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Can new rules help airlines establish order in ticket sales?

12/15/2014| 10:39:25 AM| ChinaTravelNews 中文

China Southern and China Eastern separately released a “Notice regarding the marketing order for air tickets sold online” to reign in errant ticketing agents.

ChinaTravelNews - China's airlines show renewed determination to regulate online ticket sales with China Southern Airlines and China Eastern Airlines separately releasing a “Notice regarding the marketing order for air tickets sold online” to their ticketing agents, an industry observer revealed. The notices are indications that the airlines hope to establish new sales regulations through their authorized agents to bring order to online ticket sales channels.

ChinaTravelNews obtained electronic copies of the notices and had their authenticity confirmed by different sources. Both notices specify that ticketing agents must include their China Air Transport Association (CATA) certification date and number and the agent’s name on the ticket booking page when selling e-tickets on Ctrip, Qunar or Taobao.

Our reporter logged on the aforementioned sites and found that none of the ticket listings displayed certification numbers and some of the agencies listed in Qunar and Alitrip were not even found in the CATA official website.

An industry expert explained that presently there are certified (first level) and uncertified (second level) ticketing agents. The first-level ticketing agents act as upstream wholesalers who get tickets for sale and get the rebates.

The source said it would be difficult for the airlines to enforce their new rules. “The information that is displayed on the booking page is decided by the platform, not by the ticketing agent.”

The notices of China Southern and China Eastern also specify that the authorized agents of both airlines cannot release tickets issued under special sales policies to other agents or customers through their vertical search engines or B2B platforms. These special policies include major customer policy, fixed direction direct reduction policy, and special transport price, product and agent fee policy.

Tickets obtained through special sales policies are cheaper than those offered in regular distribution channels or the airline’s direct sales. But in practice the majority of agents sell special priced tickets on B2B distribution platforms and OTA platforms like Ctrip, Qunar and Alitrip. Some agents even take tickets directly from airlines' official websites and sell them online after adding insurance and additional costs. These actions are highly disruptive to the airlines’ pricing systems and lead to a complex multi-layered sales system with low profit margins for all layers of distribution.

The industry expert said the airlines ticket sales ban is difficult to enforce and has little meaning besides posturing. The notices' threat of decommissioning offending agents also seems unlikely to be enforced. 

The key to whether or not the new guidelines set by the two airlines will effectively clean up air ticket distribution lies in the airlines' resolve to tackle the distribution chain from the roots on up.(Translation by David) 

TAGS: China | airlines | ticket agent
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