Colin Baker LONDON
The race is on to establish a common platform for e-ticket interlining before bilateral arrangements get too far ahead
Will the paper-ticket soon be a thing of the past? There are plenty in the airline industry who think so, citing the cost savings and convenience of electronic ticketing, or e-ticketing as it has become known. But there is a problem. How will airlines recognise each other's tickets in order to interline?
Passengers, and for that matter airlines, have got used to being able to interline and as yet there is no universal solution for how this will be achieved with the new breed of e-ticket. Something may have to give way. Either progress on e-ticketing will be slowed, or the consensus on interlining will fragment. The fear is that it is interlining which will come off the worse.
Clearly there are times when airlines would be happy enough to see the back of a practice which allows their frequent fliers to swap to a rival's more convenient flight - "go shows" as they are called in the USA. But passengers will not be best pleased at losing this ability. There are also times when interlining is a necessity, such as when delayed passengers are put on another carrier's aircraft.
An interline standard for paper tickets was established long ago. It still ranks as one of the great achievements of the International Air Transport Association (IATA). Although there are also IATA standards for e-tickets, many believe these need updating. However, attempts to establish an industry-wide solution face familiar problems. As ever, the risk is regional fragmentation.
In this case, North America's carriers are significantly ahead and pushing the rest of the world on e-ticketing. "Most US carriers require you to have a good reason not to use an electronic ticket. E-ticketing is the default option," says Lois McKeon, global airline marketing executive at IBM. However, last summer's delay problems in the USA highlighted the lack of interlining capability when passengers had to rely on an e-ticket. This resulted in some travel agents advising customers to return to paper tickets when using airports where delays were common.
Bilateral agreements
Against this background, US carriers are moving towards a series of bilateral agreements on e-ticket interlining, starting with alliance partners Continental and Northwest Airlines, and United Airlines and Air Canada. Others will follow, and sooner rather than later. A system of bilaterals covering all the US majors is rapidly building up.
Delta Air Lines says it plans to announce a full interline agreement with at least one US carrier by the last quarter of this year. Michelle Weeks, general manager e-ticketing, says the airline will be able to roll out similar agreements every couple of months after this. United expects to have at least two and possibly four agreements up and running by the end of the year, covering both US carriers and alliance partners. American Airlines also expects to have arrangements in place this year.
All three carriers are working on schemes with alliance partners as well, although most of the progress here will not be seen until 2002, and will be of a more limited scope. Lead carriers in the SkyTeam alliance, Delta and Air France, have a system which allows database access so carriers can print paper copies of e-tickets issued by the partner airline. A full e-ticket service is a long-term goal.
At oneworld, American and Finnair are due to complete trials of a full e-ticketing system this May, with British Airways and another carrier, possibly American, to begin limited e-ticket interline trials in March 2002.
Star Alliance partners United and Air Canada have had full e-ticketing in place since last June. European members Lufthansa and SAS are launching a service on Scandinavian routes. Star is concentrating on developing the depth of its alliance along regional lines in the Americas, Europe and Asia.
So, there is plenty of activity at alliance level. But the fact remains that, for North American carriers, the domestic market accounts for the vast majority of traffic, and interlining with major competitors is key. One commentator points out that United and American, for instance, are almost certainly each other's largest interline partners. This means that, although work is taking place to develop e-ticket compatibility within the global alliances, the US majors are almost certain to make sure their interlining is up and running first.
In short, North American carriers are not keen to hang around while the rest of the world catches up. "The advantage of bilateral arrangements is speed to market," says Dick Burdette, manager e-process development at United. IBM's McKeon also concedes that from a financial point of view, the majors are doing the right thing. The question is what this means for future interline standards?
Some in the industry fear it will lead to fragmentation, and attempts are being made to develop an international solution. Ironically, with three different proposals for a unified system on the table, further fragmentation looms here too.
Airlines say there is no guarantee that one of these systems will predominate, and point out that the bilateral agreements being developed will sit alongside any such mechanism. The implications of this are far from certain. Some argue that multiple solutions will not be a problem. Delta's Weeks says the three systems that the Atlanta-based carrier is looking at are "similar" and that the fact that there could be three different systems in the industry "doesn't matter as long as effective communication is established between them". United's Burdette comments: "The biggest issue is that we need to make sure that these systems are compatible."
Burdette, for one, doesn't rule out the possibility of a central e-ticketing service for all, in the long run at least. And IBM's McKeon argues that such a system will become more attractive as the sheer number of bilaterals that airlines have to operate builds up - even for major carriers. "It is all well and good doing bilaterals, but as e-ticketing becomes more widely accepted, you don't want to do a series of one-offs," she says. There is also a danger that carriers simply recreate the paper system, which is not necessary with a centrally based system, she adds.
