Virtual tickets

IATA wants paper tickets to be abolished by the end of 2007. In the Middle East, though, only Emirates has implemented e-ticketing. The rest of the region’s carriers will need to hurry to meet the deadline.

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By  Neil Denslow Published  July 1, 2004

|~||~||~|Airlines in the Middle East will have to adopt 100% e-ticketing by the end of 2007 following an IATA initiative to eliminate paper tickets worldwide. The plan is part of IATA’s drive to simplify airline business processes and it should result in cost savings for carriers and easier reservations for passengers. However, at present, Emirates is the only Middle East carrier to use e-tickets and other airlines will need to overcome a host of technological and organisational challenges to implement e-ticketing. The advantages of e-tickets are clear cut, as they are both cheaper and more convenient than traditional tickets. Instead of the old paper tickets, passengers receive just a number, which can be printed out with a full itinerary either over the internet or in the travel agency. This saves costs, as there is no need to pay for paper tickets or for their delivery to the passenger, and they are also more use-friendly as they can be easily changed or replaced if lost. Revenue accounting for the airlines is also easier, as there is no need to ship coupons back to headquarters. “We will drive paper tickets out of the system, reduce airline costs and at the same time improve customer service,” said Giovanni Bisignani, director general & CEO, IATA, when he announced the 100% e-ticketing plan. Despite the advantages offered by e-tickets and their widespread adoption in North America, Europe and Asia, Middle East carriers have been slow to migrate onto the technology. Emirates was the first airline from the region to implement e-tickets, but it only started to offer them on all of its routes from Dubai in May. The technology is now being rolled out to its network of travel agents and to all of its global destinations, but the project will take 12 months to complete. The region’s other airlines have yet to start implementing e-tickets; however, most are drawing up plans. Middle East Airlines, for instance, has completed a feasibility study and it is aiming to have e-tickets for its worldwide operations by the middle of 2005. Qatar Airways is similarly aiming to have the technology in place during the first quarter of next year. “We are moving towards e-tickets over the next nine months, and other self-service devices. It’s a very important solution and it’s very high on our agenda of things to achieve,” says Bradley Warren, senior IT manager, Qatar Airways. “We are moving towards it as fast as we can, but we are also making sure that we are taking a quality approach towards it… [and] looking at the customer care side of things,” he adds. “If somebody checks in at the airport, are they using a similar system to what they use in one of our in-town offices? And to what they use over the internet? Is there also an inter-connection with our travel agent partners?” Aside from the cost-savings and passenger convenience offered by e-ticketing, a further driver for carriers to implement the system is the fact that major airlines are now making it a prerequisite for interlining and codeshare deals. Continental has been the most noticeable carrier in this regard, breaking off partnerships with 55 airlines that were unable to support interline e-ticket. Such announcements have certainly focused smaller airlines on the need for e-ticketing, but Henry Harteveldt, vice president, Forrester Research, suggests the issue may be being used as an excuse for rationalising the number of partnerships a carrier has. “No airline is going to break off a valued business partnership with another airline solely because of e-ticketing,” he says. For carriers implementing e-ticketing, the challenges are both technological and organisational. The technology side, while not easy, is perhaps the more straightforward, as the systems have been widely used elsewhere and the GDSs are used to dealing with them. However, with airlines now rushing to meet the deadline, the GDSs may be overwhelmed with work. MEA, for instance, was told that it would need to wait seven months before its GDS could work on an e-ticketing project. “There is a lot of demand from the carriers concerning e-ticketing issues, and [the GDSs] cannot do it for all carriers at the same time, so there is a long queue for the GDS part of the e-ticketing equation,” says Adib Charif, head of IT, MEA. However, Harteveldt says that not all the GDSs have such waiting lists, and that if an airline does need to wait a few months it won’t be a major problem. “Provided the airline gets e-ticketing installed in the next 12 months, then they still have approximately 24 months prior to the IATA deadline the end of 2007,” he says. Instead the biggest technological issue in the region will be the limited internet usage, which will reduce some of the advantages of e-tickets. “Not every traveller in the middle East will have e-mail and that is the primary way of communicating the transaction so that could be a problem,” notes Harteveldt. “However, the travel agent can issue an electronic ticket and then print a receipt, that doesn’t change, so the travel agent can mail the customer a paper receipt.” Alongside the technological challenges, there is also the need to secure government authorisation to use e-tickets. This has been one of the biggest hold-ups to their use in the region, and in other parts of the world, as many governments still require a paper return ticket to allow visitors into the country. “Even in the United States, they like to see a hard copy of your return,” notes Jamal El-Hoss, regional vice president, sales & marketing, Middle East, Africa & South Central Asia, SITA INC. “It takes time for governments to accept this.” Migrating to e-ticketing similarly requires business process changes and training across the airline and its partners, as all staff need to work with virtual tickets rather than paper ones. This applies everyone in the airline industry: from the revenue accounting department to travel agents to immigration officials at the airport. “e-ticketing is… not an automation problem; it is an organisational problem. In fact, the easiest part for the e-ticketing is the automation,” comments Charif. “We can get the system and implement it. The hardest part is the implementation of e-ticketing in the whole company, across the different departments.” Training for airline employees will have to be undertaken by each carrier individually and it will be a big job. Third parties, such as travel agents and airport officials, will also need training, although this process has already begun. Most travel agents are already comfortable with issuing electronic flight vouchers and make most reservations via computers. Similarly, staff at a number of airports in the region have already been trained to handle e-tickets for passengers of international carriers, such as KLM, that offer e-tickets within the region. Aside from staff training, another major challenge for implementing e-ticketing is drawing up a new payment mechanism so that airlines can collect the revenue from tickets sold at travel agents. “The airline industry… now has the technology to issue and track e-tickets. The bigger issue has been setting up the national bank settlement plan to handle electronic ticketing and an electronic paper flow rather than psychical paper documents,” notes Harteveldt. Given all these challenges, meeting the 2007 deadline for the global implementation of e-ticketing will be difficult, especially for smaller carriers. “I don’t know if it can be done by 2007 worldwide,” says Charif. “Small companies need a lot of work to handle e-tickets and I am not sure all companies can deliver it by that date.” Hartveldt is optimistic that the vast majority of airlines around the world will be able to hit the deadline, but even if there are a few that miss the deadline he feels that this should not prove to be a big problem. “If it is a small country that tends to be more inbound tourism than outbound or doesn’t tend to generate a significant amount of ticket volume, then IATA and the world’s airlines can figure out a way to work around them for six months or a year.”||**||

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