Monday, February 01, 2016

Case Study Ansett’s Ticketless Travel

Case Study - Ansett’s Ticketless Travel

By Peter Hanami

On 11th November 1996 Ansett Australia launched a first for the Australian airline industry, electronic ticketing to all 28 ports in the domestic market. With electronic ticketing (ET) customers no longer need paper tickets. They merely book their travel and on arrival at an airport confirm their booking by presenting photo identification. A boarding pass, receipt, itinerary and terms and conditions are still issued, but the need for a paper ticket has been eliminated.

Technology has rapidly changed the face of many industries, including car rental, supermarkets, hotels and banks, to name but a few. Industry analysts have dubbed ticketless travel the third revolution in airline travel following the invention of the jet and deregulation. Its rapid acceptance in the North American market shows a preference for this method of ticketing and Ansett Australia has adopted it in order to gain competitive advantage in the Australian domestic air travel market. It will significantly benefit their core segment, the business traveler.

Customers are the big winners of the new system as they now do not have to queue at collection points. A flexible check-in process is created and flying becomes simpler. One phone call books your seat and creates your electronic ticket. The system eliminates the need to manage a ticket from point of purchase to the end of the journey. Lost or forgotten tickets become a thing of the past. Refunds, for example, can be credited to the customer’s credit card account. Travel becomes more flexible as travel plans can be altered without the reissuing of paper tickets. Security is increased as all information is held on Ansett’s computer system, and lost or stolen tickets are eliminated. Under the old system, Ansett was reissuing over 3,000 tickets a week.

When considering the technology, Ansett had two options. They could start with a fresh sheet of paper and build their own system or they could buy a system available on the marketplace and customize it to their own needs. They adopted the latter approach.

A project team was brought together and after travelling to the United States and Europe they narrowed their choice to two systems, Continental’s EDS system and the United Airline/Air Canada system. The Air Canada version had a better fit with Ansett’s current technology and therefore became the preferred system. It had a number of benefits:

1. It operated twenty-four hours a day, seven days a week.

2. It could handle large transactions and be upgraded.

3. It provided a link into a Global Distribution System such as Sabre or Galilee so that travel agents could have access to electronic ticketing. Business booked through travel agents accounts for over 50 per cent of Ansett’s revenue.

4. It was a proven system that wouldn’t expose them to any unnecessary risk.

5. It fit their budget and time schedule

Ansett purchased the system in February 1996, and 39 weeks later the system was launched. This fast turnaround was achieved by setting up a project team of nine full time people made up of information technology and business specialists and by clear top-management direction direction and involvement.

Six main areas were identified and targeted as being critical to the project’s success. Each area had to be carefully analyzed and coordinated and the personnel trained for the implementation and rollout of the system. The areas involved

· Information Technology

· Reservations/Retail

· Ticketing (Retail/Airports)

· Airport Services

· Revenue accounting

· Sales and Marketing

Ansett was confident enough with the technology that it chose a national launch approach rather than a limited site rollout. By the close of business, forty-eight hours after the launch, over 3,000 electronic tickets had been issued, far exceeding volume forecasts.

From a business perspective, electronic ticketing provides some key benefits to Ansett. The technology introduction will reinforce Ansett’s reputation as a contemporary, progressive and innovative airline. Ansett will have the opportunity to gain a competitive advantage over its competitors in the short term which may result in increased revenue and market share. It seems from the experiences of overseas carriers that ET will become the industry standard, so Ansett’s competitors are expected to adopt similar technology. Australian Travel Reporter, October 1996, mentioned that Qantas plans to launch their own version in April 1997.

Other benefits include internal cost reductions in the distribution of paper tickets to customers. Paper tickets incur a number of costs including: ticket production, ticket security, ticket accounting, ticket printing, ticket supply/stock and ticket labour. Ansett issued 6.5 million paper tickets in the year prior to the new system being introduced. SO the new system allows this cost to be better managed. Electronic ticketing enables the automatic updating of records and storage of the record for future reference. This reduces the likelihood of fraud, as it reduces the opportunity for individuals to fraudulently alter or lose tickets. Under electronic ticketing Ansett has custody of the ticket and is therefore able to respond to fraudulent ticket or credit-card use.

The promotion of the electronic ticket product involved communication to three segments: internal staff, domestic travelers and the travel industry. Internal staff were trained on the system and kept informed by internal vehicles such as Ansett’s news video, which is viewed weekly by all staff, sales kits and staff briefing cards. Domestic travellers learnt about ET through full-page advertisements placed in major newspapers, through Panorama, the in-flight magazine, and through brochures, posters and hanging cards in retail reservation offices. A separate information page on Ansett’s Internet Web page detailed the system. The travel industry was informed through press releases to industry journals, fax streams and a bulletin on the Global Distribution Services over a four-day period.



Industry acceptance of the new system has so far been positive. Byron Roberts, national President of the Federation of Travel Agents, stated in Australian Ravel Reporter that electronic ticketing was a ‘reality’ and ‘you cannot object to an initiative that saves money’. Domestic travelers have shown their interest by the large number of electronic tickets issued, as paper tickets are still available if customers request them.

Ansett has the opportunity to claim ownership over the technology and to promote the technology so that customers perceive Ansett as being the clear industry leader in the Australian market[lace.



Questions for Discussion:

1. What could have delayed the introduction of Ansett’s electronic ticketing system?

2. How could Ansett’s competitors win back customers without introducing similar technology?

3. Discuss the importance of pre-testing a service before it is launched

4. What actions can Ansett now take to ensure that their service advantage continues?

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Copyright Peter Hanami 1996. All Rights Reserved.