Euro crisis worries airlines, but progress marches on

Troubles in the Eurozone have caused the organization representing 240 of the world’s airlines and 84% of global air traffic to revise its overall outlook for the airline industry.

Based on current actions being taken to try to avert a credit crunch in the Eurozone and additional measures central banks are expected to take to avert financing problems facing Italy and Spain, on Wednesday the International Air Transport Association (IATA), downgraded its central forecast for airline profits from $4.9 billion to $3.5 billion for a net margin of 0.6%.

“The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the Eurozone sovereign debt crisis. Such an outcome could lead to losses of over $8 billion—the largest since the 2008 financial crisis,” said Tony Tyler, IATA’s Director General and CEO.

Tyler was speaking at a meeting held at IATA’s headquarters in Geneva, Switzerland, where a wide variety of ‘state of the industry’ reports and forecasts for security, safety, the environment and other aspects of the airline industry were also presented.

Now that so much of the check-in process is done electronically via kiosks, the web and mobile boarding passes, Paul Behan, IATA’s Head of Passenger Experience predicted that the ‘boarding pass’ will soon replaced by a ‘boarding token’ and said that “baggage processing, is still one of the greatest challenges in terms of simplification.”

Behan described several trials currently underway that allow travelers to print their baggage tags at home and another in which Radio Frequency Identification (RFID) has been embedded right into a suitcase. “This trial simply showed that you can embed an RFID baggage tag, program it at a baggage drop and then use the tag for sortation,” said Behan, but he said the next step is to use the system to make “interaction-free and tag-free baggage drop a possibility.”

Behan also noted that while many airlines already offer the ability to register a lost bag claim online, IATA is working with airlines to move the baggage tracking systems from interactive to proactive.

For example, he said that instead of having a passenger wait to see if their bag shows up at the baggage claim, “The passenger might get a proactive text or phone message from the airline saying they already know there’s a problem with a bag and that the process of locating their bag has begun.”

In the area of security, Ken Dunlap, IATA’s Global Director Security and Travel Facilitation, outlined ways in which airlines are working with airports and governments on a “checkpoint of the future” designed to change the passenger experience and enhance security. He said that while far more high-tech than today’s checkpoints, as designed, the checkpoint of the future only uses personal data about passengers that has already been gathered by other organizations. “That data is now used at the end of the journey [i.e. at customs and immigration]. We want to use it at the beginning of the journey as well to increase security.”