US$6.5 billion in potential savings
Tokyo - "Over the past year we have taken giant steps towards our goal of simplifying the business," said Giovanni Bisignani, Director General and CEO of the International Air Transport Association (IATA) at the association's 61st Annual General Meeting and World Air Transport Summit. "At stake is easier travel for passengers and US$ 6.5 billion in annual savings for our industry."
IATA launched its industry-wide Simplifying the Business initiative in 2004 to remove complexity, enhance customer convenience and lower industry costs. It includes five cornerstone projects:
- 100% electronic ticketing by end 2007
- Common Use Self Service check-in
- Bar coded boarding passes
- Radio Frequency Identification (RFID) for baggage management
- IATA e-freight – removing paper from the cargo process by end 2010
IATA brings ET solutions to airlines
"Electronic ticketing levels have jumped to 29% up from 19% last year. Some 107 of our member airlines that account for about 80% of our volumes have e-ticketing capability. And today we've signed agreements with leading technology providers to help those that don't," said Bisignani.
Bisignani made his remarks following IATA's signing of Memoranda of Understanding with Amadeus, China TravelSky, Lufthansa Systems, Sabre and SITA to provide technical expertise and work with IATA to develop a range of quality, affordable e-ticketing solutions to airlines. "The US$3 billion in industry savings ET brings - is within sight," said Bisignani. "But the timeline is aggressive and there is a lot of work ahead. We need to move fast and have all hands on deck to deliver the goods."
E-ticketing to drive Common Use Self Service check-in
IATA has also signed agreements with Geneva, San Francisco, Singapore and Toronto airports to implement Common User Interface Self-Service (CUSS) kiosks. By deploying CUSS, airlines can reduce installation and maintenance costs.
;"Self service check-in technology will save the industry US$1 billion annually when we reach 40% market penetration," said Bisignani. "E-ticketing will drive kiosk use. We are readying ourselves by developing standards and a common interface for passengers and pushing this out to key airports. Today's agreements ensure we will meet our target of implementing CUSS at 5 airports by year-end."
Standard set for Bar Coded Boarding Passes
IATA has developed an agreed global standard for print-at-home, bar-coded boarding passes as well as a replacement for the airline-issued magnetic stripe boarding passes used today. "Our job now is to promote wide-spread use of this technology," said Bisignani. "Passengers will save time at check-in and airlines will save over US$ 3.50 per check-in. At 20% market penetration, that adds up to US$0.5 billion in savings."
Building a case for RFID
The association is also developing an industry standard for Radio Frequency Identification tags and expects to meet its year-end goal of having 5 RFID trials up and running. "RFID is the wave of the future. With full implementation we will improve baggage service and remove almost US$760 million in annual cost," said Bisignani
IATA and Industry Action Group set to drive IATA e-freight
;"Today you can fill 39 747-400 or 81 A-300F4-600R freighters with the amount of paper that accompanies cargo shipments every year," said Bisignani. "Every shipment that is sent has an average of 25 documents at a cost of US$30. Twenty years ago it took an average of 6.5 days to send an international cargo shipment. Today it takes 6 days, 1 day to fly and 5 days to wait for the paper. When we eliminate paper from the process we will improve efficiency and eliminate US$1.2 billion in annual cost to the industry."
"We need partnership across the entire value chain to make our industry healthy and profitable again. That includes governments, suppliers, customs organizations, air navigation service providers and airports. Everyone must pitch in to improve efficiency as we evolve into a low cost industry," said Bisignani. "It is encouraging to see we are making some headway in that regard."
By signing the MOU, each company is committed to
- Provide airlines with technical expertise to implement ET
- Devote sufficient resources to promote its ET services
- Coordinate with IATA to develop industry solutions and to offer interline services
- Maintain industry standards as much as possible for both communications and general business practices
- Develop and follow best practice for ET deployment
IATA regional teams have met with some 400 airlines worldwide to assess their e-ticketing readiness and provide support. That number includes Member airlines as well as non-member airlines that are part of the IATA Multilateral Interline Traffic Agreement.
An Industry Action Group, comprised of British Airways, Cargolux, Emirates, Fedex, Lufthansa Cargo and Singapore Airlines along with IATA is spearheading the initiative with the intent of rapidly extending the group to include forwarders and customs authorities. The target is to have early adopters on-line by the end of 2007 with full implementation set for the end of 2010.