By Ali Ahmed al Riyami
MUSCAT — Oman Air hosted the second annually held two-day e-Conference on ‘Travel of the Future’, organised by US-based Airline Information and German consulting firm, Airline Solutions, that is set to establish standards and techniques for the next generation of airline ticketing, at the Golden Tulip Hotel, Seeb, yesterday.
Over a hundred worldwide delegates from the airline industry, its service providers — including Lufthansa systems IBS and SITA, along with representatives of global distribution system providers (GDS) — Sabre, Galileo, Amaedeus, Worldspan and Abacus — attended the conference.
Addressing the delegates was a high-profile panel made up of Said bin Hamdoon al Harthy, Chairman, Ziad bin Karim al Haremi, CEO, and Mohammed bin Mubarak al Shikely, Senior Marketing Manager of Oman Air, and Abdul Wahab Teffahi, Secretary-General, Arab Air Carrier Organisation (AACO), and Frank Socha, Founder and Managing Director of Airline Solutions.
The important issues of future travel trends, with regard to Internet on-line purchasing and e-Commerce were the main focus of yesterday’s agenda. It was noted, for Arab airlines to be able to maintain a competitive edge and be able to compete with other Asian and Western airlines, it is necessary to adopt the most cost-effective modern methods available that will add revenue and attract more customers.
Although Oman Air and some other regional airlines are already employing some of the latest e-Commerce type transactions, the scope, especially within the region, must be expanded. Implementation of e-Commerce allows for the purchasing of airfare directly from favourite airline websites.
Moreover, the customer can simultaneously book the required hotel, rent a car and even purchase event tickets in his or her destination city, which is all performed in a single ticketless and paperless transaction. In-turn this reduces costs and minimises, or even eliminates the need for interaction with intermediaries as well as the physical presence this involves.
Other advantages include the potential of receiving news of flight delays or cancellations via text messages on mobile phones prior to checking-in and using it for pre-flight check-in, printing one’s own boarding pass and satellite-tracked RFID baggage tags from a curbside self-check-in counter at the airport.
Further, it is possible to surf the web on board the aircraft, obtain baggage verification for each flight connection and receive special offers directly on personal digital assistants (PDAs) for discount concert tickets in one’s destination city during the trip. In his comments concerning e-Conferencing, al Shikely said, “e-Conference brings together the highest executive ranks of airlines, top independent experts and the best practice directors and managers eager to impart knowledge and share experiences and their projections on future trends; and Oman Air is proud to be a part of making such a reality possible.”
Other presenters include the CIO of Royal Jordanian Airlines, senior executives from Etihad Airways, Gulf Air, Jet Airways, Kingfisher Airlines, Qatar Airways and key technology suppliers to the airline industry. — Picture by Salim al Hashly
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The two-day event, which started on Wednesday, is being organised by US-based Airline Information and German consulting firm, Airline Solutions.
“E-commerce is the strategy for growth in an environment of over capacity. Air traffic demand is doubling with increased GDP growth owing to the region’s oil wealth,” said Ziad Karim Al Haremi, Oman Air’s CEO.
He pointed out that easy access to funds and liquidity, low input costs and a benign tax regime presented favourable economies of scale for growth in cargo and passenger air traffic.
In order to take full advantage of this scenario, airlines need to implement systems that facilitate direct interaction with customers, he explained. Sixty per cent of Oman Air’s bookings, for instance, are through e-ticketing. Iata recommendations emphasised 100 per cent e-enabled bookings by mid-2007, added Al Haremi.
Abdul Wahab Teffaha, Secretary-General of Arab Air Carriers Association, explained why e-commerce was so vital to the aviation industry. Electronic transactions, apart from bypassing third-party intermediaries such as travel agents and global distribution systems (GDS), transformed the customer from being a mere information recipient to one who had a wider range of travel options before him. Not only that but direct distribution tools of liaising with the customer lowered GDS fees and agents’ fees as well resulting in substantial costs benefits for the airlines. “GDS prices are increasing. The average cost of airlines’ distribution systems was between 18 and 25 per cent of total costs in 2000. The low-cost challenge is serious on short-haul routes, which is why direct distribution presents a formidable model to manage individual and corporate customer needs,” said Teffaha.
However, airlines still conducted 51 per cent of their transactions through GDS and 49 per cent through direct distribution. Eighty-five per cent of bookings for Arab airlines, he pointed out, are through travel agents amounting to operational costs of $3 billion from $15 billion in revenue.
Given this, is the region ready to take on an e-enabled environment. Teffaha felt that it would take some time for the idea to gain acceptance mainly because the Gulf region was not Internet savvy. The challenge then was to break this mindset and consolidate all arms of the airline – distribution, promotion, sales and IT.
“These should be run under one strategic direction and should be business driven rather than IT driven for better customer relation management,” he concluded.
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