E-Tickets & the five business functions

University Degree Business and Administrative studies

My point of departure here will be towards explaining and describing the issues that related to the electronic tickets which have been used in the early 2004 in terms of airlines industry. In this paper we are going to discuss the factors that affect the business functions by using the electronic tickets internally besides discussing these effects externally and for the organization as a whole part.

In this introduction, I will illustrate what is meant by electronic tickets and its' procedures for the passengers at the beginning in order to proceed its' advantages and disadvantages whether internally or externally.

An electronic ticket or e-ticket is used to represent the purchase of a seat on a passenger airline, usually through a website or by telephone. This form of airline ticket is rapidly replacing the old paper tickets. Where paper tickets are still available, airlines frequently charge extra for issuing them. E-tickets are also available for certain entertainment venues.

Once a reservation is made, an e-ticket exists only as a digital record in the airline computers. Customers usually print out a copy of their receipt which contains the record locator or reservation number and the e-ticket number.

Checking-in with an e-ticket the passenger usually comes to the check-in counter and presents the confirmation or reservation code. In some airlines it's not even necessary to present the code, as the reservation is confirmed solely on the basis of the passenger's identity. After confirming the reservation, the passenger checks-in his/her luggage and is given a boarding pass.

Having an e-ticket also allows any passenger without luggage to check to completely skip the check-in counters and proceed directly to security. The option to check-in online is available on some airlines. A passenger enters their confirmation number at the airline's website, and the passenger prints the boarding pass on their home printer. Online check-in is typically permitted up to twenty-four hours before the flight's scheduled departure time, though this may vary by airline. On airlines without assigned seating such as Southwest, it typically guarantees a passenger early boarding and a better seat. Besides identification, the boarding pass that has been printed is all that needs to be presented upon arriving at the airport. On airlines without online check-in, the check in may take place at a self-service kiosk in the airport, or at the check-in counter.

A boarding pass is required to board an aircraft; in some countries, such as the United States, it is also needed to pass through airport security checkpoints.

Finally, as part of its five key projects to simplify the travel business, the IATA has instituted a program to switch the industry to 100% electronic ticketing. The association says the program would result in upwards of US$3 billion in annual savings.

In 2004, IATA Board of Governors set the end of 2007 as the deadline for airlines to make the transition to 100% electronic ticketing for tickets processed through the IATA billing and settlement plan; in June 2007, the deadline was extended to May 31, 2008.

E-Tickets & the five business functions

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E-Tickets & the five business functions

The Finance and Accounting department

After the International Airline Transport Association has launched the e-tickets, too many airlines have directly adopted this new tool for too many aspects that by applying it will boost their businesses. From the finance and accounting view, or lets say financially speaking, the e-tickets has absorbed too many costs on this department which in turn made a profit by up to certain degree by its' saving on the paper tickets. As I have made phone interview with the finance and accounting department manager at King Fahad International Airport, briefly he analyzed the situation by making a savings to the business with around 15%, which means a drop in the costs and a huge step in profits by 15%. He says that after adopting this method, the bulk basis which were made to buy the paper have been reduced too much, for example, he said that annually we have around two million people who travels through our airline locally and internationally, and the paper ticket cost was around two riyals and seventy five cents. So, the total cost for those two million passengers reaches to five million and five hundred thousands riyals annually on a scale of two million passengers. Nevertheless, there is a cost reduction on the system maintenance to avoid it get it down and up dating it periodically. This method he claimed have reduced too many costs also on the basis of the labour rate hour, by instead of wasting time on tracking the costs for each passenger who uses the paper ticket and to be entered in the system, now we have enough time to focus in generating more profit and making good services.

The Marketing Department

At this part of the system, the marketing department has the most contribution of the advantages adopted by the business to use this kind of method, because simply the have offload some of the silly and routine work for passengers to the passengers themselves. In other words, this method have allowed the airlines companies to transfer this kind of work from internal to external and to be filled by the passengers themselves using the telephones of the website and to have as much as he wants from printed copies. As I have said before that this technique have boosted the efficiency and effectiveness of the airline employees to focus and emphasis on better functions and services.

The Human Resources Department

Also this part of the business has received and advantages either. Simply, instead in recruiting employees in very easy job descriptions and very little responsibilities and making training programmes for these new employees, the can recruit them in better job titles and training them. However, this department also can work more heavily on process innovation and employees' evaluation to improve the services offered to passengers and customers, which is good also to mention that focusing on the process innovation contributes in making cost reduction as long as it's a service company.

The operational Department

This department has the time now to focus more on operational activities such as keeping the passengers comfortable and feel relax, minimize the crowdness on the gates, to offload themselves from the responsibility of loosing luggage's up to certain degree, more time on security issues and improving better services inside and outside the airport for passengers.

