Competition in the airline industry is always described to be an "intensively competitive market." In recent years the airline industry has been in industry-wide shakedowns which have far-reaching effects on the industry's trend towards expanding domestic and international services. Originally, the airline industry was either partly or wholly owned by the government. This is still true in many countries, but in today's industry all major airlines are owned by private companies. Because of the intensive competition in the airline industry, and because of some factors and issues, some government owned airlines are becoming private owned. Airport capacity, route structures, technology, and costs to lease or buy the physical aircraft are significant in the airline industry and are considered the main reason why some government owned airlines cannot afford to stay in business. Other significantly large issues are the weather, fuel cost, and labor. It is also necessary to provide the best service and have the finest strategy for companies to maintain competitiveness in this industry.
As a response to the industry's competition, airline companies are starting to provide their passengers with online check-in services. Tie-ups with other companies to provide the best service are also happening. The best example would be Marco Polo Company and Cathay Pacific Airlines, as well as Dragon Airlines limited. Companies are now providing privileges to loyal passengers. By this means, this will ensure that a passenger will continuously support the service of the company.
American Roy C Farrell and Australian Sydney H de Kantzow founded Cathay Pacific Airways in
Cathay Pacific become
The company has unveiled a series of e-business initiatives in the areas of passengers, cargo, procurement and internal procedures. For example, Cathay Pacific was the world's first airline to offer an online air ticket auction in late 2000, allowing frequent flyer members of its Marco Polo Club and Asia Miles program to bid for exciting offers through the Web site (www.cathaypacific.com).
Another innovative service was introduced by Cathay Pacific in January of 2001, this is the comprehensive Online Check-in Service, which allows passenger to check in for flights and reserve their favorite seat by using the Internet. Today, Cathay pacific is the leading Airline Company in
What is an online check-in system? An online check-in allows passengers to instantly reserve for an available flight. All the information regarding the flight will available for viewing by the passengers. Passengers can check-in online from the comfort of their own home or office. A passenger just needs to go visit the airlines website and print the boarding pass. The main objective of the proposed on-line system is improved customer service by providing a convenience channel for customer to check-in. The on-line system will eliminate the long time spend by passengers in airport check-in queue. Passengers cannot usually choose their preferred seat, especially if three persons are traveling together at the same flight; the proposed on-line check-in system will allow passengers to choose the seat they desired, as well the food they want during the trip.
Online check-in saves time at the airport, because passengers will avoid check-in and boarding gates queues. Upon arrival of the passenger on the departure gate, passenger that used the online check-in service will be the part of the first passengers to board the aircraft.
However, online check-in can only be used by passengers that are traveling with hand luggage only. Business travelers are mostly the passengers that avail of this service. On the other hand, leisure travelers more likely to be decline in this service. It is not suitable for passengers that have large luggage with them. A passenger needs to present a valid passport or a valid National Identity card issued by the government, matching the document details printed on the passenger's boarding pass, both the airport and the departure gate. For business travelers who are always on the move, checking online for a flight will help avoid the agonizing airport check-in queue.
Cathay Pacific airlines offers frequent flyers program to loyal passengers. Cathay has two loyalty programmes, the Marco Polo Club and
There are benefits and privileges available for a member of Marco Polo Club that avail the services of Cathay pacific Airlines, as well as, Dragon Airlines Limited, the latter being a Cathay shareholder.
The Marco Polo Club offers a range of exclusive benefits to make every passenger's journey with Cathay Pacific and Dragon air as enjoyable as possible. The more a passenger flies, the more benefits to be enjoy as a passenger advance towards a higher tier. Silver, Gold and Diamond members of The Marco Polo Club can also take advantage of added privileges when flying on all oneworld™ alliance airlines. The table below explains the benefits of each Marco Polo Club card holder:
Table 1: Table that shows the benefits of each of the four tier of Marco Polo Club. Note: All Marco Polo Club benefits are applicable only to
Passengers are entitled to a wide range of exclusive benefits as a Premier Account Programme Member. A member, as well as, colleagues that avail of the Check-in services, enjoy access to tailor-made corporate services that will make travel experience even more of a pleasure. The opportunity to reduce the company's total travel expenses by receiving a travel incentive at the end of the agreement term will also be available. Travel incentives and rewards are given to members. Members are also entitled to special services by the company such as dedicated online service, priority waitlisting, advance seat reservation, online check-in, and will receive the company's latest promotional offer and services.
