The Internet will become increasingly significant over the next few years, sharpening communications along the entire distribution chain and affecting providers, travel agencies and the travelling public. Companies wishing to market products and services directly to a wider audience will find the Internet's worldwide access to potential customers very attractive.
The computer and telecommunications industries are presenting the Internet as a brave, new virtual world which will lead to explosive economic growth. Clearly, the phenomenal expansion of the Internet will have a major impact and airlines will need to develop their own individual products to exploit the benefits. These include frequent flyer plan expansion and information, product differentiation, fares offers, bookings, schedule information and even, ultimately, online access to their internal reservations systems.
Many airlines and their codesharing partners are already experimenting with how to best use the Net. Airlines recall not only how CRS proliferation around the world facilitated explosive growth and changes in travel distribution, but also the value which accrued to American and United Airlines by being first in the marketplace. This time around, airlines and other travel service providers feel compelled to participate early on.
The initiation of the airline industry into cyberspace was everything but official. In fact, before the first airline had decided to establish a home page on the Net, computer hackers took the initiative. Enthusiasts, friends and technology fanatics developed an Internet presence for their favourite airlines, carrier home pages and interactive maps of airports.
Information technology and corporate communications departments at many more airlines are now developing a bona fide Internet presence. However some remote stations even use existing local 'skunk works' to develop a semi-official presentation to suit the local market. Attracted by the increasing opportunities offered by the Net, the airline industry is well on its way to higher levels of use.
Striving to maintain leading industry roles, governments and airline trade associations are also present on the Net. The American Air Transport Association (ATA), the US Department of Transportation and the European Commission are making information services available electronically. Robert Hutt, Director of IT services at Iata, is also planning Iata's entry into cyberspace, with the goal of making its home page the premier location for accessing aviation information on the Internet.
Another traditional aviation supplier, Sita, has been quick to recognise the opportunities offered by the Internet. In developing Aeronet, an 'industrial strength' Internet for the aerospace industry and the airline community, Sita overcame many of the security issues surrounding the Internet, says Leo Downing, Sita regional development manager. With aviation ticket and fares fraud exceeding $700 million in the past five years, airlines are concerned to prevent an unknown number of foreign computers browsing through their automated systems.
Wary of these security and fraud issues, British Midland is one major airline not yet present on the Net. Chris West, general manager technical services-marketing at British Midland says, 'These are still early days', and is closely observing developments in this field. While acknowledging that the Internet is a new medium with great potential, he says, 'We are still trying to find the answers to some basic questions. What can be done? and who uses it? We want to ensure that our eventual offering is not another 'want-to-be' product, but one which is cost-effective in delivering customer value and in differentiating British Midland in the marketplace.'
The question of who uses the Net, was addressed by Cathay Pacific when it took registrations to enter its lucrative CyberTraveler contest. Whereas in the real world airlines identify and reward frequent flyers, in the world of cyberspace airlines are starting to recognise the need to reward frequent browsers. Cathay found themselves confronted by the limits of the law in this new environment. Since legislation governing the administration of competition varies across national borders, the contest had to be limited to residents of the United States governed by US law.
Aer Lingus, also wary of the legal questions raised when advertising in multiple countries, has taken the precaution of adding standard disclaimers and notices of limited liability. The carrier has launched a site on the Net to evaluate the benefits and gain first-hand experience of this new media. Use of this service, developed in collaboration with IBM Ireland, is being closely monitored in its early days. 'We see measurement of use of the site and feedback as critical to its development. Our feedback to date has been very positive - particularly from our large expatriate Irish-American community, which finds it a useful bridge back to Ireland. But we do not know how many of our visitors are one-time surfers, exploring for curiosity, never to return. By monitoring the pages most regularly visited, we are building a comprehensive picture of what our visitors find useful and we will adapt the site accordingly. Certainly the number of browsers registering on-line for our frequent flyer programme, TAB, is encouraging,' says Cathal O'Connell, manager of marketing distribution.
