Airlines plan a renewed push to drive customers direct after a 10-year campaign to divert bookings from global distribution systems (GDSs) and travel agents stalled during the recession.
Airlines set to push for direct sales again – Sita
Airlines plan a renewed push to drive customers direct after a 10-year campaign to divert bookings from global distribution systems (GDSs) and travel agents stalled during the recession.
A decade after carriers set a target of selling 80% of seats direct – believing the internet allowed them to cut out agents – GDSs continue to process just over half of airline bookings worldwide.
The latest report from aviation IT and communications specialist Sita revealed 50.4% of worldwide bookings continue to go through GDSs, with 25.8% made direct through carriers’ consumer sites – some of which are also made via agents. Almost 11% are sold through call centres and the remainder through other airlines.
Sita forecasts a substantial shift in the next three years. It predicts almost 38% of seats will be sold direct online by 2013 – taking total direct sales to 55%.
The organisation expects carriers to use various means to push passengers direct, including mobile applications that allow booking by smartphone. It reports 70% of airlines plan to sell tickets via mobile phone by 2013 – although not all will allow changes to tickets via mobiles by that date.
Airlines will also seek to bypass GDSs by offering agents online booking portals similar to the self-booking tools provided to corporate clients. Sita believes the proportion of airlines offering such portals will more than double by 2013.
The figures appear in Sita’s Airline IT Trends Survey 2010, which concludes: “Increasing business confidence is driving…airlines away from the short-term tactical remedies [to distribution] seen in 2009. Airlines plan additional website functionalities and new web-based services to drive transition.”
However, Juergen Koelle, Sita’s senior director for portfolio marketing, told Travel Weekly: “The 80% ambition of 10 years ago was over-optimistic. Take-up [of online booking] was not as rapid as airlines expected. There are constraints.”
The biggest of these remains the challenge of booking anything more than point-to-point flights online.
Koelle said: “As soon as an itinerary is more complex or involves several airlines, it remains more difficult to book. The GDSs reacted smartly. They and agents have evolved.”
But he insisted: “Airlines are setting targets [again] in terms of online distribution.” He predicted “significant numbers” of bookings would be by mobile phone “in four to five years” as airlines invest in the channel “as a means to attract direct bookings”.
One reason behind the renewed drive is cost; another is the increased revenue that unbundling fares can bring. As Sita reports: “Most revenue generation [through up-selling] takes place online.”
A third reason is customer data. Koelle said: “If an airline sells through an agent, the agent knows the customer.”
