Business Travel: Web holds the key to cut price travelling

BUSINESS TRAVELLERS may think that the internet provides an easy gateway to the cheapest flights available.

Web sites such as http://www.cheapflights.co.uk appear to offer tickets at rock bottom prices.

Unfortunately, it is not quite as simple as that.

Airlines are using the web to offer bargain basement prices direct to customers, undercutting the agents on last minute deals. This means that there is no one-stop shop for the cheapest tickets online - but the bargains are there for those willing to look for them.

KLM UK, formerly Air UK, has an "Online Specials" section on its web site. Customers can search through current ticket offers and book seats directly on the internet. One return flight from London City Airport to Amsterdam, booked five days in advance cost pounds 70.

A2btravel, a UK travel site, has a "low fare search engine" in its online flight booking section (provided by Travelocity, the internet travel agent).

But seats on exactly the same KLM return flight to Amsterdam were offered for pounds 131.80, 88 per cent more.

Visitors to Flightbookers, another online agency, were offered seats on the same flight for pounds 131.80.

Another flight from London City to Dublin was priced at pounds 82 on KLM UK's site and pounds 184 or more on agency sites.

This variation is a result of ticket pricing structures. "Airlines have highly sophisticated yield control policies, that enable them to charge 15 different prices for the same block of seats," says Gary Hance, technical director of Seaforth's travel agency, which has its own online booking system.

But because they have ultimate control of the seats, the airlines can also make their own offers if they want to sell off seats at the last minute, or drive traffic to their web sites by offering cut price fares. Lufthansa, American Airlines and Cathay Pacific US have also run online auctions for tickets, some of which have sold at rock bottom prices. Travel agents, who buy flight tickets in set price blocks, do not have the flexibility to use such techniques.

Travellers who assume that they can easily find the best fares on the web are therefore likely to be disappointed.

"There is no way to guarantee that the flight your purchase is the cheapest possible," Mr Hance says.

On the other hand, persistent bargain hunters may do better than they could with a personal travel agent, who will only spend a certain amount of time looking.

"Call some travel agents to get some benchmarks prices, then look on the internet to see if you can find something cheaper and better suited to your needs," he advises.

In the US, online flight booking is already well-established. IBM allows its employees to book all business flights under $500 on the internet, with an airline of their choice.

With airlines like KLM offering such large discounts to customers choosing to book direct, European travel agents may soon find their business custom eroding.

Julia Groves, manager of digital channels at British Airways, which does not offer online discounts, agrees that the internet is a good medium for selling air tickets:

"People enjoy doing their own research and they can do this faster and more easily on the internet."

She says that customers are growing increasingly comfortable with booking flights on the web. "60 per cent of people who book BA flights online now also pay for them online.

"That figure used to be only 35 per cent."

But BA and other airlines are keen to deny this comes at the expense of travel agents.

"The internet is just another distribution channel, and only represents a tiny proportion of our bookings," says Ubdesh Kapur, a spokesman for Virgin Atlantic.

"We work with the travel trade. We are not trying to bypass it."

Edward Hanrahan, online strategy advisor at BA, argues that the growth of online bookings in large companies is particularly hindered by their traditional relationships with travel agents.

"Most of our corporate customers have well-established booking structures.

"It is small business people, who do not have these relationships, who will find online bookings most attractive."

Scott Payton is a writer for the electronic business journal Net Profit http://www.net-profit.co.uk

Top sites

THE FOLLOWING are a selection of online sites that the business traveller might find useful.

http://www.klmuk.com

Enables customers to book seats on KLM UK's flights to 20 European destinations as well as special offers on KLM flights.

http://www.a2b travel.co.uk

Includes flight booking for over 420 airlines, plus ferry timetables, skiing news and online mapping to find your way around the UK

http://www.seaforths.com

Website for Seaforths independent business travel agency. Contains information on the Ticket Window booking system