Paper airline tickets on verge of extinction

By Kyle Peterson

CHICAGO, Feb 28 (Reuters) - Paper airline tickets, once the industry standard, are on the fast track to oblivion.

If the International Air Transport Association (IATA) has its way, airlines will issue only electronic tickets by the end of 2007, sending paper tickets the way of other rapidly disappearing industry services such as in-flight meals and free pillows.

Travelers who opt for electronic tickets check in for flights using a credit card or government ID. The migration to electronic ticketing, which could save millions of dollars, has been underway for more than 10 years.

The IATA, a global trade group, said that 96 percent of tickets issued by U.S. airlines are electronic, while globally 77 percent of tickets are electronic.

"The U.S. airlines can see the light at the end of the tunnel," said IATA spokesman Steven Lott. "They're definitely leading the world in terms of e-ticketing and going electronic."

IATA, which supplies paper tickets to most airlines outside the United States, plans to discontinue that service at the end of this year. Airlines that want to maintain paper ticketing beyond 2007 may continue to do so, but supplies will be costly, Lott said.

The IATA estimates the potential savings associated with electronic ticketing at $3 billion a year globally. On average, an airline spends $10 to process a paper ticket compared with $1 to process an electronic ticket. That may appeal to U.S. airlines hungry to cut costs because as paper tickets become less common, the cost of processing them will rise, Lott said.

Electronic tickets also encourage self check-in, which saves airlines money.

Travelers who insist on paper tickets may be adding to the cost of their tickets.

At Northwest Airlines NWACQ.PK, customers who demand paper tickets must pay a $50 fee aimed at discouraging such requests. Only 2 percent of Northwest's tickets are paper, said Al Lenza, Northwest's vice president of distribution and e-commerce.

"The 50 dollars isn't about a cost recovery. It's about getting people over the finish line," Lenza said.

AMR Corp.'s (AMR.N) American Airlines also charges for paper tickets when an electronic ticket is available. UAL Corp's (UAUA.O) United Airlines said nearly 98 percent of its tickets are electronic.

While U.S. and Chinese airlines have nearly done away with paper tickets, carriers in some countries in Africa and the Middle East, for example, are still using paper tickets. Until all airlines that partner with other airlines (called code sharing) abandon paper tickets, U.S. airlines must offer them as well, said UAL spokeswoman Robin Urbanski.

"A lot of it is dependent on ticketing agreements and the capability of airlines you code share with," she said.

(Editing by Toni Reinhold; Reuters Messaging: kyle.peterson.reuters.com@reuters.net; e-mail: kyle.peterson@reuters.com; Tel: +1-312-408-8581))

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