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Executive Summary
Distribution costs are the second hig hest costs for airlines; e-tic keting saves $ 10 costs per paper tic ket for airlines , it also saves labor costs in revenue accounting, reduces total transaction costs of makinga booking, for airlines
H o w It W o rk s
E -tic k e t
T h e c a p a bilities o f In te ra c tive S e ll is a p re re q u is ite fo r e lec tro n ic tick e tin g , th is so p h is tic a te d to o l c re a te s a tick e tin g m es s a g e in E D IF A C T fo rm a t th a t is s e nt to a irlin e a t th e tim e o f tic k e tin g . T h e s ys tem th e n p ro vid e s in s ta n t a c k n o w le d g em e n t a n d trac ks the c u rre n t s tatu s o f th e e lec tro n ic tick e ts w h e th e r th e y a re flo w n , c h e ck e d in , re fu n d e d , e xc h a n g e d , o r vo id e d . G D S p ro vid e s a n in te rfa c e fo r s u b sc rib e rs to vie w th is d a ta fro m yo u r e le c tro n ic tick e tin g d a ta b a s e fo r s u bs e q u e n t p a ss e n ge r s e rvic in g.
1.C re a tio n o f E T R te m p la te T e te type m e s sa ge to a irline
record of ticket details, keeping status of the ticket updated at every stage as the passenger uses each of the flight coupon, on post flight reconcile payments , process refunds , reissues or to generate management reports. E-ticketing has grown rapidly since its inception in 1997, mainly due to its cost saving feature for airlines. IATA has resolved that no airlines will issue paper tickets after 2007. E-ticketing, emergence of the internet websites by OTAs(Online travel agents) and airlines backed websites such as Orbitz, Hotwire have already transformed the distribution supply chain for airlines, since 2001. The complexity global electronic ticketing solution is compounded when e-tickets are interlined and used by different legacy CRS(Computerized Reservation systems) of user airlines.
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Electronic ticketing for airlines: A position paper Infosys Technologies In the late 1980s , electronic distribution of the airline product was pioneered by the Global Distribution System (GDS) industry . Now the GDS industry is being challenged by the internet, Electronic ticketing may offer an opportunity for the GDS to stage a comeback while they help airlines reap benefits of cost advantages of inter airline e-ticketing . A Global Interline electronic ticketing solution will have to be anchored by a leading GDS, or a leading IT provider like IBM, SITA, to bring cost benefits to the airlines and convenience to the air traveler in the 21st century. IBM, SITA as well as GDS like Amadeus are spearheading efforts for a global inter airline e-ticketing solution and E-ticketing is essentially all about managing electronic data processing such as electronic image creation, sharing the data, communications protocols, settling interline billings, processing data for interline billings, revenue accounting, allocation of revenue , reconciliation. Infosys offers to partner with leading airlines in evolving interlining of e-ticketing solution.
Key Questions
a) How long it will take for e-ticketing to transform the distribution supply chain of travel industry? It was only few years ago that airline industry migrated from hand written tickets to automated printed tickets from a common BSP ticket stock. b) Airline websites in USA account for more than 60% of online travel, enable bookings on own airline . Ability to make bookings on more than one airlines , issuing e-tickets valid on many airlines will involve MITA(Multilateral Interline Ticketing Agreements) between different airlines, uniform e-ticketing standards for managing e-ticketing database. IATA working group is setting standards for e-ticketing. However who will take a commercial lead in integrating airlines under one e-ticketing technology platform? c) The GDS, backed by IBM main frames, set foundation of electronic distribution for airlines in the late 80s. Can the GDS industry now lead airlines to a e-ticketing solution with interlining capabilities?
