Alvin Darlanika Soedarjo, The Jakarta Post, Geneva, Switzerland
Paper tickets are well on their way to becoming relics of a bygone era.
The air travel industry, in its efforts to anticipate profit downturn, is striving to be more efficient by eliminating unnecessary material and prolonged service at airports.
The International Air Transport Industry (IATA), a leading aviation trade group, says the industry needs to simplify its business as soaring fuel prices and the global economic slowdown will result in lower profits in 2008, despite a steady growth in passenger numbers.
E-ticketing and self-service check-in are among the services the IATA recommends global airlines, particularly airlines from developing countries, implement in full.
"Together, these projects will save the industry US$6.5 billion annually," said Phillippe Bruyere, program director of business simplification at the IATA, which has 240 global members comprising 94 percent of scheduled international traffic.
Electronic tickets alone, which hold the information previously held on paper tickets, could save the industry at least $3 billion a year because an e-ticket costs only $1 to process as against $10 per paper ticket.
Efficiency for travelers, airline companies and travel agents is the main priority.
E-ticketing requires a database that is integrated with the airlines' passenger service systems and interfaces with all partners for the real-time processing of passengers by ground handlers and partners.
The aim is for electronic ticketing (not to be confused with the boarding pass, which is still commonplace) to be 100 percent in use this year.
The IATA has set May 2008 as the deadline for all airlines to issue tickets that passengers receive in the form of e-mail, printing the hard copies at home or in the office.
Global electronic ticketing has progressed well during 2007, reaching 89 percent, according to the IATA's October report. Indonesia, the group says, is among the countries that are in the strongest positions to bring in the all e-ticketing (ET) system. In Indonesia, the ET penetration rate has reached 92 percent.
Passenger self-service, in which passengers get their own boarding passes from automated machines at airports or from home, is becoming increasingly popular in the U.S., Europe, Africa and the Middle East.
However, the Asia Pacific region is still behind in the category. Only 30 percent of travelers in the Asia Pacific use self-service compared to 47 percent in the U.S., 42 percent in Europe and 40 percent in the Middle East.
It is hoped that passengers will soon say goodbye to long lines at check-in counters to get their boarding passes printed.
"Passengers want the speed, convenience and control that self-service offers. Airlines want to use the technology to offer these options, and improve service while cutting costs," Bruyere said at a media meeting in Geneva in December.
Some countries, such as Japan and Germany, have already implemented self-service gates for boarding. The airlines, such as JAL and Lufthansa, have found that this can speed up boarding. However, the industry still lacks the reference points and implementation standards to make this a global service.
The IATA has taken its own steps to make air travel easier.
It has set 2010 as the deadline for airlines to introduce bar-coded boarding passes, which are sent through text messages from the airlines to customers' cell phones.
Passengers will simply have to register their cell phone numbers with their airline at the time of booking to receive a text message with a two-dimensional bar code. The bar code then functions as a boarding pass.
Moreover, it has launched the IATA travel information portal at www.iatatravelcentre.com. At the time of booking, the site provides tailored information by itinerary on passport, visa and health requirements, taxes at arriving and departing airports and consumer and currency regulations. The service is offered free of charge to individual travelers.
The group says consumers are demanding more self-service and complete information to avoid documentation problems. Cases of incorrect documentation discovered at check-in are estimated to amount to around 35,000 passengers annually. They are turned back at destination or transfer points by immigration authorities due to improper documentation.
The IATA believes these services are important because in 2008 the global airline industry is predicted to face a profit downturn on the back of soaring fuel prices.
In June, when the oil prices were still relatively low, the IATA had forecasted a profit of $9.6 billion.
With the rising oil prices, analysts have also revised down the industry's total income forecast by almost 30 percent to $5 billion from the $7.8 billion they predicted in September.
"The crystal ball looks rather foggy at the moment. We expect a bill of $149 billion next year (2008), which is $14 billion more than 2007 and 30 percent of our total costs," IATA director general Giovanni Bisignani said.
The peak of the business cycle is over and we are still $190 billion in debt. We could be headed for a downturn with little cash in the banks to cushion the fall, added Bisignani.
By 2011, the IATA forecasts the air transport industry will handle 2.75 billion passengers or 620 million more passengers than in 2006. It forecasts that freight will also rise to 36 million tons or 7.5 million tons more than in 2006.
International passenger demand is expected to increase to 980 million in 2011 at an annual average growth rate of 5.1 percent. For the first 10 months of 2007, air passenger traffic grew 7.3 percent from a year earlier.
This indicates that consumer demand remains strong in most regions, particularly in the Asia-Pacific. There is high demand from customers from China, but U.S. and European demand are slowing down, especially for business-class passengers.
The U.S market certainly effects global output, IATA chief economist Bryan Pearce said. "Revenue support will drop away during 2008 as the U.S. economic slowdown directly restricts air travel growth and has knock on effects on lined economies and travel markets."
With the less favorable economic situation, airlines with old aircraft in their fleet will be the hardest hit because their engines will guzzle more fuel compared to younger aircraft. Bisignani said the airline industry, which has a 1.1 profit margin, was still considered "peanuts" in terms of income.
However, in 2009, the IATA says the industry should be in a better state. "The problem with the airline industry is there are too many airlines," Bisignani added. The association cites that there are 2,092 airlines worldwide with a total of 23,000 aircraft.
"If we compare it to the car industry, we can name the brand easily. We recommend that more airlines merge, besides simplifying their businesses," Bisignani said.
