Flight tickets of budget airlines may become costlier if booked on travel portals
31 March, 2008
Budget airlines are reportedly planning to make the fares offered by online travel agents costlier than that offered by their own websites by reducing the commission paid to the travel agents and loading on some extra charges if the ticketing comes through the travel portal.
"What we are seeing is that as we sell more tickets through the travel agents our distribution cost is mounting. We want to correct this by slashing the commission rate of travel agents and also ensuring that the fares on their portals are slightly higher than ours,” a senior executive of a budget airline has been reported by Sify as saying.
I just checked the prices of a GoAir flight from Delhi to Mumbai and the price given by the consolidator was same as the official website.
Ecosystem of Internet is growing at a rapid rate than expected, who so ever has deep rooted penetration will survive this tide and guess, online travel portals have tons of investors money to pull this off from the airlines. OTA's have strong online budget to push their brand and make it worthwhile for a customer to book because of ease and user friendliness of their website. Airlines have long way to go still on these aspects.
This move could kill the dreams, aspirations and the hardwork of thousands of travel agents. Most of the air tickets are now booked online and the travel agents who used operate using their offices are bleading.
I know I will end up writing a longish muddy note, I am not very happy with such a not so wise move. I just read the complete stuff on Sify. By the way is this article is based on some speculative story some desperate jurno wrote because she/he didn’t have anything else to file? ;-) I assume it is not because I just want to air it out.
It is easier to think that, “let’s close one gate, people will be forced to take the other one, but people will normally find it hard, confusing and frustrating to search for the next gate”. You basically piss them off.
The airline friends must make their websites better than that of meta-searches & travel portal friends... rather than just making sure that people find it expensive there to book tickets.
If they actually need more direct traffic… then also need to promote it more than the travel portal folks to be visible (where is their web strategy in place? if at all it is in place, is it making any great difference?). It will not be too politically incorrect to say that the basics in some of the leading Airline websites are still not in place.
I am sure quite a few times it is smoother to transact on a travel portal than an Airlines sites (purely personal experience - though I don’t have numbers to back it up). My personal experience is been bad with some of the leading airline websites, some of the leading sites don’t even list the ‘Indian State Names’ properly in the drop downs options because the ticketing engine is some firang company providing a state drop down with state names for India like DE, OH etc.
I felt as if New Delhi is a part of a state called DE (check it out)… funnily the system accepts it. Sometimes they ask the same damn information twice, they also want you to fill some really long forms (and it is also simple commonsense that it is difficult for any business or personal users to have 10 separate registrations with separate airline sites than having a preference for mmt or yatra or travelguru or cleartrip or any other meta search site).
I guess everyone in the chain has a purpose (airlines counter, travel agents, online portals, airline sites) and solves a different customer need. I am sure all their customers are not online (though majority would be). Hence they suddenly “can’t stop a different channel for selling inventories”; just because they want to save 2% or a max 2.9% on all sales on a online travel portal (assuming they pay 3% and negotiate down a online travel portals to a 0.1% commission). I just wonder how much is this saving in value? If 1/3rd of the sales are thru online portals and on that amount each Airlines will start making 1% or 2% more.
By the way, a really budget conscious air traveler can’t get comparative prices on Airline sites (will they be able to provide that? should they even try providing that!)... one will search in meta-search sites - go to the airlines site - transaction fails – may not even comeback again... there can be so many more combinations possible; one may not mind booking where she/he actually search (interesting hypothesis to test next).
Moreover, if the best of the budget airlines in US of A don’t have any other medium then their own websites to sale tickets, it doesn’t mean one should blindly replicate that in India, I guess everyone is smart enough to understand why.
[These are purely my personal views as a consumer, has nothing to do with my professional capacity and relations.]
Cheers,
Mrutyunjay Mishra
JuxtConsult
Will the travel portals go the Zoomtra way too? It'd make sense for them.
They already have got the branding done and can easily tweak the business model a bit.
This means that good days lie ahead for meta-search engines like ixigo.com and zoomtra since they will have a price advantage.
This is a disaster for the travel portals...
Quite often most of us book tickets online due to timeconstraints, non availability of agents etc... I am sure this is difficult phase for the travel portals...
Tickets was never going to be a big game, this has been apparent for a a while now. Accomodation, packages is the real opportunity and always has been.
Already these travel portals are finding it pretty difficult to get some profit through domestic airline bookings. If these sort of things come out then it will be a night mare to all the travel portals.
But I feel these portals have already figured out these things in their business plans. Thats the reason why we are seeing these portals concentrating n hotel bookings,international flight bookings,ad revenue and a few other VAS.
I wish all of them good luck in these testing times...!!!!
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