Carl Scholtz: Executive manager for IT, kulula.com
MONEYWEB: Carl Scholtz is the executive manager for IT at kulula.com, and we've asked him to join us tonight for an interesting story. It's a real online success story in South Africa, and today an announcement came from Kulula that in the past year they have sold more than a billion rand's worth of airline tickets over the Internet. Carl, how many tickets exactly is that?
CARL SCHOLTZ: Alec, we carry around about a million passengers a year, and that's probably the number that you could work on.
MONEYWEB: But a billion rand in turnover on the Internet seems to suggest that you've got to be well, by some distance, the most active online trader in the country?
CARL SCHOLTZ: Alec, in this country we are. The sum total of online retailing, as defined by Statistics SA - and that would be retailing of flowers, books, those kind of things - is probably around about half of what we retail. And then there are obviously other airlines as well that also retail online. But as far as the total goes, what we turn over is obviously a significant portion of the total online retail in South Africa.
MONEYWEB: Now what is, from your perspective, the cost advantage of selling tickets on the Internet where people do their own booking, compared with having travel agents doing it for you?
CARL SCHOLTZ: Right. There are a number of cost elements that come into play when you do not sell directly, and through the online channel. The first one of these is obviously the cost of third-party systems and third-party technology that you need to distribute your product through. In this case, in the case of the airline and the travel industry, those would be the global distribution systems which are third-party systems that we need to subscribe to.
MONEYWEB: But try and be specific, Carl, if you can, for us. Say, on an average ticket, by selling it through the Internet rather than selling it through someone who is sitting on a telephone for you - what would your saving be?
CARL SCHOLTZ: It's probably about R50 per ticket. Just the distribution saving.
MONEYWEB: So how come, then, Kulula can come in so much more cheaply than other airlines?
CARL SCHOLTZ: Alec, there are other factors that come into play as well. The distribution cost is only one element of the airline model. There is also the catering on board, the lounges - there are a number of other cost factors that come into play when you are selling airline seats and operations. It's not only the distribution cost. The distribution cost is one element of a number of others in terms of the total cost saving.
MONEYWEB: Clearly it's very important that your whole processing engine is efficient. Did you go overseas and have a look at BMI, or perhaps even some of the American airlines before putting your kulula.com function together?
CARL SCHOLTZ: Ja, Alec, we are in the third iteration now. We've been through two other systems previously, and what we've settled on now appears to be working really well for us - and the answer is yes. We've had a look at a number of overseas systems, and what we've ended up with is something that was developed locally by South African airline people for this particular market and for our requirements.
MONEYWEB: Can you sell that possibly to competitors, or to other airlines around the world?
CARL SCHOLTZ: Yes, we can.
MONEYWEB: Have you done so?
CARL SCHOLTZ: Yes, we have.
MONEYWEB: Oh, to whom?
CARL SCHOLTZ: Unfortunately I can't disclose that at this point in time.
MONEYWEB: But are they serious players within the international environment?
CARL SCHOLTZ: I would say, yes. It is not necessarily the big low-cost players or the big airline players overseas, but certainly not some of the smaller players.
MONEYWEB: Well, that is relevant because, if it's a South African design and it has been able to be used internationally, it must have a kind of a double kicker for you, I guess?
CARL SCHOLTZ: It is. Of course, it's a challenge for us, because we've got the core business and our own requirements that we need to keep an eye on and keep focused on. But it does present additional opportunities, definitely.
MONEYWEB: Carl, we've seen here at Moneyweb, as the broadband wheel has started rolling in South Africa, the amount of people who are visiting our website have been rising significantly, almost exponentially. Have you had a similar experience at kulula.com?
CARL SCHOLTZ: Yes, Alec, we attract around about half a million visitors to the website every month. We have a pretty good look-to-book ratio. It's in the order of about 7:1. So for every seven visitors who get to the website, we get one booking. And part of the reason for that is because we are a pretty focused website. We take airline bookings and we try and optimise that process; we try and keep it easy and simple. But yes, we have seen a rise. In terms of the percentage of our bookings that are made online, over the past three years that's risen from probably 65% to almost about 80% at the moment.
MONEYWEB: And the number of people visiting? You said half a million people a month now visit kulula.com. What was that like two, three years ago?
CARL SCHOLTZ: You're testing my memory here, but I would suggest it was probably about half. In fact, it would be less than half because at that stage the passengers we flew were a lot fewer as well. So it would probably be a lot less than half.
MONEYWEB: Massive success story, and the Internet has made it all possible, David Shapiro. Interesting, isn't it?
DAVID SHAPIRO: Yes. I use the Internet. I book all my flights through the Internet. I know you've got Barbara, but some of us have to do it ourselves.
