By Dr. Baba Yerra
The IATA StB project impacts several current systems. It should be remembered how the transformation from paper ticketing documentation and paper ticketing printers to online electronic ticketing took place almost overnight. It was a significant move and enabled a paradigm shift in the commercial aviation industry, with efficiency and savings positively gaining in the process. Apart from saving the stationary costs of the paper ticket and ticket printers, it brings considerable savings in the processing costs and speed of delivery.
As we are now aware, “Electronic Ticket” (ET) is a virtual version of the old “Paper Ticket.” It moves across various systems in its life cycle from issuance to closure without manual interference.
It was a real revolution. Just look at the fallout.
- Industry estimated savings $3 billion per year
- Airline continued access to 60,000 IATA travel agents around the world
- Airline continued use of standard IATA interline agreements
In the operational mode, after the E-ticket was implemented across the global network of IATA carriers, many more beneficial features were observed, which were not originally envisaged. These came as a welcome bonus.
The ET placement aims to eliminate these cost drivers, enabling 100% cost savings, actually eliminating them from the equation. These cost drivers are:
Ticket printing costs, including the thick paper wallets to hold the hard copy
- Ticket distribution and fulfilment costs, including postage and courier
- Manpower costs of allocating staff to manage hard copy value documents safe custody.
While this may seem as stating the obvious, only after implementation was the enormity such changeover experienced. The physical savings were only part of the story.
Another central area that enjoyed a salutary advantage was ground handling, meaning the check-in, boarding and airport services. Related cost drivers were substantially reduced by the use of E-Tickets at departure. That was another benefit since ET can be issued and emailed to the passenger without contacting the airport ticket counter on departure. As a result, the shift substantially reduced the airport’s labour costs attributed to handling and processing of paper tickets.
As far as revenue was concerned, it led to many improvements and added to efficiency across the board.
- Faster and more accurate sales data
- Savings on processing paper-based tickets coupons, sorting distribution and mailing.
- ET data transmitted electronically to revenue accounting systems.
- Manpower costs of revenue accounting staff involved in sorting, handling, storage and receipt of paper-based coupons are eliminated with ETs, including scanning and data capture of these coupons.
- Another cost driver is accurate and timely revenue reporting, which adds to the value of the earlier revenues position.
These were all front offices, so to speak, behind the scenes, things got a lot better. One of the areas that offered fiscal relief was Interline Billing – the cost drivers addressed in this area are primarily the speed and accuracy of transmitting interline ticketing data by ET compared to hard copy tickets, which was so much faster a genuine saving.
The buoyancy to the bottom line was reflected in the handling and mailing of paper-based interline coupons for outward and inward billing since they were eliminated.
The advent of ET brought about seamless integration with industry systems for interline billing and settlement. Then as these plus points accumulated came the upgrade in security measures.
Revenue Protection improved exponentially with a marked drop in fraud. Unlike paper tickets, ET is stored electronically in the ticketing database and cannot be lost or stolen. This also eliminates fraud from counterfeit tickets, which was once a menace in the industry. Electronic ticketing also prevents illegal coupons “out of sequence”, booking class abuses, revalidation sticker abuse, all of these bad habits prevalent during the hitherto paper ticket era.
In addition to eliminating the aforementioned cost drivers, electronic ticketing has brought many new previously not envisaged benefits.
To understand the effect of a particular fare or price of a journey sold in a market, Electronic Ticket immediately captures data when such prices are given an ID reference. Then again, revenue generated by a flight can be captured within 24 hours by accumulating the revenue data from the uplifted ET coupons.
This is a great contributor to the decision-making process in managing route and fleet planning, yield and revenue optimisation. E-tickets have been a winner all the way for the industry and the passenger.
About The Author
Dr Baba Yerra is a management professional, academic, author and research scholar in commercial and operational components of aviation and various affiliated industries. He became the IATA StB champion for Emirates and pioneered the introduction of Electronic Ticketing in the Middle East (2005).
