e-ticketing is a fairly new concept in India and is mostly restricted to the travel domain, especially air travel with railways coming a close second. Air India, as the chair of Board of Airline Representatives, had announced that travel agents’ commissions on international tickets would be reduced from 7 percent to 5 percent, effective May 1, 2005.

Air-India entered the e-ticketing market in 2002 with its portal where clients could buy tickets using credit cards via ICICI Bank’s Payment Gateway Service. Airlines are capping International Air Travel Agents’ (IATA) commissions, to reduce distribution costs.

e-ticketing is done through Global Distribution Systems–such as Sabre, Amadeus, Galileo and WorldSpan— which are technology platforms based on a mainframe real time computer, with a Virtual Private Network that connects travel agents with the reservation systems of different airlines. According to IATA in Asia-Pacific between January 2004 and March 2005, the proportion of e-tickets grew from 10.4 percent to almost 22 percent.

In the first three months of 2005, e-ticketing averaged 111 percent growth over the same period in 2004.

The principal advantage of electronic ticketing or e-ticketing as it is commonly known, is that it reduces booking expense by eliminating the need for printing and mailing paper documents. The time spent with the customer on a booking is a direct cost included in the distribution cost of the airline.

To reduce their ticket distribution cost, airlines had to cut out the middleman from the transaction and deal directly with the air travellers.

Most successful low-cost carriers sell over 75 percent of their tickets directly via the Internet, thereby saving the distribution cost and travel agency commission. Within a year since launch, Air Deccan has become the biggest e-commerce site in India with daily ticket sales in the range of Rs 115 million ($0.26 million). IATA has decided 2007 as the deadline for paper tickets to facilitate e-ticketing and the industry will have to adopt.

Once people realize that the benefits offered by e-ticketing are real, more customers will log on, rather than walk in.