The Airline Industry Value Chain Essay

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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" (…show more content…
• Passenger flight connections - Inclusive package deals can be negotiated with railways and taxi's to transport passengers once they arrive at their destination. • Car rental/hotel reservation – software packages can be used to manage this function, "the Videcom reservations systems is a sophisticated suite of products and is able to offer customer services such as e-tickets, hotel room reservations, rental car reservations, frequent flyer program mileage, and provision for special meal requests. Airlines use our Reservations System to fully manage there inventory and yield/revenue to maximise their profits" (Videcom 2006). Again the use of e-commerce can allow the airlines to reduce their costs and increase their efficiency. Support activities • Firm infrastructure – budgets, accounting, regulatory compliance, legal issues, public relations • Human resources – baggage handling training • Technology development – computer reservation systems, in-flight systems, flight scheduling systems, yield management systems • Procurement – information technology communications Marketing and sales • Promotion – discounted tickets in conjunction with affiliated companies and newspapers. • Advertising – heavy spending on advertisements in newspapers, radio,
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