The International development of transport links, an Increase In the professionalism of tourism providers and a rapidly advancing technological development In both rainspout capacity and management were accompanied by a change In consumer behavior characterized by an increase yearning for distant places (Egger, 2005, p. 63). The emergence of mass tourism made necessary the development of information and communication technologies (Acts) in the fled of transportation.
This was essential in order to be able to manage the transport inventory and planning, to coordinate all the stakeholders involved in the transportation industry and to communicate the corresponding mass of information to the right person at the right time. Airlines were among the first companies creating worldwide electronic networks, not only for the means of selling and distribution, but also for internal management and operations purposes. Also the other types of transport suppliers, car rentals as well as railways or the maritime Industry fall Into this category: they are all technologically advanced (Worthier & Klein, AAA, p. 5). As a result sophisticated computer reservation systems (CARS) were developed to match the capacity with the customer demand (Sheldon, 1997). The Airline Industry The airline industry is characterized by some dominant carriers and a large number f smaller airlines. It is one of the most sophisticated industries, as p rate 19995 264 Transportation there are several stakeholders Involved In both the strategic and the operational management of the industry. It was deregulated in the USA in 1978 and in Europe a III/ I Nils lea to Increased competently Ana an Increase In ten need to operate cost-efficiently.
Specifically, deregulation led to a structural change in the market, increased productivity, improved customer service and lowest prices (Egger, 2005). The Global Distribution Systems, (Gags), a development from the imputer reservation systems (Cars), were for a long time the most important distribution channel for the airlines. They were effectively developed as travel supermarkets in the pre-Lenten era and their primary objective was to connect travel agencies with airlines (Bilabials, 2004).
Gags are still a vital element in the light of the huge variety of tariffs to be administered. Gags are the main link between airlines and intermediaries, such as tour operators and travel agents. They are also empowering Internet transactions by providing the background link between electronic http://www. Download-it. Erg/learning-resources. PH? Promoted=&partnerlD=&content=story&storylD=19995 travel agencies and airlines. The e-business [email protected] 2006 identified a list of broad field of applications of Acts in the airline industry, as presented in Table PIP.
I . However the cost of distributing through Gags is one of the major issues in the airline industry. Around 25-30% of the airlines’ turnover is estimated to be taken up by distribution costs (Davison, 2002). In order to escape the pressure of Gags, airlines are making every effort to maximize their direct distribution via the airline’s own website. According to the results of the most recent Annual Airline CIT Trends Survey, 90% of the airlines currently use their websites as a distribution channel (SITS, 2007).
The British Airways case study (Case 26) shows how the airline’s distribution channels have changed dramatically from Cars, through to Gags to airline solutions and how innovatory CIT solutions and the Internet have helped to advance competitiveness. In recent years, airlines have increased the direct sale of their tickets by means of e-ticketing in order to save commission and other marketing costs, since the latter amount to up to 30% of the rice of a ticket (Bilabials, 2003).
While before the turn of the millennium it was practically impossible to buy tickets via the Internet, today, in at least the business models of the low-cost carriers, it is the only way for customers, both BBC and BIB, to obtain tickets. The case study of the South African LLC Kulak. Com (Case 27) shows in this connection the importance that the Internet has for the direct marketing of innovatory airlines, how it is used as a tool for customer relationship management (CRM) and how it supports the procurement function of airlines. P retell D=19995 Transportation 265 Table PIP.