Cut-price airlines in e-sales take-off

Opinion

Cut-price airlines in e-sales take-off



Joy Macknight

Cut-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.

Email Alerts

Register now to receive ComputerWeekly.com IT-related news, guides and more, delivered to your inbox.
By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

This was first published in November 2000

 

COMMENTS powered by Disqus  //  Commenting policy