NetsAAvers, CyberSavers, E-Savers or On-Line Travel Specials - under various names, four of the largest US carriers, plus a handful of others, are experimenting with using the Internet to promote special fare deals. They are selling what is essentially 'distressed' inventory - seats on weekend flights that would otherwise have gone empty - as a way to generate incremental revenues and sharpen their direct marketing skills.
American Airlines, long a leader in yield management, was the first to offer Internet discounts last March. Participants in its NetsAAvers programme register through American's Web site to receive a weekly e-mail message outlining fare offerings.
According to John Samuel, American's director of distribution planning, 360,000 individuals have signed up to receive NetsAAver postings. Some 330,000 have asked for information on domestic fares (including flights to Canada, Mexico and Central America) and the rest want international fares. NetsAAaver fares are as much as 75 per cent below full-fare economy tariffs; some domestic first-class NetsAAers are also available, at a similar discount.
American also offers passengers who buy domestic NetsAAvers additional discounts on Avis rental cars and Hilton hotel rooms; Samuel says this will be extended to international passengers.
Like American, Continental and USAir distribute weekend discount information by e-mail. Steve Cossette, Continental's senior director of distribution planning, says his airline has signed up 70,000 subscribers, who are eligible for two types of mailings - one for deeply discounted fares on domestic routes, and a second for domestic discounts for participants in Continental's frequent flyer plan, who can buy with a combination of dollars and frequent flyer miles.
USAir says several hundred thousand travellers have registered for its E-Savers offerings, which are available on a number of domestic flights and one international route.
Northwest posts its CyberSaver discount fares each week directly on its Web site, for all Internet surfers to see; Al Lenza, managing director of distribution planning, says: 'It's a way to attract people to come to your site. If you e-mail them, you lose that opportunity.' Northwest's discounts are available only on domestic routes, though Lenza says international offerings are possible.
TWA, which offers both domestic and international weekend discounts on its Web site, expects to promote them by e-mail later this year. Unlike the other airlines, it also offers midweek, off-peak fares for travel further ahead than the following weekend.
American claims the largest financial rewards so far: Samuel says NetsAAvers generate 'six figures in incremental revenue each month.' Cossette says Continental sells $15,000 worth of tickets weekly. Lenza says Northwest's volumes have 'not been huge'.
More importantly, the airlines are using their experience to provide a better understanding of how the Internet operates and how their passengers interact with it. 'It helps us learn more about our customers and their tendencies in the Web environment, and it helps us create an additional marketing database,' explains Continental's Cossette.
'We've learned that if the price is right, people will buy,' Lenza adds. 'The Internet is a cost-effective way to distribute highly discounted products.'
Although no airline will admit it publicly, the seat sales also allow them to sell seats directly to passengers, without having a travel agent as an intermediary.
There is a danger that Internet ticket sales could dilute yields. 'If you put them in too many markets, you create demand and expectations among travellers that could be harmful, Lenza warns. But no airline admits to finding them a dilutant yet, probably because of strict capacity controls.
One possible cloud on the horizon is a complaint filed at the US Department of Transportation by the Association of Retail Travel Agents, a US trade group. Arta charges Aer Lingus, Cathay Pacific, Icelandair and Iata with selling or planning to sell international tickets over the Internet below tariff rates. Arta cites auctions offered by the carriers, as well as a Web site planned by Iata that would feature discounted fares from Iata member airlines.
Aer Lingus, Cathay, Icelandair and Iata have all asked DOT to dismiss the Arta complaint. In addition, Continental has stopped selling international Internet discounts until the Arta case is resolved. Samuel says American does not believe this is necessary because it is offering discounts only in the US market, and is therefore not violating any tariff rules.
More major carriers are expected to jump onto the Internet discount bandwagon: Delta says it will probably offer on-line discounts later this year and United says it is 'looking at the fares, though they are not a priority.' British Airways has begun trials in which it posts World Offers on its Web site, though only for flights departing from the UK.
Carriers are also likely to use the expertise they are gaining with Internet discounts to fashion promotions to sell other types of 'distressed' inventory; American's Samuel suggests selling deeply discounted tickets on flights out of Miami to Miami residents during the winter, when inbound traffic is strong. Lenza envisions Web promotions of tour packages by airlines, while both Cossette and Samuel believe carriers eventually will tailor the e-mail they send to potential passengers more exactly, with promotions crafted, for instance, for frequent flyers based in specific cities.
'Now we have pretty generic offerings, but because of our AAdvantage programme we can identify who our customer is,' says Samuel. 'We'll have offerings more tailored to him. We're trying to build a capability that when you log on, a whole set of things that deal just with you will happen. The feedback we're getting is that we ought to customise our stuff more.'
Source: Airline Business
