Aer Lingus is expected to announce a major seat sale today, offering big reductions in fares on most of its routes. In a major change of strategy, the cheapest fares will be available to passengers who book direct through the airline's revamped Internet site.
Aer Lingus is to offer some 2.5 million seats, about a third of its total annual capacity, at lower prices in 2002. About half a million lower fare seats are expected to be made available between January and March.
Internet customers will be offered a fare of €39 each way between Dublin and Edinburgh, including taxes, a saving of about 48 per cent, on the standard Aer Lingus fare.
Passengers who book through the website will be able to fly from Dublin to London for an each-way price of €52, a saving of about 18 per cent. Reductions of 40 to 50 per cent are expected to be available on a number of routes.
Customers who do not book through the website will get lower fares but not as low as those available to Internet customers. The latest moves by the national airline follow negotiations with staff aimed at cutting costs and increasing flexibility and indicate how the airline plans to move ahead when the restructuring is complete.
The new strategy is similar to that of low-cost airlines including Ryanair which offer low-cost fares through direct booking.
Customers who use the airline's website will be offered more attractive prices than those who book by telephone or through travel agents. Travel agents will be able to access the website to book for customers, but the low fares will only be available to them on a non-commission basis. With most agents expected to add a service charge or commission for the service, the price to the customer will not be as low as it would be through booking directly on the website.
Aer Lingus's new pricing strategy is a move to shift more business towards direct booking, which means the airline will pay out less commission to travel agents and retain more of the fare and cut its distribution costs. Only about 30 per cent of the company's customers currently book direct - by telephone, at Aer Lingus travel shops or through the Internet - compared with about 90 per cent of Ryanair customers.
Travel agents are likely to be less than happy at the changes, which are coming just as the airline is about to implement the second round of commission cuts. In early 2001 Aer Lingus cut commission to travel agents from 9 per cent to 7 per cent. In February it will cut the rate to 5 per cent, the rate paid by Ryanair.
It is understood that the new Aer Lingus fares will remain higher than Ryanair's lowest fares on the five routes on which the airlines compete - Manchester, Birmingham, Edinburgh, London, Paris and Brussels.