E-tickets effects on the business five functions

At this juncture, I'm going to illustrate the explain the effects of using the e-tickets in compare with paper tickets including in that the business functions which will be highlighted to indicate that it belongs to one of those departments.

Marketing wise, there are two types of tickets that you'll encounter when using an airline, namely the paper ticket and the electronic ticket (also known as ticket-less travel). Paper tickets are quickly being painted with dinosaur strokes - they somehow seem less current. Before weighing in on such perceptions, it is important to look at the advantages and disadvantages of these two types of tickets.

Paper tickets are so named because the flight coupons (the pieces of paper that contain the exact flight information and are labelled as flight coupons) are in paper form. With an electronic ticket, this information is held within the airline's reservation system, and is indicated as electronic tickets when you check in. The passenger travelling on an electronic ticket is given a copy of the itinerary, and the contract of carriage.

These documents are not a ticket but serve as an indication that you have an electronic one. With an electronic ticket, you do not have the physical ticket in hand. Knowing that paper and electronic tickets are different isn't really enough though; it is important to know what the positives and negatives are as well.

Paper tickets are particularly useful if your flight is cancelled because of a mechanical or another airline-related problem as opposed to a weather issue. Certainly if a cancellation is weather related, you are stuck. However, if it isn't and you have a paper ticket, you may have a world of options that you possibly haven't considered. If you have a paper ticket on a major airline and are flying out of an airport where another major airline also flies to your destination, having a paper ticket can serve to your advantage. If your flight is cancelled, you can ask an agent at another airline whether they will accept your ticket (more difficult to do if there is more than one terminal that airlines fly from to your destination). Often the other airline will, and you are now ahead of those on electronic tickets. You see, with an electronic ticket, because you do not have a physical ticket, you are more at the mercy of the airline you are booked on. And in the case of a non-weather related cancellation, you will be put on the next available flight on that same airline, even if it is hours later.

Paper tickets can also be advantageous in situations that don't involve cancellations. Let's say that you are checking the schedules to your destination and discover a more convenient time on another airline. With a paper ticket, you may just be able to switch airlines, particularly if it is a domestic ticket (and not on a charter airline). If it is an international destination, don't bother, as the rules of international tickets vary a great deal, whereas domestic ones are often incredibly similar. I'll demonstrate by example. A much unspoken rule at a major airline was to accept tickets from other airlines if the passengers showed up at check in. It was a large airport with numerous terminals, and a number of airlines served the exact same route. So agents were instructed to scoop the passenger, which meant accepting the passenger's ticket from another airline and taking (scooping) some of the other airline's profit. This does not occur on a consistent level at every airport, but it does happen and could serve to your benefit if you have a paper ticket.

Operationally, Ticket-less travel means that your ticket is never lost or stolen. If you lose the documents that the airline sent you, they can produce another copy at the airport. For many people, the fact that you cannot lose the ticket is the saving grace of an electronic ticket. It is really quite remarkable when you realize that there are a lot of people who have accidentally left their paper ticket at home, or the office. Unlike electronic tickets, if you leave your paper ticket at home you will either have to pay a fee to have the ticket replaced (if it is a discounted ticket), buy an entirely new ticket (as is often the case with full fare tickets), or not be able to travel at all. Electronic tickets eliminate this possible stress, and for many travelers, particularly frequent travelers, not having to worry about a forgotten ticket is a big selling point.

So where do I stand on the subject? If you have ever lost a ticket or worried about forgetting it, there is no question that electronic tickets are better. For international travel though, I have always felt more comfortable with a paper ticket for going through customs. But like choosing chicken or beef, paper or electronic is often just a matter of taste.

Financially, E-tickets are sometimes not available for some flights from an airline which usually offers them. This can be due to a number of reasons, the most common being software incompatibility. If an airline issues tickets for a code share flight with another company, and there is no e-ticket interlining agreement, the operating carrier would not be able to see the issuing carrier's ticket. Therefore, the carrier who books the flight needs to provide hard copy versions of the tickets so the ticket can be processed. Similarly, if the destination airport does not have access to the airline who booked the flight, a paper ticket needs to be issued.

Industry discount (ID) tickets also tend to be issued on paper if they are valid for more than one airline, and if the airlines that the tickets are valid for do not have an interlining agreement. Since e-ticket interlining is still the exception rather than the rule, tickets valid for more than one airline are usually issued on paper.

Currently the ticketing systems of most airlines are only able to produce e-tickets for itineraries of no more than 16 segments, including surface segments. This means that tickets involving greater than 16 segments, such as Round the World tickets are issued on paper.

However, some airlines have made some restricted policies according to the passengers and changing their tickets by adding some additional fees for their changes, confirming and attending to the flight on their times in order to avoid and prevent losing their passengers and customers to less-expensive airlines which are non-refundable.

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