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Airline industry shelving paper tickets          Send a link to a friend

[September 21, 2007]  NEW YORK (AP) -- Next summer, paper airline tickets will go the way of vinyl records and rotary-dial phones: They won't entirely disappear, but they'll be hard to find.

On June 1, the industry association that handles ticketing for most major airlines will stop issuing paper tickets. Some small regional or foreign airlines will continue issuing paper tickets, but they'll be few and far between.

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Indeed, even without the International Air Transport Association's directive, the vast majority of airline tickets are already electronic. IATA says paper tickets have fallen to less than 14 percent of the 400 million tickets it processes each year.

On its face, the move to all electronic ticketing is a no-brainer for the airline industry. Paper tickets cost airlines $10 to $17, on average, compared with $1 or less for electronic tickets. A fully electronic ticketing system will save the industry $3 billion a year, the IATA estimates.

"From the airline perspective, it's 100 percent upside," said Robert Mann, an airline consultant in Port Washington, N.Y.

In addition to pure cost savings, electronic ticketing lets airlines record revenue more quickly on their balance sheets and track revenue patterns. Airlines used to have to bundle and ship tickets to a processing facility, where each ticket had to be fed into a computer, before revenue could be booked or analyzed.

The industry also says electronic ticketing is more convenient to customers, who can manage their own bookings and make changes online without needing to call a travel agent or airline representative.

"It's very simple for the customer and has far superior protections for the customer," said Tim Smith, a spokesman for American Airlines parent AMR Corp.

Mann has a slightly different take.

"What's really happened here is that a lot of the work has been outsourced to the customer," Mann said.

Travelers holding electronic tickets perform most of the functions that used to be handled by the airlines, including in many cases booking their flights at a Web site, printing their itinerary, checking in for their flights online and printing a boarding pass from an airport kiosk.

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Many people prefer it that way, but those who don't will still have the option of booking through a travel agent or airline sales representative.

Lorne Riley, an IATA spokesman, says electronic tickets are more secure than the paper variety, which can be easily forged. Mann notes that many foreign countries require travelers to present a ticket for either onward or return travel to gain entry. Riley said printed itineraries are accepted in most cases as proof of electronic ticket-based travel plans.

Most airlines have already mostly phased out paper tickets -- AMR's Smith estimates that more than 98 percent of American's tickets are electronic -- so the IATA move largely just codifies an industry shift that has already occurred.

Some smaller airlines will likely stick with paper ticketing, for now.

"It's ones for whom moving to a fully electronic system doesn't make economic sense," such as small regional carriers that fly a few thousand customers a year, who will keep issuing paper tickets, Mann said.

"Some carriers ... they'll just continue to provide their own solution," said Riley.

Indeed, the IATA's move applies only to the 70 to 75 percent of overall airline tickets. The IATA does not represent low-cost carriers such as Ryanair Holdings PLC and Southwest Airlines.

"We do not have any plans of eliminating paper stock," said Jeannine Rahe, a spokeswoman for the Airline Reporting Corp., or ARC, a separate organization that processes 169 million airline transactions, including tickets and exchanges, each year.

Still, Rahe said 96.8 percent of the tickets ARC processes are electronic.

[Associated Press; by John Wilen]

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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