Fachhochschule Frankfurt am Main

University of Applied Sciences

Masters of Business Administration in Aviation Management

Mobile Services – Airlines and Customers

Rohit Tomar

José Joaquim Fernandes

March 2013

Page i

Table of Contents

1 Introduction .......................................................................................... 1

2 Impact of mobile technology on customer interaction .......................... 3

2.1 Omnipresent Brand ....................................................................... 3

2.1.1 Presence ................................................................................ 3

2.1.2 Personalisation ....................................................................... 3

2.2 First point of contact with customers ............................................. 4

2.3 Customized Marketing and Promotions ........................................ 4

2.3.1 Behaviour specific marketing and promotion .......................... 5

2.3.2 Location specific marketing and promotion ............................ 5

2.4 Faster feedback systems for customers ....................................... 6

3 Impact on processes and value chain of an airline .............................. 7

3.1 Operations – Aircraft Operations .................................................. 8

3.2 In-flight services ............................................................................ 9

3.3 Operations – Check-in and Boarding .......................................... 10

3.4 Baggage services and loading .................................................... 13

3.5 Flight disruption management services ....................................... 14

3.6 Value chain impact ..................................................................... 15

3.7 Futuristic products from airlines .................................................. 15

4 Results .............................................................................................. 16

5 Conclusions ....................................................................................... 18

6 References ........................................................................................ 19

Page ii

Table of Figures

Figure 1 Estimated mobile-cellular subscriptions relative to population...1

Figure 2 Breakdown of channels used to book flights (IATA 2012)..........2

Figure 3 Value Chain for an airline............................................................7

Figure 4 Mobile technologies impact on the value chain activities of an

airline........................................................................................................15

Page iii

Abstract

This report analyses the following four questions impacting the global

aviation industry:

How do mobile services change the interaction between airlines

and customers?

What is the impact on processes and value chain?

Which new products and services will develop?

How can mobile services be used as a strategic advantage?

The analysis uses data available from Harvard Business Review and

International Air Transport Association (IATA). The report analyses an

airline’s value chain by critically analyzing the impact of mobile

technologies on those value chain activities of an airline that has a high

degree of airline-passenger interaction. The report also puts forth some

innovative ideas that can transform the products and services which

airlines would produce in the future in order take advantage of mobile

technologies.

The report concludes that although airlines will extensively be targeting

mobile technologies as a resource to reduce costs and improve customer

satisfaction, solely relying on the mobile technology would not give a

sustainable competitive advantage to an airline in the long run and it is

even questionable if even an airline is proactive and achieves a first mover

advantage in the technology application and implementation.

The report moreover concludes that mobile technology will continue to be

a crucial factor in remaining competitive, in the future of commercial

airlines, both in the short run as well as in the long run.

Page 1

1 Introduction

Mobile technology is a growing industry and the applications of the

technology are being developed to tap in the huge potential market that

mobile technology has to offer. The Internet Telecommunication Union

(2013) expects that in 2013 the number of subscriptions will approach

population figures, as shown in Figure 11

Figure 1 Estimated mobile-cellular subscriptions relative to population

Airline industry has also taken note of the potential in the mobile

technology and some airlines have already started focusing on mobile

technology for marketing or other customer service activities. The

customer survey results from International Air Transport Association

(IATA) give an overview of the current status of the mobile technology

penetration in the airline ticketing process which can be considered to be

still in its infancy and having a huge potential of growth.

1 Source: International Telecommunications Union (2013)

Page 2

Figure 2 Breakdown of channels used to book flights (IATA 2012)

With the increasing number of smart phones capable of handling high

internet speeds we can expect that there will be a constant move from

bookings made via airline website (52% of bookings)2 towards airline

mobile app.

