Recent Trends in Airline Distribution Systems with Specific Reference to the Impact of the Internet

In the continuing fight to contain costs and increase revenue airlines have turned to the Internet as a new distribution channel. Direct sales to consumers has been identified as a means of reducing the levels of commissions paid to intermediaries and as a consequence airlines have commenced building their own Internet distribution channels. The Internet has enabled airlines to establish their own distribution channels as well as facilitating the establishment of a new group of do.com travel firms effectively creating five parallel distribution channels; airline Internet portals, dot.com travel agents, direct customer to airline sales via the Internet, airline to customers through the telephone and traditional shop front travel agents. For airlines to achieve savings via the Internet, strict cost controls will need to be implemented and even then it is possible that only a limited number of airline products, particularly point-to-point travel, will yield the savings desired by airlines.