The communication and information systems at airlines 作业代

 
The communication and information systems at airlines
 
 
 
 
  The communication and information systems at airlines  作业代写
 
 
 
 
 
 
 
2014.04.30
 
 
 
 
 
 
 
 
 
 
 
Prepared by
<Names of group members>

Table of Contents
 
Executive Summary. 3
Introduction. 4
1. The impact of reservation system at airlines on operational activities and decision making. 5
2. The problems each airline faced in implementing its new reservation system.. 6
3. The pros and cons of organisations being early adopters or using the “wait and see” approach. 7
4. The impact of the Internet on the communication from customers and the airlines. 8
Conclusion. 9
Recommendations. 10
References. 11
Appendices. 12
 
 

Executive Summary

 
This paper mainly discussed 4 questions about the communication and information systems in business. The questions were based on the example of WestJet and JetBlue. The different ways they implemented their new reservation system makes different results. The JetBluesuccessfully completed its overhaul and the WestJetfailed. The failure of the transfer of WestJet’s 840,000 files of the old reservation systemangered the customers and damagedthe airline's brand.Based on the case, this paper discussed the impact of the reservation system at airlinessuch as WestJet and JetBlue, the problems each airline faced in implementing its new reservation system, the pros and cons of organisations being early adopters or using the “wait and see” approachrelated to the Innovator’s Dilemma and the impact of the Internet on the communication from customers and the airlines.

Introduction

 
The airline industry is highly competitive, these competing companies can be divided into big airlines, regional airlines and low cost airlines[1]. Although some similarity to each other and there is competition between them, but the all of the airlines have their unique and individual characteristics.
Low cost airlines are a major category of the airline industry. Despite its low tickets fares, some low cost airlineshave high profit. This is due to itsextremely competitive fares and outstanding customer service[2].
The ticket price is the main actor the customers considered. As the competition in the airline industry is extremely fierce, so the ticket prices are public, in theory, also transparent. This "popular" price caused a heavy pricing pressure.
However, the ticket prices are not so much transparent as we hoped.All kinds of restrictions, special promotions, daily hundreds of price changes make it difficult for consumers to find the best prices from place A to B.
After the confusion, consumers turn to a reliable travel agent to arrange for their "best deal". Travel agencies offer this service free to consumers, their income from the commissions the airline paid to them (about 10% of the ticket price).However, from the mid-1990s, airlines began to reduce the amount of commission. To 2002, the airline has actually cancelled the commission paid to travel agents.Thus, the travel agency had to charge a service fee directly to consumers.
The internet prompts airlines to cancel the payment of commission to travel agents.With the Internet, consumers can more easily bypass travel agents, to decide "the best deal".Airlines help consumers reserve the tickets directly online and the cost is far less than they usually pay to travel agents.By eliminating commissions and forcing agencies to charge consumers, airlines create an economic reasonto consumers to reserve and buy the tickets online directly.Using this method, the airline saves millions of dollars of cost[3].
Thus, the reservation system has become the main way that airlines sell the ticket[4]. And the reservation system also becomes the mainly part of the communication and information systems at airlines. In the paper, we discuss thereservation systemat airlines in 4 questions.
 

1. The impact of reservation system at airlines on operational activities and decision making

 
This part discusses the NO.1 question: how does the reservation system at airlines such as WestJet and JetBlue impact on operational activities and decision making?
As mentioned above, the reservation system brings some benefits to airlines. However, thereservation system also had a negative impact.For example, consumers can compare fares and aircraft schedules of different airlines directlyon some websites. For ordinary customers, price and schedule is the main determinant, andin case the price is low enough, leisure travellers almost not care about the schedule. So this phenomenon increases the transparency of ticket prices, increases pricing pressure and creates the conditions for the price war. In fact, the price war will indeed broke out from time to time between the major airlines.However, because of the high fixed cost, the price war of different airlines always been constrained.
In this case, increasing the attendance of the aircraft is the most effective method to increase the profits of airlines. The reservation business is proven strategies to win more customers.
In simple terms, to win more customers, the reservationsystem sells more tickets than the flight capacity.Because there is always some passengers could not to arrive on time. Thesepassengers could alter to other flights so that there are little risks to the airlines. But the other larger risk of this strategy is thatthe number of passengers arriving at the airport exceeds the flight capacity. In this case, the social reputation and economic of the airlines will be damaged.
So, try to avoid the risk due to the reservation system is the impact of reservation system at airlines on operational activities and decision making.
 

2. The problems each airline faced in implementing its new reservation system

 
This part discusses the NO.2 question: classify and describe the problems each airline faced in implementing its new reservation system with reference to the Technology, Management and Organisation factors.
With the rapid growth of the airline's passenger number and the demand of the improvement ofconvenience, the old reservation system becomes unable to meet the demand. The efficiency of the old reservation system is relatively low, and there are many deficiencies in the security, accuracy and so on.In order to modernize the airline's management to further improve the efficiency and the convenience, a new reservation system needs to be developed.
Technologically,due tothe amount of customers increased quickly, the large databases need to be used.At the same time, the speed and running stability of the ticketing system at high load conditions need to be improved.In addition, because the reservation systemmostly acceptsthe online payment, the security of thereservation system needs to be emphatically considered.
In the managementfactor, the new reservation system needs new management methods to accommodate a larger number of customers and more demands.The airlines need to train the staffs who manage the new reservation system, in order to make them familiar with the features and operation of the new system.
In the organisationfactor, the new features of the new reservation systemneed new staff to maintain them. And the deletion of the functioncan reduce the number of management staff. So, theorganisation of the airline must be changed to adapt the changesof the new reservation system.In most cases, how to arrange the change of staff is the mainly problems the airline faced in implementing its new reservation system.

