Japan's travel agents are up in arms over a new ticketing drive by the country's major airlines which allows domestic travellers to bypass agents by ordering airline tickets directly over the telephone and paying by credit card.
Initiated by the country's biggest carrier All Nippon Airways in April, a similar scheme is set to be launched by rival Japan Air Lines in October, increasing travel agent fears of losing significant amounts of business. Until now only members of airline frequent flyer schemes had access to phone-in credit card reservations for international travel.
ANA's scheme, known as P2 (an abbreviation of Phone and Pick-up) was used by 3,900 passengers during April and 5,600 in May. A major television advertising campaign is expected to increase numbers rapidly over coming months. 'This is the first time airline telephone ticketing has been available to Japanese travellers and we are confident that P2 will further strengthen our competitive edge in the domestic market,' says Kazuo Suzuki, ANA's vice president domestic marketing. 'We expect a million travellers will use the system every year.'
The airline has installed 24 automatic ticket vending machines at airports, allowing passengers to pick up tickets and pay for them by credit card up to 15 minutes before flights. It has also begun selling tickets through 400 outlets of the AM/PM convenience store chain, with the prospect of going nationwide at some future date.
A spokesman for JAL says the carrier is planning a similar scheme in response to ANA's initiative. 'There is no name for the system as yet. We are looking at whether to have a special credit card 'desk' with credit authorisation terminals in each reservation office, or to set up a central credit card reservation centre for nationwide coverage, using a toll-free number.'
Worried travel agents see the potential growth of the new service as a threat to their profitability. 'It will be a threat to the industry, leading to a loss of customers,' warns a Japan Association of Travel Agents spokesman, which has more than 2,400 members.
About 80 per cent of domestic tickets in Japan are currently issued through agencies, which get a five per cent commission on each fare. The airlines already set limits on the volume of tickets they can sell, a measure imposed by Japan's current economic downturn and capacity constraints. Agents have responded to the new schemes by demanding these restrictions be lifted. They are also looking at other ways to improve customer service.
ANA, which expects the service to yield annual sales of about ´1.2 billion ($14.2 million), returned to profitability in the year to 31 March, lifting net income to ´4.2 billion following a loss of ´2.9 billion over the previous year.
Increased consumer spending has helped recovery, although competition remains intense. Last year the number of domestic passengers rose 6.1 per cent to 34 million, and the new scheme will consolidate that growth by making travel easier.
ANA dismisses agent concerns, pointing out that a large percentage of domestic passengers - more than 60 per cent - are group travellers buying packages which will continue to be sold through agents. During the recession group travel has increased while individual traveller numbers have decreased, says the airline.
Source: Airline Business
