Net-Enabled Systems Are The Way To Go

ET&T Staff - Mumbai

Technology is a great way to enhance business. And with the International Air Travel Association's (IATO) decision to introduce e-ticketing by 2007 in airlines across the globe, it can only help the travel industry achieve better efficiency.

Kale Consultants, a technology solutions provider for the travel industry, is all set to cash in on this opportunity. According to Vipul Jain, its CEO and MD, e-ticketing will give the industry a much-needed boost. The solution provider has plans to help airlines and hotels with their e-commerce strategies as more and more industry players are making their systems net-enabled.

"Airlines can use our solutions to sell directly to customers or help them in relationship management. Similarly, travel agents can provide their corporate customers with direct booking facilities," Jain said. Kale Consultants claims to have more than 50 global airlines among its customers, including Qatar Airways, Asiana, Indian Airlines, and Delta.

He added that as domestic carriers go international, they are bound to look for more complex technology systems to drive their businesses. "We are seeing suppliers evolve. Earlier, they offered customers plain vanilla solutions. But today, there is a demand for more value-added solutions," he said. The company currently offers products such as passenger and cargo revenue accounting, revenue recovery and protection, cargo operations, cargo ground handling, e-travel, and decision support systems.

Kale focuses on three verticals - passenger, cargo, and e-travel. "Of these," Jain said, "The passenger vertical was mature with high profit margins. However, the enterprise cargo solution launched two years ago is also growing in popularity with a number of airlines relying on us for cargo solutions." The solution drives the entire gamut of cargo operations, including allotment and booking of cargo capacity, movement of cargo, shipment, building of manifests, billing and delivery of cargo, and ground-handling services.

Airlines, Railways To Drive E-Commerce Growth

The emergence of low cost airlines and online ticket booking along with growth in online railway reservation is expected to drive the e-commerce boom in 2005-06. E-commerce is expected to clock a growth of over 60 per cent of the Rs 1,000 crore transactions.

According to the latest industry report generated by the Internet and Online Association of India (IOA), in 2004-05, 63 per cent of online revenue was generated by airlines and railway ticketing amounting to over Rs 350 crore.

This year, the e-commerce business generated Rs 570 crore. Preeti Desai, president of IOA, a conglomerate of all the major internet and e-commerce websites in the country, said, "Changing lifestyles coupled with multiple internet access points will propel e-commerce transactions to Rs 2,300 crore in 2006-07 from current projections of Rs 1,180 crore."

Fuelling the boom is the fast-paced growth of internet penetration. From 17 million users in 2003, the figure is estimated to touch 33 million in 2005-06, also the average transaction value on the net. Last year, the average transaction value per month figure hovered around Rs 4,40,000 with average value transacted at Rs 1080. This year, its estimated to touch Rs 7,95,000 per month with average transaction value is pegged at Rs 1,100.

Advertisers too are increasing their advertising spends on the net. While in 2000-01, the figure stood at Rs 30 crore, today it has reached Rs 107 crore and is expected to touch Rs 200 crore mark in 2005-06, Desai said.

The fastest growing categories on the net, according to IOA, are electronic gadgets, airline and railway tickets, computers, music and apparels. According to the report, the average age of internet shoppers falls between 18 to 45 years and 76 per cent of online shoppers access the internet from office.