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Electronic ticketing for airlines: A position paper Infosys Technologies d) The airlines in North America are setting pace for rapid migration from paper tickets to e-ticketing by 2007. However the slowest ship in the fleet decides the speed of the entire fleet, and it is the slow moving pace of e-ticketing in Asia, Africa , that will slow down airline industry s migration towards to a Global interlining e-ticketing solution. When will airlines in Asia, Africa break the technology as well as financial barriers to migrate towards e-ticketing? e) How will e-ticketing solution work when thousands passenger are stranded due flight interruptions due natural calamities, airline resorting to strike, cancellation of flights due weather, or engineering delays? Will the additional complication of e-ticket exacerbate the situation while airline staff struggle to handle unusual events like above? How can an airline carry out transactions such as endorsement of tickets, withdrawal of incentives, refunds, rerouting of tickets issued for e-ticketing? f) As per Airline IT Trends Survey 2004, average time scale for airlines to use e-ticketing for majority tickets sales will be 3.7 years.
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This paper outlines Infosys position with respect to implementation of e-tic keting technology for airlines. We describe, in this paper, our vision about the adoption of etic keting technology in various regions of airline industry. Let us start with a brief overview of the e-tic keting technology and related developments.
What is E-Ticketing?
instantly advises the airline(s) about details of the purchased ticket .This ticket record is stored in the ticket issuing airline's computer system, based upon which boarding card is issued to the passenger at airport, on presentation of personal identification. Since its inception in 1995, the use of e-ticketing has grown at a rapid pace. E-Ticketing frees an airline customer from the need for a paper airline ticket for boarding an aircraft. An e-ticket stores computerized passenger travel information for airlines, reduces ticket deliveries for agencies, eliminates lost tickets for passengers and provides them last-minute change options and faster airport check-in.
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Electronic ticketing for airlines: A position paper Infosys Technologies forecasted that by 2010, nearly 80 percent of tickets issued in the United States and the majority of tickets worldwide will by electronic.
Stages of e-ticketing
Three stages of E-icketing
Creation of electronic image
Updating status of ET
extended even to those passengers for whom paper tickets have been issued. Electronic Image allows to access the same comprehensive passenger information you get with electronic-ticketed passengers. This information provides valuable marketing intelligence . Electronic Image also provides U.S.based airlines with an efficient means to comply with the Air Transport Association s latest resolution addressing increased air travel security. Creation of electronic image completes the advantages of Electronic Ticketing. It extends the real-time exchange of ticketing data to the more traditional ATB and OPTAT paper-issued tickets.With Electronic Image , airlines capture and transmit a full and complete accounting of each ticket.
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feature. A historical record of each ticketing transaction is maintained on the eticket record. The ET record is stored in issuing airlines database. A coupon status indicator appears against each flight coupon. These codes are not to be confused with the reservation status codes such as WL for waitlist, HK for
confirmed, etc.
Status Indicator A C E F I L N O P R S T V X
What it means Coupon under airport control Coupon checked in Coupon reissued, exchanged Coupon flown, used Irregular operations Coupon lifted, boarded Coupon notification, airline Coupon open for use Print, Coupon converted to paper doc with same ticket number Coupon/ticket refunded Coupon suspended by airline Sale transaction was issued as paper ticket Coupon voided Print, Coupon converted to paper doc with different ticket number
Revenue Accounting
after all the travel is complete and data entry of all elements of the coupon is then entered into airline database, either physically or through its optical image.
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Electronic ticketing for airlines: A position paper Infosys Technologies The value of coupon which is uplifted is then prorated for interline accounting, through IATA-BSP. In case of e-ticketing, the revenue accounting work is cheaper, faster and more efficient as valuable marketing information is readily available in electronic form and there is no need of separately entering data fields of the ticket.
In mid 80 s, the GDS enabled inter-airline connectivity as well as established a communication link between airline and the travel agent. GDS also played a major role in migration of airline industry from handwritten tic kets to printed tic kets from a common BSP tic ket stoc k.
MC/Marketing carrier
OC/Operating carrier
OC/Ground handler
1 MC PNR 3 8(10)
MC/ET database
MC PNR
OC PNR ?
