Issue 2: November 2005 - January 2006

Conferences have been a source of continuing education for the airline industry from the beginning, however, rarely has a conference affected change until “E-Conference”. The

E-Conference (E standing for electronic) is the ambitious brainchild of Airline Information founders Chris Staab and Roger Williams along with industry heavyweight Frank Socha. The premier edition of the annual conference was held in Frankfurt, Germany, this past September 29th and 30th. 

The event was organized into three half-day modules: E-Ticketing, E-Distribution and E-Commerce.

E-Conference clarified many airline e-commerce issues, defined and developed new e-commerce terms and achieved several important conclusions. The gathering´s main aim was to ensure that attending airlines take a holistic approach to all IT-related investments, looking at all of them as part of "E" - a new term referring to all electronic airline applications. “During and after the conference I noticed that the delegates were using just the letter “E” as a part of their lexicon, effortlessly incorporating it into both marketing and techie conversations, this is really good I thought.” said Chris Staab.

E-Ticketing: Ground handling & Hubs:

E-Conference’s airline delegates fully supported IATA´s initiative to achieve 100% E-Ticketing by the end of 2007. Many delegates also felt that two major issues were not considered when this ambitious industry

E-Ticketing deadline was decided: Ground handlers and an E-Ticketing hub solution.

Some airlines use ground handlers versus their own staff at many stations. One attending airline uses ground handlers at 98% of its airport stations, greatly impeding its ability to implement E-Ticketing, since not all of its ground handlers are E-Ticket enabled. Airlines with E-Ticketing problems with ground handlers are urged to contact IATA to raise this issue or to change to a ground handler that is E-Ticket compliant. Airlines should also mark ground handlers who are not E-Ticket compliant as not being an industry conforming body.

Attending airlines also stated that existing E-Ticketing hub solutions are not complete. Several E-Ticketing hubs now exist, allowing airlines to interline E-Ticket with the other airlines belonging to the hub. However, not all airlines are in every hub and the various hubs do not communicate with each other at the present time, forcing airlines to pay for and join various hubs to have E-Ticketing with most interline partners. It is planned for the GDS E-Ticketing hubs to communicate with each other in the future, hopefully resolving this issue.

E-Distribution: GDS versus Genie´s:

Today´s buzzword in Distribution is GNE (pronounced Genie) standing for GDS New Entrant. ITA Software´s David Peller shared with E-Conference that the term Genie was coined by a United Airlines´ employee whose young daughter was a fan of Disney´s Alladin. Because of his familiarity with Alladin, this United employee referred to the group of companies now competing with the traditional GDS as "a Genie being let out of the bottle." ITA Software is probably the most-noted of this new breed of "Genie" that claim to reduce booking fees by up to 80%. To explore the benefits of GNEs, E-Conference staged presentations by Unisys and ITA Software, as well as a heated panel discussion between representatives of ITA and two major GDS - SABRE and Amadeus.

The clear conclusion of the E-Distribution module was that the GDS and GNE´s will co-exist. GDS still have vast worldwide reach through tens of thousands of travel agencies, offering airlines truly global distribution of their product. GDS are also diversified technology companies, providing airlines with many vital IT applications.

Airlines will distribute via GNEs in specific markets and with specific agencies where possible in order to reduce costs, but the consensus of those attending was that GNEs do not spell the demise of the GDS in the foreseeable future. In fact, GNEs are expected to have only 5% of the distribution market by 2006. This being said, airlines should speak to the various GNEs to explore areas where they can reduce their distribution costs. The key is diversifying your distribution to include both GDS, for their global reach, and GNE´s, to cut your distribution costs where possible.

E-Commerce: Airline Website & CRM:

Many airlines believe that CRM (Customer Relationship Management) and a high percentage of direct bookings from their own websites are currently out of their reach. Representatives from LAN Airlines and Siebel Systems showed E-Conference that this is indeed not the case.

Airlines from many regions still believe that they cannot distribute more of their product directly via their own websites to reduce GDS costs, because only a small percentage of their customers have Internet access. Chile-based LAN´s Vice President of E-Commerce, Alvaro Sostin, explained that this is clearly not true. While Internet usage in Chile is only about 25%, over 90% of LAN´s passengers in Chile and close to 99% of its frequent flyers do have Internet access.

While the figures of Internet usage in Lan´s other markets in South America can be even lower than those of Chile, the same rule applies - people who fly have internet access, making LAN just as capable of implementing E-Commerce as airline’s in North America, Europe or any other region. LAN has taken advantage of this fact and virtually eliminated paper statements for Frequent Flyers, Membership Cards for its Frequent Flyers. Uniquely, in Chile, LAN uses the national social security number as the frequent flyer number, so no passenger can forget the number and there by it eliminated the frequent flyer membership card.

“Regarding CRM, our approach is closely related to our view of branding, you see Chris and I created the brand E-Conference one night on a cocktail napkin. But our branding agency, Right Brain, warned us that the visual part of branding means nothing unless you deliver what you promise.” Commented Roger Williams after the conference. Williams interviewed on stage Siebel’s Jason Salfen and Alvaro Sostin from LAN at the end of the E-Commerce module. He preached to delegates in his opening comments that: “high tech is useless without high touch” and that the process of assimilating your customers into the world of “E” begins with clear and relevant messaging and culminates with delivering on promises.  The lesson to be learned is that E-Commerce changes the communication medium for your message and increases interactivity, but it should not change the basic integrity of the customer relationship required for successful marketing.

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E Newsline is published on a quarterly basis by Airline Information.

ENewsline.net is a registered URL of Airline Information. Articles

for E Newsline are written by contributing airline personnel, travel

and subject area specialists, and the writing staff of E Newsline.

The opinions expressed by contributing writers do not necessarily

express the opinions or policy of the owners and officers of

Airline Information. Comments or questions may be directed to

the appropriate editorial and administrative staff listed below:

EDITOR-IN-CHIEF

Roger Williams

EUROPEAN & CONTENT EDITOR

Frank Socha

ADVERTISING AND DISTRIBUTION

Christopher Staab

LETTERS

E Newsline Feedback

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