Corporate buyers are all too familiar with the issues generated by the airlines' ongoing ancillary revenue quest. Travelers may purchase a ticket through preferred channels, but then at the airport or on a flight Ticketing end up putting a variety of charges on corporate cards that are not producing data to match purchase with product. How can a company create policies or negotiate contracts on meals, baggage, seat allocation, upgrades, lounge access, inflight Internet or other miscellaneous services if it doesn't know what it's spending on them?
While the industry awaits improved data reporting between airlines and card companies, and some buyers have altered expense reporting procedures to get travelers to identify a la carte charges, the panacea remains a complicated-sounding standard created by the International Air Transport Association called the electronic miscellaneous document.
What is the EMD? And when will it be here? The second question is easier to answer than the first: Not soon. The answer to the first is more optimistic.
Part of IATA's e-services initiative, the EMD would replace such paper documents as excess baggage tickets, tour orders and prepaid ticket advices. It's a standard electronic document type containing codes for a wide range of services and products from airport parking to toy airplanes. It's essentially an e-ticket for add-ons.
EMD comes in two varieties: the EMD-S, or standalone, used for deposits, refunds and sales; and the EMD-A, or associated, which is used with an electronic ticket and expires when the flight is flown. Designed specifically with merchandising and ancillary revenue opportunities in mind, the EMD would be the first IATA document not to start out in paper form, noted ARC vice president of marketing, sales and customer care Mike Premo during a June National Business Travel Association webinar. The EMD promises to enable travelers using travel agents and corporate booking systems to buy miscellaneous services at the point of sale--creating better visibility and more negotiating opportunities. Currently, travel agencies can neither sell nor service non-ticketed airline products, creating missed sales opportunities for airlines and inefficiencies for travel and corporate processes.[PULL_1]
IATA estimated the EMD would save airlines between $2.4 billion and $2.9 billion annually by replacing paper and increasing efficiencies.
The bad news is that while airlines didn't wait for the EMD to start unbundling and merchandising via direct channels like their Web sites, this new indirect channel-enabling standard is years away from proliferating. As of June, just four IATA members had implemented EMDs: Air China, Finnair, Turkish Airlines and Virgin Atlantic. IATA estimated that by year-end, all major global distribution systems will have been reprogrammed to accommodate the EMD, but just 10 airlines will have adopted it.
IATA's goal is to have all airlines up to speed by the end of 2012 and to achieve 100 percent capability in billing settlement plans by 2013. ARC, the U.S. BSP, expects to implement the first phase of EMD by the end of the third quarter. Unfortunately, the sheer number of additional players involved--as well as friction between airlines and GDS firms about who will pay for what--makes ARC's Premo less hopeful about when EMDs will live up to their promise.
"I used to be an optimist," Premo said. "Now I'm a bit more of a pragmatist. There are a lot of people with a lot of different motivations playing in this field." He encouraged corporate travel buyers to lobby for the EMD in talks with travel management, technology and airline suppliers.