OC/ET database
OC DCS
7(9)
MC/RES will pass information about SSR TKNE and SSR FOID to OC/RES for passengers booked on MC marketing flight (5). Since OC is Operating carrier, OC/ETS must request Airport Control from MC/ETS. When flown, OCETS will send flown status to MC/ETS.
Distribution System) to support the particular airline for e-ticketing . This is particularly important when a booking is made with the itinerary involving multiple airlines. If e-ticketing is supported, then the GDS feature creates a ticketing message to the concerned airlines in EDIFACT format (Electronic Data Interchange for Administration, Commerce and Transport ). This message is sent also to the passenger at the time of ticketing. The system then provides instant acknowledgement and tracks the current status of the electronic tickets whether they are flown, checked in, refunded, exchanged, or voided. Most GDS provides an interface for subscribers to view this data from electronic ticketing database for subsequent passenger servicing.
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Electronic ticketing for airlines: A position paper Infosys Technologies Most passengers still want or need a hard copy Passenger Receipt, and most airlines still have to deliver a paper Boarding Pass. A number of government regulations, as well as the Warsaw Convention on liability, require that various "Notices" be provided to passengers. It is not inconceivable that a smart card could be the provider of this information and might also be used at self-service kiosks to obtain the notices and necessary boarding documentation. Sabre Airline Solutions, Amadeus, IBM, and SITA , Unisys offer e-ticketing systems that let airlines interline e-tickets with one another, without expense of creating their own systems.
E-tic keting technology is about managing dynamic information flow and keep trac k of the status of tic ket throughout its life cycle during journey of a passeng er
any applications, systems, and processes within any given airline are
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Electronic ticketing for airlines: A position paper Infosys Technologies Control, Revenue Accounting, Passenger Handling.
Check-In
Electronic flow of Uplifted ticket Airline enters data on ET in their system Application of prorate rules, Bill issuing airline Thru ICH Issuing airline Accept/rejects Billing for adjustments
Revenue Accounting
Changes in Ticket: The travel agent wants to change the original bookings due to desire of passenger. Check in process : The passenger checks in with ET at the airport, which means status of the ticket needs to be updated in system Revenue Accounting: After check in , the data about uplifted ticket is entered into airline revenue accounting system, interline billing is done through IATA Clearing House , as per SPAs (Special Prorate Agreements).
developing interline global solutions for ET, summary of which processes are given as under.
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Benefits
Phase I
Issues
Phase II
The Electronic Ticket Locator System is designed to assist with go-show passengers using electronic tickets It handles alternate search criteria queries and identifies the validating carrier of an electronic ticket when the ticket number is not known
Phase III
The interline billing and pro-ration makes payments to other airlines, based on segments flown on them Expand electronic ticketing to all itineraries will realize associated savings Customer convenience Reduce FIM cost Minimize development Additional controls for bilateral or alliance schemes
The Hub provides connectivity between electronic ticketing systems EDIFACT handling Message routing Message translation Logging Reporting
printed ticket; IATA BSP distributes 300 million paper tickets a year for airlines, and the airlines themselves issue 70 million. According to other estimates, airlines can save $ 15-24 in total costs per ticket issued electronically as e-ticketing eliminates as many as 12 steps in manual handling of the ticket by travel agents. Last year, 8 million passengers, two out of three Air Canada customers, chose e-tickets. American Airlines, Continental, Delta, have announced that all their interlining partners will have to be compliant with eticketing by 2005, they plan to go 100% electronic by then.
IA TA has pledged to push paper tickets out by 2007, as etickets will reduce costs and improve customer service . A merican, Continental, Delta have already averaged over 90% mark in use of e-tickets
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Ironically, it is the leisure travelers, who first began using latest technology of e-tickets, while more technology savvy business travelers did not patronize it for fear of losing flexibility. It is possible to track unused portions of e-tickets, make changes, request refunds, or credit miles to loyalty program, all using internet, something next to impossible with a paper ticket. Business travel using e-ticket
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Electronic ticketing for airlines: A position paper Infosys Technologies means easier accounting, expense tracking, and even self booking by the executive.
