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Abstract

  • This paper examines the impact of Internet technologies on value creation in the airline industry and focuses on the Internet strategies of two European low-cost and two traditional operators.

  • Four notable value drivers in the aviation context are identified, namely efficiency, complementarities, lock-in and novelty.

  • The Internet represents a powerful technology for commerce and communication between airlines and consumers and the paper highlights the implications for corporate strategists as customer expectations increase over time and the boundaries of the airline industry become increasingly blurred.

Summary

This paper examines how Internet technologies are impacting upon airline companies at the customer interface. The analysis focuses on a number of airline companies that have been exploiting Internet technologies. It is shown how airline operators are using the Internet to provide innovative exchange mechanisms and transaction structures with customers. The adoption of the Internet is increasing the expectations of customers as to what and how these organizations offer products and services. In fact, the Internet has become central to the strategic development of the airline companies analysed. The scope and boundaries of the airline industry have become less clear as a result of the adoption of Internet technologies at the customer interface. The offering of a range of products and services is creating industry convergence that has significant implications for the formulation of corporate strategy. Exploitation of the Internet at the customer interface has become a key catalyst in the transformation of the airline industry. Further exploitation of the Internet will lead to higher levels of sophistication that in turn will increase the expectations of the customer on what and how these organizations offer products and services. Copyright © 2003 John Wiley & Sons, Ltd.