Sky air, their way to the market

In the early 2000's a major change occurred in the airline industry. With the consolidation of the low cost model and derived from the inability of traditionalairlines to offer lower prices, a gap between traditional carriers and low cost competitors appeared. Even if prices had not been set at such low levels, they were considerably reduced, generating a loss of margins. The only way to manage the gap and bring margins up, involved decreasing costs and increasing ancillary revenues. On the basis of these strategic moves, the companies' strategies were clearly reoriented towards the final customer, and the commercial activities were modified to promote direct sales and reduce costs coming from intermediaries. Along with these measures, some actions were directed towards promoting the sale of complementary products in the airlines own websites, in an attempt to increase non-operational revenues. All these actions together were considered by travel agencies as an example of unfair competition, and caused a conflict. Sky Air was one of many traditional airlines that had to deal with this situation and face the trade-off that implied supporting one or another channel. The situation went as far as finding itself involved in a boycott led by travel agencies and having the agencies ask for the commercial director's dismissal. Sky Air was put in the dilemma of having to choose between bowing to travel agencies' demands or continuing to support their 'conflictive' commercial policies.