Europe’s major airlines will launch Opodo, a B2C travel portal.
Most of Europe’s major airlines, including British Airways, Lufthansa and Air France, have joined forces to spend E128 million setting up a travel portal, to be called Opodo. The portal, which will launch in the UK, Germany and France by the end of 2001 and elsewhere in Europe by early 2003, aims to be the leading player in European online travel. As well as scheduled and bargain flights, it will sell hotel rooms and car hire.
Travel is one of the few unequivocal successes in B2C eCommerce, because it fits well with the functionality available online. The wait for products to be delivered isn’t an issue. Fulfillment costs are low. And aggregating and comparing the hundreds of differently priced fares available for similar
journeys is much easier online than over the phone or in a store.
Admittedly, Opodo will lose out by coming into the market so late. Operations such as Ebookers, Expedia and Lastminute.com have already built substantial market share across Europe. Particularly in the areas where launch is delayed until 2003, the site will face an uphill task gaining mindshare.
The portal’s airline ownership will undoubtedly work in its favor here, though. While they will run Opodo as a separate venture, it will still benefit from their enormous resources as shareholders – in particular, the E50 million marketing budget the airlines have agreed for the site and their expertise in the travel industry.
Opodo’s rivals have already complained to the European Commission, sparking an antitrust investigation into the new venture. This does mean that some of the ways airlines could potentially help, such as restricting the supply of cheap tickets to rival portals, will be out of the question. The airlines will need to be careful to ensure they support their subsidiary without favoring it unfairly – but if they pull it off the rewards are high, with Opodo expecting the online travel market to be worth E41 billion by 2005.
