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Travel agents continue to play an important part in airline distribution

July 23, 2012 | Hotel Marketing

Even as airlines attempt to sell more tickets directly, the majority of their revenue is still generated by travel agents. For instance 50% of American Airlines' revenue last year was generated by brick-and-mortar travel agencies, and another 10 to 15% came from online agencies.

For years, network airlines have relied on travel agencies to sell tickets to passengers and the trend continues. Even low-cost carriers have been focusing on strengthening their offline agency distribution partnerships in order to capture a bigger share of the managed corporate travel market. EyeforTravel’s Ritesh Gupta finds out where offline agencies are placed today in airline distribution.

Offline agency distribution remains an important channel for network airlines, and has been gaining popularity with low cost airlines too. The majority of airline passenger revenues for network airlines are from tickets sold through travel agencies - both traditional brick-and-mortar agencies as well as online travel agencies (OTAs).

Even as network airlines attempt to sell more tickets directly via their call centres, websites and ticket offices, these sales, for the most part, remain lower than indirect channels. For instance, in the case of US-based American Airlines, last year it emerged that around 50% of the group’s revenue is generated by brick-and-mortar travel agencies, and another 10 to 15% comes from online agencies.

“Offline travel agents continue to play an important part in distribution. The majority of the world’s managed business travel is still booked with either an offline travel agent or a travel management company and that is a significant driver in making this the highest-revenue distribution channel for airlines. Outside of business travel, offline agencies also play a vital role in helping airlines to access fast-growing markets in the Middle East and Asia,” says Spain-based Cyril Tetaz, head of marketing, distribution marketing at Amadeus.

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