Thomas Phelps
3/12/2009
Pg. 51
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American Airlines known as a
leader using IT
United Airlines known as a fast
follower
Delta Airlines known as a slow
follower
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American
 Sabre reservation system
United
 Apollo reservation system
Programs designed to sell and manage
availible seats to upcoming flights
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Sell other airlines the right to use their systems
Gave American and United vast amounts of
customer information from competitors
Exsample adding flights
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Soon after their reservation system they
developed frequent flyer programs to attract
repeat customers
Buisness travelers bought in
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American and United also developed yield
management programs
Allows the price of seats to vary depending on
demand
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Plane is not full the price drops
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Program generates max revenues per flight
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American’s CIO Max Hopper sold the yield
system to competition
Recoup some development costs
Can do this because by the time Delta learns
the system American will have reached the
next platue of IT information
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1997 CIO Charlie Feld created Delta’s gate and
boarding application
Delta still remained relectant to spend large
amounts on IT
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Recently devoted $1.5 Billion to technology
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Automating Process
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Gate and boarding passes
Baggage handleing
Inventory control
Revenue accounting
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Delta went bankrupt in 2003
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Unorganization and constantly late flights
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Exited bankruptcy in 2006
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GE helped this process by lessing Delta aircraft
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Hoping to survive as a stand-alone company
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Still known for its consistanly late departures
and arrivles
Trying to innovate
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First airline to offer internet during flight
 $9 for a 3 hour flight
 $12 for a 6 hour flight
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Cutting 10% of international flights
1. What business risks would Delta
be taking if it decided not to catch
up with industry leaders in using IT
to gain a competitive advantage?
2. What competitive advantages can a company
reap if it is the fisrt-mover in introducng an
innovative IT system? What are the pros and
cons of being a fast follower?
3. What other industries could potentially benefit
from the use of yield management systems?
4.
Explain how American and United used
customer information to gain a competitive
advantage and how the competitive advantage
affected their value chains.
6. Delta’s board of directors questioned the need
to spend additional funds on IT when the
airline was under great pressure to reduce
costs. Determine a strategy for how the CEO,
CIO, CTO, CPO, CSO< and CKO can work
together to ensure IT projects are supported by
both the business and IT departments
7. Explain how an airline can use information
technology to ensure the security of its
airplanes.
Any Questions?