An examination of ongoing trends in airline ancillary revenues

The airline industry seems permanently embedded in producing thin margins and continuously combatting downward pressure on yields. To perpetuate the problem, the industry remains eclipsed with high cost structures and low barriers to entry. However, a new sizzling concept continues to counterbalance these effects in the form of ancillary revenues. Globally, these revenues have increased by 121% from 2010 to 2014 – and the trend is set to continue as carriers are quickly implementing structural changes to accommodate these revenues streams. This paper examines the performance of the two core classifications of ancillary revenues, which are unbundled products and commission based income. It also investigates the willingness of passengers to pay for these services together with what type of ancillary items are acceptable at a particular price point. The study found that passengers value a narrow range of perceived ‘necessity’ products and services such as food and drink, checked baggage and seat assignment as opposed to perceived ‘optional’ unbundled or commission based products/services. It also found significant differences in WTP for specific ancillary services based on carrier type (FSC/LCC/Charter), length of flight (long and short haul) and journey purpose (business, leisure, VFR)

Pricing strategies by European Low Cost Carriers.

We introduce an on-line pricing tactic where airlines post, at the same time and for the same flight, fares in different currencies that violate the law of One Price. Unexpectedly for an on-line market, we find that price discrimination may be accompanied by arbitrage opportunities and that both tend to persist before a flight’s departure. We find discrimination to be of a competitive type, although arbitrage opportunities are more likely in concentrated routes. Finally, the evidence suggests that discrimination may be used to manage stochastic demand.on-line pricing; price discrimination; Law of One Price; sample selection; dispersion; airlines, exchange rate.

Exploration of the relationship between information systems (IS) activity and marketing activity in the case of 'X' Airlines in developing country

Connecting IS/IT strategy with business strategy has become a crucial issue. The level of integration between business strategies requires explanation of interrelationships, in order to achieve business goals with the available resources and markets conditions. This research is a holistic examination of the relationship between IS, business strategy and marketing in 'X' Airlines. Marketing is considered as core activity. The research design involves qualitative method. It covers the literature on IS integration, a case study approach to understand 'how' and 'why' in using IS in 'X'. The research discusses existing frameworks, both theoretical and practical, of IS strategic integration. The results show that there are relationships of traditional kind as back office support of IS for business strategy and marketing within 'X'

ICT diffusion and the digital divide in tourism: Kazakhstan perspective

No abstract available

Hub Premium, Airport Dominance and Market Power in the European Airline Industry.

Using evidence from an original dataset of more than 12 million fares, this study sheds light on two issues relating to the pricing behaviour of the main European airlines: 1) the extent to which an airline’s dominant position at the origin airport, at the route and the city-pair level affects the airlines’ market power; 2) whether fares follow a monotonic time path consistent with the pursuing of an inter-temporal price discrimination strategy. Our estimates reveal that enjoying a dominant position within a route is conducive to higher fares, possibly because of the limited size of many “natural monopoly” routes that facilitate the incumbent’s engagement in a limit pricing strategy. On the contrary, a larger share within a city-pair does not seem to facilitate the exercise of market power, thereby suggesting the existence of a large degree of substitutability between the routes in a city-pair.on-line pricing; price discrimination; dispersion; yield management.

Progress in information technology and tourism management: 20 years on and 10 years after the Internet—The state of eTourism research

This paper reviews the published articles on eTourism in the past 20 years. Using a wide variety of sources, mainly in the tourism literature, this paper comprehensively reviews and analyzes prior studies in the context of Internet applications to Tourism. The paper also projects future developments in eTourism and demonstrates critical changes that will influence the tourism industry structure. A major contribution of this paper is its overview of the research and development efforts that have been endeavoured in the field, and the challenges that tourism researchers are, and will be, facing

The Structural Impact of Information Technology on the Air Travel Distribution Industry

Rapid advances in technology profoundly affect the way businesses are conducted and the way industry structures evolved. The air travel distribution industry experienced two major technology waves in its evolution, the Computer Reservations System (CRS) and electronic commerce. This paper considers various frameworks used to explain structural features of the US air travel distribution industry and the competitive forces within it. We then describe the historical context within which the structural changes occurred as a result of IT innovations. The current and relative strengths of the industry forces are examined to explain an IT-induced power shift in the industry. We then consider the impact of IT on the air travel distribution industry in the Asia-Pacific region. Based on a comparison with the US experience, we forecast that variances in geography, culture and psychology will limit the extent to which IT can be used to manipulate the balance of power in the industry in the short- to medium-term. We expect, however, that a uniform industry structure will prevail in the long-run

Electronic tourism

The constant development in technology, communication and particularly the Internet, has revolutionized the entire tourism industry, by generating new business models, restructuring the distribution channels, reshaping the production process involved in tourism industry and last but not least has influenced the suppliers of touristic services as well as the stakeholders. In this work I have tried to enhance the implications of electronic tourism for the visitors, the tourism operators, highlighting the informational systems which serve the touristic services. E-tourism comes to support the tourists by providing specialized sites and software which reduce the time necessary for the touristic destinations , making easier the process of booking or renting a car or help planning the trip and making a decision. One of the most common problems associated with the developing distribution is the large amount of information available for the client and to be able to explore it, I have presented intelligent agents with all the advantages this new artificial technology brings along.e-tourism, portal, intelligent agents.

Mergers and Business Model Assimilation: Evidence from Low-Cost Airlines Takeovers

This paper examines mergers that lead to an almost immediate replacement of the target firm’s business model in favor of that of the acquiring firm. We examine the post-merger behavior of the two leading European dedicated low-cost airlines, EasyJet and Ryanair, each acquiring another low-cost airline, respectively Go Fly and Buzz. We find that both takeovers had an immediate and sustained impact on both the pricing structures and the extent of inter-temporal price schedules used on the acquired routes, with early booking fares noticeably reduced and only very late booking fares increased. The analysis suggests that the takeovers had a net beneficial effect as a consequence of the introduction of the acquiring firms’ business models and associated yield management pricing systems. .merger policy; Business model; Low-cost airline; Price discrimination; Yield management .