BTC and ASTA Fire Salvo at IATA

Probably not the wisest move on their part but ASTA and BTC have fired a broadside against IATA's NDC "New Distribution Capability".

For your edification I reprint here their entire statement, feel free to comment:

ASTA AND BTC CHALLENGE IATA CLAIM OF TRANSPARENCY REGARDING NEW DISTRIBUTION CAPABILITY
Alexandria, Va., October 17, 2012— The American Society of Travel Agents (ASTA) and Business Travel Coalition (BTC) today sharply disputed claims by Tony Tyler, CEO of the International Air Transport Association (IATA) that the development of the “New Distribution Capability” (NDC) was being conducted in open and transparent collaboration with all segments of the travel industry that would be affected by it. Nothing could be further from the truth.
“ASTA sees nothing in the IATA process to create NDC that resembles full and open transparent collaboration with the travel agency community,” said Nina Meyer, CEO of ASTA.  “ASTA had asked to participate as an observer, with the possibility of posing questions, to the IATA Working Group on NDC in Montreal in late November.  IATA’s response was initially positive, citing a desire to collaborate. ASTA then invited IATA to come to its TRADESHOW in Los Angeles in September to meet with travel agencies and the Business Travel Coalition and respond to questions.  When ASTA later asked for details of its Montreal participation, it was told that neither it nor any other agency associations would have access to the development process for NDC. IATA did express a willingness to meet separate with ASTA, but that is far from the full collaboration and openness that IATA is trumpeting,” Meyer added.
BTC Chairman Kevin Mitchell said, “While we are still conducting due diligence with regard to understanding all the facts and implications flowing from IATA's new distribution initiative, it's reasonable to preliminarily conclude from discussions with and presentations from IATA that there is reason for significant concern over negative impacts to consumers, competition and costs. A disturbing warning sign - that all is not right - is that IATA pointedly talks about an open and collaborative industry process, yet refuses to let organizations that represent travel agents and corporate travel departments have a seat at the table. IATA only welcomes individual travel agents or travel managers who are largely prevented from speaking up for fear of retaliation on their businesses or airline contracts. BTC is among several industry organizations in the U.S. and abroad that requested to be part of the process only to be told no by IATA.”
Nina Meyer added, “The need for complete transparency regarding NDC is illustrated by some of the false premises for NDC that Mr. Tyler stated in his speech before the IATA World Passenger Symposium being held in Abu Dhabi this week.  Mr. Tyler stated that because the majority of air travel is sold by travel agencies relying on Global Distribution System (GDS) technology, “the travel offer is put together outside the airline by third parties… it is impossible for the airline to tailor its offer to the customer via the indirect channel…. this model is focused only on finding the lowest ticket price. This has resulted in the commoditization of air travel…. the travel agent only sees codes – F, J, Y…. There is no way to tell if your “J” product is a flat bed or an economy class seat with an empty seat beside it.”
These remarks essentially blame travel agents for airlines’ commoditization of their product. But it is airlines that have set prices since deregulation and entered into commoditized code share agreements, not travel agents. Agents sell what the airlines offer.  And ASTA rejects categorically the notion that travel agents do not understand what they are selling and are unable to communicate product characteristics to their clients.  If that were true, agents would have disappeared long ago, but instead in the United States alone they sold $68 billion in air transportation in 2011.
Moreover, Mr. Tyler’s remarks cite as current airline innovations such items as “special meals, expedited boarding, roomier seats and access to airport lounges.”  Most of these “innovations” have been around for years. If these products are made available to agents in a transparent and transactable manner, which is entirely possible through GDS technology and the ATPCO OC process, travel agents will sell more of them to consumers to the benefit of consumers and airlines alike. ASTA has seen demonstrations of GDS technology that has these capabilities and more.  Rote repetition of the claim that the GDSs can’t do this does not make the claim any truer.”
About ASTA
The mission of the American Society of Travel Agents (ASTA) is to facilitate the business of selling travel through effective representation, shared knowledge and the enhancement of professionalism. ASTA seeks a retail travel marketplace that is profitable and growing and a rewarding field in which to work, invest and do business.
About BTC
Founded in 1994, the mission of Business Travel Coalition is to interpret industry and government policies and practices and provide a platform so that the managed travel community can influence issues of strategic importance to their organizations.
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Bye Bye Mag Stripe Hello 2D

So the specialized printing and the expensive machines should now be history. Well not quite - BUT - IATA standard 2D is now fully implemented. But not necessarily fully deployed so they declared this week.

Some carriers are still struggling. Others are somewhat PO'ed that they plonked down a lot of money for those expensive (now) boat anchors. But 2Billion boarding passes a year is a lot!

