Transcript Слайд 1 - AMADEUS

Internet in aviation IT industry
Moscow
26 November 2008
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© 2008 Amadeus IT Group SA
Grach Muradyan
Current situation review
Internet penetration in airline sales
( airline own web site vs. total bookings)
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Western airlines:
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Southwest: 74% (2006 - 70%)
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British airways: 46.9 %
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airBaltic: 43%
RU / CIS airlines:
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Aeroflot: 6-7%
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Air Astana: 4 %
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Aerosvit: 3.15%
© 2008 Amadeus IT Group SA
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Current situation review
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The first LCC and to establish a home page on the Internet
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101+ mln pax (74+ mln pax booked online in 2007)
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2997 pax per one WN employee
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527 aircraft fleet (B737s fleet only)
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Number One airline web site for online revenue
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70% of customers are checking-in online or at self-service
kiosk
© 2008 Amadeus IT Group SA
“The web Veteran” - www.southwest.com
Current situation review
Internet in the airline IT: 3 dimensions at least
Data transfer media (terminal or host to host)
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Services access environment
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Traffic cost savings, global reach, standard protocols
Ordering and billing online, problem loading / servicing…
Sales and Marketing environment – competition is
moving from offline to online !
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Advertising, promotions…
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Travel agencies vs. airlines direct sales channel
© 2008 Amadeus IT Group SA
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Current situation review
© 2008 Amadeus IT Group SA
Ordering services online via Amadeus Extranet
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Internet sales effectiveness
Are Internet sales so easy as seemed initially ?
Full business package should be available…
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Seamless booking scenarios
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Flexible Fare Quote, simple & clear FQ rules
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Reliable CC payments + options (ATO/CTO ticketing)
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E-ticketing on the whole airline network + interlines
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Post-sell support, including online rebooking, refund,
etc… / Does anybody provide this service in RU ? /
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Increasing pressure on the airline call centres
DCS services online (web check-in…)
© 2008 Amadeus IT Group SA
( just one missing component decreases effectiveness)
Internet sales effectiveness
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Less savings as agent commissions went down
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CC transaction fees appeared instead
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Additional permanent costs for
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Website Servicing and support (outsourcing)
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Fraud protection
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Marketing (banners, advertising on the search engines)
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Payment solutions integrations costs
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Call centre for online booking (post sell) servicing…
© 2008 Amadeus IT Group SA
Are Internet sales so cheap as seemed initially ?
Internet sales effectiveness
© 2008 Amadeus IT Group SA
Marketing on easyJet.com: banners & references
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Internet sales effectiveness
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Need for permanent promotion
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© 2008 Amadeus IT Group SA
Internet sales effectiveness (post-sale services)
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Internet sales effectiveness
© 2008 Amadeus IT Group SA
Permanent support needed
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Internet sales effectiveness
Cheapest fares promotion – risk of loosing revenues
© 2008 Amadeus IT Group SA
( sales “black holes” vs. upsell options)
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Internet sales effectiveness
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Variety of travel services to be offered
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© 2008 Amadeus IT Group SA
Content competition: airlines vs. agencies
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© 2008 Amadeus IT Group SA
Content competition: airlines vs. agencies
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Internet sales
© 2008 Amadeus IT Group SA
…website referring on the offline channel ?!
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Internet sales
© 2008 Amadeus IT Group SA
…site content should be clear even for “housekeepers”
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Internet sales effectiveness
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Internet was not specifically designed for ticket sales
Global coverage / unlimited access channel, but
multilingual interface needed
No need for terminal distribution, but
requirement for user-friendly & intuitive interface
No booking / abusing responsibility vs. agency case
Risk of seats freezing (soonest payment needed)
Booking cost is not fixed (vs. GDS Net Booking fees)
Look to book ratio is very low (less then 2%)
Competition area between airlines and TAs / portals
© 2008 Amadeus IT Group SA
Internet specifics vs. traditional distribution channels
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GDS content while Internet used as an interface
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Consolidating travel services (hotels, cars, etc…)
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Acting as IT providers at the same time
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Ensuring the sales integrity (E-ticketing)
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Playing e-Commerce solutions providers role
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Sabre IBE: SU, KD…
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Amadeus IBE: FV, VV, KC…
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Supporting Travel agencies Direct sales channel
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Providing channel for higher revenue pax
© 2008 Amadeus IT Group SA
Internet sales effectiveness
GDS still behind…
Internet sales effectiveness
channels diversification history
Client
Client
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Client
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Internet trends
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Stage 1: Provider gives no choice at all to User
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Stage 2: Provider offers User to choose within a
number of limited options
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Stage 3: Provider establishes the rules,
User creates the content itself
© 2008 Amadeus IT Group SA
Provider – User relationship development
Internet trends
© 2008 Amadeus IT Group SA
choice by the users – www.SkyExpress.ru
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© 2008 Amadeus IT Group SA
Internet trends
( vs. “all inclusive” marketing concept)
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© 2008 Amadeus IT Group SA
Internet trends
Content fully created by users – одноклассники.ru
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Internet trends
© 2008 Amadeus IT Group SA
www.wikipedia.com
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Internet trends
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A project (since 2001) to build free encyclopedias in all
languages of the world
Everybody is free to contribute (neutral information)
More than 10 million articles in 250 languages
The largest Wikipedia - in English (2+ million articles)
German, French, Polish and Japanese editions (each
containing more than 1/2 million articles)
Seventeen other language editions contain 100 000+
articles
More than 100 other languages contain 1000+ articles
© 2008 Amadeus IT Group SA
Content provided by users - Wikipedia, Wictionary, etc…
Internet trends
© 2008 Amadeus IT Group SA
Passengers to bid on airline website, similar to ebay.com?
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Internet trends
© 2008 Amadeus IT Group SA
Passengers to bid on airline website, similar to ebay.com?
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Internet trends
© 2008 Amadeus IT Group SA
Airlines consolidator website: SkyAuction.com
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Internet trends
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Airline tickets, room nights, tours, cruises and
all-inclusive vacations
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Negotiating special deals with leading airlines,
hotels, resorts and cruises
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Business around two simple, but powerful, ideas:
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Consumers should pay for their travel however much
they feel it is worth (and not a penny more)
Purchasing travel should be easy
(and not difficult and boring…) !
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and exciting
© 2008 Amadeus IT Group SA
www.SkyAuction.com
Some conclusions
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Internet primary benefit is not (really) cost cutting,
but instead
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Unlimited capacity channel (24 x 7 uninterrupted services)
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Unlimited geographical coverage
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Flexible content control & shortest “delivery” time
Airline online activity to follow the Internet trends
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Providing the complete business package (including all
post-sell services and support + upsell option!)
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Becoming more interactive and flexible for choices
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Allowing User / Passenger increasing influence on the
content & services offered by an aniline
© 2008 Amadeus IT Group SA
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Some conclusions
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Internet turned out to be not so cheap channel
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Internet sales require permanent efforts &
investments for support & development
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Internet sales could lead to revenue loosing if
misused (“black hole” effect)
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It’s not simply online vs. offline, but mainly direct
vs. indirect sales split choice
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Offline vs. online sales should be well balanced:
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Every channel has it’s value vs. it’s cost
© 2008 Amadeus IT Group SA
as it seemed initially
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© 2008 Amadeus IT Group SA