E - COMMERCE AND AIR TRANSPORT

The main objective of this thesis was to bring e-commerce in the airline industry closer to the reader. In order to truly understand what e-commerce really represents in today’s world and how is it linked with airline industry, it was necessary to define e-commerce along with its main types. Also, it is crucial to understand the importance of reservation system SABRE and how it completely transformed and automated reservation process. Before SABRE, reservations were done completely manually which significantly slowed down the process and was very ineficient. The fact that after all these years SABRE is still leading the industry, speaks itself about its effect. Considering the role and impact of e-commerce, with mainly the role of mentioned reservation system on the air travel, it can be assumed that e-commerce has a big impact on airline industry in many aspects, such as minimizing costs, availability of information everywhere and anytime, faster booking etc. Related to that, after looking more deeply in current trends in airline e-commerce and how different airlines are conducting it, it is clear that social networks, booking engines and loyalty, usability and mobility are very important. Each and every of these aspects has a huge influence on the airlines. These facts are supported with various researches and graphs, along with explanations. It can be concluded that the most important thing for airlines regarding trends, is to recognize their importance and to try to provide the best service possible, as well to be present on the social media, redesign their webpages and do whatever it takes to keep them up with changing trends. After elaborating airline e-commerce trends of Millennials as consumers and target audience and consequently what are airlines doing in serving Millennials, the earliest adopters of technology, it is visible that one of the main objectives for airlines is to make some improvements and recognize their mistakes. After looking into a number of graphs and schemes, it is clear that Millennials can sometimes be rather complicated audience, but in most cases they are very clear about their needs and preferences. It is apparent that their favorite place to shop is online marketplace due to the fact that in today's world, everything is only one click away. They are very dependent on social media reviews, opinions and experiences regarding certain product, of anonimus people who share their opinions throughout different social platforms such as Facebook or Twitter. In a way, it can be concluded that they are leading e-commerce in almost every industry, as they are the ones who 35 are most likely to be the first ones to try any innovation and the first ones to criticize the innovation if its not interesting enough. More or less, some airlines seem to use almost all of their potential and they are doing a solid job in recognizing the needs of Millennials as their target consumers. However, of course, there are some airlines which were just trying too hard and because of that they were "too much" and consequently not interesting at all to their target audience. In order for airlines to recognize on which level their e-commerce is, and how they are serving to customers, implementation of DAS with its seven components is crucial. DAS represents the way in which fundamental as well as differential DAS indicators are measured with the help of proxy indicators. Each and every airline is in one of the four level of e-commerce advancement, with respect to their DAS score. Logically, the highest the DAS score, the highest the level. This measurement is very helpful to airlines as it can indicate whether the changes in their e-commerce implementation is needed. Despite the fact that the development of e-commerce is rather unpredictable, still some future improvements are sure. Air freight was increased from 2017 to 2018 and big progress was noticed. This led to a conclusion that in the period of the next 20 years, demand for new freight aircrafts will grow, as well as demand of the global freighter fleet. After a survey which was conducted by the Author in order to understand Millennials as target audience better, some generational pattern is present but not all the opinions of surveyed group were same as the generally accepted opinions of Millennials. The one thing on which they've all agreed is that they are not sure whether the airlines are doing a good job in providing them the best service possible. Also, as expected, it can be concluded that social platforms are very important to Millennials as they like to share their opinions and experiences, and probably would not purchase a product or service that has bad review. Expectedly, cheap prices and good loyalty schemes are one of the main factors when they are making a decision on which airline to travel with. As mentioned many times in this thesis, e-commerce is very present in today’s world and it is changing very fast. As well, airline industry is also very fast changing and growing industry. Also, it is one of the industries which can mostly benefit out of e-commerce. When looking all these information together, it can be concluded that most of the airlines really recognize all the benefits of e-commerce and do their best in order to keep track of changing trends and customers’ needs and preferences. Most of airlines strive for the highest 36 DAS score which also means that they strive for providing the best possible service to their customers. Of course, there is always a space for improvement, but overall, airline industry knows how to deal with e-commerce. Considering the future of Air Travel Industry, it is really unpredictable but it is good to know that, however, some changes, concretely in air freight are predicted. Taking into account the survey, some generational pattern in giving answers and sharing opinions is present, but overall, the Millennials themselves are not sure whether the airlines are doing good enough job in serving their generation. With that being said, electronic commerce and air travel have rather good connection, but as every change in trend needs time for adjustment, the promptness and understanding your customer preferences is a key in being a successful in air travel e-commerce