The relative less mobile technology penetration in the airline industry as

compared to other industries and the potential scope of the achievable

mobile technology penetration as the number of mobile subscribers

approaches the population, makes this valuable to understand. In order to

understand the impact of mobile technologies in the aviation industry, we

would:

Analyse the impact of mobile technology on customer interaction

Analyse the Impact on airline-customer processes and value chain of

an Airline

Hypothesize possible products and services for an airline using mobile

technology

Analyse how can an airline use mobile technology to achieve

sustainable competitive advantage

2 Source: IATA (2012) Global Passenger Survey Highlights

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2 Impact of mobile technology on customer interaction

In this section of the report we analyse and asses the possible impact of

mobile technology on customer interaction. Customer interaction here

would encompass all the channels of communication of the brand and the

company with its prospective customers. We divide the description of this

communication into four areas, omnipresent brand, first point of contact,

customised marketing and faster feedback systems.

2.1 Omnipresent Brand

Omnipresent branding has implications on presence and personalisation.

Each of these are described below.

2.1.1 Presence

As a brand, a company would like to be in the field of presence of its

customer. This has a positive impact on the customer loyalty, wherein the

customer is constantly connected with the brand. In the case of airlines,

this is would be all the more important considering the focus of airlines on

customer loyalty. It would also be more economical as compared to

conventional types of brand presence such as television advertisements,

outdoor advertisement boards and printed advertisement as there is

always a probability that a customer is either not paying attention or is

physically present at the time when these advertisements are telecasted,

displayed outdoors or displayed in print. Using mobile technology airline

brands would be able to better individualise and target their customer base

by using mobile advertisements, social networking channels and apps.

Taking advantage of mobile technologies would make the brand

omnipresent for the customer by always being near the customer on his

mobile phone.

2.1.2 Personalisation

Successful brands attempt to connect with their customers on an

emotional level and on a personal level. This enables the brand to retain

its customers and also achieve a differentiation among the competitors.

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This also holds true for airlines, as airlines can connect to their customers

on emotions like national airline, safety, leisure and other emotional- and

personal parameters. Mobile technology and mobile branding will serve as

a platform for an airline to be present on the personal mobile device of the

customer and hence achieve differentiation among its competitors and

improve customer loyalty.

2.2 First point of contact with customers

Mobile technology can provide a value advantage for an airline to become

the first point of contact with the customer complementing the internet.

Mobile apps would be a convenient way to achieve this advantage. It

would be convenient for the customer to use the app to find flight

information, ticket pricing information and also updates on their itinerary

thereby supplementing the use of the internet to seek the information. The

look and feel of the software on the mobile devices would also give an

aesthetic look and a new dimension of communication with the customer.

A mobile application would also give a new customer a first impression of

the services which could be expected from the airline.

2.3 Customized Marketing and Promotions

Customized marketing gives an airline the opportunity to be able to

provide a greater degree of personalised promotional offers that they

believe the customer would be interested in.

For example, an internet search for a country that a potential customer

would like to visit could result in the customer receiving a special

promotional offer from the airline for the same destination, just searched.

We divide customized marketing and promotion into two areas, behaviour

specific pattern and location specific pattern. Each of these are described

below.

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2.3.1 Behaviour specific marketing and promotion

Behaviour specific marketing and promotion would be based on the

customers travel behaviour. It will take into account behaviours such as:

Number of trips flown by a customer in a year

Destinations travelled by a customer

Nature of Travel, e.g. business travel or holiday travel, travelling

alone or with family, Business Class or Economy Class, seasonal

travel or frequent travel

Number of pieces of baggage usually checked-in while travelling

Preferred choice of seat on flights

Preferred choice of food on flights

Based on the information gathered of the customer’s behaviour pattern, an

airline would then be able to better target a specific customer with the right

product at the right time. For example, discount voucher on the destination

travelled the most frequently, free upgrade for frequent travellers, family

vacation travel discount, new destinations etc.

Behaviour specific marketing and promotion would enable the airline to

achieve a higher success rate on marketing campaigns than would

otherwise be the case with generic marketing and promotions by better

targeting individual behaviour.

