Types and Roles of Airlines - Essay Example

AVIATION INFORMATION TECHNOLOGY due: Types and roles of roles of airlines National airlines can be classified into four major categories (Burghouwt & Hakfoort 2001: 312) i.e. national, regional, low-cost and non-EU airlines. Airlines are ranked based on several criteria such as the revenue they generate or the number of destinations they cover. National airlines consist of airlines that carry passengers across the country and also other international destinations. National airlines are also classified as those that generate between $100 million and $1 billion annually. The number of employees may range depending on the management of the airline. Regional airlines cover only certain destinations in a specific region and do not have international flights. They are relatively smaller than national airlines and generate an income of between $20 million to $100 million in a year. This class is the fastest growing category since it covers most destinations that major airlines may choose to ignore and also offers the convenience as they do not have to stop at hubs for layovers. Low-cost carriers are those airlines that offer lower fares and fewer comforts as well. Since the fare tickets are relatively cheaper, the airlines may charge for extra services in the planes to make up for the revenue lost through decreased fares. Services such as seat allocating, baggage and food may be charged separately. Non-EU airlines are those that are not registered in the European Union, but still operate in their airports. Airlines play different roles in various industries. The travel and tourism industry is the highest recipient of airline services since they work very closely together. The travel and tourism industry depends on the air travel to provide services to their customers. Airlines are responsible for the provision of mass and fast transportation of passengers between countries while ensuring standardized, safe and economic conditions are observed. Airlines also play an imperative role in driving the global economy. This is because of the greatly reduced time of travel which enables businesses to operate in a fast and more convenient way without wasting time waiting for raw materials or delivering goods to consumers. Historical perspective pre E-commerce of airlines Presently, airlines are one of the most frequent users of the internet in their daily operations. Ticket sales makeup the largest portion of all online sales. Airlines were among the earliest practitioners of e-commerce and have benefitted the most from the adoption of e-commerce as compared to other industries (Yang 2001:1), with revenues increasing and costs reducing dramatically. Most of the e-commerce principles were also developed in the airline industry (Pan 2010:121). However, there have been drawbacks in the use of the internet to conduct business operations, with some of them incurring huge losses to the airlines. Before the internet, ticket booking was done manually by either seeking the services of a travel agent, making phone calls to the airline to reserve tickets or through the now rarely used City Ticketing Offices. This offline system has many disadvantages compared to the current online system where most of the transactions only require a computer, internet connection and a credit card, unlike the previous processes which may require physical infrastructure. Use of e-commerce has attracted a large customer base that would be impossible using the offline systems. For instance, 95 percent of web users have at one point used the internet to collect travel related data, 93 per cent visited destination websites and almost half used email services to get information on travel related matters (Lehto, Xinran, Dae-Young & Morrison, 2006:160). Consequently, revenue generation has increased in the same scale owing to the introduction of e-commerce. E-commerce is set to continue being utilized to even more areas of the airline industry. The internet provides an ideal platform for exchange of information and this will influence the standards of service of airlines where customers share their experiences on different airlines and those providing mediocre services may lose customers and find it hard to attract new ones. Also, airlines may take advantage of the readily available information on the internet to increase the quality of their services and also learn new ways of saving costs. In the near future, consumers and airlines that embrace e-commerce in all its aspects are going to be the greatest beneficiaries of the internet. Components of package holidays and trends towards flexibility A package holiday is one which consists of a number of separate components that are sold to the consumer as a complete package. In the least, a package holiday should cover the time span of not less than 24 hours, provide transport to the consumer, accommodation and other tourist services such as car hire. The package should also be sold inclusively. Holiday packages are increasingly being customized where the holiday arrangements are altered to exclude or include certain components but still resemble holiday package to a great extent. The tour operator may still sell such a service as long as the consumer is fully aware that it is not recognized by law as a holiday package (Gloucestershire County Council 2014: Para. 4). Holiday packages do not necessarily have to be abroad as many people think. Domestic tourism is on the increase, and most UK citizens are now visiting local tourist attractions and still enjoy the services of a holiday package. Holiday packages are the preferred choice of holiday plan. Most people prefer holiday packages due to the fact that they are stress-free, and everything is taken off and also it is the best value option (Robertson 2013: Para. 4). According to the Association of British Travel Advisors (ABTA) (2013), certain