IBM and Airline Industry Link Up On E-Ticketing System

Recognizing that consumers have taken a shine to electronic ticketing, and that airlines can save money in the process, the International Air Transport Association (IATA) and IBM (NYSE: IBM) announced today that they will introduce a system that will allow airlines around the world to exchange electronic tickets.

The new system is expected to be in place by the middle of next year, an IATA spokeswoman told the E-Commerce Times. When it is installed, the number of airlines offering electronic ticketing around the globe should increase dramatically.

“Many of our members are only offering electronic ticketing for their domestic flights because of the different systems that are currently in place,” IATA spokeswoman Martine Malka said from the organization’s Montreal office. “That’s why this system will be so great. The single interface will allow every airline to exchange electronic tickets with all the other participating members.”

Malka said the group’s 266-member airlines would also realize a significant cost savings over the traditional paper ticket process. Ultimately, she said, that benefit would be passed on to passengers, though not necessarily in lower ticket prices.

An American Phenomenon

The use of electronic ticketing is widespread in the U.S. and growing at a rapid rate. United Airlines, a leading e-ticketing practitioner, announced in May that 51 percent of its 7 million total ticket sales were electronic tickets. That milestone marked the first time in the industry when electronic ticket sales surpassed traditional paper ticket sales.

However, the use of electronic ticketing is not nearly as widespread overseas. With the exception of a few pockets here and there, Internet use is significantly less in the rest of the world than in the U.S. Another factor is that European air passengers, for example, are used to being shuttled to other carriers. If their systems are incompatible, they can’t complete an electronic ticketing transaction.

IATA said that any of its members that don’t have e-ticketing of their own can opt to use the new IBM centralized service and eliminate the need to build their own systems.

In a recent survey of airline executives, 46 percent said their information technology priority is to increase sales on the Internet. IBM’s 3,500 employee Travel and Transportation group is hoping to fulfill that wish with this new system.