Airline fare wars move to the Web

WEB SITES are beginning to usurp travel agents, with two of Britain's low-cost airlines, easyJet and Go, the British Airways subsidiary, escalating their battle for market share by moving into cyberspace.

Go is to launch online booking for tickets on its Web site today, guaranteeing that for the first month any ticket will cost pounds 100 return or less. Though easyJet has had its own Web booking facility for four months - leading James Rothney, a spokesman for easyJet, to deride Go's move as "British Airways copying us again" - the ability to book online with either company could be a milestone in the shift of airlines away from travel agents, and towards the individual buyer.

Cutting out intermediaries such as travel agents is essential to achieving low prices for both Go and easyJet.

British Airways, which has pumped pounds 250m into Go, sells about 80 per cent of its tickets through travel agents. That costs it more than pounds 500m in commission annually.

The airline war is the latest in a growing wave of "electronic commerce" battles being carried out over the Internet. Similar conflicts are taking place in the booktrade, where amazon.com, the "virtual bookshop". is taking on traditional chains such as Dillons in the UK and Barnes & Noble in the US and in housebuying, aided by electronic shop windows from estate agents.

EasyJet takes most of its bookings over the phone, but the Web site is increasingly important. Last week 5 per cent of the 55,500 seats sold by the airline were via the Internet. Though that amounts to slightly over 2,100 seats, in some weeks up to 8 per cent of the tickets are bought on the Internet and the company aims to sell 30 per cent via the Web by the end of 1999.

Both Go and easyJet avoid issuing tickets, instead sending out confirmation by e-mail, post or fax: the passenger then turns up at the airport with their passport. That alone offers a big saving, because distribution expenses make up 20 per cent of standard airlines' ticket costs.

British Midland, another BA subsidiary, was the first UK airline to offer online booking, in 1995. Although it is still limited in scope, online booking can allow electronic travel businesses to grow quickly because, once written, the computer code can do the same job as many human staff, does not need training and does not demand salary rises.

EasyJet's Web site can sell tickets to 200 people at once - meaning that it could potentially handle more than half the company's business, as there are currently 150 staff available to answer the phone at the booking centre.

"A good reservation agent can do about 100 bookings per day," Mr Rothney said. "So at present our site is doing the work of four or five people. But the cost of the Internet distribution for us is much lower than by post. And it's not as if the site costs us anything when it's not being used.

"It also gives the consumer another advantage in that they can generate their own itinerary exactly."

Once the user has chosen a destination, date, and whether they want a standard or flexible fare, the Go site will let travellers see what seats are available, and will search for the lowest fare available.

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