Cheers

IATA;s Answer to Global Warming....

Thumbing through another masterful piece of PR from IATA (full of green footprints) I happened across list of some of their strategies for reducing the carbon footprint.












So admirable goal but somewhat questionable execution.

Just take a read for yourself. Particularly Page 4. But let me save you the bother - here is what it says as an example of a technology solution to global warming:

"Less energy-consuming lighting and in-flight entertainment"

IE more air rage with bored pax in the Y cabin.

Oh yes - and I know I am taking it out of context but if you are going to indulge in puffery they you will have to accept the consequences....

Cheers

IATA finally acknowledges LCC market

Acknowledging that that there is actually a low cost airline model - IATA has (begrudgingly) started to include LCC statistics in its reporting. Don't believe me? I quote directly from IATA's stats:

"As IATA member airlines carry 93% of international traffic measured by RPKs, this change does not make a large difference in the statistics" IATA Jan 2009 Report. I think I bed to differ. The LCC model has a profound effect on airline statistics.

Interestingly IATA seems to only capture those pure LCC airlines. They so far admit that there is only 7% of total traffic being LCC. And this is where there is a pretty fundamental failure of the IATA statistical model. It measures that notional value RPK (RPMs). IE Revenue Passenger Miles. If for no other reason than everyone else uses passengers as a measure of total traffic it is high time that IATA woke up and started publishing some real data on passenger numbers.

IATA claims that LCC traffic is only "7%" of total traffic. Given that the vast majority of LCC passengers are short haul and only a smattering of long haul traffic this is starting to distort the figures. Let me illustrate this.

The total traffic worldwide (using ACI data) is estimated at 4.5 billion passengers these are actual landings and take offs. This number tends to be inflated as it includes and counts each passenger twice. One take off and one landing. So in my opinion there are actually around 2.2 billion actual worldwide passengers. (PSJs - for Passenger Segment Journeys). If we look at just one group - the ELFAA - European Low Fares Airlines Association which comprises: Vueling | easyJet | flybe | Jet2.com | Norwegian | Ryanair | Sky Europe | Sterling | Sverige Flyg | transavia.com | Wizz Air

They carried 162 million pax last year. And this is not all (but it is most) EU carriers. If we were to add back in MENA, Africa, Asia Pac, USA and Latam carriers the numbers would swell by at least double. (WN alone is now more than 100 million pax). So you can see the share of market pax worldwide by true LCCs is higher than the 7% shown using the RPK model.

Interestingly if we look at an apple to orange comparison - according to IATA's numbers total traffic (in RPKs) was down nearly 11% for Europe in 2009. But for ELFAA airlines (passengers flown) it was up 8.7%. Interestingly IATA claims that the impact of LCCs mitigated the annual fall in traffic by one full percentage point. IE LCC growth saved the world from a full percentage drop of 1 %.

For the long term - you have to make the assumption there is a move towards hybrid value carriers - where airlines move away from pure legacy full network service carriers and pure LCC models to hybrids of all types. An apple to apple comparison of say United Airlines revenue models looks remarkably similar to say Easyjet these days.

Now I am sure that some people may pick at my numbers but - the analysis is sound I believe.

Cheers

A New World Order - Asia Rising

There is clearly a sea change occurring in air travel. The move to LCC has been a phoenomen that has largely passed the USA by. Europe and Asia have adopted the so called "Southwest" model extensively and extended it. The next gen Hybrid Value Carriers (HVCs) such as Easyjet, Air Asia and Jetstar are not to be found in the USA market.

And now we see that the legacy network based airlines are feeling the pinch. IATA coming off the worst year in its history no longer fully reflects air travel. Rather the new generation of these airlines represent where air travel is going. And consumers are lapping it up.

Two recent pronouncements out of IATA confirm this. Firstly the Asia market has now overtaken the US as the world's largest market. And then there is the news that IATA thinks it is going to take three years for the market to recover.

Right in time for the next recession.

Yes the world is definitely changing....

Cheers

The BTC vs IATA Privacy Debate

The debate between BTC and IATA over the PAXIS information tool has boiled into a brawl. As it should.

The EU New code of conduct has many gray areas - but data privacy is not one of them. There are clear obligations for any provider of data. They must mask individual and corporate/group entity data so that performance of an individual side cannot be interpreted.

Frankly the Paxis product is somewhat clunky to use. As is all MIDT data. BIDT data cannot be used inappropriately, this is what seems to be the case.

IATA is going to have to back down or it will create a back door to data across the board. I hope they see the error of their ways. Perhaps when the boys and girls all move to Miami things will improve!

