Here's an article from the Edmonton Journal today (I couldn't get a link to work):

Wednesday 11 July 2001

Air Canada promises faster, cheaper online service

David Finlayson, Journal Business Writer
The Edmonton Journal


Brian Gavriloff, The Journal / Barbara Hepburn uses a laptop computer to check out flights online at the International Airport.


Air Canada plans to offer discounts for online flight bookings and to make its Web site easier to navigate as it plays catch-up in the soaring Internet market.

At a time when more travellers are clicking a mouse to book their flights, online bookings account for only two to three per cent of Air Canada's business, compared to 35 per cent for rival WestJet.

Although Air Canada considers online booking important, it was put on the back burner following the amalgamation with Canadian Airlines, spokesperson Charlotte Wardell said.

"We are planning to revamp our Web site to make it more user friendly and we will be offering a discount for online booking, as well as other new features. We are confident we'll see much higher use of online booking in coming years."

The airline, which also gets another three per cent of its business through U.S. online travel agencies such as Travelocity, is hoping the changes will be in place by 2002, Wardell said.

The majority of Air Canada's bookings come from travel agents using the airline's computer reservation system -- something WestJet doesn't have -- and that accounts for much of the difference in online business, she added.

Even a small increase in the slice of the Internet pie can have a big impact on an airline's bottom line.

North American travellers will spend about $15 billion buying airline tickets on the Web this year, according to PhoCusWright, a U.S. consulting firm. That represents 14 per cent of total spending, compared with nine per cent last year.

Apart from catering to a consumer trend, airlines save millions of dollars in travel agency commissions and other costs through Web bookings. Every time someone goes to their sites just to see if a flight is on time or to redeem frequent-flyer points, airlines can avoid answering a phone call and the associated costs.

Even people reluctant to buy tickets online often use the Internet to research fares before calling, saving the airlines even more money.

Airlines lure customers to their Web sites by offering special weekly online fares, something WestJet (www.westjet.ca), Air Canada (www.aircanada.ca) and Canada 3000 (www.canada3000.ca) all do.

Air Canada has not decided what discount it will offer, but it's not likely to be as high as the extra 20 per cent that Delta Airlines offered for online bookings when it launched a fare sale in the U.S. recently. That was immediately matched by American and America West.

U.S. airlines are in a dogfight for customers in an economic slowdown and face increasing pressure from online travel agency giants Travelocity and Expedia.

WestJet, which offers a flat $5 discount for booking online, is so pleased with its Web business growth that it is revamping its site to add more features, such as e-mailing itineraries currently faxed to customers, spokesperson Siobhan Vinish said.

"It's really growing at the speed of light, and online bookings save us a lot of money. It costs us $12 to do a phone booking and 50 cents online. We are a ticketless airline, and that makes a difference, also."

The Web site has also allowed the airline, which does not have alliances with other carriers, to increase its business from overseas, Vinish said.

It's not that the Calgary-based airline is trying to push travel agents out of the loop, she said. In fact, WestJet boosts agents' commissions from seven to nine per cent for online bookings.

"Travel agents are very important to us. We want to continue to work very closely with them."

But the travel agencies, caught in the middle of the Internet revolution, are fighting back by offering their own online booking systems.

Customers can book their travel online at AMA (www.ama.ab.ca), for example, through a system called Travelpoint.

The advantage is that it pulls up all available flights to a destination, not just one airline, sale and marketing manager Andrew Hopkyns said. A travel counsellor is available to answer customer queries.

"We have taken advantage of the technology available, but we also develop a far greater relationship with our customers than the airlines. "Travel agencies are no longer in the business of just selling airline tickets. We're travel counsellors. And those who do it well will be the survivors."

US airlines have pumped an estimated $145 million into Orbitz, a new online travel agency that opened last month to great fanfare Š and service glitches