Airline Industry Trends

Consumer Travel Report Provides Unrivaled Insights Into Airline Industry Trends

Distribution-related spats are a common topic in travel trade media, but the cur­rent airline-intermediary disputes and airline industry trends have gar­nered coverage in every major consumer media outlet as well. However, amid all the debate, the consumer perspective is often neglected. On the occasions when con­sumer interests are mentioned, the rhetoric largely consists of hypotheticals and opinions about consumer rights versus actual consumer behavior and measured preferences. How do travelers feel about airlines and their services? How do intermediaries affect travelers’ pur­chase decisions? How interested are fliers in ancillary products? To investigate these topics, PhoCusWright took a deeper look into con­sumers’ relationships with airlines as part of PhoCusWright’s Consumer Travel Report Third Edition. The objective of this derivative report is to provide insight into the key issues that shape travelers’ relationships with airlines, and how those relationships affect the leisure air travel landscape.


Airline Industry Trends


Now that online travel is well into its teen­age years, channel behavior no longer shifts dramatically from year to year. In fact, the typical channel through which consum­ers book airline tickets has shown extremely little change over the past three years. OTAs are the most popular booking channel at 37% while the airline sites attract 34%. Despite OTA popularity among consum­ers, supplier websites still generate more than OTAs in terms of air gross bookings, as high-spend consumers and frequent travelers more often book through supplier websites.


Another of the most telling airline industry trends is that booking channels indicate where consumers end the decision-making process, but the vast majority make at least a few online stops along the way. Figure 2a displays usage of the three most popular travel shopping website catego­ries – supplier websites, search engines, and OTAs – among consumers who book tickets on airline websites versus those who book on OTAs. Figures 2b shows the same information, but details overlap of usage between the three channels among airline websites and OTA air bookers. Among airline website bookers, 57% typically shop for travel on supplier websites. This statistic illustrates that a substantial por­tion of airline website bookers (43%) typically do not use supplier websites when shopping. Therefore, four out of 10 are making decisions elsewhere before booking on airline websites.


In fact, over half of airline website bookers (56%) typically use OTAs when shopping for travel. Moreover, 22% of airline bookers shop on OTAs without hitting supplier websites. So an airline risks losing one fifth of its own website bookers if it pulls completely out of OTAs. A decision to cut intermediaries off is therefore a very risky one indeed.

  At 54%, search engines also represent an important shopping channel for airline website bookers. The vast majority of airline website bookers (91%) shop using at least one of the three categories. One of the top airline industry trends : One fifth of airline website bookers typically use all three categories.