case mis 1amb m
TRANSCRIPT
first or in a preferential manner) before
showing those of competitors.
• Havingtravel agencies sign contracts
that make it difficult for them to switch
to a competitor s system.
• Chargingfees for airlines that want to
havetheir flights listed in the reserva-
tion system.
• Offeringinformation processing and of-
fice automation services for free or for
a nominal fee) for travel agents choos-
ing to hook into the sy tem.
• Offering free microcomputer work-
station terminals to travel agencies.
These terminals can also be used for
local processing tasks when not
needed for booking airline tickets.
• Expanding the services offered through
the reservation systems so that travel
agents can easily reserve rental cars,
hotel rooms, and so on for travelers.
The major airlines have spun off their
reservation systems into separate sub-
sidiaries that are expected to be prof-
itable in their own right. These sub-
sidiaries often sell computer services and
excess computing resources both to
smaller airlines and to com anies in other
industries.
Competition among the airlines shows
no signs of slowing down during the
1990s. Fare wars, special packages for
frequent flyers, and new travel services
continue to make the airlines industry dy-
namic and volatile. Some companies,
such as Eastern and Pan Am, have folded
as the result of the competitive pres-
sures. With each bankruptcy the remain-
ing competitors practically trip over one
another to obtain gates and lucrative
routes at ma or airports. Information tech-
nology has already played a critical role in
shaping how the major airlines compete
with one another and will undoubtedly con-
tinue to do so in the years ahead.
Adapted from Hopper 1990), Copeland 1991), Winkler 1990), Betts 1992), and Lawrence 1992).
D S USS ON
Discuss how airline reservation systems help the airline operate more efficiently and
assist them n providing good levels of customer service.
How have airline reservation systems altered the manner in which the major airlines
compete against one another? How have these systems made it more difficult for
newer, smaller airlines to compete against the major carriers?
How are the airline reservation systems used to lock-in travel agents and lock-out
competitors?
4 How do you think the airline reservation systems should be changed to provide new
levels of customer service and efficiency? What additional services do you think they
should offer? Why do you think airline passengers would be interested in these?
CHAPTER INTRODUCTIONTO MANAGEMENT INFORMATIONSYSTEMS 5