Airline direct bookings set to surpass GDS, online agency business for first time in 2011

BRUSSELS — Travel agents sold the vast majority of airline tickets before the advent of the Internet in the 1990s but this revolutionary technology is turning things upside down.

“Airlines continue to increase the proportion of tickets sold via their directly controlled distribution channels and I predict that 2011 will see them overtake indirect distribution for the first time,” said Paul Coby, Chair of the Board, SITA, launching the 13th annual SITA/Airline Business Airline IT Trends Survey.

“If you extrapolate the trend, by 2014 58% of tickets will be sold directly. This channel shift will reduce the share sold through GDSs and online travel agents.”

This doesn’t mean airlines are giving up on travel agents with both Vacation.com and Ensemble Travel Group last week announcing programs to give agents a chance to make commission selling airline tickets. But most agencies have been putting far more emphasis on selling cruises and tours.

Passenger mobile service offerings from airlines are set to explode in the next three years with 91% of responding airlines planning to invest in mobile device-based services for passengers over the next three years.

The priority is on mobile services which support check-in, flight status notifications, electronic boarding passes and travel distribution. Airlines anticipate that by 2014, 15% of all passengers will use mobile phones to check-in.

Some 85% of airlines either already sell (33%) or plan to sell (52%) tickets through mobile phones by 2014, and most plan to extend mobile functionality to include ticket modification/upgrades and sales of onboard services.

This year’s survey underlines how travel distribution has become a multi-channel environment with kiosks and social networks joining mobile phones as important emerging sales channels; 70% of airlines already sell, or plan to sell, tickets through kiosks and social networks by 2014. At present, 19% sell tickets through kiosks, and 16% through social networks.

Francesco Violante, SITA CEO, speaking at the Air Transport IT Summit, hosted by SITA, said: “The air transport industry has been quick to capitalize on the mobile computing revolution which started three years ago with the arrival of the first 3G-enabled smartphones. The number of airlines actively selling tickets on mobile phones has almost doubled from last year and we see clear plans now to offer richer functionality in the form of ticket upgrades and modifications.

“The survey confirms increasing interest in social networks as distribution channels. With the increase in channels, travel offers need to be delivered to passengers in a far more targeted and personalized way based on traveler preferences and the context of the channel used. This fits with the airline strategy of taking more control over distribution with more tickets being sold directly via airline websites and call centres.”

Today, 80% of airlines either already have or plan to have some presence on social networks and using social networks for “Promotion of products and services” has the highest level of implementation to date (41%).

The survey also reveals a strong shift towards the adoption of alternative usage of self-service kiosks. For example, the number of airlines with flight transfer kiosks has quadrupled since last year’s survey; 11% have already implemented it, and 39% plan to do so by 2014.

The Airline IT Trends Survey is an independent poll of senior IT personnel working within the top 200 passenger carriers.