2.3.2 Location specific marketing and promotion

Location specific marketing and promotion would use the customer’s

specific location for its customized marketing and promotions. Examples of

such marketing and promotions can be:

Airport duty free shops offers based on the location of the

passenger inside the airport

Using locations of friends and relatives from the social media and

promoting available flights and discounts on the routes

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Giving information regarding flights based on location of the

customer from the airport etc.

According to Harvard Business Review (2013) advertisement

effectiveness on mobile devices range from 17% to 47%,

depending on the context in which the advertisement are delivered

in. Location specific marketing and promotion would enable the

airline to achieve a higher success rate on marketing campaigns by

being present at the right place and at the right time.

2.4 Faster feedback systems for customers

Customer Feedback plays a vital role for an organization to assess its

weakness, address these weaknesses and take corrective action. A

customer that decides to abandon an airline because of unsatisfactory

service would be difficult to convince to return to that airline, once he has

chosen to fly with another airline. If, however, the customer is pacified

before he has decided to abandon the airline, and corrective action is

taken by the airline to appease the customer at an earlier stage, there is a

higher probability of the customer not shifting away from the airline. Mobile

Technologies can play a pivotal role in this area. Giving the customer the

ability to providing feedback through a mobile device at an earlier stage

than presently possible, for example during a flight or pre flight processes,

the feedback information can reach the airline well within time for the

airline to react and appease the customer by offering additional ancillary

services to the customer that would increase the airlines chances of

retaining the customer. Incentives for retention could be upgrade to

business class at a reduced fare, additional hotel accommodation,

discount on another flight, additional lounge access, etc.

Faster feedback systems will give an airline the opportunity to retain the

customer for a longer period.

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3 Impact on processes and value chain of an airline

With basis in Porters definition of the value chain (Porter 1985) and with

the application of Porter’s definition of the Generic Value Chain and

diagram in Figure 2.2 (Porter 1985, p37) we use the following value chain

for airlines.

INFRASTRUCTURE

Crew Hiring and Training, Pilot Hiring and Training, Ground Operations

Hiring and Training, Sales Force Hiring and Training, Safety Training,

System Admin Training

Purchasing, Services Contracting, Co-Branding, Leasing Services, Code

Sharing Services

a. Market Research

b. Flight Scheduling

c. Aircraft Scheduling

d. Catering e. Route Planning f. Fuel Scheduling g. Crew

Scheduling h. Passenger

Service i. Yield

Management j. Competitor

Monitoring

a. Ticketing b. Check In &

Boarding c. Cargo Loading d. Aircraft

Operations e. In-Flight

Service f. Baggage

Services and Loading

g. Flight disruption Management Services

h. Secondary Security Checks

i. Co-ordination with Airports & Stations

a. Co-ordination with Airports and Stations

b. Baggage Unloading and Services

c. Flight Connection Services

d. Missing Baggage Services

e. Flight Delay Management Services

a. Frequent Flyer Programmes

b. Online Marketing

c. Promotions d. GDS e. Outdoor

Marketing f. Sponsoring g. Marketing

Events

a. Customer Complaints Management.

b. Customer Relationship Management

c. Car –Rental and Hotel Reservations Services

d. Visa Assistance Services

Figure 3 Value chain for an airline

INBOUND

LOGISTICS

OPERATIONS OUTBOUND

LOGISTICS

MARKETING

AND SALES

SERVICE

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In the following we will analyse the consequences of mobile services on

the parts of the value chain, where we believe it will have an impact,

specifically related to airline-passenger interaction.

3.1 Operations – Aircraft Operations

In aircraft operations, weight is always of concern, since fuel is the second

largest, if not the largest single expense for most airlines (Belobaba et al.

2009 (Figure 1.1.3; Figure 5.1; Figure 5.5 and Figure 5.15)).

Introducing services and technologies that will reduce aircraft weight and

at the same time be perceived as an improvement in services of

performance should be of interest to most airlines.

Mobile services in the aircraft operations and in-flight services might just

give an opportunity for both.

In cockpit operations printed maps and manuals have traditionally been

kept on board or brought on board by cockpit crews.

