Pioneering in these efforts is travel industry giant American Express, which has partnered both American Airlines and Continental Airlines. Since late 1996, American has conducted a trial with a small group of its frequent fliers, giving them an American Express corporate credit card equipped with an IBM 'smart card' computer chip, that allows them to check in at a special 'gate reader' at domestic airports if they are travelling with an electronic ticket. The gate reader confirms the traveller's seat assignment and allows him to board his flight. More recently, passengers carrying the smart card have received free passes to American's airport lounges in Atlanta, Chicago, Dallas, New York (LaGuardia) and San Jose, or free drinks and the use of a lounge conference room. Data about obtaining these benefits is stored on the chip.
Tim Smith, a spokesman for American, says that approximately 5,000 travellers are participating in the trial, which has no definite cut-off date. 'We believe acceptance of smart card technology among the general US population will be driven by credit card issuers,' Smith says. 'We believe it will eventually develop here in the US, and allow us to track frequent flier programme participation. It could also show the traveller's history, contain his itinerary, and let him make purchases in an airport lounge.'
American Express' partnership with Continental is a more sophisticated version of its programme with American. Five thousand American Express corporate card-holders have been given smart cards with IBM computer chips that they can use to check in if they are travelling with an electronic ticket at Continental's 'e-ticket machines' in Boston, Houston, Los Angeles, LaGuardia, Newark and Washington National airports. The card and machine allow the traveller to choose a seat; make simple flight changes; confirm his frequent flier number to obtain mileage; upgrade and check in.
In addition, participants in the Continental trial receive four free passes for the carrier's airport lounges which are stored electronically on the smart card chip. Once they use all four passes, participants are eligible for a discounted membership fee for the lounges. They can also earn extra frequent flier miles if they use their smart card to check in.
Continental's vice president for distribution planning, Steve Cossette, says the airline's trial began last November and will continue until at least the end of May. Smart card technology could eventually make travellers' lives simpler, he says, by enabling them to check in for flights through their laptop computer and by allowing them to download all travel expense information directly from the card onto their computer, thus simplifying expense reporting procedures. The card also expedites customs and immigration procedures. 'We expect to learn about business travellers' affinity to the card, how they perceive its benefits and its value to them. It will help us decide what we should provide next. And we can define savings and create better airport facilitation by having more smart card machines and readers,' he says.
Cossette, who believes smart cards are 'unstoppable', predicts their use will grow significantly in the US over the next few years. Pamela Codispoti, director of smart card product development for the corporate services division of American Express, says her company is seeking additional airline partners to participate in its smart card programmes, which adhere to smart card standards established for the industry by Iata.
Meanwhile, Hawaiian Airlines has hooked up with a non-travel partner - the Bank of Hawaii - to sell books of flight coupons for inter-island travel through the bank's automated teller machines. The carrier, which claims it is the first airline in the US to use ATMs to sell tickets, planned to do so from March through 140 Bank of Hawaii ATMs on all the state's major islands. Under the plan, individuals will use Bank of Hawaii or other major credit cards to buy coupons at the ATMs in quantities of one, two, four or eight. The coupons will be valid for any inter-island flight within a period of one year, and priced the same as coupons purchased directly from the carrier's ticket offices. Hawaiian will pay the bank -- which it claims will not act as a travel agent -- a fee for any coupon sold. Travellers will still need to call Hawaiian to book their actual flights.
According to spokesman Keoni Wagner, Hawaiian is embarking on the ATM programme to 'provide added convenience for our passengers for their inter-island transportation.' However the carrier has come under fire from travel agency groups, which obviously feel threatened by this new means of distribution. Although the Bank of Hawaii is a state bank, the Association of Retail Travel Agencies claims the programme violates the 'spirit' of federal laws that prohibit national banks from operating travel agencies. The American Society of Travel Agents also questions the legality of the plan.
In contrast, a recent editorial in travel trade newspaper Travel Weekly says that airline ticket sales through ATMs are 'not so different from dispensing tickets over the Internet or at other types of stand-alone ticketing machines, such as those located in airports on shuttle routes. The bank is a state bank, not a national bank . . . The larger issue is convenience and value for thecustomer. The marketplace can decide.'
Wagner says his airline is confident the project will go through, 'based on research by the Bank of Hawaii showing it is in compliance with existing regulations.'
Jane Levere
Source: Airline Business
