Joy MacknightCut-price airlines are driving sales onto the Web and slashing
costs.
Low-cost airline Ryanair has reported a 54% leap in pre-tax
profits in the second quarter of 2000 - and cited the Internet as a
key factor in improved performance. The airline said annualised
cost savings of up to £20 million had been achieved by driving
business onto its Internet booking site Ryanair.com.
In just six months the percentage of direct bookings rose from
40% of sales to 90% - cutting out the middleman and saving on
travel agents' commissions and charges for computerised
reservations.
Chief executive Michael O'Leary said: "The most dramatic change
in our cost base this year has been the rapid growth of
Ryanair.com.
"The success of Ryanair.com, and in particular our ability to
guarantee the lowest air fares on the Internet in Europe, has meant
that our traffic growth in the second quarter has run at 34%
instead of our anticipated 27%."
Sales costs in the second quarter dropped from 8.5m Euros to
4.6m Euros.
Meanwhile, British Airways' low cost subsidiary Go looks set to
move into profit ahead of its sale, announced by BA last week.
Online ticket sales were one of the drivers of its 318% revenue
growth year on year.
Go said that 65% of its seats were booked online in September,
reaching a peak of 87% during a promotional campaign.