Internet bookings rival travel agent sales for Southwest

David Koenig

Tuesday, Feb. 29, 2000 | 11:18 a.m.

In Las Vegas

Southwest Airlines is by far the biggest airline at McCarran International Airport, serving 762,284 passengers in January.

That's about 29 percent of the Las Vegas market.

Southwest is also the fastest-growing major carrier in Las Vegas, with its January passenger count up 10.2 percent from January 1999.

DALLAS -- Southwest Airlines said Monday it is on track to sell more than $1 billion in tickets over the Internet this year, as carriers bypass travel agents and sell directly to customers.

The airline said it sold nearly as many tickets online in January as it sold through travel agents.

"It's a very inexpensive and very cost-effective method of booking a seat on an airline," said Gary Kelly, the airline's chief financial officer.

Kelly said Southwest spent less than $5 million to build its Internet site and relatively little to operate it. In the fourth quarter of last year, he said, the airline sold $250 million worth of tickets online.

The Dallas-based low-cost airline reported selling 27 percent of its January tickets over the Internet and 30 percent through travel agents -- to whom the airline must pay commissions. Of the remaining 43 percent, most were sold over the telephone.

A year ago, only 14 percent of tickets were sold online and 37 percent were sold by travel agents, Kelly said.

Analysts had believed Southwest sold about 15 percent of its tickets online and other major carriers about 5 percent.

"All airlines' goal is to get more than 50 percent of ticket sales on the Internet. The cost saving is potentially huge if you can do that," said Ray Neidl, an analyst with ING Barings.

Travel agents, who get a 5 percent commission on domestic tickets they sell, have grown increasingly worried by the trend toward Internet sales.

This month, the American Society of Travel Agents asked the Justice Department to investigate a plan by 27 airlines to set up a website to sell discounted airline and car-rental tickets and hotel rooms.