Global%20 E Commerce%20 A%20 Marketing%20 Challenge
EYE FOR TRAVEL CONFERENCE
A Marketing Challenge
August 16 2005
Fly Right. SM
Continental is the 6th largest airline in terms of ASMs/ASKs. We fly to 5 continents
and have four hubs globally. From our international gateways in Newark, Houston,
and Guam we fly to 278 cities worldwide; 24 being in the Asia-Pacific region.
• Continental. COM has grown significantly in the last 3 years to become a major
revenue channel for our business primarily driven by the US domestic market.
• Internationally, growing Continental. COM as our global network expands is fast
becoming a challenge.
• We have to act locally, think globally, minimize costs as well as increase sales.
• As fuels costs soar, finding cheaper cost effective channels to sell our tickets
become paramount in our goals.
• China is a phenomenal market place to be in for the long term.
• E-commerce is a prerequisite we must ensure we do right the first time.
Global Shifts in Distribution Channels
GDS sales have declined significantly since 2003 and the emergence of LCCs
% Total Revenue
10% 5% 5%
Agencies Airline sites Internet Other
Q1 2003 Q1 2005
Source: Revenue Datamart 2003/2005 (005 ticket stock only)
Focused on Low Cost Distribution Channels
Distribution Channel Shift
First Quarter 2005 3.3
Year-Over-Year basis point
Traditional CO Direct CO.COM
Agency Reservations Connect
One Way Average Cost/Ticket by Distribution Channel*
$12 $10 $5 $3
*Excludes commissions and pay for performance incentives
The business traveler’s remote control.
Manage all your travel at continental.com 4
Online Growth Challenges
For most airlines there are hindrances to international online growth:
1. Corporate Travel bookings are still embedded in legacy systems
2. Total travel package suppliers are largely embedded in legacy systems
3. Large market segments are obtained via third party intermediaries
4. Most marketing models are based on homogenous psychographics
5. Website traffic driven by primary originating hub/focus cities
6. Internet agency models driven by significant acquisition costs,
maintaining pricing parity as well as total package revenues.
7. Interline E-tickets and sales still pose a significant challenge
Building the Global Site - Challenges
Given all the industry legacy issues, we also face significant challenges
acting locally and thinking globally.
1. Constantly redefining our global site for better functionality
2. Simple web based consumer payment systems
3. Tax policy regarding different POS
4. Broadband internet penetration rates
5. Consumer adoption rates for looking and booking
6. Outsourcing vs. organic growth
7. Most importantly, consumer acquisition and retention in non-hub markets