By Neil Denslow
IATA is pushing the industry towards 100% e-ticketing by the end of 2007. However, Arab airlines may struggle to meet this deadline, as the region is lagging behind in implementing the technology.
|~||~||~|IATA’s Simplifying the Business (STB) programme is driving some of the biggest changes ever seen in the aviation industry. The global industry body is striving to force paper out of aviation and instead make most transactions happen electronically. The programme covers five different areas, but electronic ticketing (ET) is the main focus for now, with IATA aiming to achieve 100% e-ticketing around the world by the end of 2007. The technology offers numerous benefits to both airlines and passengers, but despite the assistance on offer from IATA, carriers in the Middle East & North African region are lagging behind the rest of the world in implementing ET.
The STB initiative covers five main areas: ET, e-freight, common use self-service (CUSS) check-in kiosks, RFID bagtags and barcoded boarding passes. IATA hopes to introduce all of these into the industry over the next few years, with the aim of saving around US $6 billion per annum. “Simplifying the Business is one way, but a very important way, that we can reduce costs while at the same time providing a better service to the customer,” comments Giovanni Bisignani, director general & CEO, IATA.
IATA’s board, which comprises representatives from the member airlines, approved the STB programme at the organisation’s 2004 AGM in Singapore. Each of the five tracks are now being pursued by airlines with the help of IATA, but the main focus is on ET. This element is the most important, as it is the one with the earliest deadline and also the one that will have the most impact on the industry. This is because it will not only affect the most people, including the entire aviation community and the global passenger base, but also because it is a key component in enabling other parts of STB, notably CUSS and barcoded boarding passes.
“The intensity of the message [about ET] and the sense of urgency we have is driven by the fact that we need 100% of people engaged and mobilised for it,” explains Philippe Bruyére, programme director, STB, IATA.
Carriers also need to focus on it because there will be few alternatives for those that do not meet the deadline. “It will happen, as we will not print any more tickets [after 2007],” says Bisignani.
Despite this looming cut-off point, carriers in the MENA region are far from ready for the transition. At present the only airline in the region that is 100% e-ticket compliant is the Sharjah-based low cost carrier, Air Arabia, which does not belong to IATA. Among regional carriers that are IATA members, only three airlines — Emirates, Royal Air Maroc and Royal Jordanian — are issuing any e-tickets today, and none of these are 100% compliant. As such, just 1.3% of the tickets issued by MENA carriers in May were e-tickets, which was by far the lowest total for any region worldwide [see box]. “This figure gives us some concern, as the deadline is the end of 2007,” says Bruyére.
“Two and a half years is long enough, and it is feasible [that they will meet the deadline], but it takes on average 6-18 months for an airline to implement ET,” he adds. “We therefore need to make sure that STB — the number one priority for the industry — becomes the number one priority for each airline as well.”
In order to meet the 2007 deadline for 100% ET, IATA is aiming to hit 40% by the end of the year. Some areas of the world are on track to achieve this, but others, particularly the MENA region, seem unlikely to. “This is the reason why the Middle East really has to move fast [on ET],” says Bisignani. “It is a pity to see the Middle East so focused and delivering such great results in other areas [of aviation], but a bit behind in electronic ticketing,” he adds.
To measure carriers’ progress towards 100% e-ticketing, IATA had meetings with 400 airlines around the world in March and April, an exercise it will repeat over the summer. These meetings showed that there were some grounds for optimism that airlines in the MENA region would hit the 2007 deadline. The IATA interviews showed that 70% of local carriers were planning their ET rollout, with only 26% not having reached the planning stages. “This is a similar level to Europe, and we have other regions where we have more concerns,” notes Bruyére.
“Overall, we can say that the Middle East & North African carriers are not ready today, and that they have a low penetration. However, most airlines in the region are tackling ET very seriously and they are in the planning stage. That means they are integrating ET into their overall strategy and, although they do not have a solution in place yet, they are planning to launch ET very soon and to meet the deadline,” he adds.
Implementing ET involves a host of different challenges, which IATA is helping carriers overcome in a variety of ways. The main centre for this support is a dedicated STB team of 40 people based in Geneva, which includes specialists from a variety of fields, including IT, project management and communications.
