The solution
In 1998, most airline tickets still flowed through travel agents. easyJet had launched online booking only months earlier, but The Independent reported that cutting out intermediaries was essential to low prices, and that both easyJet and Go avoided paper tickets by sending confirmations instead.
The clever move was not simply having a website. easyJet's no-frills fare structure made the site usable: customers could choose a route and date, pay directly, and show up with identification. One reservation system could do the repetitive work of many phone agents without adding salaries as demand rose.
By fiscal 2001, the channel had become the model. easyJet reported average internet sales of 86.5% for the year, 91.0% of initial sales in September 2001, passenger numbers up 26% to 7.1 million, and profit before tax up 82% to GBP40.1 million.
What it achieved
Make booking self-service before scale arrives
Why it worked
Ticketless travel removed printing, mailing and handling from the sales loop.
Direct online sales made low fares structural, not just promotional.
The website scaled booking capacity without scaling the call center at the same rate.
What can be applied
A digital channel changes unit economics when the product is simplified enough for customers to complete the transaction unaided.
Aftermath
The online-direct model became normal for low-cost airlines and then for the industry. easyJet's own branding as 'the web's favourite airline' was credible because the sales mix had already moved online before many incumbents had rebuilt distribution.
FOLLOW THE EVIDENCE
The sources
- Looking for cheap flights? First key into cyberspace the-independent.com
- Final Results Full-year 2001 investegate.co.uk