E-Business for Airlines
Unit 11
P3 – Analyse the impact of e-business
on airlines
• Analyse? Look at the impact of e-business on
airlines and discuss.
Disintermediation
• Direct bookings have saved the need for travel
agents = making a saving as no commission
paid.
• No middle-man required as bookings are
made directly and payment processing can all
be completed online.
Instant Response to Competitor Pricing
• Airlines can respond immediately to
competition from competitors.
• Market transparency.
• Pricing can be altered to be competitive and
win business .
Yield Management
• This involves airlines analysing seat sales on
their flights
• Airlines use advanced software to monitor
how seats are being reserved and react
accordingly, eg - airlines can react by offering
discounts on low demand flights, where the
flight is unlikely to sell out. Conversely, they
can sell more expensive seats when there is
excess demand in order to profit.
Staff Savings
• Why would airlines make staff savings by using
e-business technology? Any ideas?
• Less overheads eg – business premises,
salaries
• Less customer service staff required – think
self-service ticketing/ check-in, online
booking, seat reservation, travel information.
Establishment Costs
• Employing a specialist commercial web design
company to upgrade your website
• Support issues eg – support for web design,
dedicated technical support
Contd.
• Cost of hardware and new software.
• Businesses need to be flexible in their
approach. If they decide to put their business
completely online, then the customer must be
able to access all the information they require
online. Otherwise they must provide a
helpline function, eg - a wheelchair passenger
may want to find out if they can take their
wheelchair onboard.
Airline to Ground Handling Agent
• Ground Handling Agents – caterers, special
services, etc will have access to airline
information with a password and can establish
passenger figures for flights.
Low Promotional Costs
• Cost effective
• Mass marketing opportunity
• Ability to obtain customer information eg –
mailing lists
Opportunity to Use Web and E-Mail
Marketing
P4 Discuss the benefits of e-business
for airline customers
Increased Choice and Flexibility
• Can be seen on a computer anywhere – not
just at a Travel Agents or on posters. Full
choice of flights, tours, accommodation
available on the internet. Flexible to the
customer.
Global Availability
• Show an example of making a booking or getting
information from an airline at other side of the
world eg – Qantas, and show the time in Australia
at time of booking.
• Show a booking from Tokyo to USA or similar
• Up to date availability information – look at a
flight one day (print details) and then look few
days later (print details). If departure is not too
far in advance price may have gone up or
availability will have disappeared.
Immediate Booking
• Easy to make a booking and make a payment.
• No waiting for confirmation or tickets.
• Safe and secure with new technologies.
Independence
• Unpackaging the package – customers have
increased choice on the internet and have the
option to build their own package, eg – flights,
accommodation and car hire can all be
booked separately.
24 Hour Access
• Available around the clock
• Does not shut down overnight like a
reservations office