It's not surprising that Asia Pacific's electronic distribution push is being spearheaded by Japan, a country renowned for its leadership in the business of high technology.

The nation's airlines have already made ticketless travel and self-service check-in and ticketing part and parcel of flying the country's domestic skies. All Nippon Airways says one customer in three uses its various electronic check-in and sales options. From July, rival Japan Air Lines began taking domestic reservations through its site on the World Wide Web, though customers can't yet pay on the information superhighway.

In Australia, on the other hand, neither Qantas nor Ansett have yet dabbled in ticketless travel or airport automation. Both are studying the concept but implementation is thought to be some time off.

The gulf between these two markets typifies the differing levels of development in the electronic distribution revolution in Asia, where markets and ideologies vary dramatically. Korean Airlines introduced ticketless travel for domestic flights this year but virtually everyone else remains at the 'serious study' stage and few will commit themselves to a timetable.

Air New Zealand says it is studying domestic ticketless travel as a priority. 'We have to maintain the competitive edge, as [the technology] poses considerable implications for cost savings.'

For the emerging markets such as China and Vietnam, more basic modernisation programmes are taking priority, although two Chinese carriers - Air China and China Northwest - do have basic Web sites.

Unlike Japan and Korea, the domestic traffic volumes in country's like Australia don't warrant the investment in sophisticated distribution technology at current prices. Some carriers, like Cathay Pacific and Singapore Airlines, don't even have home markets. As with the rest of the global airline community, moves towards international electronic ticketing are on hold and being approached with extreme caution because of the problems cross-border transactions present in terms of currency exchange, the requirements of the Warsaw Convention and immigration rules (see p24).

Robert McFadden, Cathay's manager distribution automation support, insists all these issues are solvable. 'We are studying it very, very closely and are very interested in electronic ticketing, which is really a productivity enhancer. If you look at the cost now, you have to order airline coupons, store them, ship them, collect and process them.

No-one questioned it because there was no option. If we change to ticketless travel it changes the whole sequence of events,' he explains. Carriers are uncertain of the total savings such a change would bring, though one estimate suggests it could slash processing costs per ticket from around US$8 to as little as 50 cents.

Thai Airways International is making significant strides towards automation. The carrier will start domestic trials with the Automatic Ticketing & Boarding-Pass (ATB) system next year. Suthep Suebsantiwongse, the airline's regional director for Thailand, Indochina and Myanmar, says the initial budget has been set at Baht20 million (US$1 million). But sources indicate Thai's big leap into the electronic age will come through its alliance with Lufthansa, which aims to take its ticketless travel concept global in conjunction with its all its partners by the end of 1997 (see p24).

Ansett admits the potential cost savings means the carrier is following electronic distribution developments very keenly. 'Like all travel industry people we are very concerned by the cost of distributing our product and our distribution costs have been the one major area where costs have gone up over the last few years. In just about every other area we have been able to discipline our costs.'

Virtually all of the region's operators have sites on the World Wide Web, or are very close to launching one. Still only JAL has any form of on-line booking service.

Cathay has one of the most advanced Web sites, which includes seat auctions similar to the regular ones held by American Airlines (see p23). The airline has conducted four auctions so far - selling with 400 seat lots each. These have been limited to North and South American residents but the carrier is considering using this instruments in other regions.

ANA is holding back from following rival JAL into making reservations available on its Web site until 'security issues are resolved.' But ANA stresses that the use of the Internet in Japan is limited by various factors, including the high cost of telecommunications and a lower than average penetration of personal computers. Nevertheless ANA 'views developing the web for marketing purposes as essential for future business' and has commissioned a multi-departmental working group to develop its site.

Like many airlines, ANA is reluctant to disclose the size of its electronic distribution budget but says the new communications technology is 'both a sound and essential investment for ANA's future plans.'

Cathay is similarly cautious about how it intends using the Internet. McFadden says the Net is a very strong commercial tool but the airline is still learning about it and 'we don't want to attempt to jump too far ahead of ourselves.' The carrier maintains four separate Web sites run by its local offices, in the US (which holds the auctions), Japan, Australia and Hong Kong, offering information in English, Chinese, Japanese and Korean.

Cathay plans to focus on its frequent flyers in the next stage of development, possibly offering them access to mileage statements, and is also looking to refine the system as a direct and individually tailored marketing tool. For instance golfers would get special offers relating to golf. Cathay's site attracts up to 20,000 users daily but the airline refuses to disclose the size of its investment.

Other airlines working on Web sites include China Airlines, which was set to open its home page in July, though initially it will be Chinese language only. KAL is also currently in the process of launching a site.

Unlike the more confrontational approach of US and some European carriers, Asia-Pacific's carriers are bending over backwards to avoid alienating travel agents. Ansett says that all its long term planning studies show the Internet and ticketless travel offer a big potential for making the process more efficient and cost effective. But Ansett also predicts that travel agents will handle a larger percentage of the airline's business than they do now as they manage more corporate travel accounts and put together tailored tourism packages.

While the Asia Pacific region is, in general, lagging behind North America and Europe in electronic distribution it is likely to catch up fast, once issues like international ticketless travel are resolved. No-one is questioning the potential of such systems; the uncertainty is the timing.

Source: Airline Business