- 2015-03-09 (x)
- boundary spanning (x)
- Airlines -- United States -- Marketing (x)
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Show moreThe U.S. airline industry plays a very vital role in the national economy and defense. Even though the demand in this industry has been doubling every 8 to 10 years, the airline industry as a whole has seldom made any serious money during regulated or deregulated era. There is a strong downward trend in fare levels and airline yield. The downward pressure on yields makes cost reduction a major priority for all airlines. In the short and medium terms, equipment and fuel costs are beyond their control. Their inability to control the labor costs has pushed the airlines to focus on another major cost area, that of sales and distribution. At the same time, the airlines also want to become more customer-centric. Both of the above goals have been facilitated in the last few years by the emergenece of e-commerce and the Internet. The electronic brokerage effect in the e-commerce environment has helped the airlines to bypass the traditional travel agents to deal directly with customers, resulting in both disintermediation and reintermediation in the air travel distribution indistry. It is estimated that the cost of distribution is about 15% to 20% of the price of an airline ticket through the traditional channels. Direct selling over the Internet results in appreciable cost savings to the airlines. This is a report on direct Internet selling of air travel tickets by the airlines in the U.S. air travel distribution industry in the e-commerce environment. The study focuses on how this market palce has been changing, how it affects the cost of distribution and the bottom line to the airlines, the rate of growth of the business and the market share, and why some airlines do better in direct Internet selling than others.
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