Stating the obvious

The internet is displacing travel agent and airline reservation agent bookings. An interesting fact:

    Last year, more than 30 million people bought at least one ticket over the Internet

How significant a phenomenon is this?

    Airlines are taking note and shifting more of their resources toward the medium to reduce the costs associated with selling seats, typically their third-largest expense, behind labor and fuel. Experts say it’s paying off.

    Last year, the airline industry generated about 17 percent of revenue from leisure tickets sold over the Internet, said Henry Harteveldt, senior analyst for Forrester Research, a consulting firm in Cambridge, Mass., that identifies and analyzes trends in technology.

    Harteveldt, who focuses on travel services, predicts that at least 19.2 percent of the revenue generated next year by the airlines will come from tickets sold over the Internet.

    Online bookings at American Airlines represented 19 percent of revenue from trips flown in April and May alone, said Tim Kincaid, a company spokesman. That’s up five percentage points from the same period last year, he said.

    American Airlines wouldn’t say how much it will save by closing its St. Louis reservation center and two others that closed this year in Las Vegas and Norfolk, Va. But it costs the airline about $1 to process a ticket sold on its Web site and an additional $3 to $4 for ticketing and accounting. That’s less than the wages, benefits and other operating costs of staffing a call center, Harteveldt said.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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