Only 10% book online in region

Middle East airlines are persuading just one in 10 customers to book online, denying themselves vital revenues as the aviation industry grapples with oil prices pushing $140, according to a report. Selling online has so far saved carriers in the Middle East more than $2 billion (Dh7.34bn), but with just 10 per cent of passengers choosing the web the region is far off North America, which captures 43 per cent of sales through the internet, said aviation IT company Sita's annual study. "Among the record 121 airlines responding to this year's survey, the online sales average is only 24 per cent with their own website. This varies from 43 per cent in North America to just under 10 per cent in Africa and the Middle East," said Paul Coby, chairman of Sita. "A very important source of revenue is clearly being lost to those airlines not using web selling at a time when everyone in the industry needs to maximise returns on their IT spend. Selling online has already massively helped to drive down distribution costs, saving airlines in the region of $2bn," he added. Coby said the adoption of the new generation Web 2.0 technology could enhance sales and cost-cutting, and boost returns from the $11bn invested annually in IT. He was speaking to delegates at Sita's Air Transport IT Summit in Brussels, which also heard that technology such as location sensing via mobile phones could save airlines up to $600 million by tracking passengers, sending messages and moving them to gates more efficiently. Sita urged the aviation industry to embrace greater technology and smarter IT spend to tackle the growing menace of the price of oil. Since Sita launched the Airline IT Trends survey in 1999, carriers have invested $100bn in IT and communications. As a percentage of revenues the average airline IT spend currently stands at 2.2 per cent. At the industry level, this represents about $11bn this year, which is an increase of five per cent on last year. Sita's CEO, Francesco Violante, said: "The price of fuel is providing the economic incentive for the airlines to tap further into ancillary revenues by acting not as e-commerce companies offering every type of service to their global consumer market of 2.3 billion passengers using state-of-the-art technologies such as Web 2.0 and Travel 2.0 applications. This can greatly help to withstand predicted airline losses of $2.3bn this year." He added that Irish airline Ryanair now sells 98 per cent of its tickets online and gains more than 17 per cent of its revenues online.