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The CIO in airline has become important in delivering e-ticketing solutions quickly for its cost saving nature as well its simplification of business processes. Airline alliances will be the first ones to offer e-tickets capable of interlining among airline partners as they are most likely to have all the SPAs(Special Prorate Agreements) , technology standards in place for moving to interline e-ticketing between alliances, thereby differentiating with others. How to take the e-ticketing, after its adoption among airline alliances, to the second tier, smaller airlines is a key question that will divide the airline industry.
applications is the lack of standardization across many fronts, ranging from the different legacy systems used for reservations, ensuring that e-ticketing data remains accessible to al other participating airlines. To overcome such problems several standardization activities have started such as CUSS( Common Use Self Service) kiosks that automate check in process. The development of CUTE(Common use terminal equipment) helps airlines lower the costs of airport infrastructure and making airport check in easier experience of airline passenger. All such technological developments have speeded implementation of e-ticketing.
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Focusing on leadingairlines of airline alliances, for interlining solution of etic keting applications, is the key for developing endto-end capabilities and emergingas an important player in the e-tic keting space in airline industry.
industry ticket sales will be e-tickets. At present, N. America leads the industry with 41.4% tickets issued as e-tickets. (Source: Airline Business-Aug 04)
In Infosys view , US based airlines will completely phase out paper tic kets and reach almost 100% of e-tic ketingcapability within next three years.
irport IT trends survey reveals that within 3.7 years, majority of airline
major airlines in USA, Europe by 2007, which is the IATA deadline for migration from paper tickets to e-ticketing . E-ticketing , online booking and sales are powerful tools enabled by internet have transformed the travel distribution chain. The leading airlines now insist that their interlining partners
nfosys believes the e-ticketing technology will be fully adopted into all
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Electronic ticketing for airlines: A position paper Infosys Technologies from other airlines adopt e-ticketing which will hasten implementation of this technology in Asia , and Africa.
achieve cost reduction. Since the introduction of GDS technology, the travel industry has been at the forefront of e-business transformation. Today, the challenges are more complex. The first wave of e-business applications , eticketing for domestic travel, has gained initial acceptance, and now must expand to meet international travelers expectations. Travel is fast becoming the most-purchased product on the Internet as traditional distribution channels are giving way to online intermediaries. Travel portals and e-markets require alliances with competitors and suppliers.
irlines that invest early in e-business will outpace the competition and
ticketing applications in airlines in USA, Europe, we are aware that large scale adoption of this technology by airlines in Asia, Africa is still at least a couple of years away. While the airlines in USA, Canada race to adopt e-ticketing technology due to cost saving nature, they will make their alliance partners elsewhere to fully adopt e-ticketing capabilities .At Infosys, TnS , we believe that cost saving technology of e-ticketing in airlines can find its adoption in several other fields in transportation and entertainment industry. The
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Electronic ticketing for airlines: A position paper Infosys Technologies standards set by the airline industry can be easily adopted in railways, car rentals, entertainment, cruise, hotels industry.
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The first phase (1997-2004) of e-ticketing adoption for airlines, was confined to major airlines in USA, Europe and now the action will shift to Asia, Africa. The other dimension is that e-ticketing technology will have profound changes in several related fields like revenue accounting, MIS for airlines, ICH(IATA clearing house) operations for interline billing, automated check in counters, leading to greater coordination between eticketing data meshing with CRM (Customer Resource Management) applications. All this means airlines will have more control over their consumer data and can use it for better control over buying behavior.
