Who Are the Winners at Different Stages of the Changing Travel Industry?

1. Who are the winners at different stages of the changing travel industry?

1964--Late 1970s, Sabre succeeded. IBM and American Airlines found a better way to manage the fast-growing inventory of seats by developing a real-time computer inventory system. As Sabre developed through the 1970s, Sabre became the control center through which American Airlines functioned.

1968--1972, IBM won. IBM enhanced its PARS, targeting medium sized airlines. By 1972, 9 major airlines operating in the US used the IBM PARS system.

1977--1985, Travel Agency boomed. The number of travel agents in the US doubled and tickets generated through travel agents accounted for about 75% of airline revenues. The opened CRS market freed agents from capped commissions and made purchasing air travel more complex.

1986--1990s, American Airlines earned. With deregulation in 1978, airlines set their own fares and schedules. American Airlines reportedly benefited by $1.2 billion over a three-year period from its yield-management practices which was installed in Sabre.

1990--2000, GDS companies won. GDS companies generated profit margin of 13.6% in 2001, more than twice those generated by the major United States-based airlines. Sabre was the GDS market share leader.

2002, Travelocity, owned by Sabre, was the leading online travel agency with 40% share of market. However, it is still facing the threats of Expedia, Orbitz and other online websites.

2. What are core competitive advantages of companies at different stages of the changing travel industry?

At different stages of the changing travel industry, the core competitive advantages of companies are the combination of the ideas to set out to revolutionize and the advanced technology support.

 Sabre is the outcome of cooperation of American Airlines and IBM. It is because that American Airlines was seeking a solution to manage the fast-growing inventory of seats and the technology IBM had, Sabre appeared and succeeded.

 Following by Sabre's success, IBM stoke while iron's hot. IBM used the experience to develop a scaled-down CRS, PARS, to keep being the pioneer in the market.

 In 1974, ASTA announced an initiative to develop its own CRS to eliminate the time consuming steps, which drove the competing airlines owned and operated their own CRSs rushed to expand their capabilities and installed their rival systems at travel agencies. It also freed agents from capped commissions and made purchasing air travel more complex--all to the benefit of travel agents.

 American Airlines earned because the advanced yield management which could help to maximize the revenues from each flight by establishing different prices for different seats.

 GDS companies earned a lot is a result of its advanced