Airlines industry in America took advantage of the new technology first, when itintegrated its formerly stand-alone Sabre computer system with the Net. The newcapability resulted in an ability to manage and store 36 million fare records that in turn,were able to produce 1 billion fare offers on-demand. As a result, this practicalinnovation lead the airline to become one of the most efficient, and successfulcompanies the industry's history.
For the customer, the ability to individually research, negotiate and purchase ticketsdirectly has altered the competitive equation between buyer and seller. Before theInternet, ticket choices were primarily limited to the major airlines, and regional airlineswere not able to market effectively against the larger carriers. However, once smallercarriers and customers could connect effectively, this synergy created a host of new,cheaper travel options. As an example, between 1984 and 1996, the airline industrygrew more than 40 percent in gross terms, and much of that expansion can be directlytied to new efficiencies associated with networked marketing, sales and point-of-salesystems.
In the past, customers expected to wait up to two weeks for paper tickets to bedelivered, and even the fastest ticketing processes offered only 24-hour turnarounds.The only way to get a ticket on demand was to go to the airport and stand in line at thecounter. However, with the advent of the Internet, followed by ticketless travel, acustomer could make ad-hoc travel plans in as little as 10 minutes.
Decreased Indirect Costs
Indirect costs affect an airline's bottom line in different ways. For example, eliminatingthe travel agent as a cost center created all kinds of additional revenue margin that wasthen redirected to marketing, equipment, systems and staff growth. This subsequentlylead to customer-centric, globally distributed ticketing processes that additionallyreduced point-of-sale costs across the board.