Cost of sale is only one part of the channel equation
Distribution cost matters, but it should not be reviewed in isolation. Airlines also need to consider revenue contribution, customer reach, conversion quality, servicing requirements and strategic value. A low-cost channel is not automatically the most profitable channel.
Create a comparable view of channel economics
A useful assessment starts by defining which costs belong in the comparison. Depending on the airline, this can include incentives, booking fees, payment costs, technology costs, servicing costs and internal operating effort. The goal is a consistent view rather than perfect accounting precision.
Segment channels by role
Not every channel serves the same customer or market need. Some channels may be important for corporate sales, others for leisure, interline traffic or specific geographies. Understanding the role of each channel makes cost comparisons more meaningful.
Review commercial agreements
Agency and distribution agreements can remain in place long after market conditions change. Periodic review helps identify terms that no longer reflect the value delivered, areas where incentives are misaligned, or contracts that need clearer performance measures.
Measure revenue quality as well as volume
Channel evaluation should consider the quality of revenue generated, not just booking counts. Differences in fare mix, ancillary contribution, cancellation behavior and servicing requirements can materially change the economics of a channel.
Prioritize practical changes
The outcome of a cost-of-sale review should be a set of targeted actions: renegotiation, channel steering, process changes, technology improvements or clearer performance management. The best actions preserve valuable reach while reducing avoidable cost.
Where to go next
If your airline is reviewing this area in more depth, explore the related PAX consulting service or the founder profile for more background on experience and areas of specialization.