Cheers

The Breakup of the Holistic Airline Model

For many years people have balked at the prospect of fragmentation - that fear has kept the "Air Transportation System" - well - as a integral holistic service, at least in some people's minds. Much of this stemmed from the good old days when domestic US airlines didn't fight with each other and took each others' tickets in a very gentlemanly fashion. For International travel the only players on effective international routes all swapped tickets because - well International bilateral agreements superseded all other rules.

Fast forward about 30 years and the impact of de-regulation across the spectrum, the growth of ad hoc and even permenant alliances and the pervasiveness of web based technologies and those nice old holistic legislated or commercially constrained systems look decidedly long in the tooth. There really is no such thing as airline neutrality and a holistic system where we live in Utopian cooperation. It is everyone for himself.

Despite this reality some components of these "systems" are still living in the world of yesterday. On the other hand some progressive airlines have decided to blow right through those arcane models and form strong commercial bonds that go outside that nice old holistic model. For example LH buying into JetBlue and then integrating some of their operations. The Volaris/Southwest/WestJet relationship. The new United/Aer Lingus partnership and the announcement today of WestJet and AF/KL tie up. I can cite many more instances but you get my drift here.

It is interesting that on the very day that Westjet/AF+KL announcement is made that you have a senior GDS official getting up and saying that (and I am synthesizng out of context aggressively here to make my point) "...fragmentation ......fundamentally different from our (GDS's) philosophy on content..."

My point is that there is an inevitability now that fragmentation (as The Professor has oft opined) is not a new fleeting thing - it is here to stay and anyone who gets in the way of the unbundled and the fragmentation processes will in my humble opinion become road kill.

I liken this to the break up of Ma Bell (aka the old AT&T). People bemoan the loss of guaranteed dial tone. However they love the development of technology and the lowering of price and the plethora of options. Well so too the airline system model and the IT systems that constrained it that way. Before calm was restored in the telephony market there was a lot of disruption. I think there will be that occurring for a while in distribution.

You have been warned... that noise you hear is not just the wind...

IATA's prognostications for 2009

So we now have the formal view on 2009 from the venerable IATA. According to the International Air Transport Association (IATA),the world's airlines are expected to lose US$2.5 billion in 2009.

Forecast highlights are:
Industry revenues are expected to decline to US$501 billion. This a fall of US$35 billion from the US$536 billion in revenues forecasted for 2008. This drop in revenues is the first since the two consecutive years of decline in 2001 and 2002.

Yields will decline by 3.0 percent (5.3 percent when adjusted for exchange rates and inflation). Passenger traffic is expected to decline by 3 percent following growth of 2 percent in 2008. Cargo traffic is expected to decline by 5 percent, following a drop of 1.5 percent in 2008.

On the day when the oil industry celebrated the anniversary of the first time Oil passed $100/pp level, IATA predicts a 2009 oil price to average US$60 per barrel for a total bill of US$142 billion. This is US$32 billion lower than in 2008 when oil averaged US$100 per barrel (Brent).

Hmmm I think IATA has the price of Oil wrong. I will stick with Boeing's estimate of $80ppl as the average - however with a depressed first half I will lower it to between $70-$75. Anyone want to take my bet?

Cheers

Maybe Monday's are better - News Roundup

I thought I liked Fridays. Well this Monday is full of stories. So I will condense for the assembled masses with some commentary along the way.

1. Thomas Cook pulls out of German consolidation talks. So along with the patent's decision (or rather indecision) on its future the formation of a 3rd force in Germany looks set for the round file for a while. This in turn gives Air Berlin some breathing space to get its house in order. I shall be flying long haul on AB in 2 weeks - I will let you know what its like.

2. India - $1.5 billion market loss predicted by IATA out of $5.2 billion loss globally predicted for 2008. Bisignani is predicting a bloodbath for India unless a new regulator steps in. He could well be right. Already the premium paid for fuel in India is approximately 50%. The market is now experiencing negative growth (down 7.5% for the second half). This will impact not just the airlines but also the 4 major Online players in the market.

3. Kelleher calls for development of cheap 110-125 seater. Exhorting his "children" - Herb was waxing lyrically on two major topics. One was the regulation of ATC and the development of better processes and control in Europe. The other was the development of a low cost single aisle aircraft. Neither Boeing nor Airbus are keen to do this at the moment. More on this later when I have thought about it.

