The Future of Airline Distribution: transparency of online shopping experience.

Abstract

Price-aware generation Y customers and low-cost airlines have prompted legacy carriers to unbundle their products and adopt merchandising. At the same time, low-cost airlines have entered meta-search engines, Global Distribution Systems, and started cooperating with travel agencies to attract business travelers. Additionally, airline industry in general has been changing its focus from being product-oriented towards being customer-oriented. Such trends put forward airline merchandising as a vital strategy that can gain customers’ loyalty.

Yet what do travelers think about airline merchandising? To find this out, the research asked whether travelers are aware about airline merchandising, whether they would be ready to book ancillary services via online tools, and what they expect when shopping for airline products online. The findings show that:

+ The majority of online bookers are unaware about airlines’ unbundled products + Travelers’ readiness to search and book ancillary services online is high + Travelers demand a higher transparency of airlines’ products across various online booking tools + Online booking tools’ capability will be strengthened by adopting new open-system communication standard from IATA’s initiative – New Distribution Capability

Thus, based on the findings, air travel commerce still needs to generate and maintain travelers’ awareness about airlines’ ancillary services. Merchandising of airline products should be transparent, customer-oriented, and personalized. As the result of adopting new communication standard initiated by IATA – New Distribution Capability, online travel booking tools will facilitate the process of merchandising airlines ancillary services and meet online travelers’ high demands. This will improve traveler’s shopping experience and generate more business for all stakeholders.