Cathay Pacific, Singapore Airlines and Qantas Airways are to spend A$173 million (about HK$777.46 million) on an on-line travel agency that will include other Asian airlines, according to reports. The alliance was seeking five other Asian partners to join the initiative, which would help by-pass conventional and other on-line intermediaries, the Australian Financial Review reported yesterday. The move comes after similar moves in Europe and the United States. Cathay Pacific, which held its annual general meeting yesterday, declined to confirm the reports. Phillip Chen Nan-lok, Cathay's chief operating officer said: 'We will let you know when there's something to announce.' He indicated that even in cyberspace, there would still be competition. 'We want to be the leading airline in Asia [in terms of utilising the Internet],' Mr Chen said. As airlines have little control over fuel costs and face stiff resistance cutting staff salaries, intermediary costs are fast becoming the area where airlines are looking to add to their bottom lines. The more tickets airlines sell themselves over the Internet, the fewer commissions they will have to pay. Ticketing commissions cost Cathay HK$663 million last year, 2.6 per cent of their operating expenses. The airline is seeking to reduce the commissions it pays to travel agents to 5 per cent from 9 per cent. Jim Eckes, managing director of consultancy firm Indoswiss Aviation, said the cost of handling ticket sales over the Internet was also much lower than through ticket offices or by phone. 'Airlines in the US are offering discounts to people who buy tickets over the Internet,' Mr Eckes said. 'I'm sure Asia will follow suit.' The Internet also enables airlines to reach their customers directly and entice them with hotel bookings, car hire, insurance and other travel-related services. Supplier-owned Internet travel agencies is one of the latest initiatives undertaken by the world's top airlines to beat out established on-line players such as Travelocity and Expedia. Analysts said airlines' Web sites offered limited choice to consumers, which was one of the reasons why they joined together to form Internet travel agencies. 'You can't provide much choice at any one supplier's site,' Fiona Swerlow, an analyst with e-commerce research firm Jupiter Communications, said. Last November, the four leading US carriers - American Airlines, Continental, Delta Air Lines and United Airlines - formed an on-line travel agency. Since then more than 20 other North American carriers have joined the initiative. The European carriers responded by setting up their own cyber-travel agency called Basilica. British Airways commercial director Carl Michel denied that these initiatives were aimed at rooting-out travel agencies. 'That's not the case at all,' Mr Michel said. 'Airlines can't possibly reach all parts of the market themselves. It wouldn't be viable.'