Purchasing airline tickets online

According to data from the online company e-Bay, e-commerce is one of the fastest-growing businesses. e-Bay's revenue in the first quarter of 2007 amounted to as much as 1.77 billion dollars and was 27% higher compared to the previous year. After successful authorisation, the transaction server notifies the seller about the order and delivers all data about the order, whilst providing the buyer with feedback about the result of the card verification and confirmation of receipt of the order. If authorisation is unsuccessful, the order is rejected.

Problem

According to data from the online company e-Bay, e-commerce is one of the fastest-growing businesses.

Solution and method

e-Bay's revenue in the first quarter of 2007 amounted to as much as 1.77 billion dollars and was 27% higher compared to the previous year. Online shopping brings many advantages. Online shops are open 24 hours a day, before purchasing it is possible to check competitors' offers relatively quickly, and the purchase can be made from an armchair.

However, online shopping also brings certain risks. The greatest risks are misuse of credit card data and buying "a pig in a poke". With an inadequately secured online purchasing process, intrusion into the computer programme can quickly occur and consequently lead to misuse of the buyer's data.

Likewise, we cannot see the product before delivery (except in photographs) and test it. "How safe are online purchase transactions?" is the first question I attempt to answer in my diploma thesis, which I expand in the second and third chapters with insights about designing attractive websites and online shops, and with understanding about the advantages and disadvantages of online shopping. The arrival of the low-cost airline carrier Ryanair in Maribor – this is a carrier that sells airline tickets primarily via the internet – seemed to the author a good starting point for comparison of how affordable tickets are online and how traditional companies, such as the Slovenian national airline carrier Adria Airways, have adapted to new market opportunities.

Buyers are primarily interested in price, so I was first interested in which carrier is cheaper to travel with. I selected the Maribor–London or Ljubljana–London connection. Is the lower ticket price also truly more affordable, or are the pitfalls of low prices hidden in additional payments and charges that must be paid for purchases via the internet?

Does travel from point A to point B, as affordably offered by the low-cost carrier Ryanair, also pay off with connecting flights and on longer routes? In the diploma thesis, I will also present the history of both airline carriers, the ups and downs in their business operations, business strategies, whilst also focusing on the current offer of both carriers and on the connection from Stansted and Gatwick airports, where the aircraft land, to the centre of London. Shopping from an armchair, as some authors also call online shopping, has numerous advantages.

Online shops are open 24 hours a day, so it is possible to make a purchase at any time. Moreover, one does not need to travel to an online shop with some means of transport, as purchasing is possible from home. Purchased goods are delivered to our home by online retailers, often via post.

Among the advantages of online shopping are relatively quick review of competitive product offers, prices, as well as products that are generally cheaper. These are cheaper due to costs that online sellers save, because they do not need to spend money on salespeople's wages or rent for business premises. However, such shopping also involves a relatively high degree of risk.

Two concerns particularly stand out: buyers' fears of misuse of payment card data and buying "a pig in a poke". Serious online retailers are aware of the mentioned concerns from buyers, so they develop such shopping systems that would ensure safe online transactions, whilst simultaneously offering buyers enough information about the product/service before they finally decide to purchase. One of the mechanisms for ensuring safe online transaction processes is the so-called SET protocol. In this process, the payment procedure depends on authorisation of the transaction by the bank that issued the payment card to the buyer.

The procedure runs as follows: when the buyer submits (and pays for) an order, a payment request is sent via the online shop to the transaction server. This stores the request in a database and executes verification of the credit card's validity.

Results

After successful authorisation, the transaction server notifies the seller about the order and delivers all data about the order, whilst providing the buyer with feedback about the result of the card verification and confirmation of receipt of the order. If authorisation is unsuccessful, the order is rejected. The seller then reviews the order elements and after dispatching the goods confirms delivery to the transaction server, which at the same moment transfers to the bank a request for transfer of funds from the buyer's account to the seller's account.

I assess that the risk of misuse of payment card data in transactions that are appropriately secured with SET, SSL or S-HTTP protocols is no greater than the risks of misuse in non-online purchases. I believe that a bigger problem of online shopping is buying "a pig in a poke". We do not physically see the product, and photographs can also be misleading.

The area of consumer protection in purchases via the internet is legally regulated. Directive 97/7/EU The Fair Credit Billing Act and Recommendation of the European Union Commission No. 88/590/EEC are instruments that define the manner of consumer protection when making such purchases.

Article 4 of the directive stipulates that the consumer must have sufficient information before purchase about the supplier's identity, essential characteristics of the goods and additional delivery costs, as well as the payment method, or that data must be easily accessible to potential buyers. Article 5 guarantees the online buyer the right to withdraw from the contract and the possibility of complaint, whilst Article 6 further reinforces this right. It guarantees the consumer the right to withdraw from contracts concluded at a distance within at least 7 days without stating any reasons and without any sanctions.

In practice, however, a problem increasingly appears connected with the time spent on returning the product and complaints. When purchasing in a traditional shop, justified complaints are resolved in a few minutes; with online shopping this takes somewhat longer. The product must be returned (paying shipping costs) and one must wait for the money to be returned or for a more suitable product.

Product prices on the internet are somewhat lower, whilst sellers enable even more affordable purchases with individual daily online promotions. The question is whether these purchases also pay off in cases of complaints or in the above-mentioned cases. In Chapter 6, I focused on purchasing airline tickets.

I compared the prices of airline tickets with the Irish carrier Ryanair and Adria Airways. Ryanair is a low-cost airline carrier that offers and sells its services primarily via the internet, and is also known for very affordable flights in terms of price. I decided on a flight from Maribor to London, specifically for travel during the period between 14th and 21st August 2007.

Departure is on 14th August and return on 21st August 2007. The price of this return airline ticket for travel in the stated period and with the mentioned provider amounts to €209.05. However, it includes airport charges, baggage charge and commission for online payment.

We can also decide to purchase a ticket with the Slovenian national carrier Adria Airways. In this case, however, for travel on the Ljubljana–London–Ljubljana route, the departure date was 15th August 2007 and return on 21st August 2007, we would pay €246.59. However, such a comparison does not yet give us a sufficiently clear picture of the more affordable provider, as we must also consider the offer on the flight of both carriers.

Adria Airways guarantees a complimentary meal and drink, which does not apply to Ryanair. With the latter, all additional services, such as in-flight service, must be paid for additionally. When comparing prices, we must not forget the transport costs from the airport to the centre of London.

If we compare the fastest option, that is travel by express train Gatwick Express or Stansted Express, we find that the costs are almost equal. For the journey from Stansted airport to the city centre we would pay €35.80 (return ticket), which is only slightly less than the transport cost from Gatwick airport, which amounts to €40.