Tablets and i-pads are already finding their way into cockpits, as electronic

flight bags, replacing maps and manuals, that are not only heavy, and also

take up valuable cockpit space but are also time and resource consuming

to maintain correctly updated.

Cabin services have traditionally also relied considerably on printed and

last minute updated documentation from Red Caps including final

passenger manifest, special meal- or service requests.

Having mobile devices will not only reduce the requirement for last minute

printed documents to be hand delivered to the cabin crew prior to

pushback, potentially reducing turnaround time and reducing last minute

delays at the gate, in addition to contributing to weight reduction and

adding to airlines reputation of being environment friendly by using less

paper.

The standard glossy in-flight magazine and duty free catalogues, which

are not only relatively heavy (300-500 grams each), and typically carried in

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each seat-pocket, irrespective if the seat is occupied by a passenger or

not, but also attract operating cost in terms of printing and distribution

could be reduced by offering this on a mobile in-flight device.

Assuming at most 500 grams each of these two magazines being removed

from a 526-seat Lufthansa A380, might add up to removing roughly one

metric ton per flight.

Mobile devices could also potentially contain far more service information

about high revenue passengers on board a particular flight, giving the

flight crew an increased opportunity to provide even better customised and

individualised services to select groups of passengers.

3.2 In-flight services

The impact of introducing mobile/wireless services to passengers in-flight,

will not only potentially decrease aircraft weight, but also give the

possibility for additional ancillary services revenue and improved

technological service on board.

Bringing the ever-present internet into an aircraft cabin will from most

passengers be seen as an added advantage. The time spent in the air will

no longer be synonymous permanent in-availability from phones, SMS,

mail and presence on the internet.

Linking social networking with the cabin Wi-Fi might be perceived as

service improvement and could also mean introduction of a new dimension

of cabin interaction, such as in-flight gaming, in-flight dating or simply in-

flight chatting with your social network present on the same flight.

Giving passengers the opportunity to use their own mobile device for

accessing in-flight entertainment through mobile wireless and cabin Wi-Fi,

connected to the internet would mean that the seatback displays and

armrest displays might no longer be required on board an aircraft.

Removing seatback displays from an aircraft is expected to reduce a wide

body aircraft weight by up to one metric ton (Bloomberg Businessweek,

Companies and Industries 2012).

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In relation to ancillary services revenue, the airline could charge a fee for

the rent of a mobile device, while on board, for those passengers not

having their own device.

Furthermore the facilities of in-flight internet and email could be

differentiated, relative to seating class, giving first- and business class

passengers full and unlimited access to internet and email, having a time

limit or transaction limit on the free portion of access given to premium

economy passengers, while giving access to economy class against a fee,

thereby contributing to additional revenue of ancillary services.

3.3 Operations – Check-in and Boarding

On the passenger side of Check-In and boarding, mobile devices are

already in use, allowing passengers to perform their own Check-In and

generating or printing their own boarding cards, thus reducing the cost of

Check-In personnel and reducing the requirement of check-In counters,

while giving passengers and added sense of improved service by allowing

them to select their own seating.

Adding now location specific capabilities to the already existing mobile

services, allows an airline to even further market, target and customise it

additional ancillary services and at the same time increase the airlines

marketing knowledge of the behaviour of its passengers as they proceed

through the airport.

Already upon arrival at the Passenger Terminal Building (PTB) a

passenger could be notified that Check-In/Baggage drop is at a given

location.

This could reduce the time needed to search a Flight Information Display

System (FIDS) for the relevant check-In or Bag-Drop counter information,

reducing the time spent trying to determine where to go next.

Approaching the Check-In counter, an airline would be able to make on

the spot offer of upgrade facilities available to the passenger, potentially

convincing him to purchase an upgraded product at the time of Check-In.

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Approaching security check, an offer of fast track security processing,

against a fee, could be made, again potentially increasing ancillary

services revenue.

