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No-frills winning the war online
No-frills airlines continue to dominate in the battle for online sales, but full service airlines are catching up.
According to a recent report from Hitwise, visits by UK consumers to no-frills airlines have increased 12.5% over the year to April. Visits to the entire airline sector, including full service traditional airlines, have grown 19.4%.
Hitwise general manager Simon Chamberlain told TravelMole: “What I think has happened is that the aggressive way in which no-frills airlines have cut out agents and GDSs has resulted in a low cost per customer acquisition. Traditional airlines have looked at their model and realised that they can cut costs across all channels.
“Traditional airlines have benefited from the trail blazed by no-frills carriers. The traditional airlines are waking up to the same efficiencies that are available to them and continue to increase their share of the online market.”
But no-frills still have the upper hand online says Mr Chamberlain.
“The great advantage for no-frills airlines like easyJet is that they built their business model without inheriting the problems with legacy systems that British Airways has”, Mr Chamberlain told TravelMole.
EasyJet and Ryanair topped the table of UK visits to transport websites in April 2004. They had 11% and 7.5% of the share of visits respectively and British Airways was next with 6%. No-frills airlines are also still coming top in the analysis of search terms keyed into the internet. According to Hitwise, the top two travel search terms entered by UK consumers in the 12 weeks to April 2004 were EasyJet and Ryanair. “Cheap flights” was third and British Airways fourth.
Despite the fact that Hitwise has added 44 more websites to its commercial airlines sector in the past year, Mr Chamberlain echoes the sentiments of other industry commentators and says consolidation is inevitable.
He told TravelMole: “New companies continue to enter the fray of the airline market but it is a tough market to break. The major barrier to success – of getting people booking online – has been overcome; the question will be who grabs the market share and whether it is on price or quality.
“In most markets you get companies dropping out and others being gobbled up by bigger competitors and I don’t think the airline industry is any different.”
Report by Ginny McGrath
Ginny McGrath
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