“After three years of firefighting, today we begin re-building the industry
with four initiatives to simplify the business that will change the way people
travel,” said Giovanni Bisignani, Director General and CEO of the International Air
Transport Association. Kicking off the air transport industry’s first working
conference dedicated to Simplifying the Business, Bisignani said “Using technology
effectively, we will strengthen the industry with improved passenger service and
reduced costs.“The four core projects at the heart of the initiative are lead by a commitment to
100% electronic ticketing by the end of 2007. Three related projects further
simplify the travel process: common use self service kiosks (CUSS) for check-in,
bar-coded boarding passes and radio frequency identification for interline baggage
management. All were agreed by a resolution at the June 2004 IATA AGM.
In the wake of cumulative industry losses topping US$30 billion since 2001, cost
reduction is a priority. In 2003, airlines reduced non-fuel unit costs by 2.5% and a
further 3.0% reduction is expected for 2004.
E-ticketing will save the industry US$3 billion annually in processing costs. RFID
for interline baggage management promises improvements in handling accuracy in the
range of 15%. Placed in the context of an industry that handles 1.5 billion bags per
year, even with less than 1% of bags being mishandled, significant savings in
service recovery costs are easily realized. Each check-in using a CUSS kiosk will
save US$0.50 in processing costs.
“Whether it is saving US$9 per each e-ticket, or US$100 for each bag that is not
mishandled, each project contributes to industry savings and a better experience for
our 1.6 billion annual passengers. This is a win-win proposition,” said Bisignani.
Individually, many airlines implemented parts of the simplifying programme. IATA’s
mission is to spread the benefits industry-wide with interline solutions. “For some,
these solutions are already commonplace. But for others it is a complete
revolution,” said Bisignani. “We must all work together to ensure that the
implementation is global and that every carrier is prepared.”
Bill Diffenderffer has joined IATA to head the Simplifying the Business initiatives.
“Bill has implemented similar industry-wide change in his work at IBM’s Travel and
Transport division as well as with technology providers for travel distribution.
Closing the gap on differing levels of technology and development in the industry is
an enormous challenge. But with Bill’s leadership, I am confident that solutions
will be found,” said Bisignani.
“Aviation has never been afraid of new ideas. Our daily business is to do what was
long thought impossible—to fly. And now 1.6 billion passengers rely on air
transport annually,” said Bisignani. “Successful completion of the Simplifying the
Business revolution is a must. And it will require a united team of airlines,
airports, and suppliers. Today is a great start,” said Bisignani.