Linda Fox – Business is business

When is a sale not a sale? When it’s a Ryanair seat sold through a travel agent – online or offline.

Who would be as fussy as Michael O’Leary in an age when consumers have a huge amount of choice on who to fly with and how to book?

It makes you wonder how much going after online agents and legal proceedings costs compared with allowing a few bookings to go through intermediaries.

Or, is the airline balking because it is becoming significant volumes of bookings and it has invested millions in developing and marketing its website. There is also the ancillary revenue to be taken into consideration. Everyone knows airlines are seeing substantial earnings from ancillary products but if the seats are going through another channel then so are the other elements.

History shows that if you make it difficult for consumers then they’ll just choose a different option. No one is saying that Ryanair’s website is not easy to use but there will always be some who don’t want to do that for various reasons.

The Kayak and American Airlines debacle is another, although slightly different, example with the airline pulling its fares feed from the meta-search site just over a month ago.

The point is, can airlines, with the current economic backdrop of rising fuel prices and recession fears, really afford to turn down bookings, especially from online distributors?

An episode of ITV’s Tonight programme two weeks ago on the end of cheap flying was all doom and gloom. Experts predicted the end of cheap deals, less choice for consumers and more airline collapses – as many as 50 by the end of the year. It seems 20% of UK-based airlines are ‘on the verge of collapse’.

They also urged consumers to seek insurance against the collapse of scheduled airlines – bringing the whole protection issue into the spotlight again.

Flick over to BBC’s Panorama programme on the same night and a survey completed by almost 9,000 shows rising employment figures and inflation at its highest for 10 years. Some 1,300 in the report said they would be spending less on holidays.

Already in recent weeks Zoom Airlines has collapsed and XL Airways has axed its winter programme to the Caribbean; there are also rumours about other airlines in trouble circulating the industry.

It’s not unreasonable to think that airlines might be happy to get the business they are getting especially with the volumes of new aircraft on order versus predictions of consumers tightening their belts and people taking less holidays.

The amount of light at the end of the tunnel depends on who you talk to; apocalypse from Chancellor Alistair Darling, while the industry remains cautious but is holding its own.

Insiders say people will still travel but perhaps not take that second holiday or short break and they’ll look at their budgets a little more carefully as the cost of holidaying in popular eurozone destinations rises.

So, there will be less choice and higher prices, but that shouldn’t be a shock as many have been predicting this period of reckoning for some time.

But, to end on a positive note, it seems there will still be deals to be had and the internet will be the place to find them as price-comparison technology, social networking and ever-increasing online competition enable consumers to seek out the best value.

Linda Fox is lead reporter for Travolution

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