The impact of E-commerce technology on the air travel industry

This case study examines the impact of online reservation systems and e-commerce onthe travel industry. Two questions are examined:1. How can competitive advantage be obtained from the exploitation of new informationtechnologies—in particular, e-commerce technologies?2. How has the role of travel agents changed because of the new information technologiesbeing used to achieve competitive advantage in the air travel industry?Initial discussion concerns the impact of the American Airlines SABRE system, as thishas often been touted as giving American Airlines first-mover advantage in the industry. Thewider impact of remote-access, computerized reservation systems, or Global DistributionSystems, and e-commerce access to online reservations in the travel industry is analyzed,using Porter’s five-force model of industry competitive forces, to understand how the travelindustry has shaped and has been shaped by information systems.The case study concludes with a comparison of the impact of information technologiesbetween the U.S. and European travel industries. It concludes that technology alone doesnot affect the roles of industry players, but the development of winning technologies exploitsstructural factors in the environment. Constant evolution of strategic information systemsis critical to producing competitive advantage, but opportunism also plays a strong role.