Whilst Aer Lingus used only minimal resources from various departments, AMR Corporation has taken a comprehensive approach to its offerings. Multi- functional teams from several divisions, including American Airlines and Sabre InterAActive, were employed to develop an Internet strategy. Offering over 400 pages of constantly changing information, including 'Brochureware' - services and schedule information - AMR found this medium ideal for communicating with the travel agency community, a large part of which do not subscribe to the Sabre system.
Southwest Airlines, as ever with its own unique style, has adopted a different approach to how its visitors navigate its pages. Examples include an image of a check-in desk with familiar objects like a newspaper, a map and a cash register. By pointing and clicking on these objects, the visitor can find the latest information on Southwest, display the airline's schedules or access the special offers available.
Amusingly, a few airlines that did not survive into the 1990s (PSA, People Express and Eastern) have been reincarnated in cyberspace by enthusiasts to be immortalised on their own home pages. More sophisticated experiments are also underway, with access to live data.
Examples include allowing passengers real-time access to accumulated frequent-flyer points. Much debate is also raging within airlines as to whether on-line access should be taken to its ultimate conclusion - allowing access to carriers' internal reservations systems.
The purpose of such a distribution strategy is not clear. From a traveller's perspective, comprehensive and neutral reservation offerings by EAAsySabre, Worldspan's Traveller Shopper or the OAG's Travel Guide have existed for many years. Yet, these services do not represent a significant percentage of bookings. Lufthansa believes this situation will change rapidly and that direct passenger bookings via CRSs may reach 15-20 per cent of total bookings by 2000.
Current low usage is partly because travel agency negotiated or consolidator bargain fares are not usually included in CRS fare databases, a fact which can obviate the traveller's incentive to use CRS systems. Nor is there any obvious incentive for a passenger to use proprietary airline reservations systems because of bias towards the one airline's schedules and fares.
Nevertheless, many new reservations service providers are entering cyberspace with upbeat user-friendly interfaces and discounts on bookings. Already established are Internet Travel Network, for airline tickets, travel reservations and bookings; PC Travel, for real-time reservations, TRaX Air Res System; and TPI On-line Booking Request. In many cases, these services are able to offer both travel agency databases of negotiated fares and connection to a CRS.
For an airline entering the mysterious world of home pages and World Wide Web (WWW) sites, a new generation of service companies has emerged to assist them in getting up and running. These services range from straight-forward consultancy to full outsourcing. Furthermore, these companies are already becoming niche-oriented, with one specialising in airlines, another in tour operators, and another in travel agents.
Web pages are increasingly seen by users as stepping stones from one information source to another. Each page is expected to have links to other pages by following a particular thread. When a schedule is requested between two cities, a user would expect to click on the airport name to access its home page. The airport's home page should then include a button to access the city's home pages, then another button to access the home pages of the city's museums, for example. All these links need to be created by the airlines, either free of charge or as billable advertising for that city.
Similarly, an airline will need to announce its presence to the world by listing its site in the numerous directories which each claim to be the most comprehensive available. The trick is to balance the amount of incoming advertising revenue with the cost of advertising on other sites.
Ultimately, airline and other travel service providers' use of the Internet will become more sophisticated. Some examples of what others are doing include:
1 On-line education - New ways to learn. Tutorials, lectures and training packages are provided on the Net and since the WWW, with its multimedia capabilities was created, more and more 'virtual centres of education' such as the Aeronautical Technology Centre at Cranfield are delivering on-line lectures, training seminars and business simulations. Such educational material ranges from elementary school level to top management-related issues, such as airline yield management and brand marketing.
2 Cyber talk - New ways to communicate. The Internet enables airlines to expand the number of channels of communication. From dealing with passenger service issues to links to aircraft suppliers to access schematics of aircraft parts, the focus is on a more efficient exchange of information between colleagues, partners, suppliers and clients though email, video-conferencing and multi-media.
3 Focused feedback from potential and actual passengers can be gathered by setting up a company-specific WWW site. Such a channel can greatly contribute to enhanced passenger monitoring and the collection of focused market data which should ultimately result in improved customer services.
