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Online Marketing in the Airline Industry: Expectations about ...

Source: www.aerlines.nl
Topic: Airline Industry

Sort Desciption: Drivers of E-commerce in the. Airline Industry. Airline Point of View ... tion, we will discuss customer relationships in the airline industry, ...

Content Inside: Customer Relationships in the Airline Industry Before the commercial application of the internet, most airlines used brick and mortar sales offices and call cen- ters to market their product to poten- tial passengers. Their activities were supported by the development of so called Computer Reservation Systems (CRSs) at the end of the 1960s, which were developed and owned by airlines (GAO 2003). Examples are SABRE by American Airlines and IBM, Apollo by United Airlines and Trans World Airlines, and Galileo. These systems allowed the travel agents to query air- line flight schedules and fare infor- mation in order to find and reserve a suitable ticket for their customers. The CRSs therefore developed into Global Distribution Systems (GDSs) reaching markets across the globe. Figure 1 below depicts the airline ticket distribution relationships under the rules established by regulators. When authorities reduced the control of GDS’s by airlines, the GDSs became corporate entities in their own right controlling as much as 75% of total airline ticket sales (Alamdari 2002), and they added other lines of business to the original airline ticket booking function as well such as hotel and car hire booking. When the pressure on airlines to reduce their distribution costs during the eco- nomic downturn in the early 1990s, air- lines started to bypass traditional GDS’s by setting up booking facilities on their own websites and through online travel agents (although online travel agents often use online GDS versions too) dealing directly with the airline. The birth of the e-ticket in conjunction with the development of the internet channel has resulted in further savings in print- ing and mailing costs that characterized traditional paper tickets. Drivers of E-commerce in the Airline Industry Airline Point of View One driving force for growth of e-com- merce in air transport is the cut in dis- tribution costs by selling tickets online, which could benefit both the cus ...

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