IDC Expects Travel Agencies to Outsell Airlines on the Internet

FRAMINGHAM, MASS – SEPTEMBER 18, 2000 – With major airlines preparing to launch their own kind of online travel agencies this fall, IDC today released research findings that indicate the majority of online airline ticket sales will be purchased from independent travel agencies and not from sites directly affiliated with the airlines.

Next summer, United, American, Delta, Northwest, and Continental will launch their own joint airline-owned travel agency, Orbitz.com. United, American, Northwest, Continental, US Airways, and America West will also be part of Hotwire.com, a site scheduled to launch this month that will distribute distressed airline inventory.

Despite the opening of these sites, however, airlines' share of online ticket sales will decrease. According to IDC, the airlines' Web sites today account for more than half of all online ticket sales. By 2001, however, their share will fall below 50%, and it will continue to drop through at least 2004.

"Because of their sizable marketing muscle, these start-ups will create good publicity for the online travel business. However, the traditional travel agency model, which includes Internet pure-plays and clicks-and-mortars, will better understand the needs of the traveler and will be unbiased and will therefore get more business," said Joshua Friedman, senior analyst for IDC's Consumer eCommerce: Travel research.

The good news for the airlines is that IDC expects online ticket sales to more than triple from over $5 billion in 1999 to over $18 billion in 2004.

"Many factors will contribute to the growth of online airline ticket sales," Friedman said. "An increasing number of Americans are going online, the demographics of online users are shifting favorably, and online users overall are getting increasingly comfortable with ecommerce in general. Additionally, we expect the online airline purchasing process to improve considerably over the next few years."

IDC’s new bulletin U.S. Online Airline Ticket Sales: Market Forecast and Analysis, 1999-2004 (IDC #B22662) forecasts online airline ticket sales through 2004 and discusses the factors driving the market's growth and those that could inhibit it. The bulletin compares online airline tickets sold directly by airlines to those sold by travel agencies. Finally, IDC makes recommendations for vendors selling airline tickets over the Internet. To purchase the report, contact Demetra Georgakopoulos at 1-800-343-4952 extension 4496 or demetra@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 600 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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