Case Study 2 Essay

Words: 2880
Pages: 12

Airline Distribution Systems in 2013:
A Case Study
Embry-Riddle Aeronautical University Worldwide

Airline distribution systems are undergoing a dramatic change in the way airline tickets are distributed due to the influence of different factors such as new technology, low-cost demands, and the changing needs of travelers. This paper will discuss those factors and discuss Global Distribution Systems (GDS) and what advantages airlines would gain from being in control of ticket distribution. The strengths and weaknesses of such systems will be discussed and a government report will be reviewed throughout. Finally, two websites will be researched as to their successfulness and ease of use for customers. The two airlines for
…show more content…
Domestic airlines in Mumbai, India are attempting to not follow the conventional fixed commission system (Cuckoo, 2005). The issue of commission reduction has caused a huge stand-off between travel agents and international airlines (Cuckoo, 2005). Legacy airlines let by flag carrier Air-India announced in May, 2005 that they would cut commissions from 9% to 5% (Cuckoo, 2005). British Airways joined in with this plan and other European and Southeast Asian carriers were expected to follow suit (Cuckoo, 2005). Travel agents are planning to fight the commission cuts through the Travel Agents Association of India (TAAI) and the Travel Agents Federation of India (TAFI) (Cuckoo, 2005). Just as many U.S. Carriers have claimed fear of, agents in India announced a plan to boycott Air-India and to stop selling their airline tickets in the event of commissions being cut (Cuckoo, 2005). Low-cost carriers have an advantage to the internet because they can start off with new models of distribution whereas legacy carriers have been using agents for decades and it is hard for them to step out (Cuckoo, 2005). Air Decan is a low-cost airline in India that sells 35% of its tickets online and has been knowingly boycotted by agents because it offers a lower price, usually around 5% less, to consumers who book directly from them (Cuckoo,