<FONT SIZE="+3"><B>E-Tix Accord Set</B></H1><H3>IATA Standards Will Spur Use Of Smart Cards, Permit Int'l Interlining</H3>
By Jay Campbell
<I>Los Angeles</I>- The International Air Transport Association this month ratified worldwide standards for airline smart card and electronic ticketing programs, encouraging carriers for the first time to negotiate with each other on how to interline these services.
The move will prompt speedier development of the two services among worldwide airlines and should make international interlining a reality sometime in the next two years.
The lack of an interlining system, both here and abroad, is one of several problems corporate travel managers are struggling with when it comes to managing electronic ticket programs. As a result, business travelers' use of electronic ticketing is lagging, even though travel managers recognize it provides substantial benefits and eventually will be the norm.
"The airlines have built an electronic platform on which they benefit," said Ed Boyle, American Express director of electronic ticketing and smart card. "In order for the travel manager to benefit, that platform needs to be enhanced. These standards allow the industry to move forward knowing we won't get hit with any major changes to these services, and now it's incumbent on the travel buyers to discuss it with each other, and most importantly with the airlines, to make sure they invest on the follow-through."
According to statistics compiled by consultant Bob Harrell for American Express, the rate of electronic ticketing usage by all travelers ranges around or below one-third of availability for most airlines. But as a percentage of direct sales-mostly leisure travel-electronic ticketing is much more substantial, reaching 60 percent for Delta and Continental and 50 percent for Northwest.
Corporations Still Hesitant
While United Airlines said the distribution of electronic tickets is fairly evenly split between business and leisure customers, Continental has noticed a clear lag on the corporate side. Similarly, Hewlett-Packard, which has worked with United since e-ticketing became available, said acceptance by its travelers has been spotty. The service has been most popular in Colorado, where 60 percent of H-P tickets are electronic, but travel manager Phil Wilson said the number is a lot lower in some areas.
"It's very clear that a hesitancy on the part of corporations has kept this from being a more heavily used process," Harrell said. "Corporate travel managers and travel agents, for good reasons, have been slower to adopt electronic ticketing."
In addition to the interlining problem, what to do about unused tickets remains the number-one concern among travel managers, according to an American Express survey of 300 corporate travel managers over the past two months.
Because there is no paper ticket to remind the traveler that he needs to request a refund, travel managers are concerned that they will in the end lose that money. Some industry sources believe the airlines themselves should provide unflown-flight data.
"In an electronic ticketing environment, the airlines have taken flight status information out of the travelers' hands," Boyle said. "It's possible for the airlines to immediately see PNR flight data, so travel managers should request that the airlines release that data to the corporate card."
But the airlines, at least for now, have no intention of doing that.
"I doubt seriously that Continental would provide unused ticket data," said senior director of distribution planning Steve Cossette. "In what other industry does that happen? If you buy four tickets to the World Series and you don't go, they don't go get the buyer. The concept is absurd."
Travel agencies could provide the solution, as there is a tracking mechanism in the CRSs that makes unflown-segment data available for 13 months after the date of travel. But that method, similar to the way refunds are processed with paper tickets, is costly because reservationists waste time gathering information from only one PNR at a time.
"Based on our numbers, the refund process in the paper environment is not perfect either," said Sue Fullman, director of distribution for United. "In the electronic environment, there's less of a disparity because there are less unused tickets."
That may be a point of contention among travel managers, but it is true that processing refunds for electronic tickets can be better, depending on how the travel management program is set up.
A key issue is whether airline tickets are centrally billed. For Price Waterhouse in Tampa, Fla., refunds aren't a problem because travelers use individual credit cards and thus have the incentive to avoid paying for unflown segments, said travel manager Mark Williams.
Handling Refunds
Booking-to-expense-reporting products also could provide a solution to the refund problem, but in the end some companies may be stuck paying more in travel agency fees if they hope to push electronic ticketing and capture all refunds.
An additional concern involves getting a receipt and reporting to the IRS-which some say isn't as much of a problem as they originally thought it would be.
"Our policy is to have travelers ask for a receipt when they check in at the airport, but if they forget, our travel agency will always have a copy of the receipt," Williams said. Thirty-five percent of his company's tickets are now electronic.
Airlines also are making it a practice to fax receipts, although some travel managers said that process is less than smooth. The Air Transport Association will address that issue by developing a standard fax receipt format. Williams said the ultimate answer could be e-mail. American Express is working on an electronic receipt service, which it said will be approved by the IRS.
Other concerns expressed in the Amex survey can be chalked up to confusion over the variety of airline security requirements and airline checkin procedures, Boyle said, but those issues will be addressed by smart cards.
Even if these concerns can be overcome, travel managers still are left asking, "what's in it for me?" In addition to the added security and flexibility e-tickets provide travelers, travel managers have been told time and again that e-tickets will save on pre-paid shipping costs, and that's true for some companies and in some situations.
For example, despite the fact that Texas Instruments has "not embraced e-ticketing," according to travel manager Colleen Guhin, the company now uses electronic tickets for job applicants. Terry Sullo, corporate travel manager for tech company BBN in Cambridge, Mass., said that when a rainstorm denied employees access to some areas of her company's headquarters this month, she too issued e-tickets.
These are good benefits, but some buyers say they're not enough.
"Just because the airlines were inefficient doesn't mean I'm willing to change the way I do something without it being a win-win situation," said Ely Lilly travel manager George Odom. "I don't mind taking costs out, but I'd like to share in it."
Whether e-ticketing reduces airfares remains to be seen, but travel managers are skeptical of that trickle-down theory, particularly when it comes to shifting share based on e-ticket use. The other option is for e-ticketing to become a negotiating point, and that's starting to happen.
Southwest Airlines, the pioneer of ticketless travel, has a ticketless discount product. But, said manager of business development Joe Lampkin, as rarely as Southwest discounts corporate contracts, this is even more "closely controlled."
One problem in negotiating is that there is no efficient system in place for identifying e-ticket volume. "Unless the airlines allow the system to be altered so that they tag e-tickets with an identifier, there's no easy way to distinguish," said Williams.
"It's incumbent on CRSs, travel agencies and card companies to build that capability for purposes of negotiating with airlines," said Boyle. "Travel managers should ask the airlines if they can designate electronic tickets in the CRS."
Travel managers certainly see the potential for such practices, as evident in their inclusion of requests for electronic ticketing procedures in travel agency RFPs. Aquarius Travel in Cambridge, Mass., said it sees electronic ticketing in RFPs "almost every day."
"This is the wave of the future, and our road warriors are using it already," Odom said. "So we want to know what agencies have in place." Guhin echoed those comments. "Eventually, the airlines are going to require it," she said.