Crossing the security check and entering airside of the PTB, passengers

could be made a range of offers, all potentially increasing ancillary

services revenue while giving the passenger a sense of increased

personalised service. One the spot GPS directions to lounge facilities for

eligible passengers could be pushed to the mobile device. For non-eligible

passengers, on the spot offers of lounge access against a fee or against

accrued air-miles could be made.

Airports always have an interest in keeping passengers inside the

shopping section of the PTB for as long as possible.

The increased exposure to services and goods inside the PTB not only

gives an opportunity for potential sale, but also reduces clogging of

passengers around the space-constrained boarding gates.

In anticipation of generating additional sales while the passenger is inside

the PTB, targeted marketing offers could be made, either against payment

or against redemption of accrued miles.

When passing a shop, special offers of interest to that particular

passenger could be made, for example, books, watches, tax-free sales

etc.

Example: “Your wife’s favourite perfume is available with the tax free shop

at a special discount available to you upon presentation of this message”

Linking social networking with location specific PTB sales could mean that

a passenger would know who of his social network were present inside the

PTB at the same time.

Airline lounges, food establishments, bars and cafes could then promote

the opportunity to offer a passenger his social network connections

present inside the PTB to meet at a lounge against a fee or to meet at a

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food establishment, bar or cafe again for a special group offer upon

presentation of a personalised message.

In relation to flight delay management and passenger boarding, linking

these passenger processes to location specific services would give the

gate personnel a better opportunity to keep track of passengers that do

not show up at the gate in time for boarding.

In Copenhagen Airport, for example, passengers transiting through the

airport and causing either boarding delays or baggage offloading, were

often found to be having lost track of time either in the Duty Free Shopping

area or in one of the many pubs available inside the PTB.

Being able to pinpoint the exact location of a particular passenger at the

time of boarding would allow the airline to directly approach the passenger

and advise him of boarding, rather than making endless number of last-

minute boarding calls. This facility could potentially reduce boarding delays

caused by passengers.

As with at the time of Check-In, at time of approaching the boarding gate,

additional targeted customer specific offers could be made to the

passenger, specifically relating to upgrading and in-flight services prior to

the passenger boarding the aircraft, again giving the airline an opportunity

for generating additional ancillary revenue.

On the ground staff side, equipping check-in agents with a mobile CUTE

Terminal (Common Use Terminal Equipment) might even completely

eliminate a passenger’s need for visiting a dedicated landside check-in

counter in a fixed location inside the PTB prior to security check.

Check-in staff roaming with a mobile device might be able to assist with

check-in of passengers, for example passengers with hand baggage, as

they proceed directly from the entry of the PTB towards security. Such

measures could ease the flow of passengers through the landside PTB

while at the same time further reducing the airline’s requirement and cost

for fixed CUTE check-in counters.

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3.4 Baggage services and loading

One of the biggest worries for most frequent travellers is the “Send and

Pray” approach that passengers have had to adapt to their checked

baggage.

Typically, we see out suitcase disappear at the check-in counter or at the

bag drop, and pray that our chosen airline will successfully be able to

deliver our checked baggage at the correct baggage belt at our arrival

destination.

Most of us have surely been very anxious to the extent of feeling a

complete ruin of either a business trip or a vacation, particularly when our

checked baggage appears at the “last bag” on the baggage carousel.

Even worse is, of course, the situation when the baggage does not turn

up.

Airlines would be able to remove much anxiety and concern for travellers,

by being able to push real-time information about each passengers

checked baggage to their mobile device.

Most of us are used to the real-time tracking of our DHL or Fed-Ex

package, and a similar approach would be welcomed by many travellers in

relation to our checked baggage (IATA 2012).

On the operations security side, such real-time tracking might aid check-in

ground staff and ULD- and belly loaders in improving baggage

reconciliation. This might in particular be the case if information of a

passenger’s location sensitive mobile device could safely be related to the

baggage reconciliation process.

