Airline E-Tickets Are Easy But Not Cheap

World Airline News, Feb 26, 1999

As the airline industry begins to offer more convenient ways to pay for tickets - electronic ticketing and via the web - it is clear that convenience does not always equal savings for the consumer.

Within the past year and a half, most of the major and start-up airlines have launched programs in e-ticketing and ticketless travel. What these programs have in common is a goal to reduce airline paper distribution costs by eliminating most of the accountable documents traditionally used in airline ticket sales. What is not as readily apparent is that in many cases, airlines are charging customers extra fees for using paper tickets in an attempt to give incentives to go the e-ticket route.

"Airlines are already saving money using the electronic ticket system, so charging more for paper tickets is not only unnecessary, but could ultimately alienate consumers that they're trying to attract," said George Hamlin, an analyst at Washington-based Global Aviation Associates.

Since late 1997, electronic and ticketless travel has been available with most major carriers including Delta [DAL], US Airways [U] and United [UAL]. Smaller airlines like AirTran [AAIR] have successfully used electronic ticketing as the only means of low-cost ticketing.

"The price for purchasing either paper or ticketless boarding passes is the same in most cases because the airlines do not and should not want to penalize the customer for a particular preference," said US Airways' Dave Castleveter.

According to United's Joe Hopkins, about 93 percent of the carrier's destinations can be reached by e-ticket and ticketless travel. "We're hoping that in the next few years, all of the cities we fly to, especially our European stops, will be included as well," he said.

In an effort to further increase savings, most U.S. domestic airlines and now the major European carriers have turned to capping travel agent commissions to maximums of eight and 10 percent on international tickets.

"There has been a continued marginalization of travel agents," said Brian Simpson, vice president of The Boyd Group. "(Airlines make) commission cuts and caps, making agents unable to book many fares. This also reduces the airlines' personalized sales staffs."

Nonetheless, the objective of all airlines is to keep the consumer satisfied. "The best way to maintain a happy clientele in commercial air travel is by keeping prices standard across the board for both paper and electronic tickets," said Hamlin. "With a solid base of loyal customers, all other issues can, and usually do, work themselves out." >>Hamlin, 202/457-0212, Hopkins, 847/700-5770, Castleveter, 703/872-5116, Simpson, 303/674-2000<<

Out With The Old, In With The New: A look at the past and future of airline ticketing

Table below.

Old                       New
Travel agents             Web site bookings
Reservations agents       Electronic tickets
CRS wars                  Internet technology
Paper tickets             Impersonal service
Long phone waits          Reduction in channels
Occasional service
  orientation             VRUs and automation
Source: The Boyd Group