American Airlines Information Systems

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Figure 1: Top Ten U.S Airlines International Schedules Enplanements, 2008 {draw:frame} {text:bookmark-start} American Airlines engagement in E-Business {text:bookmark-end} AA website has more than 1.6 million site visits per day. AA is deeply dependent on e business as their website involves functioning of many online distribution channels doing business online 24-7. To add to that, at customers are provided with comprehensive services such as, they can search for and book low fares and award travel; select seats; make hotel, rental car and cruise reservations; get flight arrival and departure information; sign up for flight status notification and even check in and print boarding passes. Providing such services to customers involves aligning with other business partners and stakeholders via online alliances. Other services are, availability of RSS feeds at their website, customers can manage their personalized AAdvantage account online, as well as sign up to receive emails, get customized DealFinder SMS alerts and also customers can compare various flight fare options according to their choices online. Additionally, AA has done localization and adaptation of website in terms of language, pricing, advertisements, communication with local stakeholders and culture for international markets covering North America, Caribbean, South America, Central America, Europe, and Asia and the Pacific. has twice received the World Travel Award for World's Leading Airline Internet Site. (American Airlines, 2009) Surveys done by SITA (2008) on priorities or reasons for IT investment by airlines given in table 1 below, four main priorities have been identified. Figure 2: Priorities in the IT investment decision {draw:frame} Therefore, it is trend in airline industry to adopt technology, it is not different or strategic of AA to invest in technology; they need to do it to survive in the industry. It can also be confirmed by BDC consulting e-business relevancy diagnostic, airline industry relevance score is 98%, which indicates an airline firm needs to invest in technology to survive in the industry. *Figure 3: Summary of e-busines*s relevancy for an airline firm Source: BDC consultation consulting. (2008) {text:list-item} To analyse AA engagement in e-business deeper, Michael Rappa, 2009 revenue models need to be identified and analysed. AA uses the following models in their e-business functioning, also refer to appendix 1. Advertising Model ' AA generates profit by selling its products online and also its affiliate’s products as volume of viewer traffic is very large and is increasing day by day, on an average welcomes 1.6 million site visits on an average weekday. Therefore they use the space efficiently to generate revenue. Merchant Model- The service industry is a variant of the merchant model as AA provides a service to its customers, and its profits come from the margin on the sale of those services. Affiliate Model- AA sells products which are matching with the airline service such as hotels, car rentals, and vacation packages by affiliating with partner sites. Customers get purchase opportunities of these products and services on American airlines website by offering incentives to affiliated partnered sites. {text:list-item} American airlines competitive strategies include: Strong competitive positioning- due its ability to connect to secondary destinations through the use of its extensive regional network in the US. Strong route network and hub presence-it holds some of the most popular routes in the US, mainly due to its presence in larger airports in Chicago, Dallas, and Miami etc. Wide geographic expansion- it serves 250 destinations in over 40 countries, in 2007-2008 it introduced new services to key markets such as Argentina and Russia and announced plans to further expand its route network in markets like Brazil and China....
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