Air Transport World

E-commerce: The future is now.

Airlines are running behind the power curve in adapting to the new realities

Any airline self-satisfied enough to think e-ticketing, a website, some Internet seat sales and a one-to-one customer management system are all that's needed to market in the future had better think again. Experts in e-commerce--for current purposes, simply selling on the Internet--predict much more is in store.

Keep in mind, though, that everything hyped as new is not. Remember Allegis, former UAL Inc. Chairman Richard Ferris's failed 1987 travel company? Allegis, designed to transform Westin hotels, Hertz rental cars, United Airlines and UAL's Apollo CRS into a supermarket for travel cross-selling? Allegis, whose unfortunate name and opposition from pilots, not strategy, clinched its downfall? Well, Allegis is back under the more modern e-commerce banner.

Travel agents have been the airlines' retail face. But, suggests Greg Conley, global general manager of travel and transportation at IBM, with so many entities selling travel online--airlines, travel agencies, other travel or nontravel entities through standard websites or portals-- airlines must keep plowing money into Internet commerce. Or, he warns, "That face [of the airlines] could turn out to be Yahoo!"

So airlines must counterattack. Why hand over business unnecessarily? Conley says: "Airlines should be asking themselves, 'Can I be a portal myself? What can I do to create a business out of that [website]? How can I expand business with people I already communicate with?' They should take their website, the information they have developed, and regard e-commerce as a business in itself."

With IBM since 1995, Conley knows something about strategic repositioning. "This is not a world where you can sit around, watch somebody else and guess what might be happening," he says. Lest anyone think IBM is just hawking e-commerce to others, between the first half of 1998 and 1999 its own e-commerce revenue rose to $6 billion from $472 million, the result of moving many of its own services and sales online. …

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