3. The pros and cons of organisations being early adopters or using the “wait and see” approach

 
This part discusses the NO.3question: in the case, WestJet was the first to update their system and JetBlue followed, learning from the mistakes made by their competitor.  Discuss how this relates to the Innovator’s Dilemma in terms of the pros and cons of organisations being early adopters or using the “wait and see” approach when changing / innovating their information system. Giving examples from the case study, what risks are taken when upgrading an information system and how can these be overcome?
Innovation can be divided into breakthrough innovation and continuity innovation[5]. Breakthroughtechnology usually produces new markets.But most of innovation was continuity innovation. The so-called continuity innovations are the innovations which could improve the performance of the product. They improve the performance of mature products based on the customer’sdemand for products.
In many cases, information about the continuity innovation is known, and relevant plans can also be developed. So the leading position in this process is not important in terms of competitive.In this case, early adopters and the late adopters can do it as well.And in a breakthrough innovation, we have very little information of the market, so the early adopters have large advantage.
The implementationof the new reservation system at airlines is the continuity innovation, so early adopters and the late adopters can do it as well, and early adopters may face the risk of the neglectfulfault, such as the transfer of old files at Westjet.Getting more information and making a perfect plan may be the way to overcome these risks.
We think that if the innovation is continuity, “wait and see” approach is a better way. And for the breakthrough innovation, being early adopters should be a better choice.
 

4. The impact of the Internet on the communication from customers and the airlines

 
This part discusses the NO.4question: discuss the impact of the Internet on the communication from customers and the airlines related to their problems.  How has social media been used as a negative tool in this case and for organisations in general? Suggest how such negative communication should be addressed to reduce risks to the organisation.
Many bigairline companies make the social media as a new channel of communication with customers to improve the customer service. Among them, many companies are forced to use social media, JetBlue is one of them[6].
In early 2007, JetBlue cancelled large number of flights because of weather problems, but the customer services have not kept pace. Some customers began to complain it on Twitter. This makes the company's reputation received a great deal of damage. And JetBlue began to realize the power of social media such as Twitter.
After this, JetBlue began to explore the possibility of using social media.JetBlue has millions of followers on Twitter now.The company organized a team composed of seven employees to run its Twitter account, in order to provide whole-day customer service.
Using the social media, the airlines can provide the customer service more quickly. It is faster than to call the customer service center on the airport. Moreover, some small demands, for example, adjust the temperature of the standby room, can also get satisfactory answers onsocial media.
When large numbers of negative newsappears on the social media, it is used as a negative tool. This mostly occurs because of the lack of communication between the airline and customers. So, we suggestthat the airline should maintain adequate communication with the customer to solve the problem.
And airlines should choose some special communication ways to communicate with customers, such as the direct messaging service on Twitter, so that the communications can be limited to a single customer and the company, while some sensitive topics or privacywill not be seen by others.This is another suggestion.

 

Conclusion

 
As the reservation system becomes the mainly part of the communication and information systems at airlines, in the paper, we discuss thereservation systemat airlines in 4 questions. We find that try to avoid the risk due to the reservation system is the impact of reservation system at airlines on operational activities and decision making.And in this paper, the problems each airline faced in implementing its new reservation system are discussed at the second section.
The implementation of the new reservation system at airlines is the continuity innovation, so “wait and see” approach is a better way. And for the breakthrough innovation, being early adopters should be a better choice.
Finally, we discuss the impact of the Internet on the communication from customers and the airlines, and provide two suggestions to solve the problem of negative communication on social media.

Recommendations

 
We think that the reservation system at airlines could be further improved. We recommend that theimprovedreservation system could predict the passengers’ next purchase time and other information based on their buying habits. This may attract more customers and make the attendance higher.
 
 
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References
  The communication and information systems at airlines  作业代写
  1. Miller D, Chen M J. Sources and consequences of competitive inertia: A study of the US airline industry[J]. Administrative Science Quarterly, 1994: 1-23.
  2. Mason K J. Marketing low-cost airline services to business travellers[J]. Journal of Air Transport Management, 2001, 7(2): 103-109.
  3. Buhalis D. eAirlines: strategic and tactical use of ICTs in the airline industry[J]. Information & Management, 2004, 41(7): 805-825.
  4. Tuttle J R. System and method for locating individuals and equipment, airline reservation system, communication system: U.S. Patent 7,570,151[P]. 2009-8-4.
  5. Christensen C M. The Innovator's Dilemma: The Revolutionary National Bestseller that Changed the Way We Do Business, 1st HarperBusiness ed[J]. New York: HarperBusiness, 2000.
  6. Kaplan A M, Haenlein M. Users of the world, unite! The challenges and opportunities of Social Media[J]. Business horizons, 2010, 53(1): 59-68.
 

Appendices

 
This paper has no appendices.
 The communication and information systems at airlines  作业代写