Systems

E-ticket all the way

Airline representatives give their views on how trade relations are expected to evolve once 100 per cent e-ticketing hits the Indian travel industry. By Chetan Kapoor

The travel industry is on its way to make history. Come May 31, 2008 and IATA's mandate of 100 per cent e-ticketing would be in place. This will result in many benefits to many parties involved:

• For the customer this means stress-free ticketing, no tickets to lose and no last minute queues for tickets on departure, together with greater opportunities for using self-service kiosks
• For the travel agent, e-ticketing will mean greater opportunities to manage the corporate travel experience by being able to make changes to the actual ticket whilst the customer is on the telephone
• Airlines are estimated to save approximately US$ 9 per ticket on paper

Neerja Bhatia General manager - India Etihad Airways

Orhan Abbas VP (India & Nepal), Emirates Airline

Laurent Recoura Senior country director - India, Continental Airlines

Rakesh Raicar Marketing and sales manager (India, Nepal, Bangladesh & Bhutan), Cathay Pacific

In all, IATA estimates that the airline industry could save as much as US$ 3 billion annually with 100 per cent e-ticketing - an e-ticket costs US$ 1 to process and IATA processes around 300 million paper tickets per year. In spite of these benefits that will 'simplify business', there still exists resistance from the travel trade towards e-ticketing citing commission charges. However, since e-ticketing is a global phenomenon, the trade has no choice but to evolve beyond earning commissions on ticketing. At the same time, even the airlines need to maintain their trade relationships so as to be the first choice when it comes to flying to various destinations.

Airing voices

Doing business online has transformed various industries primarily because of the cost-cutting that it brings to the table. Talking about the positives of e-ticketing, Neerja Bhatia, GM (India), Etihad Airways, says, "E-ticketing has no doubt simplified the process for the average customer and given them a sense of power. The passenger can now book tickets and even make changes. While it may be true that our relations with the trade have subsequently evolved, we continue to see significant contributions from the trade to our revenue. E-ticketing needs to be viewed as a win-win initiative that drives down costs for the travel agent and the airline."

Also, from a customer's point of view, online bookings have opened up doors that were restricted only to the travel trade during the days of the paper tickets. Today, a customer can book the ticket with multiple itineraries either with the help of booking engines on various online travel agents (OTA) or the carrier's website and print the e-ticketing from the comfort of one's home.

Laurent Recoura, senior country director for India at Continental Airlines, says, "We are strongly promoting e-ticketing and the percentage of paper tickets ex-India is now marginal. It is convenient for the customer, makes transactions (re-routing, changes) easier and is a major cost saver for us in terms of process and back office. The OTA market shares are picking up but traditional agencies are still dominant in the India market. As far as we are concerned, the online market for long-haul flights has still not matured."

According to Orhan Abbas, VP (India & Nepal) at Emirates Airline, online bookings are expected to become more popular owing to a more global and wired community that requires a 24/7 sales outlet. "The internet as a sales channel is establishing itself as an alternative and is seen as a complimentary outlet in our distribution strategy," he adds.

Trade relations

In February 2008, Express TravelWorld reported that the IATA Agents Association of India (IAAI) wanted to challenge the decision of zero per cent commission in court if it was not reviewed by the airlines. So much so that Biji Eapen, its president, was quoted saying, "The airlines say they have not made profits for years. I would like to ask them why they are still in business then. This move is nothing more than a way to wipe out smaller travel agents in the country and we are disappointed that even the national carrier has turned hostile." The above statement is a clear sign of the trade being divided over the issue. While some associations have accepted the zero-commission regime, others have not.

Contradictory to Eapen's claims however, the national carrier Air India will continue to pay commissions. According to the airline spokesperson, the advent of e-ticketing is not expected to change the balance as far as the issue of agent commission is concerned and they will continue to issue tickets for passengers except that it will be electronic and not paper. The role of the travel agents therefore is not expected to change drastically. Other airlines are all for the change as well. Rakesh Raicar, marketing and sales manager (India, Nepal, Bangladesh & Bhutan) at Cathay Pacific, feels that e-business is the future. "The system is currently in practice in most parts of the world with much success. With India featuring an increasing number of tourists each year, e-ticketing will certainly enhance the convenience of travellers, both international and domestic. Travel agents can substantially optimise their resources on ticket delivery, re-deploying them in other areas to increase productivity. Most importantly, because of the shortened ticketing and delivery processes, it opens up more opportunities to the travel agent to accept last minute business," he says. The airline claims that almost 98 per cent of all eligible tickets issued the world over are e-tickets and the percentage in India is 90 per cent.

Bhatia adds that the Indian consumer continues to rely on the trade for all travel needs, especially corporate and bulk bookings because of the ancillary services offered for long distance travel and stay. She says, "We consider the travel agent as a partner and work collaboratively to achieve our mutual goals. The way forward in many segments of the markets is to be online but substantial segment cannot and will not move online for many years to come." Nevertheless, when it comes to trade relationships, airlines are optimistic that e-ticketing will not only streamline operations but also make the travel agent focus on what they do best - service the customer better.

With inputs from Andrea Lopez