Internet airline ticketing is flying high

TACOMA — When Mark Guerette and his information technology crew at Alaska Airlines saw the first online reservations trickle in over their servers 10 years ago today, they were practically giddy with accomplishment. Just seven online reservations were made Dec. 28, 1995, and the week that followed, but Guerette and his team sensed they were on to something big.

“Unfortunately, we didn’t save the name of the people who bought the first tickets,” said Guerette, now director of Alaskaair.com. “I remember it was a family from the Olympic Peninsula.”

Those online transactions at Alaska were the first tickets sold by any airline via the Web. They ultimately foretold a revolution in the sales of airline tickets. That revolution has made huge changes in the travel industry and the way airlines price and sell tickets.

Today, Alaska and its sister airline, Horizon, sell 34.6 percent of their tickets via the airlines’ Web site, a far greater percentage than most of their competitors. An additional 11 percent of the airlines’ sales come via online travel sites such as Expedia.com, Travelocity and Orbitz.

That Internet sales channel has been a great benefit to consumers, who now can do instant comparison shopping for airline tickets, pick seats and print boarding passes from their homes. The electronic sales sites have played a major role in creating simpler fare choices and cutting costs for airlines engaged in dogfights for financial survival.

The Internet sales sites also are the force behind the near demise of paper tickets and the security problems and handling costs that accompany them.

“For every ticket we sell via Alaskaair.com, we save the company over $10 compared with our other sales channels,” said Steve Jarvis, the airline’s vice president of sales and customer experience.

To even out those costs, SeaTac-based Alaska and Horizon recently joined the parade of other airlines imposing an extra charge of $10 per ticket for tickets bought at the airline’s counter or via its phone-in reservation system.

Internet ticket sales, which grew slowly at first, are a key component of Alaska Air Group’s drive to pare its costs to make the two airlines competitive with upstart, low-cost carriers. Alaska Air Group is the parent company of Alaska and Horizon.

The growth of Internet ticket sales has been a mixed blessing for the rest of the travel industry, particularly for travel agents.

The availability of a less expensive sales operation was part of what enabled airlines to virtually eliminate sales commissions to travel agents for ticket sales. The elimination of airline commissions was behind the demise or consolidation of many travel agencies and led to their imposing ticketing fees on passengers for the services they provide in booking air trips.

The number of travel agents nationwide peaked at 33,715 in 1994 when travel agents booked some 85 percent of airline trips. The number of agents has since dipped below 15,000 as the travel agency industry re-engineered its business toward more package tours, cruises and business travel to compensate for the losses of vacationers and some business travelers to the Internet.

Alaska’s Jarvis said the airline didn’t create its Internet sales site with the idea of eliminating travel agents. Travel agents and corporate travel departments will always be part of the mix of ticket sales channels Alaska and Horizon will depend on, he said.

What drove Alaska to pioneer Internet sales, said Guerette, was the interest by then-Alaska Chairman John Kelly in advancing technology. The airline has been a groundbreaker not only in Internet ticketing, but also in advanced aircraft instrumentation and navigation systems, airport design and customer relations.

Kelly supported the online sales initiative a decade ago even though the airline sold just 0.1 percent of its ticket volume through the Internet that first year.

The Internet ticket sales curve turned sharply upward in 1999 as more consumers obtained high-speed Internet service and the public became comfortable with the idea of using their credit cards over the Internet, Jarvis said.

That was the year Alaska became the first airline to offer Web check-in and boarding pass printing at home.

That development, subsequently copied by most major carriers, also gave travelers an additional incentive to use the Internet to book their tickets.

As a further inducement, Alaska also offers its frequent flier program members an additional 1,000 miles credit for each ticket they buy at Alaskaair.com. Alaska also offers Web fares that are available only on the Net.

Over the years, Alaska has overhauled its site several times, adding features and increasing usability with each remodeling, Jarvis said.

Ten years ago, the traveler could buy only a simple round-trip fare. On today’s site, travelers can book complex, multi-leg trips, reserve rental cars, hotels, cruises and vacation packages.

The airline’s new fare display screens allow travelers to combine lower price fares on one trip leg with higher price fares on another.

The site also offers the ability of frequent flier program members to book free flights and for reservation holders to change their flights without calling an agent.

Fliers also can pick their seats on an online seat map or let the computer assign them seats based on a set of preferences they’ve specified. The airline’s computer system even e-mails online ticket holders the day before their trip to prompt them to check-in online.