Online sales of airline ticket will take wings

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With major airlines preparing to launch their own online travel agencies this fall, IDC has released research that indicates that most online airline ticket will be purchased from independent travel agencies, and not from sites affiliated to the airlines.

Next summer, United, American, Delta, Northwest, and Continental will launch their own joint travel agency. Orbitz.com. United, American, Northwest, Continental, US Airways, and America West will also be part of Hotwire.com, scheduled to launch this month (September) that will distribute distressed airline inventory.

Despite this, airlines’ share of online ticket sales will decrease. The airlines’ sites today account for more than half of all online ticket sales. By 2001, however, their share will fall below 50%, and it will continue to drop through at least 2004.

“Because of their sizable marketing muscle, these start-ups will create good publicity for the online travel business. However, the traditional travel agency model, which includes Internet pure-plays and clicks-and-mortars, will better understand the needs of the traveller, will be unbiased, and will therefore get more business,” said Joshua Friedman, senior analyst for IDC’s travel research.

The good news for the airlines is that IDC expects online ticket sales to more than triple from over $5 billion in 1999 to over $18 billion in 2004.

“Many factors will contribute to the growth of online airline ticket sales,” said Friedman. “An increasing number of Americans are going online, the demographics of online users are shifting favorably, and online users are getting increasingly comfortable with ecommerce. Additionally, we expect the online airline purchasing process to improve considerably over the next few years.”

IDC

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