ICT and e-business in the tourism industry ICT adoption ... - empirica

Tourism
References
Research for this case study was conducted by Aneta Herrenschmidt-Moller on behalf of
e-Business W@tch. Sources and references used:
Interview with Mr Tony Capiau, Information & Process Manager - Sales, Marketing &
In-flight services, Ticketing Systems at SN Brussels Airlines, on 15 September 2006.
Websites:
• Company website: www.flysn.com (Sept 2006).
• www.crt.dk/UK/staff/chm/trends.htm (Sept 2006)
• AEA website: www.aea.be (Sept 2006)
• IATA website: www.iata.org (Sept 2006)
4.3.8 Summary of main points and conclusions
The aviation industry is one of the sub-sectors of tourism most affected by the
development of ICT and the internet. In this context, no-frills airlines are the most striking
feature of this market as they rely heavily on e-business solutions. Yet, currently the
whole airline industry – including traditional flag carriers – is being transformed by ICT
and e-business. Most of these developments concern customer-facing activities and are
therefore directly recognisable for flight passengers, e.g. e-ticketing, online sales of
tickets, customer self-service check-in or bar-coded boarding passes. Yet, e-business
also heavily shapes the internal workflow of airlines and the co-operation with suppliers
and intermediaries. This is particularly exemplified by the gradual substitution of
traditional Global Distribution Systems (GDS) through services provided by new entrants
operating with internet technology or through airlines’ own websites. Ideally – from an
airline’s perspective – the majority, if not all bookings of tickets should be made directly
over the airline’s website. This would imply that all sorts of intermediaries would be
omitted. Not only low cost airlines pursue this business strategy; classical network
carriers are following suit.
The case study about Ryanair demonstrates how the adoption of e-ticketing and internal
e-business systems has enabled an airline to keep its operating costs down. A
sophisticated yield management system which allows flexibility in dynamic pricing of
tickets has successfully been in operation for years. In the near future, Ryanair will further
boost self-service check-in processes accompanied by new strategies, such as separate
pricing of hold luggage. 85 Furthermore, Ryanair intends to increase ancillary revenue
sources, e.g. by packaging flights with hotel rooms, car rentals and travel insurances.
These ancillary business areas are expected to become even more important in the
future.
85
However, it remains to be seen how recently aggravated security measures regarding
allowances for cabin luggage by many airports will thwart Ryanair’s strategy to reduce the
transportation of hold luggage at the expense of increased volumes of cabin luggage.
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