One of the leading lights in the European air travel market is Volotea, an innovative LCC that was launched in spring 2012 and is enjoying healthy growth across the region. Volotea specialises in point-to-point flights between small and medium-sized European cities, on routes where connecting via hub airports was previously the only option for travellers. This young budget carrier now flies to more than 50 destinations – including cities as diverse as Munich and Malaga, Prague and Palermo – and operates more than 97 routes, the majority of which are not served by other airlines.
Let’s take a look at some of the factors driving Volotea’s growth – they are examples of best practice that other LCCs, whether new or long established, may wish to incorporate into their business strategy. Volotea has achieved a great deal in a relatively short period, and is clearly keen on stimulating demand for low-fare, direct flights from a standing start. Key to the LCC’s success in this respect is its sophisticated distribution strategy. In a move that points to an increasingly popular trend among LCCs, Volotea has chosen to distribute its inventory via travel agencies and other indirect channels, in addition to the direct channel.
From day one of its launch, Volotea has distributed its inventory with Amadeus. The airline firmly believes that indirect distribution is a must, and is clear about the benefits of the indirect channel. “Our intention from the very beginning was to sell through the GDS: it’s a matter of reach,” emphasises Didier Legault, Volotea’s Commercial Director in France. He adds: “We fly to 50 airports and consequently have many routes. However, from some airports, we might only have one or two routes that are flown twice a week, meaning it is difficult to justify very large marketing budgets to attract customers to these routes. This is where the GDS channel and travel agents provide such significant value and are very effective in securing reach and scale.”
Volotea benefits from the fully ticketed GDS model, which means that its inventory is integrated seamlessly into travel agents’ workflow, as well as their mid- and back-office systems. We worked closely with Volotea to implement the Amadeus Electronic Ticketing solution and standard access connectivity to the GDS. The whole process took just six weeks, in accordance with the airline’s very short time-to-market objectives. What’s more, Volotea sells its inventory through the indirect channel – which spans traditional and online travel agencies – in full compliance with IATA BSP industry standards.
Access to the travel agency network has helped Volotea to rapidly increase its reach, driving customer growth at an efficient cost point. In particular, agents have strong relationships with leisure travellers, Volotea’s core customer segment. Moreover, targeted marketing via Amadeus Selling Platform, our travel agency desktop, has increased awareness of the Volotea brand significantly, which is fundamental for a start-up airline. “Travel agents are important to our leisure customer base, particularly for group reservations and chartered services. Travel agents provide a direct route into the local communities that we want to reach,” comments Legault.
Volotea is among more than 70 LCCs distributed to Amadeus travel agencies, and is delighted with the results of indirect distribution. As Legault concludes, “The performance of the GDS has been very good, right from the beginning.” Volotea saw an immediate return on investment, while sales in the indirect channel now represent, according to the carrier, more than a fifth of its overall revenues. They also offer higher yield than is typically seen in the carrier’s direct sales channels. The role travel agency distribution has played for Volotea highlights the impact that indirect distribution can have when driving high yield, high volume sales and boosting limited brand presence.
This post is part of a series exploring how Amadeus is driving the next phase of growth for low cost and hybrid carriers. See new posts as they are published on the LCC page.