A survey has indicated that airlines are investing in IT to provide richer functionality to their online customers and creating additional channels to market in order to increase the level of direct sales now that online distribution is almost universal.

Published: 24 Jun 2010

A survey has indicated that airlines are investing in IT to provide richer functionality to their online customers and creating additional channels to market in order to increase the level of direct sales now that online distribution is almost universal.

According to the 12th annual SITA/Airline Business IT Trends Survey, the airlines which carry the bulk of the world’s air traffic, are on course to sell the majority of airline tickets direct to passengers by 2013. The record 129 airlines who responded to this year’s survey carry over one billion passengers and are currently selling 40.8 percent of tickets directly to the public which breaks down as: over the Internet, 25.8 percent; through call centres, 10.7 percent; and interlining, 4.3 percent. These 129 airlines intend to bring their level of direct sales up to 55.1 percent by 2013. While sales through airline call centres and interlining will remain largely static, direct channel sales through websites are expected to jump to 37.9 percent.

In order to increase online sales, airlines are prioritising the implementation of new functionality on their web sites in the following ways: online shopping tools (61 percent have already implemented this); change/cancel/rebook (52 percent); and frequent flyer redemption functionality (51 percent).

In all, 129 airlines responded to this year’s survey, including 14 percent classified as low cost carriers; 81 percent full service carriers; 5 percent charter carriers.

Role of kiosks

The survey confirms the important role of kiosks in a multi-channel environment. It was found that 80 percent of the largest airlines plan to use kiosks as sales points.

The next wave of implementation will be around booking portals for travel agencies which 41 percent have already done and a further 43 percent plan to do by 2013; while 44 percent have already implemented booking portals for corporate customers and a further 38 percent plan to do so by 2013. By comparison, just 21 percent of survey respondents have integrated social networking capabilities while 45 percent have no plans to do so.

Mobile phones

In addition, 70 percent of airlines have a strategy in place to use the passenger’s mobile phone as a further distribution channel to sell air tickets. Currently, 18 percent of airlines sell tickets over mobile phones and the ambition is to reach 70 percent by 2013. Some 85 percent of the largest airlines responding to the survey plan to offer such services by 2013.

The mobile phone will become an essential tool for airline travel by 2013 with 86 percent of airlines planning to offer flight notifications; 80 percent, online check-in; 76 percent, send electronic boarding passes to mobiles; and 68 percent using the mobile phone to target passengers with travel offers.

Upselling

Airlines are becoming increasingly adept at upselling, using fare families and marketing types; unbundling fares, by charging for services such as meals and baggage management; and selling non-air services such as hotels, car hire and insurance.

Most of this revenue generation takes place direct on line: 63 percent, upsell; 41 percent unbundle; and 51 percent sell non-air services. In 2013, 91 percent of survey respondents will have implemented at least one of these ancillary revenue strategies via their own direct web channels.