Archive: Issue 1: August/September 2005

Why E?
by Christopher Staab

Electronic Commerce or e-Commerce is defined as the buying and selling of goods and services through electronic technology, such as Internet, interactive television and commercial online services.

No other industry has the potential to fully exploit the cost-saving and efficiency benefits of e-commerce than the airline industry. While today only about 1 billion of the world´s more than 6 billion people have access to the Internet, the majority of those who fly have access to the Internet. Looking at frequent flyers, this number increases to over 90% with internet access.

These facts have enabled the development of “e-airlines.” Their low cost model is simple: Keep distribution costs low by only selling direct- primarily online; Keep aircraft utilisation high by having quick turn around times; Keep maintenance costs low by using few types of aircraft; Keep operational costs down by using only secondary airports; Keep inflight costs low by cutting out catering and other frills; Keep fare structures simple to decrease related costs.

Most of these factors have been possible since the beginning of aviation yet low cost airlines are a relatively recent phenomenon. It can therefore be argued that the factor that has permitted the development of low cost airlines is the one that has developed in the last 10 years- the Internet. This clearly points out that all airlines must embrace e-technology to lower costs and increase efficiencies to compete in today´s airline business.

However, all airlines still face e-commerce challenges, including: Government regulation; Changing the behaviour of passengers to embrace new technologies; Slower pace of interline partners to implement new technologies; and the extreme example of airports in some developing countries that face daily power outages. These are just a few of the many challenges that airlines still face in e-commerce, not to mention the obvious challenge of finding the right technology for your airline at the right cost.

For these reasons, we are bringing you E-Newsline and E-Conference to address these challenges, as well to bring together airline e-commerce personnel from around the globe. We hope that you enjoy this publication and will join us in Frankfurt on 29&30 September at the first annual E-Conference.

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E Newsline is published on a quarterly basis by Airline Information.

ENewsline.net is a registered URL of Airline Information. Articles

for E Newsline are written by contributing airline personnel, travel

and subject area specialists, and the writing staff of E Newsline.

The opinions expressed by contributing writers do not necessarily

express the opinions or policy of the owners and officers of

Airline Information. Comments or questions may be directed to

the appropriate editorial and administrative staff listed below:

EDITOR-IN-CHIEF

Roger Williams

ADVERTISING AND DISTRIBUTION

Christopher Staab

LETTERS

E Newsline Feedback

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