China witnesses progress in e-ticket proliferation

China Special: By EyeforTravel.com Correspondent in Beijing

The recent BSP e-ticket reimbursement policy in China has had some implementation glitches, but directionally, the industry is heading the right direction.

Apart from growth and reduction in fares, the Chinese aviation industry has witnessed increasing fragmentation.

Andy Clayton, vice-president – Air, eLong, one of the speakers on the second day of the Travel Distribution China 2006, being held in Beijing, said: “Disjointed implementation of new e-ticket policies in June demonstrated the difficulty of policy enforcement across airlines, Travelsky, CAAC and BSP/IATA. Other examples, such as China Southern developing their own e-ticket system, and the imminent opening of the GDS market, all indicate a trend towards fragmentation.”

On general trend related to fares, he told EyeforTravel.com’s Ritesh Gupta, “Ticket prices have continued to drop with increases in airline capacity, which has led to record low fares. Although this makes promotion of low fares easier, profitability suffers as actual commissions drop with fare price.”

Clayton added that airlines are concerned about price integrity, and very cautious of agents using commissions to offer rebates to customers. 

Providing his perspective on the current status, Chris Amenechi, senior director – International Distribution Planning and E-commerce, Continental Airlines, who also spoke during the aviation industry session, said, “Significant progress has been made with respect to e-ticket proliferation. Also, good progress has been made in achieving improved GDS accessibility.”

Referring to China’s online growth challenges, he said the total transaction capability and adoption are still evolving. He pointed to book online and buy offline, research and transact offline, buy online and bundle offline. According to him, capacity to penetrate China’s diverse market requires a combination of online and offline tools. Third party intermediaries still control large market segments as well as the bundling of packages but are largely embedded in legacy systems. He added that e-functionality is still evolving.

Amenechi emphasised on functionality and experience. He propagated that it is imperative to ensure consumers are engaged in their preferred language, manage their travel plans and maximise their experience. He also spoke about capitalising on the natural adoption rates to acquire, retain and grow sales. “Make sure that customers use e-services,” he added.

With respect to Hong Kong and Greater China, he said the main challenges would be to be functionally ready for the market, grow as market expands and give Chinese customers a befitting experience.