The International Air Transport Association this week reduced previously set expectations for worldwide electronic ticketing, saying it expects the industry to achieve a 92 percent penetration rate by year-end based on "current BSP status and project pace." IATA's initial goal was 100 percent by the end of this year; as of April, it said, the industry stood at 80 percent.
In addition, the organization announced that 100 percent usage is not achievable and instead identified 96.5 percent as the "maximum (long term) penetration" target. IATA blamed the shortfall on interline agreements "which are rarely used" and therefore not worth converting (2.4 percentage points), agent and passenger preference for paper tickets (1 percentage point) and a handful of airlines that have no intention of converting (0.1 percentage points).
IATA said it resolved this week to aim for 96.5 percent by 31 May 2008, allotting time to overcome regional challenges, including regulatory obstacles in Russia, and delays at carriers with no e-ticket technologies. By next June, IATA is saying that it will stop issuing paper tickets to travel agents altogether.
Russia, which IATA refers to as the Commonwealth of Independent States, had achieved only a 16 percent e-ticket penetration rate as of April, according to IATA. However, the group indicated that it expects the CIS rate to jump to 66 percent by year-end. IATA e-ticket project leader Bryan Wilson last year said Russia was plagued by a lack of understanding regarding the interdependence of global air transport networks.
"When they fly outside Russia--to Western Europe, the Middle East--they want to sell through travel agents," Wilson told The Beat. "They need to pick up on the conventional ET processes to facilitate that." A travel manager for NCR Corp. in Russia last month said the lack of e-ticketing impedes traveler service.
At 43 percent, the Middle Eastalso is a worrisome region, though it has made progress and IATA anticipates a rate there of 89 percent by year-end. Said Wilson, "In the Middle East, there is a modus of doing business where travelers put cash down on the table and a travel agent issues a piece of paper, which is expected to be shown as validity of travel for immigration and visa purposes."
Regional leaders in e-ticket adoption at this stage include North Asia (91 percent), Europe (83 percent) and the Americas (83 percent, and specifically 93 percent in the United States).
Electronic Ticket Penetration by Region | | April
2006 | April
2007 | December
2007 (est) | | Middle East/North Africa | 11% | 43% | 89% | | North Asia | 32% | 91% | 96% | | Asia Pacific | 37% | 69% | 89% | | Africa | 36% | 60% | 84% | | Europe | 66% | 83% | 93% | | Americas | 64% | 83% | 89% | | United States | 87% | 93% | 97% | | Russia (CIS) | 1% | 16% | 66% | | TOTAL | 48% | 80% | 92% |
Source: International Air Transport Association |
IATA has estimated that an airline's cost for processing an e-ticket is $1, compared with $10 for a paper ticket. E-tickets contribute to overall industry savings of $3 billion annually, the group said. It also suggested that by eliminating paper, airlines around the world would spare from destruction the equivalent of three square miles of mature forest each year.
E-ticketing also benefits distributors, corporate clients and travelers through efficiencies in automated reservations, self-serviceable procedures and streamlined fulfillment and expense reporting processes--and, of course, cheaper ticketing. The costs of ticket printing, delivery and security do not hit just airlines.
Nortel Networks global travel manager Robert Ridpath last month noted that "paper ticket issues" represent a quirk that on a regional or national basis precludes the achievement of economies of scale in end-to-end processes for multinational travel programs.
"Our figures show that our travel agency customers have seized on the e-ticketing capability of every airline that has implemented e-ticketing," according to a prepared statement attributed last month to former Sabre Travel Network European senior vice president Richard Adams.