Interview from http://www.moneyweb.co.za/
Compare kulula.com car hire rates with southafrica-carhire.com rates at www.southafrica-carhire.com
CARL SCHOLTZ: Alec, we carry around about a million passengers a year, and that's probably the number that you could work on.
MONEYWEB: But a billion rand in turnover on the Internet seems to suggest that you've got to be well, by some distance, the most active online trader in the country?
CARL SCHOLTZ: Alec, in this country we are. The sum total of online retailing, as defined by Statistics SA - and that would be retailing of flowers, books, those kind of things - is probably around about half of what we retail. And then there are obviously other airlines as well that also retail online. But as far as the total goes, what we turn over is obviously a significant portion of the total online retail in South Africa.
MONEYWEB: Now what is, from your perspective, the cost advantage of selling tickets on the Internet where people do their own booking, compared with having travel agents doing it for you?
CARL SCHOLTZ: Right. There are a number of cost elements that come into play when you do not sell directly, and through the online channel. The first one of these is obviously the cost of third-party systems and third-party technology that you need to distribute your product through. In this case, in the case of the airline and the travel industry, those would be the global distribution systems which are third-party systems that we need to subscribe to.
MONEYWEB: But try and be specific, Carl, if you can, for us. Say, on an average ticket, by selling it through the Internet rather than selling it through someone who is sitting on a telephone for you - what would your saving be?
CARL SCHOLTZ: It's probably about R50 per ticket. Just the distribution saving.
MONEYWEB: So how come, then, Kulula can come in so much more cheaply than other airlines?
CARL SCHOLTZ: Alec, there are other factors that come into play as well. The distribution cost is only one element of the airline model. There is also the catering on board, the lounges - there are a number of other cost factors that come into play when you are selling airline seats and operations. It's not only the distribution cost. The distribution cost is one element of a number of others in terms of the total cost saving.
MONEYWEB: Clearly it's very important that your whole processing engine is efficient. Did you go overseas and have a look at BMI, or perhaps even some of the American airlines before putting your kulula.com function together?
CARL SCHOLTZ: Ja, Alec, we are in the third iteration now. We've been through two other systems previously, and what we've settled on now appears to be working really well for us - and the answer is yes. We've had a look at a number of overseas systems, and what we've ended up with is something that was developed locally by South African airline people for this particular market and for our requirements.
MONEYWEB: Can you sell that possibly to competitors, or to other airlines around the world?
CARL SCHOLTZ: Yes, we can.
MONEYWEB: Have you done so?
CARL SCHOLTZ: Yes, we have.
MONEYWEB: Oh, to whom?
CARL SCHOLTZ: Unfortunately I can't disclose that at this point in time.
MONEYWEB: But are they serious players within the international environment?
CARL SCHOLTZ: I would say, yes. It is not necessarily the big low-cost players or the big airline players overseas, but certainly not some of the smaller players.
MONEYWEB: Well, that is relevant because, if it's a South African design and it has been able to be used internationally, it must have a kind of a double kicker for you, I guess?
CARL SCHOLTZ: It is. Of course, it's a challenge for us, because we've got the core business and our own requirements that we need to keep an eye on and keep focused on. But it does present additional opportunities, definitely.
MONEYWEB: Carl, we've seen here at Moneyweb, as the broadband wheel has started rolling in South Africa, the amount of people who are visiting our website have been rising significantly, almost exponentially. Have you had a similar experience at kulula.com?
CARL SCHOLTZ: Yes, Alec, we attract around about half a million visitors to the website every month. We have a pretty good look-to-book ratio. It's in the order of about 7:1. So for every seven visitors who get to the website, we get one booking. And part of the reason for that is because we are a pretty focused website. We take airline bookings and we try and optimise that process; we try and keep it easy and simple. But yes, we have seen a rise. In terms of the percentage of our bookings that are made online, over the past three years that's risen from probably 65% to almost about 80% at the moment.
MONEYWEB: And the number of people visiting? You said half a million people a month now visit kulula.com. What was that like two, three years ago?
CARL SCHOLTZ: You're testing my memory here, but I would suggest it was probably about half. In fact, it would be less than half because at that stage the passengers we flew were a lot fewer as well. So it would probably be a lot less than half.
MONEYWEB: Massive success story, and the Internet has made it all possible, David Shapiro. Interesting, isn't it?
DAVID SHAPIRO: Yes. I use the Internet. I book all my flights through the Internet. I know you've got Barbara, but some of us have to do it ourselves.
Interview from http://www.moneyweb.co.za/
Compare kulula.com car hire rates with southafrica-carhire.com rates at www.southafrica-carhire.com
Labels: South Africa - Airlines
