APEX Insight: For decades, airlines have sunk vast fortunes into global distribution services such as Amadeus and Sabre for ticket sales. Bucking that trend, carriers are doing it for themselves – doubling down on their own e-commerce portals to directly woo passengers – and it’s working.
The Direct-Sale Revolution
A delightfully geeky report from Hinnerk Gnutzmann, CEO of airline-industry e-commerce consultancy Flexponsive, asserts that online visits explain most of the variation in passenger numbers. The report shows a correlation between traffic to an airline’s website and the number of travelers who book flights.
This is about turning eyes on screens into bums on seats. Getting would-be passengers to your site is only the very first step. Airlines have to convince them to buy a ticket right here and now, and then make it easy for them to do so. The separately-priced outbound and return journeys, as well as the add-ons (or nickel-and-diming, depending on whom you ask), can make comparison shopping through airlines’ own channels a challenge; all-in displayed pricing has long been a selling point for global distribution service (GDS) systems.
Top Three Airlines Online
Virgin America is the clear winner in online engagement, according to Gnutzmann’s report. This is most likely due to Virgin’s modern, responsive website. Booking a ticket with Virgin is almost as easy as tweeting, since each step along the sale-trail follows intuitively from the one before. Even if all the text were removed except for destination, dates and price, you’d still know exactly what you were doing. Virgin is the only airline at the top of the list that isn’t a low-cost carrier. Rather than compete on price, Virgin makes a go of competing on service and style.
Romanian low-cost carrier Wizz Air came in second, also with a really smooth web experience. The user interface elements aren’t groundbreaking, but they’re really responsive and fast. The steps for selecting your flight take place on the landing page, so you can book that spontaneous Euro-holiday with a speed that will simultaneously thrill and disturb you.
Spanish low-cost carrier Volotea, a Flexponsive client, came in third. Its website features cats in lawn chairs and dogs on the beach. The page elements are bold and beautiful: Not reinventing the wheel but giving it a shiny hubcap.
These overachievers’ results suggest that assuaging a would-be customer’s price concerns while also making it dead easy to book a flight are indeed the olive oil and balsamic vinegar for your direct-booking bread. To that end, airlines are engaging e-commerce specialists like Flexponsive.
Meanwhile, business-travel mainstays like Air Canada and Etihad Airways have used SAP-owned Concur, which allows a company to book flights directly through it expense-management system. Virgin America currently uses Sabre, while Wizz Air and Volotea use Navitaire (which was just acquired by Amadeus). However, the passenger-GDS-airline relationship was forged before color television was a thing: how long into the Internet Age can it continue without either dying or transforming?
All Tomorrow’s Bookings
In what may be a harbinger of future industry trends: Lufthansa will soon charge extra on tickets sold through the Amadeus. The GDS is not happy about this, not one bit. The hotel industry is doing the fadeaway from middlemen as well. Check out Marriott’s bizarre-yet-oddly-catchy campaign to get guests to book directly through its web portals:
This airlines-vs-GDS situation is partly the airlines’ own doing, due to regrettable decisions in how they dealt with travel agents as well as the relatively-recent proliferation of low-cost carriers. The solution, it would seem, is equally in the airlines’ hands.