4. Low Cost Congress in London. Lots of news going on there - I hope to do a recap by the end of this week.

5. On Airline Bankruptcies... ABTN was calling for the CAA to learn how to be an Undertaker after the ludicrous handling of the XL failure. BTW Paddy says FlyGlobespan is next to go. Easing odds on Alitalia who has a respite until October 15th. I believe the CAA should be reformed and some of its functions divested. However I do agree with Malcolm that there needs to be a better handling of processes with regards to addressing big failures. The UK has not seen such a failure since the Court Line crash in the 1970s.

6. Pilot Charged with Mooning. A TransStates/United Express pilot was charged with being drunk and indecent behavior after he mooned traffic. The pilot told police officers he had an early morning flight, and he hoped the officers were happy because "50 people's flight would be delayed because of (Officer Dustin Cook, the arresting officer)," according to the news report. Makes you think carefully about flying on an RJ.

7. One of the big losers in the Wamu failure of course was TPG who saw their $1.5 billion investment wiped out. Looks like TPG will have a much harder time in raising capital for any major project. That means they will be sitting out on the sidelines for the foreseeable future. The impact on the BA -IB match up is yet to be determined.

There is more... but for now digest this lot!

Cheers

Phelps may be all gold - but International Travel is failing to qualify

The latest stats from IATA point to slowing across the board. With the US $ rising against the pound and the Euro - we have a very weird situation.

The US economy may be not as bad as the others now that the markets have taken the US decline into consideration. But Europe and UK are a different matter.

As a result we have declining oil rates (down from a high of $148 to $116 at the moment. We have declining precious metals - gold and especially silver. We have declining Euro and Pound.

So traffic is slowing internationally. The blood bath will be across the board. The latest IATA numbers point to a world wide decline in both cargo and premium pax traffic.

Ouch this is still ugly....

Chart and numbers courtesy of IATA

Is IATA nuts or just its DG?

The latest missive from IATA's Director General (yes Martha he is Italian), takes aim at the GDS providers.

The International Air Transport Association has called on GDSs to cut their fees – or risk losing air product. IATA director general and chief executive Giovanni Bisignani said its partners in the value chain “must deliver similar efficiencies to airlines”. “Why can China TravelSky charge US$0.50 per segment
while the western GDSs charge over USD$4?,” he said. “The industry is in crisis and they must come to the table with better efficiencies or we will use other ways to distribute products.”

OK - so the theory is Travelsky can do it for 50 cents but the Western GDSs charge too much. Either he is nuts or he is mad or he has another agenda. Frankly this cannot possibly be a good way to start a dialogue with your "partners".

Please note I am not defending GDS costs. Far from it - I believe wholeheartedly that the GDSs need to do something about their cost structures and about their technology and processes. Airlines need to just transform their cost structures - however you have heard me rail against that set of issues before. But he clearly knows nothing about China and Travelsky as to why they charge that fee, nor does he understand the issues facing GDSs.

Where I will agree with him - is that there needs to be a transformation in the cost structure for distribution. This is essential. What he is attacking is the headline number. There are many more costs which are dependent on this number which need addressing. At the same time no one seems to be paying attention to the new cost structure which is even worse than the old one with a certain company's new hosted product that the Lemmings are buying.

So perhaps he has a secret pact to attack the GDS model while preserving the new hosted reservations system model? I for one do not understand why he is taking this tack because to those who understand the economics of distribution - he is barking up the wrong tree at the wrong time.

Perhaps he just knows something more than the rest of us. OK - I will buy that... just share a little please.......... If you know - please help me out from my misery of understanding his position.

Cheers

Timothy

Bravo Sita - Sure IT can help save money but why stop there?

Research by SITA and trumpeted by their top brass at the recent SITA event in BRU (the past week) shows that the airline industry could save a lot of money.

The report distributed this week at SITA’s Air Transport IT Summit in Brussels, includes research from Cambridge University which demonstrates that technology such as location sensing via mobile devices could save airlines up to $600 million by tracking passengers, sending messages and moving them to gates more efficiently; improving turnaround times and reducing delays.

At current growth rates, there will be five billion mobile customers by 2011 and functionality on mobile devices will be increasingly sophisticated. For the air transport industry this opens the door to a new way of doing business as mobile phones are currently used by 90% of airline passengers. Bear in mind that this would mean about north of 80% of all the world's population will have Mobile phones. No other technology in the history of the world has been so universally distributed.

Jim Peters, Chief Technology Officer, SITA said, “These ‘digital travellers’, will have on-demand access to a range of mobile-enabled services such as real time flight updates; self-service booking, check-in and boarding; and mobile payments.”

OK so here is a challenge. Why not be really smart about it and start re-thinking the process of travel and eliminating now obsolete and useless technology components - like for example e-tickets.

