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
Showing posts with label ticketless. Show all posts
Showing posts with label ticketless. Show all posts
21 May 2008
ASTA says no alternative to ARC feasible.
ASTA the organization that represents a rapidly shrinking breed of animal formerly known as a Travel Agent, has for the past year been trying to espouse an alternative to ARC - the Airlines Reporting Corp, itself a "not for profit" that manages the commercial issuance of neutral airline tickets and clearing. (For our non-US readers the equivalent is BSP - however due to an anti-monopoly decision in the 1970s, ARC replaced ATC as a commercial enterprise).
No where in the world has such an entity ever been created with ONE exception (Russia and the TKP/TCH which is a whole other story). ASTA should have known that there is no power that they have to even indulge in such an exercise. As their very tall ASTA President and CEO Cheryl Hudak, CTC. said "ARC is a monopoly—it has no competition and accordingly there are no options for an integrated airline ticket settlement system. We had hoped to lay the groundwork for an alternative settlement mechanism, but it has become clear to us that without acceptance by the legacy airlines this, for the present, is an exercise in futility."
Perhaps the understatement of the year. Continuing she states:
"Travel agents today face a quandary when it comes to airline ticket settlement in that the current system is untenable and yet there is no viable alternative."
The task force, formed last year in the wake of ARC's announcement that it would be increasing travel agents' annual fees by 172 percent. The task force met three times over the past six months. This fee increase is the first of a series of fee hikes that will increase by 500% through 2011.
There is a bigger issue here. Are neutral tickets needed at all? I have asked this question for many years and no one likes to give me an answer. With eTicket now mandatory from the end of May, why is it necessary to use a neutral clearing house for what is now an electronic good. ARC itself is an anachronism - just like the system it serves. Airlines would save significant individual sums of money if they accepted that tickets themselves are not necessary. The saving of at least $1 per ticket across the board has to be significant. With interline tickets now less than 1% of all those issued, there are cheaper alternatives out there.
I think there will be a lot of people probably not liking this idea at the moment but it is the inevitable march of time and progress.
No where in the world has such an entity ever been created with ONE exception (Russia and the TKP/TCH which is a whole other story). ASTA should have known that there is no power that they have to even indulge in such an exercise. As their very tall ASTA President and CEO Cheryl Hudak, CTC. said "ARC is a monopoly—it has no competition and accordingly there are no options for an integrated airline ticket settlement system. We had hoped to lay the groundwork for an alternative settlement mechanism, but it has become clear to us that without acceptance by the legacy airlines this, for the present, is an exercise in futility."
Perhaps the understatement of the year. Continuing she states:
"Travel agents today face a quandary when it comes to airline ticket settlement in that the current system is untenable and yet there is no viable alternative."
The task force, formed last year in the wake of ARC's announcement that it would be increasing travel agents' annual fees by 172 percent. The task force met three times over the past six months. This fee increase is the first of a series of fee hikes that will increase by 500% through 2011.
There is a bigger issue here. Are neutral tickets needed at all? I have asked this question for many years and no one likes to give me an answer. With eTicket now mandatory from the end of May, why is it necessary to use a neutral clearing house for what is now an electronic good. ARC itself is an anachronism - just like the system it serves. Airlines would save significant individual sums of money if they accepted that tickets themselves are not necessary. The saving of at least $1 per ticket across the board has to be significant. With interline tickets now less than 1% of all those issued, there are cheaper alternatives out there.
I think there will be a lot of people probably not liking this idea at the moment but it is the inevitable march of time and progress.
04 May 2008
Who said paper tickets are dead? IATA that's who!
So the final countdown has begun. IATA has decreed May 30th will be the last day for using paper tickets. I remain a little skeptical about the whole process. The BTC group are agitating strongly against the deadline and I think with some merit.
There are a number of major problems with ET (Electronic Ticketing). It is not as simplistic as IATA and others would have us believe. Further there is still this nagging feeling that ET is – well too complex. Perhaps we need to consider pure ticketless as a better way forward.
Frankly I don’t believe the IATA statistics that 98%+ of all the BSPs are already issuing all ET. I have this vision of some very unhappy accountants at Travel Agencies (and airlines revenue management departments) in some countries who are desperately figuring out how to get those last people to use ET. And then there will be all those users out there.
Frankly I think it is all a sinister plot. If you are a conspiracy theorist – this is just another form of ancillary revenue. The number of tickets returned under ET is significantly less than was the case under paper tickets. I saw a statistic from 2000 where the number (in the USA) was 2% of all paper tickets were never used but 5% of all electronic tickets were not used and not returned for some value. 3% gross revenue boost is a better number than most airlines make in yields. All for doing nothing!
Still ET is better than paper.
Cheers
There are a number of major problems with ET (Electronic Ticketing). It is not as simplistic as IATA and others would have us believe. Further there is still this nagging feeling that ET is – well too complex. Perhaps we need to consider pure ticketless as a better way forward.
Frankly I don’t believe the IATA statistics that 98%+ of all the BSPs are already issuing all ET. I have this vision of some very unhappy accountants at Travel Agencies (and airlines revenue management departments) in some countries who are desperately figuring out how to get those last people to use ET. And then there will be all those users out there.
Frankly I think it is all a sinister plot. If you are a conspiracy theorist – this is just another form of ancillary revenue. The number of tickets returned under ET is significantly less than was the case under paper tickets. I saw a statistic from 2000 where the number (in the USA) was 2% of all paper tickets were never used but 5% of all electronic tickets were not used and not returned for some value. 3% gross revenue boost is a better number than most airlines make in yields. All for doing nothing!
Still ET is better than paper.
Cheers
09 September 2007
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.
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.
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