The Airlines as a Retailer.

Airlines clearly have a financial incentive to maximize revenue through their direct Internet channel. The friction between airlines and distributors will continue, as carriers try to regain control over customer relationships and encourage travelers to use the less expensive distribution channels. One powerful way to increase customer loyalty and services is for carriers to become Internet travel retailers. To execute on this vision, airlines must take ownership of the entire vacation planning process and integrate complementary services into the airline booking path. Traditional outsourcing to third party tour operator specialists does not allow the airline to take control of the customer relationship, and prevents cross-sell and up-sell opportunities along the booking path. White label solutions also relinquish controls, often to the very OTAs who compete with the carriers. Airlines should consider a technology solution that provides a robust multisource framework to add hotel and dynamic packaging capabilities that can be controlled through an easy to use rules engine. The technology solution must be flexible enough to integrate with airline systems and meet the airline’s specific requirements. Ultimately, airlines can gain a greater share of a customer’s wallet by embracing online retailing and working closely with other travel suppliers to execute customized vacation planning on their website.

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