4 Aviation forums. The Internet allows the creation of airline and aviation- specific news groups where topics ranging from market trends (competition, industry, new products, mergers, prices) to customer reactions (product or service-specific) to safety and regulatory issues, can be discussed and individuals can contribute thoughts and data. These forums are being established both on an ad-hoc basis, such as Aviation Industry's Webserver and official associations such as Iata may soon follow suit.
5 Employment information. The Internet represents a unique environment in which to learn about new employment and career development opportunities such as Airline Employee Placement Service.
In their tentative foray into cyberspace, some airlines are finding traditional advertising, marketing and technology skills inadequate for Cyberspace. New, multi-media on-line skills are required in this unforgiving and fickle environment. Expectations of the on-line consumers are high and their loyalty is low. Airlines will need increasingly sophisticated and constantly-updated offerings to attract and retain the browser.
Knowledge and competence will be the keys to success in this new world. Already alliances are evolving to address such problems as electronic commerce. Companies such as MasterCard International, Intuit Inc and Netscape (credit card, home banking, surfer-software) have created a joint venture for safe messaging using advanced technology to secure on-line credit card and other financial transactions.
The Internet is also a great equaliser among airlines where small airlines are able to post their pages on an equal footing with larger rivals. The Web provides an inexpensive way to experiment with the potential of the electronic marketplace.
While airlines grapple with the possibilities of this vast and fast-growing new medium one thing is certain - we, as buyers of products and services, will pay many more visits to Cyberspace than to outer space.
North America
American Trans Air: A fact sheet.
Canada 3000 Airlines: An unofficial web site maintained by the employees of the airline. Under development. Currently a fact sheet.
Canadian Airlines Int'l: Claims to be the first airline (Feb 94) with web server. The site is still under construction. Currently a fact sheet.
Delta Air Lines: Brochure for its Olympic sponsorship and status as official airline of the Olympics.
Frontier Airlines: A brochure.
Mexicana Airlines: Complete information. Well-designed website, including tour packages, schedules, photos and maps. Ranked by Point Communications in the top 5 per cent of all web sites.
Northwest Airlines: A fact sheet. Short history plus reservations addresses and phone numbers.
Southwest Airlines: Complete information. A well-designed site that looks like a gate.
Western Pacific AL: Two sites, one with an on-line reservations page and a separate site currently running a cross promotion with Fox Broadcasting. The Simpsons cartoon characters are prominent with a complete description plus amusing story line.
Europe
Air France Flying with the Stars: A pictoral history of cinema sponsored by Air France.
Austrian Airlines: A brochure available in both German and English.
Iberia Airlines: A brochure.
LOT Polish Airlines: A plain text schedule of all LOT flights.
Transwede Airlines: A brochure in Swedish.
Virgin Atlantic: A complete description; web version of the inflight magazine under construction.
Asia
All Nippon Airways: A fact sheet that is part of Country Connect tours.
Cathay Pacific (USA): The USA division's complete description plus a contest for AAdvantage miles.
China Airlines: A fact sheet.
Garuda Indonesia: Check-in server (not responding).
Indonesian Airlines: Promotional description as part of transportation Information about Indonesia.
Japan Airlines: Pages for JAL's frequent flyer programme.
Sempati Airlines: Two sites running promotional material on Singapore.
Singapore Airlines: Promotional material that is part of a communications page for Singapore.
Thai International AW: A promotional description.
Africa/Middle East
Alliance Airlines: Promotional material.
Saudia Airlines: A promotional description forming part of an information sheet on Saudia Arabia.
South Africa Airlink: A fact sheet.
Uganda Airlines: A fact sheet. The flight information page is still under construction.
Australia/New Zealand/Pacific Islands
Air New Zealand: Flight operations crew training, but no information about the passenger side of the airline.
Ansett Australia: A brochure. Also offers a downloadable screen saver.
Mount Cook Airlines: A brochure.
Qantas Airways: A complete site, including pictures of Koala bears.
Southern Australia AL: A fact sheet.
Central America
Source: Airline Business
