[London, ENGLAND] European online travel agency ebookers.com
has shrugged off the decision by Northwest Airlines and KLM Royal
Dutch airlines to stop paying commission for online ticket
sales, saying that its business will be completely unaffected.
The reason for ebookers.com’s confidence is firstly that the
ruling by the two airlines applies only to North America,
secondly that it deals with published air fares — whereas
ebookers’ sales are mostly negotiated or late booking air fares
— and thirdly that ebookers deals with so many airlines that
a move by just two of them will not make much difference.
The response by ebookers.com has been made because, on hearing
the news of the Northwest/KLM decision, investors and the media
jumped to the conclusion that independent online airfare dealers
will be squeezed out of the market when airlines act together.
“Due to complexities of fare types in the travel industry,
ebookers.com can sometimes be associated with fare change
speculation that in reality bears little or no relation to
our business. This recent announcement is one such case,” said
ebookers.com Managing Director Sanjiv Talwar.
“Even in the unlikely event that such announcements are
mirrored by these two airlines in Europe for published fares,
over 99 per cent of our business would remain unaffected,”
he continued, adding this was not the case with some travel
sites that are more reliant on published fares.
However, ebookers.com certainly sells published tickets —
and in fact offers published tickets for over 500 airlines
as opposed to the negotiated tickets it sells for 120 airlines.
Currently the agency’s business is split 80-20 in favor of
negotiated or late booking air fares.
The shock decision by Northwest and KLM, while hitting some
American travel sites hard, has highlighted differences
between the U.S. and European travel markets.
It is much more difficult for airlines to act independently of
travel agents in Europe, where a higher proportion of sales are
made via agents. For example, far from shunning the online
operator, British Airways actually selected ebookers.com as
a “preferred travel online partner” in August last year.
Nonetheless, even European airlines may begin to see
advantages in dealing direct with the consumer, harnessing
the power of the Internet to overcome such informational
problems as communicating “which airline flies where.”
ebookers.com operates across Europe in eleven countries:
Denmark, Finland, France, Germany, Ireland, Netherlands,
Norway, Spain, Sweden, Switzerland and the U.K.