What is the purpose of check-in before flying?

You are correct, it is a useless extra step in the age of electronic tickets and boarding passes. Therefore some airlines (e.g. Air France) offer automatic check-in now:

Automatic check-in is a useful service that helps you save time: you
automatically receive your boarding pass 30 hours before departure. No
need to check in!

To use this service, simply book your flight on www.airfrance.com. The
service is currently available for most of our flights for both
departure and return.

I’m sure that in the future ‘check-in’ will become an outdated term, just like ‘smoking is prohibited’ is now the default rather than the exception when flying.

It’s how the airline gets paid for the flight.

At check in, the airline receives the relevant flight coupon(s) from the ticket or electronic ticket. The coupon, whether paper or electronic, is needed for the operating airline to claim the value of the flight back from the original travel agent or airline that issued the ticket, and who received the money from the purchaser in the first place. The coupon (and the money) is not transferred earlier because once it is out of the agent or original issuer’s hands, the flight related to it cannot be cancelled or changed until the coupon (or the money) is transferred back to the original issuer. Everyone has to play by the same rules, to ensure interoperability between airlines and travel agents worldwide.

However, some low cost airlines, like EasyJet and Ryanair, do not participate in the “normal” way ticket accounting is done, they just collect all the money at the time the booking is made. Travel agents who wish to sell their flights must arrange to use their special and proprietary systems. These airlines are free to arrange their check in system however suits them best. They still have an interest in knowing how many people are likely to show up, in collecting passport or immigration information where required, and estimating baggage weights for the flight. But they do not need to obey the rules on time limits.

Longer explanation.

You probably have noticed that you often buy your flight from a different company than the airline itself. Maybe you buy the ticket from a travel agent. Or perhaps even a different airline. Often many airlines are involved in a complicated itinerary, such as a round-the-world ticket.

There are many millions of travel agents around the globe and hundreds of airlines. But they are not independent. Airlines often need to work together, not just on codeshares but for interline feed too, and travel agents anywhere could be selling a journey for any airline. Therefore we need a single, universal system for moving money between airlines. It’s no good to make it up for each individual transaction, (unless you are a low cost carrier who sells your tickets yourself only for your own flights).

So how does the ticket seller who collects your money distribute it to the operating carriers, and more importantly (considering we are talking about billions of dollars moving around the globe every year) what is the audit trail for this process? How do you keep track of currency exchange movements in a fair way?

When you buy a flight or a journey, you are actually buying a ticket. This used to be a paper ticket, but now it’s electronic. But the actual process is the same as before, it’s just an electronic implementation of the paper. The ticket is your proof to the airline that you paid an organisation it trusts for the flight. The airline will only distribute its unique ticket paper to travel agents it trusts. With electronic ticketing, only travel agencies it trusts will have access to its e-ticket server. The airline may also trust the ticket paper of other airlines through a formal process called an interline agreement.

The ticket also has, for each flight, a “flight coupon” of certain monetary value attached to it. That value is determined by the appropriate fare for the journey.

At check in, in the old days, you presented your ticket to the airline. The airline detached (“clipped”) the flight coupon from the ticket and kept the flight coupon. In exchange, you got a boarding pass. At the end of the month, the airline collected all the paper flight coupons and figured out who issued each coupon based on their serial numbers. It presented the coupons back to their original issuers and in exchange gets the financial value of those coupons. Since this happens only once per month, it’s a lot easier than money moving about in each ticket transaction.

The system is exactly the same now, except the tickets and coupons are electronic instruments that are transferred in the background when you do your check in.

Also, the International Air Transport Association publishes a monthly exchange rate for all currencies based on the average over the past month, to ensure currency movements do not unfairly affect any individual carrier. If anyone has any questions about a fraudulent ticket or a defaulted payment, there is a clear paper trail to follow.

But why doesn’t the travel agent just send the money right away and give you a kind of a receipt? If you wanted to change or cancel your itinerary, the travel agent would have to claim all the money back and send it out again. When dealing with paper tickets, making changes could take weeks. Also, in some circumstances it is necessary to issue a ticket for travel occurring more quickly than money can be moved between accounts. This is particularly the case when moving capital between certain countries, such as to Syria or Iran, where capital controls may delay the settlement of such accounting. It makes sense to settle it all after travel with the flight coupon system.

