Case Study 2
Airline Distribution Systems in 2013:
A Case Study
Embry-Riddle Aeronautical University Worldwide
Abstract
Airline distribution systems are undergoing a dramatic change in the way airline tickets are distributed due to the influence of different factors such as new technology, low-cost demands, and the changing needs of travelers. This paper will discuss those factors and discuss Global Distribution Systems (GDS) and what advantages airlines would gain from being in control of ticket distribution. The strengths and weaknesses of such systems will be discussed and a government report will be reviewed throughout. Finally, two websites will be researched as to their successfulness and ease of use for customers. The two airlines for this discussion will be United Airlines and Southwest Airlines.
Airline Distribution Systems in 2013
Introduction
Web based commerce and internet technology have dramatically transformed the airline industry throughout the past thirteen years. The internet has enabled travelers to bypass the traditional distribution pattern of travel agencies and enabled airlines to sell more directly to passengers (European Commission, 2006). Since the mid-1990s there have been some major changes to the airline ticket distribution industry which were both a result of internet technologies (GAO, 2003). Major U.S. Airlines claimed a net operating loss of nearly $10 billion in 2002 and had paid over $7 billion to distribute tickets to consumers (GAO, 2013). These distribution expenses include booking fees to global distributions system to the amount of hundreds of millions of dollars (GAO, 2003). Airlines would receive a set booking fee each time an airline ticket was purchased through a travel agent by the global distribution system used by the travel agent (GAO, 2003). Due to most U.S. carriers being largely dependent on each of the global distribution systems for distributing tickets to different travel agent and consumers
A Case Study
Embry-Riddle Aeronautical University Worldwide
Abstract
Airline distribution systems are undergoing a dramatic change in the way airline tickets are distributed due to the influence of different factors such as new technology, low-cost demands, and the changing needs of travelers. This paper will discuss those factors and discuss Global Distribution Systems (GDS) and what advantages airlines would gain from being in control of ticket distribution. The strengths and weaknesses of such systems will be discussed and a government report will be reviewed throughout. Finally, two websites will be researched as to their successfulness and ease of use for customers. The two airlines for this discussion will be United Airlines and Southwest Airlines.
Airline Distribution Systems in 2013
Introduction
Web based commerce and internet technology have dramatically transformed the airline industry throughout the past thirteen years. The internet has enabled travelers to bypass the traditional distribution pattern of travel agencies and enabled airlines to sell more directly to passengers (European Commission, 2006). Since the mid-1990s there have been some major changes to the airline ticket distribution industry which were both a result of internet technologies (GAO, 2003). Major U.S. Airlines claimed a net operating loss of nearly $10 billion in 2002 and had paid over $7 billion to distribute tickets to consumers (GAO, 2013). These distribution expenses include booking fees to global distributions system to the amount of hundreds of millions of dollars (GAO, 2003). Airlines would receive a set booking fee each time an airline ticket was purchased through a travel agent by the global distribution system used by the travel agent (GAO, 2003). Due to most U.S. carriers being largely dependent on each of the global distribution systems for distributing tickets to different travel agent and consumers
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