Press Release No.:
16 November 2004
Simplifying the Business - Industry Revolution Kicks Off
(GENEVA) "After three years of firefighting, today we begin re-building the industry with four initiatives to simplify the business that will change the way people travel," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA). Kicking off the air transport industry's first working conference dedicated to Simplifying the Business, Bisignani said "Using technology effectively, we will strengthen the industry with improved passenger service and reduced costs."
The four core projects at the heart of the initiative are lead by a commitment to 100% electronic ticketing by the end of 2007. Three related projects further simplify the travel process: common use self service kiosks (CUSS) for check-in, bar-coded boarding passes and radio frequency identification for interline baggage management. All were agreed by a resolution at the June 2004 IATA AGM.
In the wake of cumulative industry losses topping US$30 billion since 2001, cost reduction is a priority. In 2003, airlines reduced non-fuel unit costs by 2.5% and a further 3.0% reduction is expected for 2004.
E-ticketing will save the industry US$3 billion annually in processing costs. RFID for interline baggage management promises improvements in handling accuracy in the range of 15%. Placed in the context of an industry that handles 1.5 billion bags per year, even with less than 1% of bags being mishandled, significant savings in service recovery costs are easily realised. Each check-in using a CUSS kiosk will save US$0.50 in processing costs.
"Whether it is saving US$9 per each e-ticket, or US$100 for each bag that is not mishandled, each project contributes to industry savings and a better experience for our 1.6 billion annual passengers. This is a win-win proposition," said Bisignani.
Individually, many airlines implemented parts of the simplifying programme. IATA's mission is to spread the benefits industry-wide with interline solutions. "For some, these solutions are already commonplace. But for others it is a complete revolution," said Bisignani. "We must all work together to ensure that the implementation is global and that every carrier is prepared."
Bill Diffenderffer has joined IATA to head the Simplifying the Business initiatives. "Bill has implemented similar industry-wide change in his work at IBM's Travel and Transport division as well as with technology providers for travel distribution. Closing the gap on differing levels of technology and development in the industry is an enormous challenge. But with Bill's leadership, I am confident that solutions will be found," said Bisignani.
"Aviation has never been afraid of new ideas. Our daily business is to do what was long thought impossible—to fly. And now 1.6 billion passengers rely on air transport annually," said Bisignani. "Successful completion of the Simplifying the Business revolution is a must. And it will require a united team of airlines, airports, and suppliers. Today is a great start," said Bisignani.
Notes for Editors
1. The IATA Simplifying the Business conference is taking place at the IATA Conference Centre in Geneva, Switzerland 16-18 November, 2004. Over 350 representatives of airlines, airports, industry partners and suppliers from around the globe are attending.
Full text of Bisignani's speech.