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Online distribution of airline tickets: Should airlines adopt a single or a multi-channel approach?

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  • Koo, Bonwoo
  • Mantin, Benny
  • O'Connor, Peter

Abstract

In today's digital world, airlines typically distribute tickets both via their own websites and through online travel agency (OTA) platforms such as Expedia and Travelocity. Although associated with higher distribution costs, selling tickets through the platforms offers airlines exposure to a broader consumer base, and potentially higher sales than selling tickets solely through their own websites. While most airlines have adopted a multi-channel approach by selling tickets through OTA platforms and their websites, some (e.g., Southwest Airlines, easyJet and Ryanair) sell only via the latter. Is one approach better than the other, and if so, under what circumstances? This study analyzes factors that affect an airline's distribution strategy by developing a decision support model. We find that airlines are less likely to use OTA platforms if they have a large loyal consumer base or if the OTA platform is highly competitive.

Suggested Citation

  • Koo, Bonwoo & Mantin, Benny & O'Connor, Peter, 2011. "Online distribution of airline tickets: Should airlines adopt a single or a multi-channel approach?," Tourism Management, Elsevier, vol. 32(1), pages 69-74.
    • Handle: RePEc:eee:touman:v:32:y:2011:i:1:p:69-74
    DOI: 10.1016/j.tourman.2009.11.008
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. José Múgica & Carmen Berné, 2020. "Direct and Indirect Tourism Online Channels. Do They Have a Different Potential for Customer Loyalty?," Sustainability, MDPI, vol. 12(11), pages 1-15, June.
    2. Lu, Jing & Meng, Yucan & Timmermans, Harry & Zhang, Anming, 2021. "Modeling hesitancy in airport choice: A comparison of discrete choice and machine learning methods," Transportation Research Part A: Policy and Practice, Elsevier, vol. 147(C), pages 230-250.
    3. Jost Daft & Sascha Albers & Sebastian Stabenow, 2021. "From product-oriented flight providers to customer-centric retailers: a dynamic offering framework and implementation guidelines for airlines," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(6), pages 615-625, December.
    4. Lu, Qiang (Steven) & Yang, Yupin & Yuksel, Ulku, 2015. "The impact of a new online channel: An empirical study," Annals of Tourism Research, Elsevier, vol. 54(C), pages 136-155.
    5. Roma, Paolo & Zambuto, Fabio & Perrone, Giovanni, 2014. "Price dispersion, competition, and the role of online travel agents: Evidence from business routes in the Italian airline market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 69(C), pages 146-159.
    6. Yeh, Chien Chi & Ku, Edward C.S. & Ho, Ching Hua, 2016. "Collaborating pivotal suppliers: Complementarities, flexibility, and standard communication between airline companies and travel agencies," Journal of Air Transport Management, Elsevier, vol. 55(C), pages 92-101.
    7. Long, Yong & Shi, Pingping, 2017. "Pricing strategies of tour operator and online travel agency based on cooperation to achieve O2O model," Tourism Management, Elsevier, vol. 62(C), pages 302-311.
    8. Cui, Qiang, 2019. "The online pricing strategy of low-cost carriers when carbon tax and competition are considered," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 420-432.
    9. Tatiana David-Negre & Arminda Almedida-Santana & Juan M. Hernández & Sergio Moreno-Gil, 2018. "Understanding European tourists’ use of e-tourism platforms. Analysis of networks," Information Technology & Tourism, Springer, vol. 20(1), pages 131-152, December.
    10. Escobar-Rodríguez, T. & Carvajal-Trujillo, E., 2014. "Online purchasing tickets for low cost carriers: An application of the unified theory of acceptance and use of technology (UTAUT) model," Tourism Management, Elsevier, vol. 43(C), pages 70-88.
    11. Hao Huang & Yide Liu & Dong Lu, 2020. "Proposing a model for evaluating market efficiency of OTAs: Theoretical approach," Tourism Economics, , vol. 26(6), pages 958-975, September.
    12. Tomasz Stanisław Szopiński & Robert Nowacki, 2014. "Plane Ticket Price Dispersion in the Online Selling System in Poland," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 8(2), June.
    13. Santiago Forgas-Coll & Ramon Palau-Saumell & Javier Sánchez-García & Juan Fandos-Roig, 2013. "Airline website loyalty formation and the moderating effects of gender and education," Service Business, Springer;Pan-Pacific Business Association, vol. 7(2), pages 255-274, June.
    14. Akamavi, Raphaël K. & Mohamed, Elsayed & Pellmann, Katharina & Xu, Yue, 2015. "Key determinants of passenger loyalty in the low-cost airline business," Tourism Management, Elsevier, vol. 46(C), pages 528-545.
    15. Tomasz Stanisław Szopiński & Robert Nowacki, 2015. "The Influence of Purchase Date and Flight Duration over the Dispersion of Airline Ticket Prices," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 9(3), September.

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