17 Aug Increase in Airline Travels
There are quite strange times in the airline industry. Wall Street seems to be unable to say bad things about the profitability of airlines. The largest 4 airline companies in the United States had $ 4.1 million in bank money; But industry-wide increases in revenues due to cheaper tickets were seen as 2%, some researchers call it pricing dysfunction.
Supply vs. Demand
Seat capacity grew by almost 5% across the industry, while the US economy grew by 2.5% when a full comparison was made with the industry. The cheaper fuel price allowed this to grow. Especially for days such as Saturdays and Tuesdays when the demand is not heavy.
Business Travel Agreements
One of the problems most talked about by airline executives is “short-term return”, which means; Business travelers do not pay a price close to normal fare when they use last minute tickets. For example; If the ticket price from Los Angeles to New York is 1000 dollars, pre-flight Wednesdays can be priced at a very low price of $ 230.
With a fall in crude oil prices, a barrel of oil is around $ 44, and prices are 28% lower than in the second quarter of the previous year. For airline experts who are accustomed to having a barrel price of $ 100, this low-cost energy means a large amount of bumper, which also allows them to focus on protecting their floors and attack their enemies.
How Can Low Cost Airline Tickets Work?
Business travelers can not be disturbed by unnecessary distractions during their journey. According to them, time is cash, so they want to pay extra for better seats, fast boarding and flexibility.
Other low-cost carriers such as Ryanair and easyJet are also aware of this, and now they can offer business travelers the extra services they need through the travel agency, thanks to the profitable mobile segment.
However, there is much more opportunity for airline companies and hybrid companies to provide low-cost services to capture corporate spending on travel agency channels.
Today, more than 50,000 travel agencies using Amadeus see an increase in the number of bookings they make for airline companies offering low-cost services for business travelers. Last year the number of corporate flight booking made by business travelers through Amadeus for airline companies offering low-cost services was almost 20 million, and compared to the same period last year, we see that the booking rates of low-cost aircraft companies have increased by 11% in 2015. This is an important development; But only a start.
Ryanair has been included in the package services provided by the “Business Plus Mouse” tariff for business travelers and has successfully implemented this strategy on the corporate travel market to achieve higher efficiency. In addition, Ryanair has made this tariff useful to ensure full channel uniformity for all Amadeus agencies around the world at no additional cost, and to make best use of indirect distribution offers.
EasyJet has drawn attention on the corporate travel field by developing their own unique container and flexible tariff proposals. It also benefits from the billion dollar market of Europe, thanks to 20% of its business travelers, by providing food and beverage services needed by organizations and business travelers.
With this new, business-focused tariffs, travel agencies that offer these low-cost, hybrid content offerings are also getting paid. Now travel agencies can make reservations 5 times faster and save 3 euros per round-trip booking, and their global seat share is also increasing. There are many more opportunities in this area.
Amadeus is distributing over 80 low-cost service providers and hybrid company tariffs, and over the past 5 years this number has more than doubled over the previous year.