So we need a universally agreed system for flight coupons to be detached and given to the operating carrier. In the case of changeable or cancellable tickets, we need a way for the passenger to say “I definitely want to exchange my flight coupon for a flight today”. The agreed time is no earlier than 24 hours before departure of the first flight on the ticket.

Although the air carrier does want to know about final loads and baggage weights, the real reason for the check in is to facilitate the coupon collection.

However, not all airlines are part of this system. Some of the low cost airlines don’t care about the interoperability advantage that this system offers. They find it is too expensive to run. So they have their own way of managing ticket sales and running the finances. Each travel agent must sign up to their proprietary system and make payments immediately. Such airlines will do the “check in” according to their own requirements.

Originally, checking in indicated (as you say) that a passenger was at an airport (possibly a different airport in the case of connecting flights) and gave the airline a better sense of who was going to fly. These days, most of the airline’s processes are done during the final pre-departure processes at the gate, so the notion of checking in equating to being at the airport has lost its usefulness. However, checking in is still an important step for contract-of-carriage reasons. Two cases to illustrate this:

• Some airlines (particularly non-U.S. ones) will completely void your
  ticket (meaning that it loses all value) if you miss a flight after
  checking in. (Most U.S. airlines do not do this.)

• Airlines will not permit checking in unless they are reasonably confident of getting you on the plane. When a flight is overbooked, some passengers holding confirmed reservations will not be checked in nor given a boarding pass. They will be given a document in lieu of a boarding pass that enables them to get through security and approach the gate. The document may look like a boarding pass, but it will not have a seat assignment. This indicates that, despite holding a confirmed reservation, the passenger really is stand-by and must be confirmed onto the flight by an agent before being allowed to board.

Note that airline systems allow agents to see where a passenger is (or at least the last known location), so they have an idea if someone arrived on a connecting flight and may be in transit towards the gate, or is in an airport lounge, etc. So much of the old purpose of checking in is done by more featured internal systems.

Checking in has to be done before the airline can confidently prepare the airplane. (Example: this plane has two broken seats. Can we use it for flight 123 as planned? Depends how many people have tickets, and even more so how many of them are actually going to fly.) Different airlines have different cutoffs, typically it’s 1 or 2 hours before the flight. If you aren’t checked in by then, you can’t take the flight, even if you could reach the gate before it left. The purpose of checking in hasn’t changed in decades – they need to know whether to let standbys on, to know whether all the luggage has been loaded, to load the amount of food and drink this many people are likely to consume, etc.

Allowing people to check in weeks before the flight doesn’t negate these benefits, unless that check in means nothing. If I check in but never come to the airport, I mess up all the planning. Most airlines now allow online checkin before you are at the airport. 24 hours is normal. Well, I still might not make it to the airport. So they need a way to cancel checkins, and they probably need some historical data on what fraction of people check in but no-show.

Many people stress and even set alarm clocks so they can check in exactly 24 hours before. You can see that letting you do it 30 days in advance might be a selling point to those customers. The firmer your customers’ plans tend to be, the less of a problem it is to the airline to allow this. What’s more, it might even out the load on a server or make it less critical if the server goes down, because most people have already checked in. Airlines with lots of customers who change their plans will see no value in knowing your opinion, 30 days before the flight, about whether you’re flying or not, so they open checkin much closer to the flight. Those who open it so wildly early must have learned that, for their customers, this opinion carries useful data.

I think your assumptions are all still valid. You need a point when you decide who gets to fly, prepare the airplane, etc. Low-cost airlines can allow passengers to check in a long time in advance because they know that, given the way their fares are structured, almost everybody will show up. Besides, they have extremely short turn-around times so they don’t need and can’t prepare the aircraft an hour or more in advance.

Note that easyjet almost does what you suggest: If you book less than X days before the flight, you get a boarding pass immediately with no obvious option to defer check-in. Legacy airlines have a lot of things to deal with (no-shows, flexible fares allowing passengers to change their plans on short notice, connections, overbooking, upgrades, etc.) that would make such a solution much more difficult to implement.