Air ticket becomes paperless from June, amid industry gloom

IATA's direction comes at a time when the international airline industry faces a "grim" outlook as soaring fuel costs and economic turmoil hit passenger numbers. "The impact of skyrocketing oil prices and weaker economies has made its way to traffic growth," said IATA director general Giovanni Bisignani. "The industry outlook is grim at best."

According to a data compiled by IATA, the number of airline passengers grew by just 3 percent in April, against 5.4 percent in the corresponding month a year earlier.

IATA members, which make up 94 percent of the world's airline traffic began switching to e-tickets from February onwards as rising crude oil prices forced them to find ways to cut down on operating costs.

According to IATA, the move to ban paper tickets will not only help the industry save at least $3 billion per year, but also will bring a smile to the conservationists as about 50,000 trees will be spared per years.

E-tickets, IATA claims, also reduce the worry of passengers as it eliminates the chance of losing the ticket. Besides, e-tickets can be easily changed and reissued without necessitating a trip to the local travel agency or airline ticket booking office. Also e-tickets enable a wide array of self-service options including online and mobile check-in.

According to a conservative estimate, the average cost of processing paper ticket was $10 while that of processing e-ticket is $1.

E-tickets usher in "the beginning of a new, more convenient and more efficient era for air travel," IATA director general Giovanni Bisignani said.

While the history of paper tickets dates back to 1920s, the first e-ticket was issued in 1994. By 1997, IATA adopted the global standard for e-ticketing and deployed a global team of 150 people to work with various airlines and system providers around the world to facilitate implementation and transition.

According to IATA, international airlines will implement the move with immediate effect while some time has been given to domestic carriers to make the transition.

Only in unique and exceptional circumstances will a paper ticket be issued to a passenger, IATA said. For instance, the airlines can continue issuing paper tickets alongside e-tickets as some smaller airports are still not ready for the change.

If a passenger insists on having a paper ticket, he or she can contact the relevant airline through the travel agent and get one, the aviation body said.

International carriers have welcomed the move saying e-tickets will improve the convenience of the passengers and offer them a superior flying experience.

"Electronic ticketing benefits both the customer and the airline by providing greater convenience, reduced processing time, simplified operations and faster check-in. It is also paperless, and thus greener. Customer response has been extremely positive, and today e-tickets have become accepted as the norm," said Keith Longstaff, senior vice president (commercial operations), Emirates.

"Virtually all tickets now are electronic, somewhere close to 99 percent," said Tim Wagner, a spokesman for American Airlines. "Paper tickets are really only used by some smaller airlines that have not quite stepped up their technology yet. There is absolutely no reason for or advantage to having a paper ticket."

United Airlines' Jeff Kovick said paper tickets would be available for a few flights, mostly for international travelers using airlines that do not have interline agreements with each other.

In India, domestic airlines like Jet Airways, Air India, Kingfisher Airlines and JetLite have already begun issuing e-tickets.

Some of the international carriers that implemented the e-ticketing system long before the June 1 deadline are British Airways, Singapore Airlines, Air France, Lufthansa, Sri Lankan Airlines, Emirates and GulfAir.

In Africa, 87 percent of IATA member airlines have already made the switch.

IATA's move comes at a time when the international airline industry faces a "grim" outlook as soaring fuel costs and economic turmoil hit passenger numbers. "The impact of skyrocketing oil prices and weaker economies has made its way to traffic growth," Bisignani said at IATA's 64th Annual General Meeting and World Air Transport Summit in Istanbul, Turkey. "The industry outlook is grim at best."

"The situation is desperate and potentially more destructive than our recent battles with all the horsemen of the apocalypse combined," he said.

Bisignani revealed that the aviation industry would suffer a $6.1 billion loss in 2008 if oil prices continued to hover above $130 per barrel.

As recently as April the IATA had forecast an industry profit of $4.5 billion. In 2007 profits reached $5.6 billion.

"If we see $135 oil for the rest of the year, losses could be $6.1 billion," Bisignani said.

Even if the price of oil averages $107 per barrel this year, the industry would stand to lose $2.3 billion, the IATA chief said, noting how 24 airlines have stopped operating or gone bankrupt in the last six months.

Surging oil prices have also forced international airlines like American Airlines Inc., Qantas Airways Ltd. and Korean Airlines Co. to cut routes.

Others, looking elsewhere to cut costs, are charging for items such as snacks and checked luggage.

Soaring fuel costs are also forcing airlines to consolidate to survive. On April 14, Delta Airlines Inc. and Northwest Airlines Corp. agreed to merge in a tie-up that will create the world's largest carrier.

"It's another perfect storm," Bisignani said. "The spreading impact of the US credit crunch is slowing traffic...After enormous efficiency gains since 2001, there is no fat left, and skyrocketing oil prices are changing everything."

According to Brian Pearce, chief economist, IATA, soaring oil prices and erosion of consumer confidence amid global economic slowdown has left airlines in poorer state than after September 11 attacks.

"The impact is probably slightly worse than after 9/11," Pearce said, adding that he expected the downturn to last until the first half of 2009.