Just our small direct research on an 8 million passenger airline showed savings of between $2-20 per ticket. That would return savings far in excess of the numbers mentioned here. This was conservative and didn't include the savings from removing hardware and even organizations like IATA's BSP from the stage.

Will the airlines do it? Nah - not in yours and my life time. Or will they?

Let me know what you think.

Send me a comment or private note!

Cheers

Timothy

New EC Commissioner Confirmed - Tajani now in the hot seat

The Italian Antonio Tajani has now been confirmed as the replacement for Jacques Barrot who moves over the Justice Commissioner.

This move has been welcomed by fellow Italian and head of IATA Giovanni Bisignani. (What's with all these Italians!!!).

Levity aside below you will find the PR release from IATA. However not one mention of the critical issue of Alitalia which remains the number one urgent practical issue in front of the new Commissioner.

Mr Tajani will have his hands full. We wish him the best of luck and hope that he displays wisdom in his handling of these critical issues.

PR Release follows

IATA Welcomes EC VP Tajani’s Single European Sky Priority

Geneva – The International Air Transport Association (IATA) congratulated Antonio Tajani on his confirmation as Vice President of the European Commission and Commissioner for Transport.

“Vice President Tajani has picked the right priorities, starting with delivering a Single European Sky (SES),” said Giovanni Bisignani, IATA’s Director General and CEO. “We’ve been talking about a SES for decades. Now is the time to make it a reality. An effective SES would help alleviate two critical issues related to fuel burn. First, with oil in the US$135 a barrel (Brent) range, the industry fuel bill will balloon to over US$176 billion this year. Already we have seen 24 airlines go bust and thousands of layoffs. An effective SES would shave EUR5.5 billion off the fuel bill with more efficient air traffic management. And it would reduce carbon emissions from airlines by as much as 12 million tonnes. I am confident that Vice President Tajani will deliver the political will to turn the technical solutions into reality,” said Bisignani.

Bisignani also encouraged Vice President Tajani to weigh-in on Europe’s misguided debate on bringing aviation into the Emissions Trading Scheme (ETS). “First, the timing is wrong. Bringing aviation into Europe’s ETS was conceived when oil was at US$60 a barrel. Today, with the price more than double that, it’s a completely different world. If oil stays at the current price level for the next 12 months, airlines will face US$99 billion in extra fuel costs. Airlines have the biggest incentive of any industry to improve environmental performance. With jobs disappearing from the industry already, I hope that Vice President Tajani will bring a strong message that this is not the time for reckless decisions that could put more jobs at risk,” said Bisignani.

Bisignani emphasised the illegal nature of Europe’s unilateral approach. “All this effort at a time of crisis for something that is illegal makes no sense. Countries in the developed and developing world are opposed to Europe’s unilateral approach - and rightly so. What right does Europe have to charge non-European carriers for emissions outside European territory? I encourage Vice President Tajani to bring a strong reality check to his Commission colleagues: the best thing that Europe can do to tackle the important issue of aviation and the environment is to facilitate a global solution through the International Civil Aviation Organization - a UN body with a proven track record of promoting global standards,” said Bisignani.

Bisignani noted that the aviation industry takes responsibility for its 2% of global carbon emissions seriously. “Our vision to achieve carbon neutral growth sets the benchmark for other industries to follow. And our four-pillar strategy based on technology, operations, infrastructure and positive economic measures is delivering results. Last year IATA’s efforts delivered 10.5 million tonnes of CO2 savings. If Vice President Tajani is successful with SES, we will deliver much more,” said Bisignani.

Just because Gio says so doesn't make it so. Paper Tickets the Saga continues

OK so at a sweep of the electronic pen - paper tickets were consigned to history.

Politely BS.

As we are now seeing they are very much alive. Further the lack of full interline e-ticket is causing all manner of problems. For example if you are an external airline serving a single airport in one country without the interline etix of the national or dominant carrier in that market you are screwed. Specifically if you are in Germany and the long haul airline doesn't have an etix agreement with Lufthansa EVEN THOUGH THEY HAVE JOINT FARES. You are now in deep dog poop.

This is causing lots of issues for vendors of software and I am sure that even the GDSs don't have it all fixed yet.

But Don't worry Gio says its OK. And you believe him!!!!

Good luck if you are travelling any time soon on a cheapie consolidator ticket.

Cheers

Timothy

IATA takes a swipe at "Monopoly Suppliers"

IATA at the 64th AGM in Istanbul has been having fun celebrating the end of its paper trail. However it what it describes as "Historic Declaration it makes 6 points. I wont bore you with all of them except one.

• Business partners, in particular monopoly service providers, must become as efficient as airlines are now. If not, regulators must restrain their appetite with tougher regulation.