Conclusions
technology for airlines, promising to save $3 billion per year. More savings are expected from saving in travel agency commissions, which are possible only due paperless transactions. Further, e-ticketing will result in quicker realization of payments, shorter working capital cycle, faster accounting systems for reporting revenues. North America is leading region in implementing eticketing technology , due to spread of internet, online travel portals and the airlines emphasis on developing own websites. Airlines in USA will continue to hasten the pace of global interlining solutions of e-ticketing, after experiencing its cost benefits on online carriage. As e-ticketing is essentially all about managing information, (electronic image creation, sharing information, communications protocols, settling interline billings, processing data for interline billings, revenue accounting, allocation of revenue , reconciliation, etc) as has been explained in this paper, Infosys can very well position their proven IT capabilities in any of the following ways; Infosys business consulting role: IATA/SITA as well as IBM are interested in hearing from prospective launch customers for e-ticketing interline solution to enable beta-testing to take place. Infosys as a business consultant can carry out a pilot for the interlining of eticketing solution to increase its effectiveness. Infosys role in internal airline IT system development: ( Legacy system protocol adaptors) There are number of off the shelf commercial packages
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Electronic ticketing for airlines: A position paper Infosys Technologies available in areas such as e-ticketing, finance, revenue accounting, CRM, crew scheduling, Internet booking engines, etc. However the integration of these packages with core sales and operating systems of the airline is often the black spot of the project. Lack of understanding of data and protocols often leads to delays, hidden costs and delay in time to market which denies full benefits of the new system. Infosys as IT consultants can expose the host data in XML with schemas which enables any solution provider to plug in their application quickly into airline environment. Infosys role in B2B system development: Airline need to optimize the value supply chain with their suppliers, intermediaries, corporate customers, where fast and efficient flow of information is the key to success. The creation of well structured XML messages enables the airline to establish business relationships that can be implemented quickly, extended easily . Infosys has proven success stories in design, development of B2B internet based portals for Reatisl Supply chain industry. Similar initiatives for airlines focusing on their corporate clients, frequent flyers, interline partners, etc, will greatly assist airlines in transition to an IT enabled airline. Infosys role in B2C system development: By converting the host e-ticketing data in XML, it is possible to match with multiple interfaces. For example, a single host transaction such as flight information , can be transformed into XML, and then retransformed into XSLT to provide a web interface, an SMS interface, a voice interface(using VoiceXML), a kiosk interface or an interactive inter active TV interface.
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Airline Guide to Involuntary Rerouting The IATA publication "Airline Guide to Involuntary Rerouting" is now available. This guide details procedures to be followed and suggests best practices when dealing with flight disruptions. Produced in co-operation with the Airline Revenue Accounting community as part of their "Vision Project" the book in particular suggests ways in which the issuance of Flight Interruption Manifests (FIMs) can be reduced and dispels some of the most common beliefs surrounding revenue accounting and FIMs. The book also comes with a high value CD-Rom incorporating an electronic version.
AGENT means an accredited Passenger Sales Agent location having direct access to one or more System Providers/Servicing Carriers. AUTOMATED TICKET/BOARDING PASS (ATB) is the form of automated ticket and boarding pass described in Resolutions 722c and 722d. It is a single copy noncarbonised ticket (normally on card stock) with each coupon imprinted separately. Each coupon used for air transport is comprised of a flight coupon and a detachable passenger coupon and boarding pass for a specific flight. One coupon is issued as the passenger receipt which together with all passenger coupons and boarding passes builds up the passenger copy of the passenger ticket and baggage check. BILLING AND SETTLEMENT PLAN (BSP) is a method of providing and issuing traffic documents and of accounting and settling accounts between airlines and Travel Agents. COMPUTER GENERATED DOCUMENT NUMBER is a document number that is computer generated and printed on the document at the time of issue. The airline code and form code may be pre-printed, with the serial number being computer generated. COMPUTER RESERVATIONS SYSTEM (CRS)/SYSTEM PROVIDER means a
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