24th in a series of occasional articles on venture businesses
Now that Japan has entered an era of low economic growth, Air Link Co. Chairman Yasuyuki Takimoto gives higher priority to pleasing customers to lure them back, rather than simply expanding the scale of his travel business.
“Many of our customers repeatedly come back. We aim to raise the level of customer satisfaction. And the more we learn about our customers, the better we can serve them,” Takimoto, 52, said.
Realizing low-cost service through a membership system, Air Link has grown rapidly in discount air ticketing and providing other travel products for nonpackage tourists. The travel agency currently boasts more than 100,000 members.
“Through the membership system, we want to show that we are an agent belonging to clients, not an agent belonging to the travel industry. At the same time, we can lower prices by focusing on specific kinds of clients instead of trying to serve travelers in general,” Takimoto said.
A large client membership puts the company in a strong position in price negotiations with airlines, enabling the firm to purchase tickets at lower prices, Takimoto said.
Under the membership system, members pay a 2,000 yen annual fee and receive bimonthly bulletins providing information on discount tickets, hotels and other travel tidbits. The company sells its products only to these members. “Those who pay the membership fee are people who support our way of doing business. In the service industry, congeniality with clients is an important factor. So we make our business policy clear to our clients,” Takimoto said.
In 1994, Takimoto launched a new service, called “Bargain Fax,” to offer Air Link members direct access to what is known in the industry as “loss tickets,” or tickets unsold two weeks or less before the departure date.
Air Link literally links customers and airlines by faxing the prices and flight schedules of such loss tickets — prices for which are drastically reduced — to its members for immediate sale. “We offer a marketing means (to airlines) to enable them to reasonably cut losses. When air tickets were expensive, airlines did not care much about empty seats. But, after ticket prices declined, airlines became eager to fill those empty seats (even at lower prices). Also, more and more consumers now have fax machines at home,” Takimoto said.
The idea of selling loss tickets initially drew concern within the travel industry as they feared it might prompt an avalanche in falling ticket prices. But the industry has come to accept this service because Air Link sells those tickets only to its members and not to general consumers, Takimoto said.
In 1978, Takimoto translated and published a guidebook on inexpensive trips to Europe. The guidebook enjoyed a good reputation because, at that time, overseas trips were a luxury that only the rich could afford and there was little information for frugal travelers. “Only those with high incomes could go abroad at that time. And all guidebooks were geared toward those who could afford such luxury. I believed that Japanese should be able to travel inexpensively, just like Europeans and Americans,” Takimoto explained.
Learning the potential demand for inexpensive trips, Takimoto founded Air Link with his wife, Fumie, in 1979, targeting nonpackage tour travelers who want to travel overseas on a budget. Takimoto’s wife is the current president of the company.
The foundation of the company was timed with the growth of nonpackage tour travelers in the early 1980s, when discount overseas air tickets began to circulate in the market. The volume of business handled by Takimoto’s company grew from 100 million yen in 1984 to 10.4 billion yen in 1998. Last year, the company posted 1.3 billion yen in sales and currently has about 130 employees.