Now most of you will think this applies to Airports. But I think this is a hidden swipe at Amadeus. Notice I did not say GDSs. Amadeus' monopoly position in several areas is becoming a cause for concern. Without a shadow of a doubt they wield market maker power in both large swaths of the planet and in significant sectors.

I interpret the airlines' 4th point as a challenge.

However this is somewhat of a toothless tiger approach. Who else are they going to turn to?

At least we still have two large scale airframe manufacturers.

Cheers

Timothy

The end of the paper ticket. IATA PR (aka BS)

"Press Release: Industry Bids Farewell to Paper Ticket"

Well at least those nice people in Geneva think so. They are looking for the last issued BSP paper ticket now. I think it will be in the pacific somewhere tonight. BUT it wont be the last issued ticket on paper. Not by a long shot.

We still have a year validity of tickets that have been issued and there will be paper tickets (OK we wont be allowed to call them tickets because that is now officially banned), issued in the coming months and years. Also there is still a lot of non-IATA players issuing paper tickets, even IATA Airlines in domestic mode are going to be issuing paper tickets.

Of course if we were all very smart - we would go TICKETLESS not that expensive crapola solution called eTicketing.

Cheers

Your Humble Servent.............

Text of the PR Release follows:
May 31st 2008.

Industry Bids Farewell to Paper Ticket
Meets deadline for 100% ET

Istanbul –The International Air Transport Association (IATA) today launched a new era in air travel as it bid farewell to the paper ticket on the eve of the industry’s conversion to 100% electronic ticketing.

“Today we say goodbye to an industry icon,” said Giovanni Bisignani, IATA’s Director General and CEO. “The paper ticket has served us well, but its time is over. After four years of hard work by airlines around the world, tomorrow marks the beginning of a new, more convenient and more efficient era for air travel.”

The history of tickets…

Paper tickets date back to the 1920s. Each airline used a different form with varying rules. Airlines soon recognised the need for standardisation of traffic documents, regulations and procedures to support the growth of an industry that spanned the world. In 1930, the IATA Traffic Committee developed the first standard hand-written ticket for multiple trips. These same standards served the industry into the early 1970s.

The first ticketing revolution occurred in 1972 with automation. The IATA Billing and Settlement Plan (BSP) for travel agents began in Tokyo that year. This led to the birth of the IATA neutral paper ticket. For the first time the IATA logo appeared on the cover of tickets that could be used by any travel agent to ticket journeys on almost any airline in the world.

The next revolution took place in 1983 when the system was further automated with a magnetic stripe on the ticket back. This allowed all of the ticket information to be stored electronically on the ticket itself and it could be used as the boarding pass as well.

At its peak, 285 million of IATA neutral paper tickets (both versions) were printed in 2005.

The first e-ticket was issued in 1994. By 1997 IATA had adopted global standards for e-ticketing. But the evolution was slow and by May 2004, only 19% of global tickets were electronic.

Simplifying the Business

At the 2004 Annual General Meeting in Singapore, the successive crises of war, terrorism and SARS were still being felt, the price of oil was approaching US$40 per barrel and the imperative for cost efficiencies was critical. IATA presented a plan for Simplifying the Business, the highlight of which was to achieve 100% e-ticketing.

Over four years, IATA deployed a global team of 150 people to work with airlines and system providers around the world to facilitate implementation.

“In four years we achieved what many thought was impossible. We made 100% ET a reality everywhere – from our largest hubs to small remote island airports with no electricity. It is an incredible industry achievement,” said Bisignani.

“The benefits to the business are real,” said Bisignani. A paper ticket costs an average of US$10 to process versus US$1 for an electronic ticket. With over 400 million tickets issued through IATA’s settlement systems annually, the industry will save over US$3 billion each year.

Consumer benefits…

Consumers can look forward to easier travel in an electronic world. 100% ET eliminates lost tickets. ETs can easily be changed and reissued without necessitating a trip to a travel agency or airline ticket office. And they enable a wide array of self-service options such as online and mobile check in.

”With ET a reality we can now enter the next phase of Simplifying the Business,” said Bisignani. “We are moving ahead with a further revolution - Fast Travel that will provide convenient self-service options from check-in to baggage tracing and re-booking.”

Cleaning-up paper…

While IATA will no longer issue paper ticket stock, IATA neutral paper tickets issued by travel agents before June 1 remain valid for travel under the conditions they were purchased. Paper tickets may still be provided by an airline from its own offices or from a travel agent in the USA, although it is anticipated the volumes will be very low.

