International Air Transport Association members are aiming for 100% global implementation of electronic ticketing by the end of 2007 as part of an ambitious plan to reduce costs, writes Nicholas Ionides.

Member carriers approved a motion identifying that target at their annual general meeting last week in Singapore, where the past year's sharp rise in fuel prices sparked much discussion. IATA says it recognises that the target will be difficult to achieve but it is needed to save the industry $3 billion annually.

"We will drive paper tickets out of the system, reduce airline costs and at the same time improve customer service," says IATA director general and chief executive Giovanni Bisignani.

IATA says eliminating paper tickets "will save the industry up to $3 billion in direct costs alone". The association says it processes 300 million paper tickets a year, noting that an electronic ticket costs $1 to process while a paper ticket costs up to $10.

As expected, fuel costs also dominated conversation as IATA warned that the higher prices may add up to $1 billion in combined costs for member airlines each month.

Bisignani said in his keynote address that the result could be another year of steep financial losses, rather than the combined $3 billion profit forecast previously for member airlines.

"Last year we survived the four horsemen of the apocalypse - SARS, conflict in Iraq, terrorism and the economy," he said.

"This year was meant to be the first profitable year for our industry this century. But a fifth horseman - the price of oil - could add up to $1 billion per month to our costs and deny us profitability yet again."

He added that the earlier $3 billion profit forecast was based on oil averaging $30 per barrel. However: "If oil prices average $33, we break even. At $36 we could expect $3 billion in losses."

Source: Flight International