Airline Changes
ONLINE TICKETING IN THE AIRLINE INDUSTRY: THE GLOBAL IMPACT Chiang-Nan Chao, St. John’s University, Jamaica, NY, USA Robert J. Mockler, St. John’s University, Jamaica, NY, USA Dorothy G. Dologite, Baruch College, New York, NY, USA
ABSTRACT As consumers move away from the traditional approach of buying airline tickets in the past years, airlines are benefiting from cost reduction due to the rapid increase in paperless e-ticket sales and restrictive use of traditional travel agencies. However, when purchasing airline tickets across national borders, traditional travel agencies still play a role, even many US- and European-based airlines have reduced their ticket sales commissions to the travel agencies. This study suggests that in order for airlines to stay competitive in the industry, in addition to offering better airfare, many international airlines in developing countries must follow their US and European competitors to aggressively deploy online ticketing strategies. Keywords: E-commerce; E-tailing; Airline Industry; Multinational Management, Travel Industry 1. INTRODUCTION Although setbacks in the airline industry discouraged consumers to travel, the total number of travelers continues to grow at a slow but a steady rate. The occurrence of the terrorist attack in New York City on September 11, 2001 has caused many consumers to loose confidence in the safety of air travel. Travelers have now started to use alternative modes of transportation to reach there destinations. In the hope of attracting more travelers, many major airlines are offering generous discounts, better service, and more flight options, while security at the airports has been tightening in recent years. The traditional relationships between travel agencies and consumers are being redefined by the technological transformation to the digital economy. User acceptance is the key to a quick and successful implementation of an online industry’s strategy, especially in the ticketing area. By keeping
ABSTRACT As consumers move away from the traditional approach of buying airline tickets in the past years, airlines are benefiting from cost reduction due to the rapid increase in paperless e-ticket sales and restrictive use of traditional travel agencies. However, when purchasing airline tickets across national borders, traditional travel agencies still play a role, even many US- and European-based airlines have reduced their ticket sales commissions to the travel agencies. This study suggests that in order for airlines to stay competitive in the industry, in addition to offering better airfare, many international airlines in developing countries must follow their US and European competitors to aggressively deploy online ticketing strategies. Keywords: E-commerce; E-tailing; Airline Industry; Multinational Management, Travel Industry 1. INTRODUCTION Although setbacks in the airline industry discouraged consumers to travel, the total number of travelers continues to grow at a slow but a steady rate. The occurrence of the terrorist attack in New York City on September 11, 2001 has caused many consumers to loose confidence in the safety of air travel. Travelers have now started to use alternative modes of transportation to reach there destinations. In the hope of attracting more travelers, many major airlines are offering generous discounts, better service, and more flight options, while security at the airports has been tightening in recent years. The traditional relationships between travel agencies and consumers are being redefined by the technological transformation to the digital economy. User acceptance is the key to a quick and successful implementation of an online industry’s strategy, especially in the ticketing area. By keeping
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