Lufthansa, the German airline, has implemented a smart card program that will eliminate the need to issue tickets for its most valued customers.

The product, called the ChipCard, will enable selected passengers to choose seating, automatically credit frequent-flier points, and charge their purchases to a Lufthansa account.

Ticketless air travel is becoming popular in the United States as well. Some major U.S. carriers, including Delta Air Lines and Continental Airlines, are experimenting with the technology.

Lufthansa said it will add other functions to the ChipCard, so that the card can be used to pay for such things as car rentals and hotel stays. The company indicated that it may cobrand with Visa International or MasterCard International in the future.

The fact that the card, manufactured by Germany's Giesecke & Devrient, uses a contactless chip could limit its functionality for financial services as the industry is basing its infrastructure on a chip that makes contact with a point of sale terminal.

A Lufthansa spokesman said the company is considering alternatives to overcome those hurdles.

Charles B. Fischer, general manager of the Air Travel Card, an airline charge card, said the industry is experimenting with both contact and contactless cards.

"We're at the beginning of what will be a long road to developing technology that will permit passengers to board airplanes in a hassle-free environment," said Mr. Fischer. "We're looking for smart cards to facilitate the process and interface with airline electronic ticketing systems."

He added that the airlines are working on their own smart card standards, which will be brought to the international standards organizations to develop an multi-industry standard.

The Lufthansa program has been in pilot phase since May 1995, when 600 cards were distributed to top clients on flights between Frankfurt and Berlin. It will expand to 1,000 cards, offered to Lufthansa's Senator Cardholders, the company's executive frequent-flier club.

The program will expand to frequent flier members and other interested customers in the future.

Meanwhile, 37 automated teller machine style kiosks, called "Chip-in" terminals will be installed at airports throughout Germany by March 1, when cards will be mailed. Customers will download boarding information onto the card at the Chip-in terminal. The card is then waved in front of a small terminal at the gate.

Initially, service will be available strictly for German domestic flights.

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