Marco Polo Members that availed
Loyalty reward program has been Cathay Pacific's strategy to maintain their long customers and to acquire potential customers as well. All of Cathay Pacific's e-business enhancements are geared to enhance customer service efficiency and convenience. The company must maintain a high level of customer satisfaction to maintain high level of customer satisfaction. This requires not only reliable hardware and flawless applications, but as well as, continuous strategically improvement.
The proposed on-line check-in system will be beneficial to passengers. Benefits that entitled a user of the on-line check-in system are: the on-line check-in system allows passengers to check-in two days in advance before the flight via Internet; passengers will have the privileged to choose their preferred seat and food for the flight; and passengers using this new system can earn extra points.
The airline will also benefit to the on-line check-in system. Controlling the stock of food, and reducing waste of foods will be easy for the company; an effective market program will be developed by the airline because information regarding passenger's travel habits will be collected; the workload for the check-in department of the airline will be reduce, giving more time for customer service; this on-line check-in system will help the company in maintaining a good reputation in the airline industry.
Using online check-in system is easy. The steps are basically easy, for both members and non-members, to follow. Following and doing the steps properly will automatically reserve the passenger a flight. Passengers who want to avail of the service just needs to log-in in Cathay Pacific web site (www.cathaypacific.com).
Members are requested to log-in there membership number and pin, and then click the log-in button after providing this information. If the member provided the correct in formation, it's up to the passenger to choose the best flight schedule and the seat that suite the passenger's preference. Finally, the passenger needs to confirm the reservation and print out the boarding pass. The printed boarding pass will serve as the passenger's pass to avoid airport queue.
For non-members or e-ticket holders, the steps for members are almost the same. Enter your personal and flight details such as name, flight number, origin and destination in order to retrieve your booking. Select the flight that you wish to check in. then select your seat for the flight. Finally confirm your Check-In and print your boarding pass.
The only difference of the member screen and the non-member online reservation screen is that non-members need to log their full name instead of their membership number. But the whole process is generally the same and as easy with the members process.
In order to standardize the process of business applications in the company, Cathay Pacific has adopted a new methodology called "ProjeCX". [ProjeCX] require that testing should be integrated at different phases, ranging from solution design and development to actual application deployment, in e-business procurement. In 2000, Cathay Pacific turned to Mercury Solution, a software development company, in order develop and application that can predict system behavior and performance as if in a real user's world.
Mercury's LoadRunner, the industry-standard load testing software, focuses on testing an entire infrastructure by emulating thousands of users, and employs real-time performance monitors to isolate performance bottlenecks and fine-tune performance within the application infrastructure. LoadRunner enabled Cathay Pacific to decrease test cycles in both development and test environments and maximize the performance of their e-business services.
"We chose Mercury's solution for its comprehensive functionality and greater flexibility. Mercury - It can be easily integrated with other tools provided by other technology vendors, creating greater compatibility within our system environment," noted by S.F. Chan, Applications Development Support Manage. Cathay Pacific realizes how testing is essential in development cycle of web-based applications. Comprehensive testing is a must to ensure quality development of application in accordance to the company's strict requirements. Mercury solution produced a comprehensive functional e-business application with great flexibility. The produced application can be easily integrated with other tools that are provided by various technology vendors, with vast compatibility. The application is flexible and well-compatible with new technologies coming out.
Cathay Pacific was impressed by the high level of customer support and training that Mercury offers. Mercury provides training at their local training center, or even onsite. And in addition, Mercury also provides online support 24x7. Mercury response to their customers prompt and Mercury specialist actively visits Cathay Pacific's office to ensure that the system is not encountering any technical problems and o ensure the system functionality is not cut at all time.
Business and Technological Consideration
There are some aspects in the airline industry that needed to be considered to gain a competitive advantage in the market. Cathay Pacific has been successful in the market because of the company's global standard strategy being applied locally.
Table 1: hardware requirements of an on-line check-in system
The proposed on-line check-in system will not depend on hard ware alone; new software is also required to run the new system. Investments on new software will are also a must for the company. Table 2 shows the software requirements of the proposed on-line check-in system.
Table 2: software requirements of an on-line check-in system
Because of today's advance technology it will not be hard to adopt a new system. Today's advance technology allows continuous improvement of various processes in different fields. Technology has not been an obstacle for Cathay Pacific to pursue e-commerce in their business. Cathay Pacific Airlines used their website to interview and conduct business with frequent airline passengers with regards to their airline, destination, airport, and even aircraft preferences.
