The Russian market for online airline ticket sales has grown to a whopping $3 billion, according to the general manager of online travel agency Biletix.ru, Alexander Sizintsev. This distribution channel currently accounts for 15 to 20% of all the plane tickets sold in the country, RIA Novosti reported last week.
About 40% of the plane tickets purchased online are sold by online agencies, while airlines’ own sites account for the other 60%, Sizintsev added.
“The leader in online ticket sales in Russia is S7 which sells 30% of its tickets online; in Europe it is Lufthansa, with up to 45%. Aeroflot sells up to 25% of its tickets online,” he told journalists.
Boris Ovchinnikov, partner and head of research at a leading Russian e-commerce consultancy, Data Insight, provides a similar valuation of the online airline ticket sales market in Russia, putting it at $2.75 billion. However, the figures for specific airlines are confusing, he argues.
“Aeroflot officially reported that their direct online sales provided 13% of their total sales in 2010 and 16% in 2011. There are no official numbers for 2012 yet, but I’m sure it will be below 25%. And if we add online sales of tickets to Aeroflot flights by 3rd parties…the share of online sales will be much higher than 25%,” he told East-West Digital News.
Increased competition and profit squeezing
Sizintsev has characterized the growth of online plane ticket sales as “explosive,” although he also emphasized that it will slow down in the following years, as most of the audience has already come online. This means, among other things, an increase in competition in this market, which leads to a lowering of online ticket agencies’ profitability.
“Because of marginality reduction, online agencies are trying to sell new services, such as hotel bookings, tour packages, and travel insurance. However, 90% of our sales are still plane tickets,” Sizintsev said.
The online travel agency Biletix.ru sells about 80,000 airline tickets per month. It is a part of Vipservice holding, one of the biggest plane ticket sales aggregator in Russia.
- RUSSIAN E-COMMERCE REPORT – The total volume of Russian online retail reached approximately $13 billion in 2012, up 25% from the previous year, not including cross border sales. EWDN has published an in-depth research on this industry in partnership with leading universities and consultancies. To receive free insights or to order the full version (2013 edition), please contact us at [email protected].