Real time tracking might even be a preventive measure to limit misdirected

baggage. A passenger having boarded one aircraft, receiving information

on his mobile device that his checked baggage is in the process of being

loaded on another aircraft, might even in a timely manner be able arrange

for the safe reloading of his checked baggage or arrange for minimal delay

in redirecting his misdirected baggage to his final destination.

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3.5 Flight disruption management services

Flight disruption management services have traditionally been dealt with

by transfer desks only after a passenger reaches his final destination or

intermediary flight stop. The dreaded situation of being the last passenger

disembarking a 747 only to find all co-passengers queuing at the same

transfer counter for rebooking of the missed connection flight out of an

foreign airport, can sure haunt even the most hardened air traveller.

Proactive notification of flight disruptions are unanimously preferred by

passengers (IATA 2012).

Being able to make use of in-flight Wi-Fi during actual flying time to enter

into a dialogue with passengers regarding re-booking, hotel overnight

compensation and airline delays would be able to address and remove

much anxiety of passengers already before they arrive delayed at their

next airport.

Using in-flight Wi-Fi, Airlines would be able to negotiate, agree and

transmit rebooking PNR, revised itineraries, hotel compensation vouchers,

airport meal vouchers, transportation arrangements and other relevant

information and documentation to the passengers. Consulates, embassies

and immigration authorities could be notified to facilitate unanticipated

time-limited entry into the nation of a transit airport which would normally

require an entry visa.

Airlines will, by entering into a dialogue with each and every passenger

during in-flight of a delayed flight, be able to spread out the peak load on

the transfer counters while at the same time providing far more timely

information to passengers, delay-stay hotels, supporting service providers

and consulates, embassies and immigration authorities, reducing the

requirement for un-predictable stand-by capacity in all these parts of the

value chain. Passengers will on their side arrive at their next airport

knowing that all possible measures have been taken by their preferred

airline of choice in accommodating their unfortunate delay.

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3.6 Value chain impact

Based on the benefits that an Airline can achieve from integrating the

mobile technology into various primary and secondary activities we can

summarise the value chain impact as follows

Impact on activities in

the value chain

Cost reduction Customer loyalty

Inbound logistics Significant Not significant

Operations Significant Significant

Outbound logistics Significant Significant

Marketing and sales Significant Significant

Service Not significant Significant

Procurement Significant Not significant

Human ressources Significant Significant

Infrastructure Significant Significant

Figure 4 Mobile technologies impact on the value chain activities of an airline

Integration of mobile technologies will have a significant effect on cost

reduction and customer loyalty across most of the primary- and secondary

activities of the value chain, and can in the longer run enable an airline to

achieve a first mover competitive advantage.

3.7 Futuristic products from airlines

Briefly summarising the futuristic products from airlines, we are likely to

find the internet contributing to the in-flight experience and will probably

see products such as:

In-flight gaming on mobile devices

In-flight chat rooms on mobile devices

Make to order meals availability for passengers on board via mobile

devices

In-flight dating services

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Real-time baggage tracking

4 Results

Mobile services are here to stay. As Porter (Porter, 1985) points out, being

a first mover gives the opportunity to define standards. Being amongst the

airlines defining the standard for in-flight internet would certainly give an

airline an advantage, the question though is, if being a first mover and

failing to successfully define a sustainable standard for in-flight internet in

a highly uncertain technological environment is going to be too risky a

proposition for an airline to undertake on their own.

Airlines are at the moment mesmerised by the prospect of additional

ancillary services revenue, generated from in-flight internet and mobile

services on ground.

An airline engaging in in-flight internet will very carefully have to evaluate

how to offer and market its in-flight internet to different passengers.

Business and First class segments are most likely less user intensive than

economy class, and certainly also much less price sensitive, although

reliability and quality will play an important role.

If in-flight internet is priced too high, few passengers will actually use the

service and little ancillary revenue will have come out of all the

investments.

The lack of success of in-seat telephones installed in most economy class

aircraft a decade or so ago, almost now having completely disappeared

bears witness of a pricing strategy gone wrong.

Price the in-flight internet too low and it will not make significant

contributions to ancillary services revenue to offset the required aircraft

infrastructure investments.

