CASE STUDY DISTRIBUTION AT AMERICAN AIRLINES
CASE STUDY: DISTRIBUTION AT AMERICAN AIRLINES
OVERVIEW
American Airlines is a major United States airline. It was formed in 1930 as a passenger airline and merged with different carriers since its formation.
American Airlines’ operations grew rapidly after World War II. In 1921, American‘s corporate predecessor had only five small airplanes for transporting airmail. In 1946, American ordered 220 new planes.
1952 - American introduced the Magnetronic ― “Reservisor”, a mechanical console installed on each desk to help automate inventory control. The Reservisor offered major productivity improvements: A trial in the Boston reservations office served an additional 200 passengers daily, with 20 fewer reservations staff.
American and IBM collaborated on the design of an improved inventory management system, ultimately called the Semi-Automated Business Reservations Environment (SABRE). IBM provided the hardware, while American and IBM jointly built the software. The initial investment was comparable to half a dozen Boeing 707 jet airplanes.
Competitors make their own distribution system and later, certain circumstances open the industry to Global Distribution System allowing AA’s own system to be access by those customers of competitors.
TIME CONTEXT In year 2006, when American Airlines faced the impending expiration of its three-year contract with its four then existing GDS.
POINT OF VIEW Lead negotiator Charlie Sultan and co-lead negotiator Chris Degroot.
STATEMENT OF THE PROBLEM American Airlines was unable to shoulder the fees set by GDS due to struggled with fuel prices and increased competition from new entrants.
OBJECTIVES
Must:
To continue attending to customers’ requirements as well as preserving the relationship with travel agents.
To maintain easiness in accessing American Airlines’ services through supporting their existing GDS.
To overcome possible threats brought by the changing environment (fuel prices and new airline entrants).
Wants:
To
OVERVIEW
American Airlines is a major United States airline. It was formed in 1930 as a passenger airline and merged with different carriers since its formation.
American Airlines’ operations grew rapidly after World War II. In 1921, American‘s corporate predecessor had only five small airplanes for transporting airmail. In 1946, American ordered 220 new planes.
1952 - American introduced the Magnetronic ― “Reservisor”, a mechanical console installed on each desk to help automate inventory control. The Reservisor offered major productivity improvements: A trial in the Boston reservations office served an additional 200 passengers daily, with 20 fewer reservations staff.
American and IBM collaborated on the design of an improved inventory management system, ultimately called the Semi-Automated Business Reservations Environment (SABRE). IBM provided the hardware, while American and IBM jointly built the software. The initial investment was comparable to half a dozen Boeing 707 jet airplanes.
Competitors make their own distribution system and later, certain circumstances open the industry to Global Distribution System allowing AA’s own system to be access by those customers of competitors.
TIME CONTEXT In year 2006, when American Airlines faced the impending expiration of its three-year contract with its four then existing GDS.
POINT OF VIEW Lead negotiator Charlie Sultan and co-lead negotiator Chris Degroot.
STATEMENT OF THE PROBLEM American Airlines was unable to shoulder the fees set by GDS due to struggled with fuel prices and increased competition from new entrants.
OBJECTIVES
Must:
To continue attending to customers’ requirements as well as preserving the relationship with travel agents.
To maintain easiness in accessing American Airlines’ services through supporting their existing GDS.
To overcome possible threats brought by the changing environment (fuel prices and new airline entrants).
Wants:
To