IATA is backing a series of initiatives to drive costs out of the industry under its "simplifying the business" banner, including e-ticketing and RFID.
A move to the 100% implementation of e-ticketing by the end of 2007 was the boldest project unanimously backed by IATA's board at the annual general meeting in early June. It is one of five ideas shortlisted from 22 produced by an expert airline group designed to simplify the airline business process and save millions of dollars.
Referring to the uncomplicated model adopted by low-fare carriers, IATA senior vice-president Tom Murphy commented that "our low-cost friends have shown us the way". The projects IATA will lead include Common Use Self-Service Check-in Kiosks (CUSS), barcode standards for tickets, radio frequency identification (RFID) for baggage management and an automated interlining study, he said.
IATA director general Giovanni Bisignani said that most of his efforts on the e-ticketing initiative have been directed at convincing those carriers that are only just beginning to use the technology - especially in Africa and Latin America - of its benefits. "IATA understands that the larger network carriers are well on the way to e-ticketing. We also understand that smaller airlines that interline won't be able to do so if they do not transition."
For smaller carriers, 20-40% of their revenues can come from interlining, said Bisignani. That could "disappear" if they do not move to e-ticketing, he said, adding: "We can't see that happening."
A move to e-ticketing by 2007 in Africa, where internet use is still relatively low, will not be achievable without IATA's help, said Titus Naikuni, chief executive of Kenya Airways. IATA has pledged to give carriers support in training and in updating technology to reach the e-ticketing deadline, said Bisignani.
IATA quantifies the cost benefit of eliminating paper tickets as up to $3 billion a year. The introduction of CUSS, on which around 40 carriers are working, is harder to quantify, but the technology is "not living up to its potential", said Murphy. IATA will promote CUSS, with airlines "driving the charging structure" and not airports, he said.
There is a need to develop a common industry standard barcode, and a transition plan to use it, said Murphy. Barcodes will replace magnetic stripe technology on tickets and boarding passes, which passengers can print out at home, with savings in paper and equipment replacement costs.
The use of RFID to track luggage more accurately will generate savings of $350 million annually by reducing the number of mishandled bags, said Murphy.
However, the concept of automated interlining is a less mature technology and will require further analysis to identify how this system can be simplified. Interlining is an important system for carriers, but it has weaknesses such as its complexity, while disputes are common, noted Murphy.
MARK PILLING SINGAPORE
Source: Airline Business
