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Airlines put savings plan on paper

Airlines put savings plan on paper

The International Air Transport Association has set aggressive new information technology-led savings targets as the faltering global economy threatens to drag aviation industry revenue down as much as US$35 billion this year.

The International Air Transport Association has set aggressive new information technology-led savings targets as the faltering global economy threatens to drag aviation industry revenue down as much as $US35 billion this year. The fresh plan, finalised in late 2008, could cut industry costs by an additional US$3.7 billion a year if carriers succeeded in eliminating all paper documents used in shipping goods by air.

The change lifts expected savings from IATA's e-freight project from $US1.2 billion to US$4.9 billion if all air freight operators were to abandon paper documentation in favour of electronic messaging.

IATA estimates that the air cargo industry sends 7800 tons of shipping records around the world each year, with each freight load requiring at least 16 sets of paper documents to reach its destination.

However, it is expected to take several years to deliver on the savings goal and the association is aiming to eliminate paper for 80 per cent of air freight shipments by the end of 2010.

If it achieves the 80 per cent target, it expects to reap about US$3.1 billion in annual savings under the revised plan.

According to IATA's revised e-freight business case, the aviation industry would save $US1.7 billion a year on document processing costs alone, with other savings expected to come from improved delivery times and reduced inventory in the air freight supply chain.

The association estimates that the elimination of paper documentation could cut the time taken to ship goods from their point of origin to their destination by as much as 24 hours.

The use of electronic messaging would also increase transparency in the supply chain and reduce the chance of shipments being delayed due to misplaced paper records.

About 25 airports, including a number of Australian and New Zealand facilities, have introduced electronic documents for air freight handling and IATA hopes that a further 14 airports will move to the technology this year.

The airports slated for a change in 2009 are in Belgium, Switzerland, China, Japan and Malaysia.

"We are committed to getting everyone involved," IATA e-freight project director Steve Smith said in an industry communique issued late last year.

"Our ability to deliver this kind of industry change is based on developing a product that works for everyone."

The e-freight project is part of IATA's Simplifying the Business initiative, which aims to strip billions of dollars of costs each year out of the aviation industry through the use of the new information technologies.

Completed programs under the IATA initiative include the changeover to electronic ticketing for all commercial flights.

Other programs under way include moves to replace magnetic stripe boarding passes with bar-coded passes that travellers can download to mobile phones or print at home.

ht handling and IATA hopes that a further 14 airports will move to the technology this year.

The airports slated for a change in 2009 are in Belgium, Switzerland, China, Japan and Malaysia.

"We are committed to getting everyone involved," IATA e-freight project director Steve Smith said in an industry communique issued late last year.

"Our ability to deliver this kind of industry change is based on developing a product that works for everyone."

The e-freight project is part of IATA's Simplifying the Business initiative, which aims to strip billions of dollars of costs each year out of the aviation industry through the use of the new information technologies.

Completed programs under the IATA initiative include the changeover to electronic ticketing for all commercial flights.

Other programs under way include moves to replace magnetic stripe boarding passes with bar-coded passes that travellers can download to mobile phones or print at home.

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