CLOSE-UP: LIVE ISSUE/ONLINE AIRLINE PORTAL - European airlines prepare their portal for takeoff. Airlines go online as nine players plan a joint travel portal. Jenny Watts reports

By JENNY WATTS, campaignlive.co.uk, Friday, 15 December 2000 12:00AM

It's not often that major blue-chip brands will climb into bed with one another. However, nine major European airlines have announced that they are forming a pounds 30 million joint venture travel portal.

It's not often that major blue-chip brands will climb into bed with one another. However, nine major European airlines have announced that they are forming a pounds 30 million joint venture travel portal.

The portal will sell travel-related products and services online, while also offering details of airlines outside the shareholders. Comprising British Airways, Air France, KLM, Aer Lingus, Alitalia, Finnair, Lufthansa, Iberia and Austrian Airlines, the shareholders are all heavy-hitters, each with a strong, individual web presence in their own right.

As the first venture of its kind, it's an impressive - and ambitious - project. And the weight of those involved gives it a good headstart in attracting consumer interest.

Charlie Dobres, the chief executive of i-level, believes its lure will be significant. 'There absolutely is a place for this portal. Given the people behind it, it must have a good chance of getting a significant market share,' he says.

The portal offers the ability to bypass browsing all nine different airline sites for details, which will save the consumer valuable time. 'People won't trawl round all of the sites. It's a better opportunity for them if they come together,' John Owen, the director of Starcom IP, says.

And, as with many online ventures, there is the added advantage of bypassing commission to the middle man. But whether the consumer will reap this cash benefit remains to be seen. And with all those chiefs, what of the risks of an ego clash? According to Paul Longhurst, the managing director of Quantum, this is very much a marriage of convenience. The question of whether nine airlines can really co-operate on a venture of this magnitude must be addressed, along with the issue of competition on air routes.

'It's a brave move,' Owen says.

Exactly how the portal will fit in line with each airline's individual offering is unclear, and no-one representing the shareholders is willing to comment further on the venture at this stage. This in itself could point to the potential pitfalls of communication between so many large companies. At this point, it seems likely that each of the partners will have a link into their own sites with further details of their individual offerings, although the portal is only likely to run alongside existing online strategies and high-street offerings, rather than completely replacing the individual airlines' existing forms of business.

The advantages of channelling so many airlines through one online destination seem obvious, and the magnitude of the names behind the venture will doubtless engage numerous consumers. But, ultimately, the question of whether the offer is strong enough to entice people to buy on the internet will decide the venture's fate. As Dobres says: 'People who buy online are a canny bunch.'

Taken at face value, the portal will represent a highly attractive proposition to the consumer. 'It's a one-stop shop,' Longhurst says. But whether the alliance will offer cheaper prices as well as convenience is in doubt, as the respective airlines historically have little price difference.

If the portal will be selling flights at normal rack prices, rather than discounted prices, the convenience of the one-stop shop may not signify enough of an incentive to keep consumers from shopping around for cheaper sites. 'The nature of the online shopper is to be price conscious, rather than choice conscious,' Dobres says. 'The portal will still be capable of being undermined and beaten by the cheaper sites.'

Cynics may well question whether the convenience aspect of the offering will over-ride any potential price premium. 'Looking at it cynically, it seems more like a move to keep prices up,' Longhurst says. 'These guys aren't known for their discounts.'

By definition, it could be hard to keep the portfolio of high-profile brands happy while simultaneously co-operating on one definitive online brand. However, the habits of the fickle online consumer will surely dictate the unification of BA, Lufthansa and the rest within the venture. 'The airlines are in cahoots. They know that if they offer more choice under one roof, the consumer will go there,' Longhurst says.

The shareholders will doubtless be hoping that the portal will boost the image of online ventures, which has suffered in recent times following the industry's well-documented failures. 'But the fact that major blue-chip brands are going into online business together is a positive sign,' Dobres says.

'If this adds to the general confidence of the online arena for both selling and advertising, it's a very good thing.'

There is a risk that the venture could turn into a high gloss marketing exercise rather than a truly competitive price-led site for the consumer, presenting the portal's agency, BMP DDB, with a task that is all too familiar in this year of empty dotcom offerings. Whether the portal will offer true value remains to be seen.

However, if the venture does become successful, the creation of a new and important online brand is all but inevitable. 'If that happens, the force of the market will dictate that it becomes relatively separate from other individual offerings,' Owen says.

Ultimately, the portal will serve to be just another facet of the marketing mix for the companies involved. Offline, the consumer is used to having to deal with more than one outlet for their travel interests, and the same variety of choice on the web will doubtless continue to keep this venture on its toes.



This article was first published on campaignlive.co.uk

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