Room for online channels in Asia to improve planning and selling functionalities

Travel Distribution Asia Special: By EFT Correspondent in Singapore

The online direct and agency channels should become more proficient with planning and selling functionalities in order to become a viable channel in the Asia Pacific region, according to Chris Amenechi, senior director – international distribution planning and e-commerce, Continental Airlines.

Amenechi, one of the speakers for the Travel Distribution Summit Asia ’07 in Singapore, on the major development in the online travel business in Asia in the last 12 months or so, said, “(A major development is) the increased penetration of online agencies in China, India, as well as APAC countries continuing to drive adoption for the airlines. Also, the LCCs have also morphed the US/European direct models to fit their market place but long-haul adoption continues to face trust, payment, product, and general cultural adoption issues.”

He added, “Customer service functionality has evolved to save costs as well as give customers more options and flexibility.”

As more and more low cost carriers enter the market with a focus on online sales, this gradually changes peoples buying behaviour and encourages the use of online purchasing. There is to some extent a halo effect from this.

Assessing the situation from

Asia

perspective, he said, “It has been interesting to see the changes in the short haul domestic/regional markets. From a long-haul transcontinental carrier view point, the market place is much slower compared to the regional pace.”

Markets in

Asia

vary are in different stages of their online development, and each faces different issues in relation to e-commerce. The constraints vary technology and technical infrastructure to language and cultural ones to payment acceptance, credit card penetration and fraud etc. How can a supplier adjust to this diversity and adapt its model?

On the same, he said, “We deal with it country by country as well as being competitive with models that are reliable and trusted.”

GNEs already claim that the flutter created by alternative means of distribution highlights the increasing importance of new capabilities in distribution.

On possibilities of such alternate forms of distribution shaping up in

Asia

, he said, “I think in the regional space, LCCs and some online agencies have adapted their models to the market place to gain traction. To the extent, distribution capability and consumer habits align, this could spur significant growth in traffic and lower costs.”

In August last year, talking about

China

, Amenechi had acknowledged that  the agency channels are still dominant. The direct channels are improving in penetration. On the other key markets in

Asia

, he said,

“There are slight differences in how the agency channels are dominant in these other markets. However, there are significant differences in how customers interact with the agencies as well as the product they buy in the long-haul business. Domestic and regional short-haul LCC business might drive more direct business and challenge the agency dominance. I think both are finding approaches to coexist and reduce cost.”

A lot of airlines are re-launching their booking engines. On the new trends regarding the same in

Asia

, he said, “I believe the trend in

Asia

is following that of

Europe

and the

US

to drive more transactions reliably as well as more relevant to the customer. Also, online customer self service functionality is being driven via different communication/technology tools – computers, SMS, PDAs, Kiosks, etc.”