For the time being, any central service will have to work in conjunction with the bilateral agreements being put in place by the majors. Compatibility will be key. Some predict that this could prove difficult. Peter Heath, president global enterprise at IT provider SITA warns: "Past experience shows that, even though there are a set of standard messages defined, it is unlikely that individual systems will be totally compatible."
SITA points out that there is also a problem with existing technological divergence. "Some airline systems are legacy-based, some are open systems and some have a combination of both." Heath says a centralised system will solve compatibility problems without the need for major investment from airlines.
In fact, has teamed up with IATA to put forward an industry-wide solution, one of three such proposals being studied by airlines. The SITA/IATA product was demonstrated to 35 leading e-ticket airlines in Montreal in March. Phase one, scheduled to be up and running this summer provided two airlines can be found to trial it, will be what one airline insider described as "message broker". This is a central hub for switching messages between carriers, even if they are using different EDIFACT electronic messaging systems. Airlines use a multiple of different versions of EDIFACT, and a central messaging system, known as "hubware", will be able to translate the information and send it to the appropriate destination.
From this system it is hoped there will be a gradual migration towards a central database, with access rules controlled by SITA/IATA. This will initially be restricted to alliance/code-share partners in phase two, but there are plans to extend industry-wide at a later date. This will be phase three. This brings up another issue which has a familiar ring to it - the willingness, or rather unwillingness, to share passenger information. "We have concerns with giving too flexible search criteria," explains Jim Fitzgerald, managing director enterprise projects at American. In particular, many carriers are loathe to provide frequent flyer information to an outside system, however neutral. "Too date, with our exposure to industry solutions, we haven't found any that are so attractive that we would be willing to charge down that path," Fitzgerald warns. "This is a very difficult problem," he says, adding that past solutions developed by IATA and others were not attractive enough. "We are concentrating on bilaterals, while keeping our eyes and minds open."
So, despite their misgivings, US carriers are not closed to a possible industry solution. "It is always a concern with new technology that there are carriers ahead of the curve. When you do that, you might look only at your own market," says United's Burdette, warning of the need to avoid designing into the system aspects which are very local.
There are various other parameters which can be used of course. Credit cards is one, although this is problematic if the flight was booked by someone else. There are also problems with privacy laws. Ticket number is another obvious marker, although Fitzgerald points out that "you would hope that would not be required". Telephone number, driving licence and date and time of departure are further possibilities, and industry experts say a combination of different "pointers" is the most likely answer.
The second-and-third phase solution of a database with functionality beyond just the alliances may be more attractive to second-tier carriers who cannot afford the cost of a series of bilaterals. Fitzgerald says: "Smaller carriers have a much harder time doing bilaterals. They require a system that can deal with all sorts of other carriers." Delta's Weeks concurs that there are second-tier advantages, but adds, "When you are talking about US majors, and even European majors, the big carriers have already built their e-ticketing database. They don't need the third tier."
This is not only a concern for second-tier carriers. "Cost is an issue," says Fitzgerald, noting that bilateral arrangements don't involve a middle man. McKeon, noting the benefits for smaller carriers, says the larger carriers do not want to subsidise smaller ones.
Divergence
It is clear that fault lines are developing in the e-ticket sector - between North America and Europe, major carriers and second-tier airlines, and even between different industry solutions. Some are convinced the airline industry can live with this scenario, which would at least allow carriers to develop e-ticketing at their own speed. It would also protect existing investments.
Others fear compatibility will be a problem. According to Gerry Obara, manager for revenue and e-ticketing at IATA, the US systems tend to be relatively basic and may not be suitable for other parts of the world. International customs, for instance, could be a problem. Even those who are convinced that in the short- to medium-term a global solution is out of reach, recognise that effective communication between systems is crucial. Otherwise, it may be some time before the world sees the last of the paper ticket.
SITA/IATA proposal The solution for world e-ticket interlining being proposed by IATA and SITA is expected to be up-and-running this summer. In the initial phase, it will involve a switching system to manage the exchange of EDIFACT messages between reservation or departure control systems and e-ticket systems. This is aimed at partner airlines which have e-ticketing systems in place but do not have the capability to exchange EDIFACT messages. The system performs the following functions: Communications This is carried out by a centralised communication system, or hubware, using IATA host-to-host protocol Routing This covers the routing and delivery of EDIFACT messages. The originating system sends the message to the hubware, which in turn delivers the message to the appropriate target system. Translation The hubware translates messages using a common language agreed by trading partners in bi-lateral agreements. Logging SITA will maintain a selected amount of information to track receipt and delivery of messages to and from the hubware.
Next year, a database service will be available, initially aimed at partner airlines but with plans to serve as a central resource for airlines
Source: Airline Business
