1. History

In the early days of American aviation, passengers were very few and the airlines did not fly regularly as at present. Ticket fares were regulated by the Civil Aeronautics Board. All routes, fares and flight schedules were published in the Official Airline Guide and travel agents requested reservations by phone or telex. As the number of passengers flying annually began to grow, this manual system could not cope and the airlines looked at upgrading their method of ticketing.

In 1946 American Airlines were the very first to come out with an automated booking system. This was called the Electromechanical Reservisor which comprised a temporary storage of magnetic drums. The airline’s operators had to do the actual lookups as travel agents could not directly query this system.

1953 marked the birth of complex airline reservation systems when American Airlines launched the SABRE (Semi-Automatic Business Research Environment) reservation system. Next came DATAS by Delta, Apollo by United Airlines and PARS by Trans World Airlines. Eventually these were replaced by complex computer reservations systems (CRSs). Originally operated by airlines, CRSs were later extended for the use of travel agents who could query the systems and make reservations themselves.

In the early 1980s CRSs were extended with more features and the new systems were able to book and sell tickets for multiple airlines where the earlier CRSs could handle only one. These newly developed systems were called global distribution systems (GDS). Eventually airlines divested their direct holdings in GDS companies, with the notable exception of the Asian carriers who remain owners of the following GDSs: Abacus, Topas, Axess, Infini and Travelsky. In addition Amadeus has Air France/ KLM, Lufthansa and Iberia as minority shareholders.

Through a GDS, travel agents could easily retrieve the information needed about many airlines. They had greater information-searching and booking capabilities.

Yet passengers themselves needed a travel agent’s assistance when making a booking. If any passenger wanted to book a seat or to go through a schedule they would have to contact the travel agents. So the airlines needed a web-based booking system which will allow the passengers to directly retrieve information about the air schedules, make booking etc. That is when the Internet booking engines (IBEs) were introduced. IBEs are used by nearly every airline at present to cut off extra expenses and to support instant booking and payment.

2. Overview

An internet booking engine allows a customer to specify their travel requirements such as city of departure, destination, departure date, return date and class of travel. Once this information is received, the IBE will offer a list of available air tickets, hotels and excursions which the customer can then book.

The real value of an IBE is in the business rules and processes that package the content and provide the capability to shop and purchase. This includes packaging and pricing rules, customized displays for different customers and channels, business rules, and check out and payment processes.

2.1. How It Works

An IBE is installed on the home page of an airline to enable easy access for customers. When shoppers enter their travel preferences the IBE contacts the GDS or CRS/HRS (computer reservations system) to receive the relevant information which is then shown to the user in an appropriate interface.

The flights and fares may differ according to type of customer accessing the IBE. For example, corporate members or frequent flyers may have access to discounted fares or will enjoy privileges such as redemption of loyalty points against the airfare.

With the Super Passenger Name Record (Super PNR) function an IBE offers the capability of booking non-air elements such as hotels, cars, holidays and insurance.

After the customer has finished selecting their flights they must choose a payment method. There are several options to choose from; credit card payment, redeeming frequent flyer program (FFP) points or miles in exchange for a flight ticket, discount vouchers as well as alternative payment methods such as PayPal or direct transfers from a customer's bank account - the number of options mostly depending on the point-of-sale country. If a customer prefers to pay in cash they will need to visit an airline office to complete the purchase. Once the customer has completed the payment process, a Passenger Name Record (PNR) is created in the airline's reservation systems and an e-ticket will be issued.

As the IBE is an online booking system the interface is often in HTML. With the growth of broadband, technologies such as Ajax or Flash are now used to support the change of the user’s interactivity.

An IBE has real time connectivity to a credit card clearance agency as most payments are made through credit card. Some IBEs offer multi-lingual and multi-currency support for customer convenience.

A good security system which supports authentication and authorization is a must for an IBE.

3. Recent Developments

IBE providers keep adding new features to internet booking engines such as multiple search options so that a customer can book the flight in a manner that suits his/her requirements. If the customer is “schedule sensitive” or needs to adhere to specific travel dates, the IBE offers ticket fares giving priority to the travel calendar. Some IBEs also support passengers who desire to have multiple stops on their way to their destination. As many passengers are very concerned about the ticket price, the IBE of an airline shows a comparison between the low and high ticket fares, with the services included in each.

A user may be able to access a seat map and reserve a preferred seat which is available. The selection of a front row, aisle seat, or window seat is possible. This feature, which is known as web check-in, allows a passenger to check-in online and print their own boarding pass.

Carbon offset programs are also a new feature offered through IBEs. Here, a passenger can contribute to the airline’s environmental initiatives by making a special donation at the time of booking a ticket.

There are also IBE providers who now focus solely on the Vacation Condo, Vacation Villa and Vacation Apartment rental industries along with IBE providers who focus on smaller boutique and independent family owned motel and hotels.

More recently, the leisure, tour and activity market has been digitalized by IBE providers focussing solely on this segment.^[1]

4. Internet Booking Engine Websites

Online travel bookings will represent almost a third of worldwide volume by the end of 2012, according to yStats.com "Global Online Travel Report 2012" report.^[2]

Most of the growth of online travel booking has come from the development of travel websites that allow booking of flights, hotels, and car rentals. In the past 15 years, there has been a significant shift towards more online booking. This shift started with the creation of internet booking engine websites which search across multiple independent travel sites & booking engines.