Case Study: e-commerce in passenger air

transport

By- Megha Dengre & Prakhar

Passenger air transport

Passenger air transport was one of the early users of ecommerce. Early innovations of airline booking systems,
such as United and American Airlines, gained competitive
advantage from the deployment of their systems and, even
after the elimination of various anti-competitive features,
continued to gain significant business value.
With the advent of e-commerce, the air transport industry is
at the forefront of e-Commerce developments with each of
the larger airlines providing for on-line bookings and in
many cases linking into their frequent flyer programs and
electronic heck-in facilities at the airport.

Airline Booking System

Developed in the late 1970s by some large airlines.
Notable examples are:
United
Apollo
American Airways
Sabre
Initially a competitive weapon for the owning airline.
Latterly developed as unbiased markets to sell
seats for any airline.

Airline Booking System

Currently three major e-Market
airline booking systems:
Sabre
Galileo
Amadeus

Sabre

Sabre (AmericanAirlines):
Started in the early 1960s
Installed first terminal in a travel agency in 1976
Provides web based access via travelocity.com

At the time of writing Sabre:

Is processing over 400 million bookings a year for over
440 airlines (about 40% of the world market)
Is linked to more than 210,000 terminals
Uses 30 mainframe computers (US based)
Has peak processing exceeding 7,450
messages/second

Galileo

Galileo (United + European Partners):

Started in 1971
At the time of writing Galileo:
Is processing over 250 million bookingsa year;
For over 530 airlines(about 30% of the world market);
Is linked to about 160,500 terminals;
Uses 21 mainframe computers (US +UK);
Has peak processing of about 5,000messages/second.

Amadeus
Amadeus (Four European Partners):
Founded in 1987
Continental joined in 1995
At the time of writing Amadeus:
Is processing for over 469 airlines;
Is linked to more than 190,000
terminals;
Is based in Germany.

Competition and customer loyalty

Airline branding/customer loyalty:
Advertisement:
United the friendly skies
BA the worlds favourite airline
Hub operations/connections
Loyalty/frequent flyer programs
Alliances: Star Alliance/Our World
Competition:
De-regulation
Low cost/no frills carriers

Web booking systems

The web provides:
A new sales channel
Less opportunity for price comparison
Chance to develop brand loyalty.
Value-added features can include:
Customers Frequent Flyers account online
Pre-allocation of seats
Online selection of meal options
Additional travel services
Travel and airport information
Access to seat sales/auctions
Personalisation of the web site

Web Booking Systems

Analysis of airline web sites (1999)

With
website
(%)
North America

58

With Online
booking
(%)
22

South America 33

Western
Europe

42

12

Eastern
Europe

Pacific

44

Asia

23

Africa

26

Average

33

10

Customer Information
Alternatives:
Requirement for prior registration
Take detailswhen purchase is made
Prior registration:
Can annoy/put-off customers
Might tie customer into site
Details at time of purchase:
Time-consuming (if done every time)
Sales can be mixed mode:
Web enquiry / telephone sales

Product (flight) Information:

Alternatives:
Show Timetables
Take date, time andairport details
Issues:
Knowing airport names / codes
Several airports for one city
Alternative dates and times
Check out some Airline sites for cheap deals:
London to New York:
Several airports for each city
Cheaper tickets may be available on alternative
date

Payment & Delivery

Payment by Credit Card:
Security Issues
Delivery:
By post
Collect at airport
e-Ticket

Options for booking Airline Seats

Thank You