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China’s Online Air Ticket Reservation Market Hit RMB 80.93 Billion in 2015 Q3, and O2O Cooperation Mode Reshaped Industrial Ecosystem
In 2015 Q3, China’s online air ticket reservation market realized a transaction size of RMB 80.93 billion
  • 31 Dec, 2015
  • Travel
  • 1399
Analysys Insight:
In 2015 Q3, China’s online air ticket reservation market realized a transaction size of RMB 80.93 billion, a rise of 18.0% quarter on quarter or a rise of 58.7% year on year, shows the Quarterly Monitoring Report on China’s Online Air Ticket Reservation Market 2015 Q3 published by Analysys Industry Database.

China’s online air ticket reservation market grew steadily. AffectedInfluenced by the seasonal factor, air travelers grew a lot in 2015 Q3, driving an increase in the air ticket reservation volume.

1. Airline companies promoted Internet direct marketing business with the core objective to enlarge the profit space and gain customer resources

After reducing the fee rate of domestic air ticket agency from 1% to zero in June 2015, the top three airline companies also started restricting low-price ticket, return to alteration, bundled sales with insurance and other products, and other sales forms, and also strengthened direct marketing through online low-price promotion. In the opinion of Analysys, airline companies have increased the proportion of direct marketing with the core objective to enlarge the profit space and gain customer resources. From the perspective of profit, by skipping the intermediate channel, airline companies can reduce the commission expenditure, strengthen the bargaining power and mitigating the dependence on channels. From the perspective of customer resources, intermediate channels, online or offline and platform or agent, exclusively control user information and consumption data during the development of China’s air ticket agency market for more than 10 years. As a result, the membership system of airline companies is weakened, making it unable to directly know consumption habit and service feedbacks of users. With direct marketing, airline companies can get closer to consumers, strengthen brand influence and improve brand loyalty. At the same time, airline companies can better know consumers to improve service level and competitive strengths.

2. The competitive landscape of the online air ticket reservation market has changed and displayed a concentration trend

The move of airline companies, the core traffic resource provider in the tourism market and an influential industry player, to increase their direct marketing proportion, will deliver a far-reaching influence on the online air ticket reservation market. With sales commission being the major income source under the new situation, existing online air ticket agents will face an even bigger pressure from profit and competition, and the market share will concentrate on large agents and personalized agents, and size and service will constitute the core competitiveness of online agents. In October 2015, Ctrip.com and Qunar.com merged and forged an absolute leading advantage in the online air ticket reservation market, squeezing the growth space of platform vendors.

3. Industrial ecosystem has changed and online-offline cooperation has given birth to modal innovation

First, the online air ticket market will give birth to modal innovation matching the demand of airline companies, and user sharing and win-win cooperation will become major areas of innovation. For example, Biqu, an application published in July 2015, connects the platform user system and the membership system of airline companies through the direct marketing platform on the supply side to meet the data sharing demand. At the same time, the application offers vertical search, one-stop service and other services to assure user experience. On the other side, airline companies fuse with online platforms to explore new profit growth areas. In July 2015, Juneyao Airlines and 117go.com launched Taotravel.cn, which relies on the aviation resources to forge an “aircraft + X” platform and penetrates into the vacation travel market in depth.

In 2015 Q3, Qunar.com and Ctrip.com took a share of 75.9% in the online air ticket reservation market. In detail, Qunar.com realized an online air ticket reservation volume of RMB30.94 billion and took a market share of 38.2%, while the corresponding figures for Ctrip.com are RMB30.53 billion and 37.7%. In the opinion of Analysys, an obvious concentration trend is now emerging in the online air ticket reservation market. In October 2015, Ctrip.com and Qunar.com merged, and the new Ctrip.com family will take an absolute leading position in the online air ticket reservation market. Vendors based on the platform mode will face a vast pressure from competition, and under the new market situation, vendors will mainly strengthen service and modal innovation to wrestle with rivals.

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Research Note:
To deliver the industrial analysis, Analysys mainly employs the industrial analysis model and combines the model with the market, industry and vendor research methods to mainly reflect the current market status, trend, deflection point and rules as well as the current status of vendors based on macroscopic industrial data, quarterly final user survey data, vendors' historical data and quarterly vendor monitoring information.
Analysys believes data derived from the aforesaid industry research methods fall into the error range generally accepted in the industry and can accurately reflect the industry trend and rules.

Research results obtained from the professional research methods are for reference only. For actual data of vendors, please inquire a about their financial reports. 

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