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The Trick to Selling Airline Tickets Online? Minimalism
Can a Web site be too simple? A lot of Southwest Airlines Co. passengers thought so. After it became the first major carrier to sell tickets online in 1996, the airline says, its reservations center kept getting calls from customers who had just booked tickets on the site. The transactions happened so fast and so easily that they feared they had been scammed.
Not at all. For the scrappy low-fare king, simplicity--including one aircraft type, no meals, and a straightforward fare structure--has always been the key to satisfying customers and improving profits. Southwest's Spartan Web site, built on the same customer-service philosophy, is also winning passengers in droves. "Simple is better," says Ron E. Stewart, global managing partner for transportation and travel services at Andersen Consulting. "Bells and whistles don't sell tickets."Less is more. And therein lies the innovation: Southwest has shown that when it comes to the Web, less can be more. The airline now gets about 30% of its revenue from online bookings, almost all from its own site--compared with an estimated 6% to 7% for other big carriers, says Forrester Research Inc. That means big savings on commissions and reservation-system fees: Southwest expects the Web to save it $80 million this year, says Chief Financial Officer Gary C. Kelly.
Another big benefit is that this no-nonsense focus attracts more customers. "Southwest seems to be doing a much better job [than other airlines of] driving people to the Web," says Bear, Stearns & Co. analyst Robert A. LaFleur. In five years, he figures, Southwest could book 50% to 75% of its sales online.
With bigger rivals such as American Airlines Inc. furiously adding new features, such as wireless access to flight information, Southwest is trying to make sure the site stays as smart as it is simple, says Kevin Krone, Southwest's senior director of marketing automation. Since last fall, customers have been able to check the status of their frequent-flier credits online. And later this year, the company expects to add the ability to rent a car and check a flight's arrival or departure status.
Don't expect big changes, though. Southwest CEO Herbert D. Kelleher isn't likely to be swept up in Web mania: On the computer in his office is a Post-It note telling him how to turn it on. At Southwest, keeping it simple starts at the top.By Wendy ZellnerReturn to top
Kevin Krone, Senior Director, Marketing AutomationThe Project: To make buying tickets online irresistible by emphasizing simplicity and speed over whizzy features.The Payoff: Web sales are almost 30% of revenues, saving $80 million on agent commissions and other overhead.Return to top