1. Thiti Wang-Aryattawanich
The Online Travel Industry (Airline Tickets)
Adam Ratana
Rohit Ravinath
Thiti Wang-Aryattawanich
Rubina Zaidi

2. Industry News & Projections
Travel eCommerce is expected to reach $20 billion by 2001 (source: eMarketer)
33.8 million travelers used the Internet for travel planning, up from 11.7 million in 1997 (eMarketer)

3. Online Airline Ticket Industry
Major Players in the
Online Airline Ticket Industry
Auction Services
Priceline.com
Expedia.com (auctions section)
Travel Agency Services
Expedia.com
Yahoo! Travel
Travelocity
Direct Purchases from Airlines
American Airlines, US Airways, etc…

4. The Basics
Consumers sign up online with the service and can shop anytime, anywhere for travel services w/ a web browser
Log in, select cities, dates, get price (for priceline, enter price)
Pay using credit card and delivery in electronic form or paper

5. Reverse Auctions
Enter a bid price along with destination, origin, and other flight options
Once bid is submitted, if found and accepted, consumer is committed to purchase ticket
Priceline and Expedia offer this type of service
Sample screen in next slide

7. Online Travel Agencies
Once submitted origin, destination, and dates, several options are provided for purchasing tickets
Offers price comparisons through different airline companies
Consumer commits on his own will
This service is offered by Yahoo!Travel, Travelocity, and Expedia
Sample screen provided in next slide

9. Direct Online Purchase from Airlines
Consumer enters origin, destination, and date of travel
Different flight options are displayed for that Airline
Firms that offer this service include American Airlines, Southwest Airlines, US Airways, etc…
Sample page provided in next slide

11. Who are the Customers? Anyone who travels and has access to the web
The everyday consumer
Corporate accounts
Small businesses

12. How do the firms Attract Customers?
Media Advertising (print, radio, TV – priceline)
Banner Ads (Yahoo!, Travelocity, Expedia, etc)
Gimmicks/Promotions (free stock- travelzoo)
Affiliation Programs (American Express & Expedia)
Additional frequent flyer mileage with online booking
Discount coupons, Premium Goods
Word of Mouth (most or all of them enjoy this)

13. What Value-Added do the Firms Offer?
The basic value-added for consumers is to pay the lowest price possible for tickets and save time. They can now either afford to fly instead of another means of transportation, or they can fly more often.
Another basic value-added for the firms is that they can fill airline seats closer to capacity.

14. Additional Value Added
Price comparisons!
Extreme Convenience of doing it online, 24/7 – saves time
Electronic Tickets (Paperless)
Incentives (i.e. US Airways gives you more frequent flier miles)
Choose Seat Assignments online
Additional content services (maps of local areas, hotels, restaurants)
Book whole trip (flight, hotels, etc) without an intermediary

15. How do the Firms Retain Customers?
Like any offline service, they use frequent flier miles
services (USAir E-Savers, AA NetSavers, periodic discounts, fare-trackers)
You can track prices on your pager/cell phone
Traditional methods such as discount coupons, complimentary upgrades
Complimentary goods (small gifts at the end of the year)