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Monday, May 28, 2012

Anti-disintermediation - The airlines should be leading the charge!

Very interesting blog post from the excellent distribution-solutionz blog: Anti-disintermediation - The airlines should be leading the charge!
 "Today's consumer can access goods or information on the Internet that traditionally required the assistance of an intermediary such as a retailer, travel agent, or banker. By cutting out the middleman (disintermediation), e-businesses are able to sell goods and services more quickly and efficiently, and for lower prices."

What they demonstrate is why airlines still need Mega Agencies (TMCs), Online Agencies (OTAs) and all other agencies: Air ticket categories and ticket prices.

"For international, a much smaller percentage of transactions (13%) sold by the agency community comes through the MEGA channel, but the average fare is more than twice that yielded by their brick and mortar agency counterparts and three times that of their online counterparts."

It might seems counter-intuitive but: 
"From the consumer perspective, it is important to understand that the airline ticket does not COST more through the agency channel. It is that the dialogue is simply different. Online typically presents the lowest cost first, even if price is not the consumer's criteria. An agency asks lots of questions - who are you traveling with, when do you need to be there, do you want a non-stop. Each of these helps refine the process to produce what the customer actually wants for a given trip."