trends have been identified that are targeted at increasing the flexibility of the holiday package (Para 3). Demand for tailor-made packages is expected to rise. Most people are looking for tour operators who will offer customized holiday packages so that they can enjoy the benefits of holiday package protection while still enjoying greater flexibility and multiple centre holidays. Even with the uncertainty of the economy, most holidaymakers are looking for value for their money spent on holiday as opposed to cutting back on going away. Younger travellers are also expected to go on more holidays as compared to previous years. Travellers aged between 15 and 24 years took more vacation breaks (five, up from four) in the 2012, in comparison to the previous year, and the trend is expected to continue. In addition, more established tourist destinations are expected to continue being popular as opposed to less popular ones. In this light, destinations such as France, Spain, Greece, Italy and the United States will continue to attract more tourists from the United Kingdom (ABTA 2013 Para. 4). Interaction between airlines, tour operators and other intermediaries Airlines and tour operators have been working in close coordination for so long. Tour operators are responsible for providing tour services to consumers from diverse parts of the world to various destinations. Since most of these holiday arrangements are international, airlines play a major role in the tourism sector where they have the responsibility of transporting the tourists from their countries to their destinations in a safe, comfortable and economical way. Tour operators, therefore, have to find the most reliable airline that provides the best services to its consumers and also suits their profit margin. Sometimes, travel agents are used as middlemen to help in the procedure of identification of the most feasible airline for a certain tour operator. Travel agents have been in the transport industry for a long time, prior to the creation of aircrafts. They provide a link between the traveller, and the transport means provider. A while ago, one had to look for them physically, mostly in their offices, to book tickets. However, with the invention of the internet, travel agents have reduced greatly in number since most consumers are capable of booking their own tickets through the various ways provided by the airlines. This has led to diversification of the roles of travel agents in this industry where most of them provide information on ticket prices, service quality and other facets of air travel. Most travellers will first visit a travel agents’ website where they can get additional or up-to-date information before proceeding to book tickets. Travel agents also help consumers to book other means of transport such as cars and buses at a fee. The hotel and hospitality industry also interacts with airlines a lot by providing accommodation to travellers. Most of them are built a short distance from the airports and target a myriad of airline customers ranging from business travellers to tourists. The airlines, tour operators, hotels and other transport providers all work closely together to provide services to people with different travel needs. The three share similar information such as consumer behaviour, trends in tourism and other factors to predict future losses or profits. Change in airlines over the past thirty years Changes in the airline industry have been dramatic over the past three years. Airlines are now carrying more passengers, offering more services and covering more distances as compared to the situation thirty years ago. The biggest impact to the airline industry has been due to two major factors: airline deregulation and information technology. Airline deregulation has led to many entrants in the industry, reduction of tickets prices, innovation in aircraft manufacturing and a generally improved airline service. However, many airlines have filed for bankruptcy due to stiff competition while others are forced to compromise their quality of service in a bid to save revenue and compete with larger airlines. This has also led to many delayed flights due to congestion in airports brought about by an increase in air travel (Rose 2012:377). Technology has led to increased access to and use of information in the management and marketing processes. This has enabled most airlines to perfect their operations over time and provide services more efficiently (Goodall & Ashworth 2012:3). Consumers are also able to access airline services easily without the need of physically going to the offices. This has led to more bookings being made annually but also less staff being employed since their services are replaced by use of technology. Online platforms provide more opportunities for marketing and extra revenue, not to mention the immense savings made by the airlines through online bookings. However, as much as online transactions provide convenience for both the consumer and airline, it predisposes the airlines to criminal activities which can result to huge losses for the company. Human errors in operating the machines also contribute to more risk in online transactions. Due to the ease of sharing information, a company might be at jeopardy of losing its customers and failing to acquire new ones in case a consumer posts information staining the company’s name on the internet as compared to thirty years ago when such information would not reach a lot of people before being corrected. Bibliography ABTA, (2013, December 27). 2014 Travel Trends Report. Retrieved October 31, 2014. BURGHOUWT, G., & HAKFOORT, J. (2001). The evolution of the European aviation network, 1990–1998. Journal of Air Transport Management, 7(5), 311-318. GLOUCESTERSHIRE COUNTY COUNCIL, (2014, September 26). Business Advice - Package tours & holidays. 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