The Use Of Icts In The Airline Industry Tourism Essay

Information and communication technology is the new style of doing business in a useful method. This method was using since 1930s. in past 15 years this system have followed by various industries such as retail, banking, telecommunication, government, tourism etc This method covers huge series of applications like internet, wireless, Digital Cameras Wi-Fi, VIOP, GPS, Digital Radio, etc. all the industries are trying to apply this method from one way or the other to develop their business performance. in an article they have mentioned (“daily telegraph IT”) that majority of organizations will not 24hrs without the help of ICT

This growth was expected and this made the work easier and faster. This is the main reason why outsourcing of work start. The cost of making was condensed and so was the cost of goods. This technical development has removed the national limits and helped various industries to go worldwide, thus mix markets as well as market across the world.

This rapid growth in the technology has lead to the concept of E-Business and E-Commerce. With e-business there are various advantages due to the presence of global audience, online transaction, etc. This is playing a major role in reshaping the tourism sector across the world. This concept of ICT has brought people much closer to the tourism service providers. Now, customers do most of their holiday or travel plans online. Many tourism companies are adopting this technology.

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The tourism sector being one of the traditional sectors it was not a smooth ride in taking up this technological advancement. Many small could not afford this kind of investment. They had to terminate a lot of workers as after this advancement there was minimal response to the traditional high street travel agencies. Although physical services are the core products of industry, it is dominated by information systems. (Shankar, 2008)

ICT for business and the travel industry in particular:

Information technologies have made high changes in the environment by using the new technologies in business. Information Communication Technologies (ICTs) can provide powerful planning and planned tools for organizations when properly applied and used can bring more advantages for promoting and strengthening their competitiveness. The increase of the Internet, as a main stream communication media and as an info-structure for business dealings has a high range of designed implications for businesses and for the travel and airline industries mainly

ICT revolutionized business processes and practices

The current ICT developments have vast implication for the business, structure. And plan of organizations. The computation of future market will leads to a great extent and it will depend both such as development and purpose of these technologies. The creation of the World Wide Web will forces most of the organizations will make to re think about two things i.e.,

In which they are performing their business.

How they can re-engineer their business methods.

The business can be performed more efficiently by system, by facing so many new opportunities and challenges. ICTs contribute towards good organization, output and competitiveness development of both inter-organizational and intra-organizational systems.

The affiliation between ICTs and competitive advantage and their performance is still vague. Even though there is an indirect and complex sporty relationship between ICTs and success, it is difficult to be measure and describe. Technologies have already developed a wide range of functions including business functions, external environment monitoring, communicating with associates and with clients in high level. Clear planned goals and obligation are basics for the growth of a proper ecommerce plan and the growth of web sites and other technological solution. The growing mobile technologies and mobile business are estimated to modify severely a number of industries and to force business to think again about their strategic management.

ICT in the travel and tourism industries

The main function of travel and tourism industries is run by ICT. The internet will allows them to demonstrate their products clearly and they can communicate easily with the customers. Intranets will provide friendly environment access for employees of organization , extranet will shows authorized partners with the ability to use computer information to operate through online, so many internal management applications shows the planning and operational management and marketing of travel organization.

ICTs support all business functions and are critical for operating in the travel industry as a worldwide. Few other industries rely on so many partners to work together directly for delivering their products and few other value chains are as involved as the one for travel. ICTs provide the tools to look for important and profitable place market segments, to identify their value added components

Cost success and suppleness are serious assets contribute by ICTs in this process, as they help the cost decrease and make best use of effectiveness. The power of ICTs on travel business is enveloping, as information is serious for both day-to-day operations as well as the planned management of organizations. On the strategic level, travel organizations have to constantly assess for all elements of their outside surroundings, as well as their opposition and customer requirements, and so, adapt themselves in order to improve their competitiveness.

Using ICTs, tourism organization can make a distinction their product customizing the final product and by adding value according to person supplies. ICTs support the strategic management of travel business by allowing long-term result making and by providing a platform for teamwork and dealings between associates. ICT will help the complete industry to operate by empowering internal procedure, coordinating partners, as well as by interact with future travelers and the general public. As a result, the recent ICT developments have develop the entire system and have thoughtful implications for both the strategic and planned management of travel organizations. Most important that they have severely changed the industry structure and polluted the competitiveness of all players in the market.

Airlines and the Internet revolution

Internet was introduced in 1990’s and due to the development of intranet and extranet have forced on airlines to make a changes in their panning on technical improvement in order to enhance their competitiveness.

Finally airlines have identified that the internet is important product to handle distribution costs and to modify the structure of the industry. In 2001 that British Airways CEO ROD Eddington said that BA spent 1.1 billion of pounds on distribution and that have became the third most costly after labour and fuel

In the Internet era, GDSs is as self-governing business from airlines developing their offer to provide the backbone for the complete industry to establish the info structure for the dealings undertaken by high number of Internet travel entrances. In addition, they slowly reinvented themselves to main technology suppliers for a broad range of tourism organizations as well as airlines, travel agencies and Internet travel portals.

