Revenue from airlines' Web sites takes off

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Revenue from airlines' Web sites takes off
By Barbara De Lollis, USA TODAY

Bargain-hunting travelers pushed airlines' Web-site sales over $6 billion=20
in 2001, giving the nation's struggling carriers a small victory in a=20
devastating year. Bookings on major airlines' Web sites rose by more than=20
$1 billion from 2000, estimates PhoCus-Wright, a consulting firm=20
specializing in Internet travel. Southwest and Delta appear to have led the=
=20
industry, producing more than $3 billion in Internet revenue, based on a=20
USA TODAY survey of major carriers and PhoCusWright estimates. Southwest=20
and Delta's take was nearly half of the at least $6.4 billion in bookings=20
expected for major airlines' Web sites, PhoCus-Wright says. "It's pretty=20
amazing," says PhoCusWright analyst Lorraine Sileo. "These airlines will=20
probably have a double-digit decline for the year and a double-digit=20
increase in their Web sites."
It's a welcome increase for the airlines, because they don't have to pay=20
travel-agent commissions on tickets sold directly to consumers. But their=20
Web sites produced a small slice of their $86 billion in 2001 revenue.=20
Travel agents still sell 70% of airline tickets.

Comparing some results: Southwest.com, by far the most successful airline=20
Web site, delivered $2.1 billion in revenue, or 40% of Southwest's=20
passenger revenue. The site had $1.7 billion in bookings in 2000. It=20
accounted for about 10% of total revenue for all online travel services in=
=20
2001, says airline analyst Susan Donofrio of Deutsche Banc Alex.=20
Brown.  Delta.com broke the $1 billion mark in 2001, selling 42% more=20
tickets than the previous year.  Northwest Airlines' nwa.com delivered $600=
=20
million last year, up 60% from the prior year. Alaska Airlines'=20
alaskaair.com brought in $311 million in revenue last year, up 53% from=20
2000. America West Airlines' americawest.com brought in $275 million last=20
year, nearly 60% more than in 2000.  "We'd be happy if we are able to see=20
our volume double again," says Lloyd Parker Jr., America West's vice=20
president of distribution.

Parker expects the trend to continue this year, noting that americawest.com=
=20
delivered 16% of the airline's revenue in January vs. 7% the same month=20
last year. American, United and US Airways declined to provide figures.=20
After the Sept. 11 terrorist attacks temporarily shut down the U.S. air=20
system and made many people afraid to fly, airlines began promoting=20
specials on their Web sites. "The Internet was a good way for us to get out=
=20
the message that there were a lot of good airline deals out there," says=20
Bill Brunger, a Continental Airlines vice president. Southwest.com offered=
=20
double miles, making it easier for frequent fliers to win free trips.=20
Alaskaair.com offered double miles, discounted frequent-flier award travel=
=20
and ran special vacation packages with hotel partners. Usairways.com was=20
able to change its fares and promotions as it liked, even hourly, says=20
sales Vice President Steve Tracas. "It's a key part of our culture now," he=
=20
says.

Airlines' Web sales boom
Major airlines' revenue from bookings made on their Web=20
sites:
Airline Web site 2001 revenue % growth over 2000
Southwest southwest.com$2.1 billion24%
Deltadelta.com$1.1 billion42%
Americanaa.com$900 million (1)50%
US Airwaysusairways.com$705 million (1)60%
Northwestnwa.com$600 million60%
Unitedunited.com or ual.com$530 million (1)40%
Continentalcontinental.com$332 million45%
Alaskaalaskaair.com$311 million53%
America Westamericawest.com$275 million57%
1 =97 PhoCusWright estimate
Sources: Airlines, PhoCusWright




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