This central team is then supported by regional STB managers spread around the world who act as the main point of contact for the airlines. “We really use our local teams at the regional or country level as our main implementation platform,” explains Bruyére. “The idea is to the leverage on the relationships they have developed over the years, not only with the airlines, but also with the airports, groundhandling companies, journalists and the entire community.”
The IATA support begins with educating airlines about the benefits of ET and why they need to move ahead with it. Once the go-ahead is given for the project, IATA then provides support in a variety of different areas, reflecting the all-encompassing nature of migrating onto ET. On the technology side, for instance, IATA has developed relationships with a number of solutions providers, including formalised memorandums of understanding, which can help airlines chose the right ET partner.||**|||~||~||~|“We really act as a matchmaker,” says Bruyére. “This means we have formalised existing information and then structured it in such a way that the different players can select the best solution and the best partner [for them],” he explains.
“The IT challenge may ‘just’ be the integration of a solution available in the market, but on the other hand, it may also be IT development,” he warns. “And, we except that airlines using their own systems will have the greatest challenges in moving to ET.”
“We also need to keep in mind the number of players involved,” he adds. “Expert resources are very scarce in the market and the number of global solution providers for ET is really limited… This is another reason why we need to move fast so as to make sure that there is no traffic jam in 2007. We do not want 20% of the airlines ready to go then, only to find that their partners do not have enough capacity to support them… Thus, the sooner all airlines start, the better it will be.”
However, Bruyére emphasises that moving to ET is not just an IT issue, but rather one that will affect all areas of an airline and its interactions with a host of different entities. Therefore in order to smooth the transition to the technology, and to ensure that the carrier gets as many benefits as possible, a variety of different departments within the airline need to be involved in the rollout.
“ET is not an IT project, but a business project,” he explains. “Through ET, an airline can re-engineer its internal processes to make them more efficient and also re-engineer its business relationships with its partners as well. This is firstly business-to-business... but then also with the customers.”
IATA is helping airlines change how they interact with other organisations, including airports, groundhandling companies and government departments, in a number of ways. For instance, it is set to launch a three month campaign to talk to all of the groundhandling agents around the world about the changeover and to then help them prepare for it.
The organisation is also coordinating moves towards ET by airlines on a regional basis, so that common opportunities and challenges can be identified and tackled. This coordination is being focused through two-day regional workshops, which also include introductions from the main global solutions providers. (The next Middle East event will be held in Amman in September.)
Other challenges that airlines could face in the ET migration may include tax laws that require paper tickets, for instance. IATA can help in this regard by lobbying for new regulations through its regional offices or by drawing on the organisation’s experience in solving similar challenges in other parts of the world. “We have formalised knowledge in a database here [in Geneva]… so that we can store and share potential solutions,” comments Bruyére. “The challenges will be quite similar [around the world], but the people you need to meet to implement the solution are always different, so it is easier to implement the solutions on a case-by-case basis,” he adds.
However, in many ways the biggest challenge that airlines will face in rolling out ET will be telling passengers about the changeover. Communications will be a key area in ensuring a smooth migration, but it is an area that local airlines have rarely excelled at. IATA is aiming to raise awareness among the travelling public about ET through advertising — particularly on ticket wallets and its website — and by highlighting the advantages of ET to passengers, such as the greater ease of booking and the fact that it is impossible to lose an e-ticket.
However, the organisation also emphasis the role of public relations and the need to use the press to spread the word. “We need to make sure that the airlines communicate proactively on this… and the media is a key stakeholder in this process in terms of education, bringing transparency and transmitting information to the public,” says Bruyére.
To help airlines in this regard, IATA’s STB team includes a communications department that can assist carriers in a number of ways, such as arranging press interviews or penning articles for inflight magazines. If successfully utilised, such a campaign will help smooth the ET changeover and potentially also allow the airline to improve its sales as well.
“If you do not explain to your market what will be the impact of ET, then you will have issues and resistance… But it is also a fantastic opportunity for communications people and marketing people to gain market share for the airline,” says Bruyére.
“However, communications is not just something that happens by chance after the fact,” he adds. “Instead, it is as important to us as the programme management piece, as what is not communicated does not exist.”||**||