At the same time a number of plain airlines appear in both countries i.e., Europe and the US. These airlines concentrated on lower input cost in as many areas of their operations. They also developed simple distribution strategies and took full benefit of the Internet for converse with their clients. Internet near the beginning adopters, such as both well-established and newly-established airlines recognized a clear opportunity.

They invested a lot in order to develop their on-line brand name and to gather the important market share.

Some of the high established airlines, such as American Airlines. Recently established airline industries such as Bratthens, Rynair and Easyjet they have adopted the Internet from the early stages.

Several carriers even decorated their aircraft with their Internet address at the same time as they arranged special promotions with the media to make transfer to their web sites. They provide incentives for consumers to book online and ensured that they were not distributed through the GDS in this way airline are forcing their clients online.

Easy Jet and Ryan is a good example:

In the year 2002 the majority of airline booking have done through the internet and the consumers have got the 5 pounds discounts on their original. No frills airlines are managed by the Internet and other ICT tools, made the industry reengineer. By introduced a number of ICT-enabled innovations including:

Electronic/paperless tickets

Transparent and clear pricing led by proactive and reactive yield management

Single fare tickets with no restrictions on staying or Saturday nights rules

Commission capping and publication of net fares

Financial incentives for self-booking online

Auctions and online promotions

Powerful Customer Relationship Management Systems

Online and context-relevant advertising

As the customers are enjoying the facilities which have provided by the airlines and the customers are benefited by low rates provided by the airline. Therefore some of the airline have followed the no frills carriers to develop their online marketing and to also satisfy the customer needs

HISTORICAL DEVELOPMENT AND THE USE OF ICTs IN THE AIRLINE INDUSTRY:

Most of the airlines are using advanced ICTs and mostly the airline functions highly depended on ICTs. Sharing and partnership is perhaps one of the most important areas of ICTs contribution. Majority of low-cost to be dependent on support on ICTs for displaying their availability and for the communication and transaction with their clients. ICTs have the equal importance in operations management and contribute for the improvement of procedure and processes and also good facilities such as in flight entertainment and good customer service

Most of the airlines have been investing on ICTs service since 1950’s. They have introduced ICTs to get effective, quickly, quality and exact procedure of their inventories (reports) in which to communicate easily with travel agencies and with others. When the airlines have changed the date, time and route to update easily with in fraction of seconds for the clients.

SABRE computer reservation system (CRS) was introduced in 1962 by American airlines alternatively to expend its Boeing 770 fleet by 50% (8-12 aircrafts). This project have described as a technically to feel amazement to represent a program task that increase the power of coding efforts which is needed for NASA Project Mercury . In mid 1970’s SABRE have made as a powerful inventory control system. SABRE made base for the changes in flight plans for aircrafts, tracking spare parts, managing events for crews and for developing the level of decision support system for the airlines management. Then after all the airlines have followed the same system to provide the facilities to satisfy the clients (customers, consumers) needs.

In 1970’s USA air transportation deregulation made airlines to make a changes in their fare and routes. This have made a huge growth of air traffic and increased the demand for information, CRS gave a chance for airline to improve their internal organization and CRS have made into powerful tool (product) to control the airlines inventories (reports) in this way CRS made airlines to communicate easily with travel agencies, consolidators, other distributors by providing update routes, availability price standards. Because of deregulation airlines have increased the tariffs and computing and communication needs. Agents and others have used newly introduced computer technologies to control their reservation and to get easily about tariff information.

Slowly CRS have became strategic business unit (SBU) in its own way, because of one reason i.e., huge usage of this in airline (airline are using more because due to this they have increased their income or sales ratio).

In 1980’s airlines and CRS executives realized that air transportation was a fairly small and has large travel experience then travel agencies are demanded to increase the number of carriers from a single terminal and to increase the value of information on destination. CRS were developed to much and introduced GDS (Global distribution systems) by offering a huge range of tourism products, such as hotels and car rental reservations. SABRA system have developed there database to include their itinerary and inventory from other airlines, the same procedure have introduced in EUROPE to develop the Galileo and Amadeus GDSs, then GDS have became backbone of airlines by providing good communication between airlines and travel agencies. GDS will handle millions of tariffs in their database by making 40 millions of changes in their inventories in every month. Finally GDS have developed their standards to control more than 500,000 passengers’ records and nearly 2000 messages in each second.

In 1990’s GDS have became like a travel supermarket by offering information and reservation capacity by providing high level of travel products such as accommodation, car rental, exact plans for non- air transportation etc., GDS offer a chance for travel agencies to access their essential information on their screens and to develop the travel schedule (itinerary) from the convenience of one inter-connected system. GDS have became a one of the marketing, important procedure for scheduled airlines operational and strategic agendas as they can control and distribute the majority of airline seats. Due to some changes CRS results into four major GDS such as SABRE, world span, Amadeus and Galileo. These four GDS have the permission for recruiting the travel agencies and they select their own market place by increasing number of value added services for travel agencies and airlines.

The below table will shows ho GDS moved highly successful business in their own way by getting and providing high profits for airlines, travel agents and others.