To complete the conversion IATA has contacted 60,000 travel agents in more than 200 countries to collect the remaining unused paper tickets in the system – some 32 million worldwide. These will be securely reclaimed, destroyed and recycled. “An era has ended. If you have a paper ticket, it’s time to donate it to a museum,” said Bisignani.

Last paper ticket ceremony photos

For more information on Electronic Ticketing and Fast Travel visit: www.iata.org/stbsupportportal
- IATA -

Contact:
Lorne Riley
Manager Corporate Communications
Tel: +41 79 542 1961
rileyl@iata.org


Editors Notes:
• IATA (International Air Transport Association) represents some 230 airlines comprising 93% of international scheduled air traffic.
• The IATA Billing and Settlement Plan (BSP) is a system by which IATA, as an independent third party, manages the transfer of money derived from cash sales of airline tickets between travel agents and airlines.
• IATA has 80 BSPs covering more than 162 countries and territories that handle some US$220 billion annually.
• When the ET project was launched in June 2004, the industry was at 19% Electronic Ticketing.
• IATA has 150 staff supporting its Simplifying the Business programme.
• IATA invested $1.3 million in an ET Buddy Programme to provide free consulting to airlines needing assistance in launching their ET projects.
• Since June 2004 IATA has held 23 workshops worldwide to support ET implementation.
• Key Dates
o IATA interline manual ticket established: circa 1930
o Transitional automated ticket (TAT) established: 1971
o IATA creates standard for Neutral Paper Ticket: 1972
o IATA launches BSP Japan and Neutral Paper Ticket: 1972
o Automated Ticket & Boarding Pass (ATB) established: 1983
o Electronic Ticket (ET) established: 1994
o IATA standard for ET established: 1997
o IATA Board of Governors pass resolution for 100% ET: 2004
o 100% ET – June 1, 2008

Timothy

IATA has more bad news – the recession bites deeper and broader

IATA has more bad news – the recession bites deeper and broader into global air transport.

IATA’s latest worldwide traffic numbers are not providing any comfort to beleaguered airline managers.

The latest numbers we are seeing from several key industry indicators are increasingly depressing. The factors affecting traffic are beginning to bite.

Witness the following:

US Airport traffic continues to slow. The extra day of February this leap year masks a flat traffic month.
Load factors are falling across the board.
Yields are significantly off
Deals – especially across the Atlantic abound even for the summer.
Premium traffic that has held up well is now declining.

The airlines are not going to be able to retire large fleets of inefficient jets because the ones that need to go are the ones that they need!

This is going to be a bumpy ride. Sorry but I am now a bear….

Cheers

Timothy

Air Travel - the New Sin Tax

Following the success of the various fees and fees being charged in various jurisdictions – the governments are beginning to use Air Travel as a tax revenue source, sadly with little relevance to the use of the funds.

So let’s look at the issues – it is not very simple. In fact its REALLY complicated.

The facts:

1. Governments need more money
2. Environment is a bigger issue now than it has ever been (thank you Al Gore)
3. Air infrastructure is creaking
4. Post 9/11 security demands are enormous
5. Growing demand (with increased spending) is moving faster than GDS growth
6. Prices of air travel has fallen and continues to fall
7. And one to come….

So with these background facts it is only natural that taxes/fees or other charges are going to be due to be paid by someone.

The US originated much of this via the various post 9/11 fees and as well the allowing of mandated PFCs (Passenger Facility Charges) which allowed individual US airports to levy fees for airport usage. But perhaps one of the most interesting issues is that the US traveling population has been paying into a fund which has been funding the feds nicely every year. It was intended for the things like new airports new runways etc etc. None of which it ever funded.

So the Brits jumped in and started charging the now infamous APD. No pretence – it’s a tax. The French however wanted to charge several taxes for things like saving Africa and the environment. But they got smart about it and actually show how much the fee is for “eco”.

Next up the Dutch… the Secretary General of IATA is now pretty pissed.

So is everyone going to do this? Probably we are going to see all manner of fees and charges emerging over the next few months and years.

You remember my 7th point above…

It’s the Chicago convention. It is supposed to be used to exempt airlines from paying taxes on international travel. Specifically it bans the taxes on fuel. In the past it has been used as logic for avoiding all taxes on international travel as agreed by the Chicago convention which also set up ICAO as a UN Agency. The latter is important because it transcends national laws.

So bottom line… all bets are off and air travel is now a full open source for new taxes. Despite what Mr O’Leary might say – they are here to stay. We should only hope that some international rationalization of the tax regime is put into place. The only way to do that is to file a notice under GATT or some other convention. Otherwise its going to get REALLY messy. Watch for this its going to run and run.