There are various business considerations to consider that will determine the success of an on-line check-in system. The company should take in consideration the aspect of the business; on-line check-in system is e-commerce. The company should be knowledgeable and well-experienced in the filed of e-commerce before implementing such system. Promoting the service and convincing the passengers to use the system should be given a thought; a good strategy on how to market the service is needed for the service to gain acceptance to the passengers. The benefits of the new system to the company as well to the passengers should be evaluated; if the proposed system will benefit both, then it is good to implement the proposed system, on the other hand, if neither the company nor the passengers will benefit from the proposed system then it is better to turn down the proposal. Also, if only one of the two will benefit in the proposed system the system then is not feasible for implementation.
There are also technical considerations that needed to be handled. The problems that will arise in the new system should be considered such as problem in data exchange and security issues. Data exchange problems may arise because of using different database; this is also the reason why security problems arise. The speed of the network connection should be fast enough to accommodate consecutive transactions in the system. The proposed on-line check-in system should support multi-lingual function; this is to cater to all kinds of passengers around the world. This function will make the system user friendly for anyone.
The success of Cathay Pacific in their online check-in service depends on the number of aware passengers of the service that company provides. How to market the service must be considered by a company in order for the service to gain recognition and success. Because Cathay Pacific is a known and respected airline industry, the company didn't have a hard time for their online check-in service to gain success. A good advertisement about the service and further introduction to the market allowed the service to gain public recognition. The process in online check-in system is easy and user friendly, this is also the reason why many passengers are continuously patronizing Cathay Pacific, especially those individuals who are always in the go and value time so much. These individuals are mostly businessmen who are on a business trips, or some individuals who have urgent matters to attend. Because of the fast processing of the system, and once a passenger had printed their boarding pass they are relieved of the long airport processes before boarding. This will save some precious time for the passenger.
Deployment and Configuration
New hardware and software is necessary before the actual system is deployed. The new system must be configurative with the hardware and software that are used by the company. This will ensure that the system will flawlessly run and its functionality attain. Before deployment the users of the system must undergo intensive training so that these users will be knowledgeable of how to use the system properly. This will ensure that the functionality of the system is achieved to benefit the business. Training the users will be Mercury's responsibility. End-users of the implemented on-line check-in system are required to undergo implementation requirement; which is implementation training. Table 3 shows the require training and the cost needed for the training.
Table 3: implementation requirement of an on-line check-in system
The proposed on-line check-in system will required the company to invest company resources to the system. Table 4 shows the total investment needed to implement an on-line check-in system:
Table 4: total project cost of an on-line check-in system
Even though, the company needed to invest in the new system, this system will ensure that the company will regain this investment in the long run. Before implementing the new on-line check-in system, all the users of the new system must undergo implementation training in order to avoid conflicts and problems when the actual system is implemented by the company. The online check-in system must be flexible enough to adapt to the continuously developing technology. It must capable in adapting new software and hardware that will come out in the future. This will save the company resources, in terms of investment, because instead of paying to develop a new system, the old system should be capable of enhancement and further improvement. Web-based application, such as the online check-in system of Cathay Pacific Airlines, has been a fundamental factor in the company's worldwide success. Various companies have different advertising and marketing reason for establishing and maintaining a Web-based application for business. Some company uses the internet as a medium of introducing itself and its new products to potential customers both local and worldwide. Its objectives could be to create corporate and product awareness and inform the market. On the other hand, if the company's services and products are already publicly known, then the net can be used to make a customer buy the product and support the services of a company. Another company may be advertising and marketing well-known existing products in the internet to solicit feedback from current customers as well as informing new customers.
Thus, Web sites can be used to progress customers and gain prospects or potential customers through successively support and buy the product. Companies do this by attracting customers, making contact with interested customers, qualifying/converting a portion of these interested customers into interactive customers, and keeping these interactive customers interactive. Different tactical variables, both directly related to the Web site, as well as to other elements of the marketing communication mix will have a particular impact at different phases of this conversion process. It is important to have to ensure that once the on-line check-in system is implemented, that the system is constantly maintained error free. This will ensure that the system will run and maintain functional in the long run.
In today's marketing trend, e-business has been a vital part of any business industry, especially in the airline industry, with the ultimate purpose of not only achieving cost savings but also to generate additional revenue. Mercury's software and support have helped Cathay Pacific to succeed in the field of e-business.
Approximately 2 million hits are now being recorded per day for the online auction, check-in and cargo services sites, and enhanced online customer experiences mean that Cathay Pacific is now in an optimal position to generate more online transactions, contributing to the overall financial returns of the carrier.
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