TRAVELtech: The true cost of booking an airline ticket

First of my posts from the conference TRAVELtech. Have been listening to Tim Russell (MD of Amadeus Australia).

Tim made a very good point when looking at the costs of booking an airline ticket online. He presented research indicating that at a dollar charging level the cheapest place to book a flight is usually the airline’s own website where there is normally only a small credit card fee but no booking fee. Call it $0-$15 per booking. In the middle of the cost spectrum there is the online and offline agent where there are fees and charges ranging from $10-$30 per ticket. Finally At the end of the spectrum there is the full service Travel Management Company (TMC – corporate travel agent). These providers can charge upwards of $50-$60 per ticket.

On the crude measure of dollars per ticket, the airline direct site is the cheapest. However, Tim brings in the great point that when assessing the cost of booking we should really also be considering the time cost is searching and completing the transaction. When this is taken into account the cost spectrum is turned on its head. The TMC booking takes the least amount of time – say 15 minutes, the time it tkes to make a phone call to a dedicated agent. Next comes the online agent who can display multiple carriers in one place making searching faster. Finally the airlines direct site takes the longest – more than an hour because of the need to search more than one supplier before taking a booking.

Including these measures it becomes a neck and neck race between the cost of TMCs and online agents with airlines coming third.

If you are booking a leisure flight for the family and have all the time you need then time does not come into account but certainly in the corporate area there is a huge time difference between the different travel booking channels. Goes part of the way to explain the success of Webjet in Australia despite the huge fees they are charging.