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 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