Tale of Two Airlines in the Network Age or Why the Spirit of King George Is Alive and Well

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“Paying more and being a Gold Card member calls for a certain standard”. This statement is in line with the benefits of FlyingBlue (2017). Gold-Card Gold members can rely on elite treatment and expect “SkyPriority services”, which amongst other benefits include priority check-in, boarding, priority service at ticket and transfer desks.

It is therefore undoubtedly clear that Professor McPhersons’ expectations were definitely not misguided. The assumptions and expectations of Professor McPherson are advocated by Ikpeminoghena (2012). According to Ikpeminoghena in his thesis “Design and implementation of airline flight information system”, airline flight information systems were used as a separate component, and the information centralised, meaning it was not available to other airlines, not even ticket agents. Iatrou (2014:15-20) however, notes that in today’s network-age air travel information is linked, stored and retrievable by a network of Computer Reservation System (CRS), making information accessible to all stakeholders. Ikpeminoghena further affirms that “Airline Reservation System (ARS) is an integral element of the Passenger Service System (PSS) as it supports direct contact with the passenger. ARS store information about air schedules, fare tariffs, passenger reservations and ticket records.

- Information technology support

Information technology is a structured tool used for gathering, entering, handling storing, managing, controlling and reporting information (Cornford & Shaikh, 2013). Nair , Raju and Anbudayashankar (2016) document, prior to the 1980’s, the flow of information within an organisation was strictly paper based, sharing information was a sluggish task, and often meant that important information was overlooked. Due to a high demand of computing and the advancements brought about technology, companies began to share information internally. Later it became evident that all stakeholders needed to access information, as it empowers all employees, allows them to share sensitive information internally , also, it allows consumers to access all relevant information, it mean of communication between organisations and consumers, and more notably help organisations gain a competitive advantage (Bourgeois, 2014). Johannessen & Olsen (2009:559-580) advocate increasing competitiveness is responsible for boosting new applications in information technology in the airline industry.

Butler (2002) recognised that airlines in the US adapt quickly to new technologies, resulting in cost savings, this is because they are inherently dependant on information. Since airlines are so dependent on information, it is important that the gathering, entering, handling storing, managing, controlling and reporting information is done timeously and accurately. To do this airlines make use of Reservation Systems, which according to Kindervater (2010) controls bookings. Airline Reservation System is Airline-based; it deals with data of a specific airline, such as, flight schedule, fares, and passenger data and is available to other airlines, travel agents, passengers and on the Central Reservation System (CSR). CSR deals with reservations, ticketing, and ensure consistency in ARS and is available to ARS’s, travel agents and passengers. Revenue Management Systems (RMS) deals with data relating to the number of passengers and the fares they pay. Airline Passenger Revenue Management (AMR) deals with data relating to different market segments i.e. first-class and economy, the price differences, seating arrangements and anticipation of cancellations to increase profit maximisation. Expected Marginal Seat Revenue (EMSR) deals with data of higher-valued-reservations, ensure that seats correlate with the associated fares and forecasting of passenger contribution.

The efficient utilization of information technology support in the case study would enabled the travel agent to recognise that Professor McPherson was a valued, loyal member, a Gold Card holder and even his regular drink and meals, as with the other airline. Using data from CRS the agent should have picked up that Professor McPherson had a reservation in first class, he a Gold Card holder, and that has a connecting flight. With the AMR system the agent would have noted the substantial fare and that Professor McPherson should receive preferential boarding as opposed to normal (economy) passengers. In the case of the mechanical failure the airline should have a contingency plan as this could be a crucial factor for retaining clients. The airline should have noted that a valued client was not boarded on to the plain.

- Alternative approach and advantages

- Approach 1

Send an agent to meet Professor McPherson at his arrival gate and attempt to get him to the plane. This will ensure customer satisfaction.

- Approach 2

Ensure that the agents have all the available information. This would have been in line with all his expectations and he would have made it in time for his meeting and his connecting flight

- Approach 3

Track the trend of the customers. This will enable the airline to take care of its customers and to avoid inconveniencing them as in the case of Professor McPherson, this will also give the airline a comparative advantage.

- Approach 4

Keep airplanes on standby. Having contingency plans will reduce the delays. A lack of contingency plans meaning clients switching to competitors, also, clients will arrive at their destination in time, inspire customer loyalty and ensure that the airline retains their current client base.

- Approach 4

Implement a mixed-fleet approach. With this approach a pilot can fly different types of aircrafts. Both airlines and clients benefit from this approach. It reduces training cost, increases productivity, increases mobility, it enables airline to match the demand and the aircraft capacity. In the case the professor they could have used a bigger craft to meet customer demand. It will increase customer satisfaction. Also, with this approach clients like Professor McPherson (first-class clients) and economy flying clients can rest assured that they will have seat whether its peak or off-peak season.

- Value chain

Bourgeois describes Value Chain as a sequence of actions in the production process. Each link of the chain (each step production process) adds value to the final product or services. He further acknowledges