While low-cost carriers are becoming an increasingly important part of the travel landscape in the Asia Pacific region, almost two thirds of online travel agents say they are still unable to sell their fares.
This is one of the key findings of a new report by Abacus International, which identified a major gap between supply and demand for LCC content online. In a survey of 62 travel agents in the online space, 42% of respondents acknowledged that LCCs have a “major presence” in their markets. Sixty percent however, said they were unable to display and sell LCCs’ inventory.
Only 29% of the online agents said they have any kind of agreements in place with budget carriers, with the rest either excluding them from their search results or, as one in seven admitted, screen-scraping results from LCCs’ own sites. Almost a third stated that they “ignore LCCs and focus on airlines that can be booked through our online booking engine”.
“We cannot assume users of these travel agents’ sites are familiar with all the airlines operating on their chosen routes, or to know where else to look to compare the available fares,” said Martin Symes, vice president of product & marketing at Abacus International. “An LCC’s absence places the carrier, the intermediary and the consumer at a disadvantage.”
Where online travel agents are able to book LCCs, the low-cost model is also more challenging to sell, due to its focus on ancillary sales. One third of the agents said that the concept of LCCs’ “added extras” makes it difficult to quote a total price.
“It’s a snapshot of where we are on this important debate,” said Symes. “In other parts of the world including the US, Europe and Australia, we have witnessed major LCCs work to gain share of the higher yielding corporate market, by evolving their products and GDS participation levels. It will be interesting to see if this is replicated here in Asia.”
“LCCs in this region now have the ability to engage the trade in many different ways, given innovation in the distribution technology. They can readily scale a B2B model to complement their direct focus,” he added.