Airlines Turning Into Retail Powerhouses

Results published in the 12th annual SITA/Airline Business IT Trends Survey, show that 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% of tickets directly to the public which breaks down as: over the internet, 25.8%; through call centres, 10.7%; and interlining, 4.3%.

These 129 airlines intend to bring their level of direct sales up to 55.1% 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%.

Francesco Violante, SITA CEO, said, “This year’s survey tells us there is a climate of increasing business confidence. 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.”

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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% have already implemented this); change/cancel/rebook (52%); and frequent flyer redemption functionality (51%).

This is in line with overall airline strategy to migrate passengers to self-service including a multi-channel check-in environment. The airlines stated ambition is to reduce the number of passengers processed via agent check-in from 50.7% to 28.9% by 2013. Kiosk check-in is expected to remain static at just below 20% while web check-in options will grow from 21.6% today to 35.5% in 2013, and mobile check-in will advance from 28% today to 70% by 2013.

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

In addition, 70% 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% of airlines sell tickets over mobile phones and the ambition is to reach 70% by 2013. Some 85% 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% of airlines planning to offer flight notifications; 80%, online check-in; 76%, send electronic boarding passes to mobiles; and 68% using the mobile phone to target passengers with travel offers.