| Journal: TWUK | Section: |
| Title: | Issue Date: 17/04/00 |
| Author: | Page Number: 33 |
| Copyright: Other |
Airlines told to ditch consolidators
New challenges were highlighted at a two-day Airline On-Line conference in London. Jane Archer reports
AIRLINES could cut out the middlemen and increase their own profits overnight, Genesys senior partner Paul Richer said.He told airline delegates that consolidators only exist because airlines don’t like to be seen to be discounting their own air fares but that policy means they do not know who their customers are.
“Global alliances should launch their own travel agencies so they become the consolidators and own their customers,” he said.
“One boardroom decision could wipe out a whole industry of companies such as Gold Medal and Expedia which sell discounted air fares.”
Pointing to the ebookers Web site, which lists air fares according to price, with the cheapest at the top, Richer warned that air travel is in danger of becoming a commodity bought only on price.
“The only thing ebookers is concerned about is price. There is no mention of what travellers get for their money, for instance sleeper seats in British Airways’ business class.
“The challenge for airlines is to find a way to differentiate themselves on the Internet and that is not going to be easy.”
Richer forecast that the future marketplace would be carved up between global players at one extreme and niche companies at the other, with few survivors in between.
“I am sure some airlines will not survive,” he said, adding that any airline that doesn’t start offering new on-line capabilities such as mobile phone check-in, for business travellers at least, within the next five years would not be able to compete.
“Travellers expect to be able to contact an airline whenever they want using the new distribution channels such as digital TV, the Internet and mobile telephone and if they cannot, they will go to another company,” he said.
“Airlines need to realise that the channel is now more important than the brand.”
Quality control: Richer warned that as on-line bookings increase, air travel is likely to become a commodity based on price alone. For example, BA corporate clients won’t be told they will be getting bed seats when they book business class