The new distribution capability in the airline industry: a game theory approach

• Paulo Nabais ; Marta Dias ^[1] ; Sílvia Jorge ^[1]
  1. [1] Universidade de Aveiro

     Universidade de Aveiro

     Vera Cruz, Portugal

     
• Localización: Revista Turismo & Desenvolvimento, ISSN 1645-9261, Nº. 27-28, 2, 2017 (Ejemplar dedicado a: INVTUR 2017 Intl' Conference), págs. 413-414
• Idioma: inglés
• Enlaces
  • Texto Completo Ejemplar
• Resumen

  • The air transportation market is one of the largest markets in the world, and is the major focus of this study. Nowadays, with the growth of the Internet and the GDS (Global Distribution Systems), airlines started to find the GDS an expensive process compared with what airlines could win if they were not using this intermediate. However, the consumer base which is obtained when using these systems is very different and greater than the one which the carriers can get on their websites. With this, IATA has created the NDC (New Distribution Capability) to tackle the main problems that airlines were having with the distribution of their products. This NDC will allow airlines to fill the gaps between their direct channel (the website) and indirect channel (travel agencies), providing identical distribution capacity in both cases. This will also be advantageous for airlines, since they have the opportunity to distribute directly to travel agencies and thus reduce costs. The objective of this paper is the study of the different distribution strategies that the airlines have at their disposal. Also, it analyses the strategic behavior of the several players in the market with the entry of the NDC. In this research, we have used game theory, more specifically a static game model of simultaneous decisions, to find the airlines strategic behavior when it comes to choose the distribution channels. The main goal of our paper is to discuss the behaviour of airlines in the distribution of their products, if they keep the distribution channels that they are currently using, including website (direct channel) and GDS (indirect channel), or if the entry of the NDC is going to change these options