New Airline Ticket Site Lets Consumers Set Prices
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A Connecticut entrepreneur is planning to launch an e-commerce system that he hopes will revolutionize the way people shop for airline tickets, and eventually other products, allowing consumers to set the prices.
Stamford, CT-based Priceline.com will in essence allow consumers to name the price they are willing to pay for airline tickets.
The buyer-driven system is aimed at leisure rather than business travelers, and a dozen major U.S. and international airlines are cooperating with the venture, Priceline.com Chairman Jay Walker told Reuters in an interview.
The company's Web site is scheduled to open for business today.
"We are expecting conservatively to sell somewhere on the order of 1,000 tickets a week, as our initial objective," Walker said. "The site is capable of handling 100,000 hits a minute. It's a very large site we've built."
Walker concedes that few, if any, companies have as yet harnessed the Internet into huge profits, but he is convinced he has hit upon a compelling idea.
There are about 500,000 airline seats that fly empty every day, and the airlines would just as soon fill them with leisure travelers at bargain prices, he said.
Customers can go to Priceline.com's Web site, insert their dates and destinations, as well as the price they can afford, and Priceline.com will respond within an hour, Walker said.
If a customer offers $300 to fly from New York to Los Angeles, Priceline.com will try to buy a seat for $280, and keep the difference as profit, Walker said.
The service is not for business travelers. "When you use Priceline, you must agree to let the airlines pick the flight and the routing," Walker said. "You can't change the tickets, and there are no frequent flyer miles." The service is initially restricted to flights originating in the U.S., but Walker expects to expand overseas soon.
Priceline.com also offers a toll-free phone number for consumers who are not Internet-savvy, Walker said.
"We believe we have invented a new form of commerce, which we call buyer- driven commerce," he said.