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June 10, 1998 5:22 AM PT |
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Credit card fears slow airline Internet sales |
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By David Gersovitz, Reuters |
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MONTREAL -- Fear of fraud rather than fear
of flying has held back the growth of air travel sales on the
Internet, travel industry experts told the International Air
Transport Association(IATA) annual general meeting.
But even that won't stop air travel from becoming the biggest selling consumer item on the Net by 2002, according to recent forecasts. Concern about the security of credit card information transmitted online is the reason most frequently cited for why a majority of travel shoppers do not end up completing a purchase, a panel of electronic commerce experts said at the AGM. It is also a totally groundless fear, the panel said. Last year, there wasn't a single report of theft of credit card information processed using the secure encryption facility built into the two main Internet browsers, Netscape Navigator and Microsoft Explorer, Terrell Jones, chief information officer of The SABRE Group said. "Not one (theft of in-transit credit data) happened, but it
simply hasn't been publicized," Jones said. People who will readily give a credit card to a waiter in a
restaurant or an order taker in a call centre tend to be
reticent about disclosing card information online, he added.
So online travel services like SABRE's Travelocity allow people to call a toll-free number to give their credit card information to an agent, or allow them to transfer an online booking to their travel agent who issues the ticket.
Between 1997 and 2002, air travel sales on the Internet are forecast to increase almost nine-fold, from less than $1 billion last year to almost $9 billion, though that will constitute only nine percent of total airline passenger revenues. It is not just airlines which have gone online with travel ticket offices. In the past 12 months, three online travel booking services have broken into the top 30 ranking of U.S. travel agencies by sales. Agencies like Travelocity and Microsoft Corp's Expedia are the most active sites, but thousands of conventional travel agencies are going online, some of the largest offering the capability to book travel while connected. Yet fewer than one in two online travel shoppers is buying on the Internet, a major reason why services like Travelocity are not yet profitable, said Jones. "We have too many lookers and not enough bookers. We have too many people who shop our site and not enough people who buy." Besides dispelling fears about credit card security, he said, airlines and online travel agencies can encourage electronic buying by adding visual features to their sites that people cannot get over the phone. Such features could include aircraft seating diagrams, maps and the latest travel and weather information, Jones said. Also spurring Internet sales of air travel is the phasing out of paper tickets. Today 40 percent of passengers on Continental Airlines CAIb.N are travelling without paper tickets, whether they made their booking online, through a travel agent or airline call centre, said Steve Cossette, the airline's vice-president of distribution planning. All it takes to get a boarding pass is a confirmation number. "Electronic ticketing combined with the Internet are the great enablers of electronic commerce" rather than the Internet alone, he told the IATA delegates.
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