The Airline Industry Value Chain

1757 words 8 pages
Airline industry value chain

Inbound logistics
Primary activites
• Stock control – airlines must store and handle fuel, food, and drinks. Stock is managed to ensure reductions in stock turnover, thus reducing costs and wastage.
• Route selection – airlines must choose their flight routes. These will be selected upon desired routes, and deals negotiated with the airports. Airports are selected for their prime location, to allow consumers to get to their desired location. This then entails the scheduling of flights and crew.
• Passenger services system – software which allows the airlines to function "comprehensive passenger reservations, inventory control, fares, ticketing, and departure control functions" (
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• Advantage program – these are strategies used to increase consumer loyalty and repeat purchases. Airlines give their customers free air miles, when purchasing related products, such as flight tickets, or affiliated products/affiliated services (hotels etc.). This therefore encourages the customer to continue to fly with that particular airline with the incentive for discounted flights.
• Travel agents – act as a third party for airlines selling tickets to end users. This has been one of the traditional methods of selling tickets to end users, as airlines focus more upon the service and marketing, and outsourcing travel agents to make the sales.
• E-ticketing – is fast becoming the best way for airlines to sell their tickets. E-ticketing allows the consumer to make a ticket purchase online, and then print it off from their own home. This creates great value to the airline as it "reduces ticket processing charges, eliminates the need for paper and allows greater flexibility to the passenger and the travel agent to make changes to the intinerary"
Support activities
• Firm infrastructure – budgets, accounting, regulatory compliance, legal issues, public relations
• Human resources – agent training
• Technology development – product development, market research
• Procurement – information technology communications

• In-flight service –


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