Colgan Air Case Study

Colgan Air: Case Analysis

1. The advent of the Internet changed ticketing procedures and operations as well as costs for major airline companies in many ways. At this time, many major airlines were starting to involve the hub and spoke models of business, which meant that these major airline companies had central airports in large cities as their main operation bases, and then contracted with regional airlines to fly from smaller, non-central airports. Although this was a start to trying to provide cost-efficient ticket fares to their consumers, the advent of the Internet caused a lot more issues for major airlines. Although people were purchasing tickets through major airlines like Continental, they were actually purchasing tickets for regional airlines that were operating flights under contracts with these major airlines. Tickets for regional airline flights had the same code share as the major airlines which gave people assumptions that they were purchasing flights through these major companies. The Internet led to consumers being able to purchase these tickets online while shopping around for the best deals both within carriers and between different carriers. Discounted carriers, like Southwest Airlines, were gaining market share due to the advent of the Internet and their cheaper prices being readily available and comparable to other airlines, which couldn’t compete with that hub and spoke model that had been adapted by major airlines to reduce their ticket costs. With a loss in market share for major airlines like Continental to other major airlines like Southwest, it forced many major airlines into bankruptcy and even caused some major airlines to leave the industry. Reducing the competition in the industry led to a person shopping for the lowest fares having less work in comparisons to do. This Internet shopping for the best deals forced people into purchasing the lowest fares, disregarding which airlines they were flying on and whether or not these...