In criticizing the discrimination in the implementation of the price ceiling, the deputy CEO of Flightio says that this issue has only harmed online agencies. He believes that the accommodation market is less than 10% online and has a lot of potential for growth, although it is not an easy task
According to the Iran digital economy annotation, Kamyar Irani, the deputy CEO of Flightio, in the first episode of the sixth season of the attached station, talks about the discriminatory implementation of the price ceiling for domestic tickets and believes that this implementation has only harmed online travel agencies (OTA).
In this regard, Irani says: The issue of the rate ceiling was raised from the beginning of this year. This issue became a challenge between civil aviation, airlines and travel agencies. In this regard, we held many meetings with civil aviation and other actors and explained how this issue harms OTAs.
Each of the main actors found solutions, but these are not solutions that will bring the situation back to the past. The civil airline has given a price list that we must follow, but we receive higher prices from the airlines through the web service, and we have to filter these prices ourselves.
He explains about the impact of this issue on online agencies: We have to follow the rules of the airline organization, so we have to proceed according to the price list. This is a challenge between civil aviation and airlines, but the arrowhead has come to OTAs. It has also had a very serious impact. In the beginning, it had an impact on our sales up to 50-60%, and it gradually decreased but did not disappear.
According to him, the main damage has been done to these agencies: when online sites, which make up 50-60% of the market, cannot display high approved rates, people who visit the site want to make that trip and cannot find their ticket, so They refer to offline agencies.
There is no supervision there, and the ticket from Tehran to Mashhad may be sold for even more than one million. The customer is happy that he found his ticket, the agency makes a profit of 1 million tomans on the ticket whose commission is 90 thousand tomans, and the airline company is also happy. Only we are unhappy in the meantime.
Irani also says: Of course, the total volume of flights has decreased for various reasons. The discussion of removing the sale of charters was also important, but the main impact is due to the rate ceiling. If the price ceiling was respected and we did not have to filter the higher prices, the passenger would not feel that it is not a ticket.
The deputy CEO of Flightio explains about the purpose of the price list that was not achieved: What was the purpose of the price list? Due to the imbalance of supply and demand, the lack of fleet and the lack of supply, the prices went up, and an airline was introduced to control the rates and the end customer would get a better price, but in the implementation, this goal was not achieved at all. The passenger has to go to the offline agency, even the website of the airlines. Interestingly, some of these companies sell tickets at higher prices on their sites.
Flightio’s focus on foreign flights and hotels
He also says about Flightio’s focus area: Flightio has defined its position in foreign flights and hotels since its birth. Our focus is still on this product and its features. At the product level, we want to improve our quality. During the time that OTAs have been formed in Iran, the focus has been on search, comparison and purchase, and no other features have been provided.
This is one of the problems of our work. Of course, in the last few years our focus has been on working on other features as well.
Irani adds: If we compare the first 6 months of this year and last year, this market has grown, but the effect of the exchange rate cannot be ignored. When the currency grows and inflation affects, there is a shift from trips from surrounding countries to domestic destinations, but it has not been very big. But when the market gets a shock when the exchange rate increases, it has an immediate impact.
According to him, attracting capital for companies like Flightio is always an option on the table and negotiations are always ongoing.
Actor one to three markets
The deputy CEO of Flytio says: We have to see what product we are looking at. We are actors one to three in foreign products such as hotels and flights.
He also explains about customer needs assessment methods: All platforms in the last few years were on search, comparison and purchase, and on the other hand, they were looking for market share by giving lower prices. This era is not over and the price is always a serious issue. But we work on the customer experience that is reflected in the product, and we launched the customer experience and customer discovery team.
Irani adds: In the past, we mistakenly added a feature to the product based on the data of individuals and the person and the shareholder or manager of a part, which of course is not only about Flightio. We move forward by setting up these teams based on customer needs. In the offline market, more than 50% of the market still buy offline.
On the other hand, trains are online up to 70% because they do not have the complexity of the purchase process and the number of web service companies is small in terms of technology. In these teams, we measure the customer’s needs and provide solutions based on that.
Purchase credit from Flightio
He pointed to one of the outputs of this needs assessment and said: In foreign travel, many travelers who go to offline agencies do not have the money for their entire trip at that moment and pay the money in different parts. We launched Flightio Credit Payment and it has been very well received. 30% is paid first and the rest is settled after the trip.
This senior director of Flightio also says about the transformation of offline businesses: Nowhere in the world when the online market was formed, the traditional market did not disappear and change its shape. The point is, this issue will not continue forever. Small businesses such as supermarkets collaborate with platforms and retailers are also active on Instagram. Anyway, when the market trend is going online, the agencies also go in this direction, but they are not expected to work on that scale.
He says about the way to interact with agencies: At Flightio we have a b2b platform where we both sell to and buy from agencies. This is how we interact with agencies.
Irani says about the high growth potential of the online accommodation market: There is a lot of potential for accommodation. Between 5 and 7% of residences are online and the capacity is very high. But two factors make growth slow and difficult. A positive issue is that the purchase process is not complicated like foreign flights and hotels, but there is no single technology for accommodations. We contract with one company for flights and we have 200 airlines, but it is more difficult to work with accommodations.
In the end, he also says about the growth capacity of the online agency market: it differs in different products. In a foreign hotel, where the online market is still less than 50% online. I think there is another 20-30% room for foreign flights and hotels to go online.
No Comment! Be the first one.