Cheers

Here is the text of the IATA Press Release

Dutch ticket tax proposal is ineffective and inappropriate- breaches international obligations -
GENEVA -The International Air Transport Association (IATA) condemned the Dutch Government's plans to impose further taxes on air passengers. The government is planning to tax passengers departing the Netherlands by air as much as€45 citing environmental reasons."This passenger tax is ineffective, inappropriate and it breaches international obligations.It is a thinly disguised tax grab that does nothing for the environment. If anything, it is counter productive as it limits airlines' ability to buy newer, more fuel-efficient aircraft," said Giovanni Bisignani, IATA Director General and CEO."Airlines are making great strides to improve their environmental performance. Last year we saved 6 million tonnes of CO2by shortening 350 routes globally. We have improved fuel efficiency 70% over the past 40 years and forecast a further 25% improvement by 2020. The Dutch Government should be looking at what it can do to help airlines limit emissions. It can start by working with other EU governments to implement a Single European Sky that would save 12 million tonnes of CO2each year. It should also look at tax credits as an incentive to improve environmental performance rather than counterproductive taxes," added Bisignani.The passenger tax also breaches resolutions of the International Civil Organisation (ICAO) and Article 15 of the Chicago Convention on International Civil Aviation. "I am surprised that the Netherlands, as an ICAO Contracting State, chooses to ignore its obligations and trample over international agreements," Bisignani commented."We are seeing a worrying trend across Europe with governments cynically taxing air passengers for environmental reasons then failing to use the revenues for environmental purposes. These taxes are blunt instruments that just damage tourism and impact the competitiveness of European businesses. We urge the Dutch Government to rethink this ineffective, inappropriate and misguided proposal," concluded Bisignani.

Last call for paper tickets - the end of the line for paper?

With much fanfare IATA announced that it was placing its last call for paper tickets.

However let us be a bit of a naysayer here. We see there are 2 issues.
A) will ALL the world world's airlines meet the deadline?
B) is the absence of paper tickets really a savings to the airlines?

The answer to A is definitely NO. There will be (and I will eat something vile in public if anyone can prove to me that all airlines meet the May 2008 deadline). Specifically Airlines in Asia, Latin America, Africa and the Middle East are struggling with this deadline. Some are just accepting that they will be cut off come the end of May. We believe that IATA needs to arrange some accommodation for these (typically smaller and less financially able) carriers. We are concerned that there will be a new class division of "Have" vs. "Have Not" airlines which will last for some time. Be careful IATA what you wish for.....

The issue of B is more interesting. Having spent years involved in the revenue accounting, ticketing and financial fulfillment side of air transportation - we can assure our dear readers that the processes are less than exemplary. The designs and solutions that have been implemented are rather arcane in their design and in some cases diabolical in their complexity of implementation. It is here that the LCCs have provided a lesson and a model to the rest of the Industry. Ticketless - IE a completely different approach that eliminates the need for even a notional ticket (as e-tickets do) - is a far better solution for simplification and reduction in paperwork and administration. We believe that after May 2008 - and independently of IATA - we will see a greater move away from the e-ticket idea to a pure ticketless implementation.

Of course this begs the question - if we have pure ticketless - should IATA have any say or even sponsorship of such systems as BSPs? Given the removal of anti-trust immunity and the general improvement in commercial conditions worldwide, we believe now is a good time to start to think of a Non-BSP world. If IATA was really keen to reduce the complexity of the business then they should set a date (2010 sounds nice) when they sunset BSP.

OK Mr. Bisignani, why not consider this for the future? Why not drive this home. It would result in a far better solution for the world and a significant savings for the world's airlines not to mention a reduction in your own organization which in turn would result in savings to your members.

Tear Down the Wall: IATA Block Exemption is cancelled

The EC in its infinite wisdom has chosen not to renew the Block Exemption it gave last year to the IATA Passenger Tariff Conference.

For once this is a good thing as it slowly breaks down the barriers to normal behavior by the airlines. For many years the IATA carriers (now numbering approx 250) have benefitted from operating under supra national rules. In the years before GATT and with certain strange legal mechanisms that actively worked against global trade this was understandable. With GATT and better legal frameworks for international trade, these protections are not nearly as relevant. Perhaps the biggest most telling argument is that there is now a significantly larger non-IATA component to air travel - at least regionally within each Traffic Conference. The second component of this is the alliances which means a single ticket and carrier listing even if the metal is from another airline. According to the EC now less than 5% of travel within EU (defined as EC to non-EC countries) is interlined. This therefore negates the need for the exemption.

We are encouraged by this move to make the airline world more competitive. Perhaps now IATA can go back to being an association of talkers.