The question could even be whether to price in-flight internet or not,

depending on what other major players in the market are doing.

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If everybody else offers in-flight internet for free and your own airline is the

only airline charging for the service, be sure that your airline will not

generate much of the expected ancillary services revenue from in-flight

internet to maybe even offset the required aircraft infrastructure

investments.

In regard to mobility services in in-flight operations, such as cockpit

operations, cabin crew operations, boarding gate operations and aircraft

maintenance, these would obviously not generate any ancillary services

revenue as they are used internally in the airlines by cockpit crew, cabin

crew and aircraft mechanics. Introduction of these services would lower

operating costs and are likely to be considered as a natural development

away from paper-based systems to even more automated systems,

contributing to internet process improvement and services improvement.

To what extent the development- and maintenance costs will be significant

lower that the reduction of operating costs, will probably to a large extent

depend on economies of scale.

With regard to PTB mobile services on the ground introducing location

specific sensitivity, different services would probably be appealing to

different groups of passengers.

Linking location specific ancillary services with airport specific offers would

be a significant success factor in the applicability of such services.

The challenge here is that an airport might have a preference to offer such

services to its home carrier or a significant carrier at the particular airport,

in which case location specific ancillary services revenue linked to ground

based airport passenger services would be limited to your home base or

outstation stronghold, limiting the usefulness to your passengers.

Another issue is the pushing of promotional information to passengers as

they proceed through the PTB. A balance will have to be sought between

pushing all offers and pushing the “right” offers. Overwhelming a

passenger with a large number of “useless” offers, might cause him to

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“miss out” on the relevant matching offer, not being able to see the forest

for trees.

5 Conclusions

The “gold” at the end of the ancillary services revenue tunnel for mobile

services are not necessarily as big as everyone would believe it to be.

Although an airline will extensively be targeting mobile technologies as a

resource to reduce costs and improve customer satisfaction, solely relying

on the mobile technology would not give a sustainable competitive

advantage to an airline in the long run, even if an airline is proactive and

achieves a first-mover advantage.

In the short run, an airline might gain some advantage over other airlines

by achieving a first-mover advantage, but the mobile technologies are too

easy to imitate to last for a long time.

The mobile technologies will, rather than contributing to significant

ancillary services revenue, be a steady basis for which the airlines can

reduce their operating costs. The reduction in operating costs will be as

well on the ground as in the air, by contributing to aircraft weight reduction,

increased passenger self service, improved disruption management

services, reduced traveller anxiety through clarity on baggage services

and loading, and re-focused efforts of ground-staff.

Mobile Technologies will however, in line with the present day

requirements for being able to offer web based sales and check-in, be a

crucial factor in remaining competitive, in the future of commercial

airlines, both in the short run as well as in the long run.

There is no doubt that mobile services are here to stay, and that whether

we like it or not, an airline will, if not for revenue but alone for reputation of

following the new trend, sooner or later have to catch up and join the road

to further unimaginable mobile services that will forever change the

interaction between passengers and airlines.

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6 References

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Bloomberg Businessweek, Companies and Industries. (2012). IPads Help

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airlines-cut-costs [Accessed on 21 Mar. 2013]

Harvard Business Review (2013). Vision Statement, How people really

use mobile (p. 30-31). Harvard University Press, January-February 2013.

IATA. (2012). 2012 IATA Global Passenger Survey Highlights.

http://www.iata.org/publications/Documents/2012-iata-global-passenger-

survey-highlights.pdf [Accessed 21 Mar 2013]

International Telecommunications Union (2013). The World in 2013, ICT

Fact and Figures. Geneva, February 2013. Available at

http://www.itu.int/ITU-D/ict/facts/material/ICTFactsFigures2013.pdf

[Accessed 25 Mar 2013]

Porter, Michael E (1980). Competitive Strategy: Techniques for Analyzing

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Porter, Michael E (1985). Competitive Advantage: Creating and Sustaining

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The Free Press.