Airline operating costs and passengers travel experience : e-commerce perspective

Abstract

This study aims at establishing if the benefits of adopting e-Commerce can improve the airlines competitive advantage (by reducing its distribution costs) and improve the passenger travel experience. The researcher was motivated by the effective use of e-Commerce by other airlines to reduce their product distribution costs, helping them increase profits and become more competitive in the market. The researcher targeted Air Botswana primarily due to the fact that the Airline launched its e-Commerce website in January 2010. Relevant and credible literature on air transport management and e-commerce strategies is reviewed in order to ensure the research findings are credible for the purposes of developing this new and informed knowledge. This paper utilises the Saunders research 'onion' to set out a clear path for the purposes of guiding the researcher throughout the study from the initial understanding of the research philosophies, through the approaches and choice of research strategies necessary for generating and analysing quality data. The researcher also targeted 100 passengers on board various flights on Air Botswana and distributed questionnaires to capture data which would fulfil the study's objectives, mainly, to determine the significance of the adoption of e-Commerce on the passenger travel experience, and to recommend how the airline can leverage on this technology in sustaining business survival and growth. Based on the data analysis, a conclusion is drawn that, the airline has an opportunity to reduce its in-direct expenses, primarily ticket distribution costs, by selling directly on its website instead of subscribing to global distribution providers. A further conclusion is made that the passenger travel experience, which begins with a ticket purchase. is further improved by availing fares and other airline services online. This finding may motivate the airline to change its product distribution strategy in order to take advantage of the benefits of selling its ticket stock direct on-line.