S/ no

Company

Period ending

Worldwide locations

segments

per year (m)

Total revenue

(m)

Operating expenses (m)

Operating income or loss

Operating margin

Other income

Less taxes

Net earnings /loss (m)

Net margin

Sales and marketing support:

Airlines contain lengthy used internal Computer Reservation Systems.

Airline are using this to co-ordinate easily with GDSs and with the airline Internet site in order to increase the sales and marketing by distributing inventory globally

.airline is using these systems to issue electronic tickets and to sale their e-tickets in hyge number by travel agencies over all the world.

Inter views suggested that they greatly need to encourage their web site as their primary reservation path and as an alternative to the GDS/travel agency route. Such systems link all partners in the handling process, automate procedures, and support smooth communication flow.

Airlines try to do something by use technology to improve their effectiveness and therefore they attempt to combine new technologies such as electronic scales, stacker systems, handheld terminals, and bar coding to increase their usage competence and to reduce preparation costs.

These systems will support the airline internally such as administration, accounting, and passenger or goods handling process by coordinate inventory management, sales and marketing, yield and revenue management, ticketing, and departure control systems and other departments.

Airlines will use decision support systems to control traffic and bookings on computer reservation systems because in order to identify customer activities, traffic flows or trends, as well as the performance of followers and sales agencies.

This system will also follow the pricing of their challenger for several city join up.

These systems will also permit airlines to charge their situation against the performance of their competitors and also accept positive and immediate actions.

A broad information foundation will show the way to more right decision for heart airline plan and arranged activities, such as marketing & sales, schedule planning, yield management, and pricing.

Distribution, marketing and sales support with partners

In the past majority of marketing and distribution of airline are done by the travel agencies for the distribution of their products. Then now the air line are linked travel agencies is normally facilitate by the global distribution systems and they provide the info structure for the itinerary building and facilitate for the total transaction. Airline high level management employees have explained that they like to communicate with the travel agencies on Extranet, by using internet in order to avoid the GDS bookings fees.

For example

British airlines have developed a separate web site for the travel buy and sell (www.batraveltrade.com). They have developed this website to develop the extranet in order to make easy the process.

Some of the travel agencies slowly find out the useful financial features. For example if the customers are using the credit card payment they will charge the airlines for the credit card payment, in the same way KLM provided the web fares for only extranet GDS fares are more expensive to cover the additional costs.

Airlines also employed numbers of General Sales Agencies in all regions that they have to stop the person who are operating in their own office do not operate their own offices. They have appointed by international airlines to secure business from IATA and non-IATA agents in markets anywhere agency networks are so far to be fully automated and where airlines need monetary security to cover business risks.

They also involved in their reservations and distribution in local and they will maintain the good relationship with the executives to promote the product in the market.

Now a day the travel agencies are buying the seats in a large quantity and selling in local market by providing the discounts to customers. These discount rates, can be updated through online for the customers by using ICT

Resource Management Systems

Airlines are needed to maximize the consumption of their most expensive resources such as human resources and fleet, for that they have to ensure that their tools and aircraft are efficient and its ability fully used. Maintenance Control systems have manages some things such as aircraft maintenance, commercial, and operational requirements. Airlines have to make sure that aircraft and other equipment is frequently maintained and also that technical problems and unprepared services are deal with as capably as possible to minimize out-of-service periods whilst minimizing service disruptions.

These systems are built-in with proper systems for allowing airlines to arrange parts and other consumables online, at the same time as engineering systems may be included for providing online manuals and technical support.

Technical documentation management systems such as create, distribute, and manage complex technical data and documents. Hence, airlines aim to maximize task force utilization by improving maintenance, repair and repair performance. The airline will get this result by optimizing the supply chain network, aircraft downtime, and materials management.

Airlines will manage their crew schedule through crew management systems. Planning duty schedule is a difficult process as there are several key limits including skills and they should have the ability to operate tools, level, immigration problems, rest periods, and cost of rest periods.

Crew management systems use complete crew record to start pairing construction, schedule making, and crew manage in order to optimize the human resources performance. They need to be coordinated with all associated activities, such as flight arrangement, operations manager, crew contact, flight meeting, etc.

These systems will also undertake a number of usual tasks, such as inspection legalities, publishing rosters and announcements, and administrate hotel accommodations, deadheads and pick-up services. Communicate setting up information with crews (notices) and next duty period (briefings) as well as information regarding flight load, crew composition, aircraft and airport details is also critical. A number of intranet solutions facilitate this process.

It is the coordination of all these systems that ensures that airlines enjoy operational efficiency and are empowered to achieve their long-term strategy

SWOT ANALYSIS:

What is SWOT analysis?

Swot analysis is a planned method; this method is used to extract the strengths, weaknesses, opportunities and threats involved in any business project. This analysis will identify the internal and external factors that are useful to achieve the product.

Strengths: the point or a quality or a power of a company that are helped to achieve the product.

Weakness: the point or a quality or a power of a company which are harmful to achieve the product.

Opportunities: the external situations which are helpful to achieve the product of a company Threats: external circumstances which can do the damage to achieve the product.

SWOT ANALYSIS OF ICTs IN AIRLINE INDUSTRY