The Austrian Airlines Group is launching a dynamic and extensive innovation offensive in three areas. In an effort to meet changed market and customer requirements, the company has completely redesigned its fare concept for short- and medium-haul flights. This change will also see the introduction of a new internet booking platform designed to reflect the fare structure in a transparent, user-friendly manner. The third innovation is the introduction of optimised traffic flow management. This will allow differentiated management of local and transfer traffic, as opposed to the former system, which only took individual routes into consideration. Austrian Chief Executive Officer Vagn Soerensen, made the following comment on the innovation offensive: ‘These measures will optimise and increase our revenues and significantly raise the level of customer-friendliness of our sales channels, enabling us to take on our low-cost competitors even more effectively.’
New, flexible fare concept for short- and medium-haul flights
With immediate effect, the new fare concept will make it possible for passengers to freely combine different fares and booking classes, so giving them far greater flexibility. Where it has only been possible to combine fares within the bounds of specified fare families until now, for example, booking Economy Class for an outbound flight and Business Class for the return will now become an option for passengers.
In Business Class, a new type of fare, the ‘Business Holiday’, will be introduced for leisure travellers on routes with high tourist potential (Italy, Spain, Greece, Cyprus, Turkey, France, Benelux, Great Britain, Scandinavia, Hamburg, Berlin, Dubrovnik, Split, Amman, Cairo and Tel Aviv).
In Economy Class, the fare structure has been completely adjusted and the price rises levelled off. The previous fares applicable to special customer segments (weekend, youth, senior fares, etc.) will now all be covered by the new fare concept. In the redticket best price field, an even more attractive new all-in price of EUR 159 has been introduced on selected routes in an effort to increase competitiveness.
Austrian Chief Commercial Officer, Dr. Josef E. Burger, said the following about the benefits of the new system to the customer: ‘With the transparency and the flexibility we have now introduced, we have simplified and standardised fare conditions for our customers. Good examples of this include the maximum length of stay, or the refund and rebooking charges. In parallel with such moves, the redticket all-in prices have now been brought together in four ‘fare clusters’ - with the lowest price redticket now starting at just EUR 159.’
New internet booking platform
Due to Austrian’s numerous improvements to its internet-based service in 2005, which included a more booking-friendly homepage at the www.austrian.com site, the numerous new language versions of the site booking process and greater payment methods, the company’s internet-based revenues rose by 74% compared to 2004. Austrian has set itself the objective of doubling these revenues in 2006 compared to the previous year’s figures. The percentage share of revenues generated over the internet in Austria currently already stands at around 12%, the world average stands at 5.5%, figures with a tendency to rise sharply.
In order to display the new, flexible fare concept on the internet, the booking platform at www.austrian.com has been completely redesigned. The already high price transparency in place through bestprice.click has been developed further still, and the full combinability of fares has been designed to be straightforward and user-friendly on the internet as well. Users will now be able to see at a glance the fares that are available and bookable, and display and select options for any fare combinations for short- and medium-haul flights according to the reason for travel for the flight in question. Passengers will be entitled to this new level of booking comfort not only for point-to-point flights but also their transfer connections. The terms and conditions of travel applicable to the fare chosen will of course be displayed in simple, transparent language where the passenger will be aware of them.
Optimised traffic flow management
Austrian Chief Executive Officer Vagn Soerensen summed up the benefits of the new traffic flow management system as follows: ‘Compared to the way in which single flights are managed at present, we will be able to maximise revenues for our entire network in future. This is particularly important due to our high level of transfer traffic, because it will allow differentiated management of local and transfer traffic.’
With the previous system, flights could only be taken into consideration on an individual basis. In the event of transfer connections, the same booking classes had to be available for all legs of the route, as this was the only way an appropriate overall fare could be calculated.
Compared to the previous system, which was based on individual flights, Austrian flights will now be managed in accordance with their value contribution to the total result. The IT-supported system considers data for the past year and produces a one-year future forecast based on a wide range of different parameters. This will allow the appropriate final conclusions for optimum management to be drawn based on these figures. In the event of a booking request, the total value of the journey is taken into consideration, evaluated on the basis of the value contribution necessary and only then released for sale. Traffic flows and special segments (e.g. ethnic traffic flows) can also be managed more precisely, and marketed better, using the new system.