ELECTRONIC COMMERCE AND FINANCIAL PERFORMANCE OF SELECTEDAIRLINE OPERATORS IN KENYA

Abstract

Airline industry remains one of critical forms of transport globally. The airline industry facilitates the fastest transportation of people, goods and services where e-commerce has been gaining prominence in the online sale of goods and services. The Kenyan airlines have expanded its airline services accessible on the airline operator website like electronic airline booking, e-payment services, the digitization of airline services and operations including e-ticketing and e-ordering and distribution of airline cargo. Despite the prominence of e-commerce in the airline industry, its impact on financial performance of airline operators has not been exhaustively studied in empirical studies. This investigation thus sought to explore the effect of e-commerce on the financial performance of Kenyan airline operators. Specifically, the study sought to establish the effect of e-ticketing, e-marketing, e-cargo ordering and e-payment services on financial performance of airline operators in Kenya. It also sought to determine the moderating effect of ecommerce infrastructure on the relationship between e-commerce and financial performance of airline operators. Diffusion of innovation theory, the technology acceptance model and the dynamic capability theory guided the study. A correlational research design was used with a target population of 6,262 employees of Kenyan airline operators. The sample size was 376 employees computed using Yamane formula. The study adopted purposive sampling method to select airline operators and stratified random sampling to select the sample employees from the various departments. Primary data was utilized and was collected using structured questionnaires. The analysis of data was carried out using Pearson correlational statistics including means, frequencies, percentages and SD and regression analysis. From the findings, e-ticketing, e-marketing, e-cargo ordering and e-payment have a positive impact on financial performance of selected airline operators in Kenya. Furthermore, e-commerce infrastructure was found to be a significant moderating variable in the relationship between e-commerce and financial performance of selected airline operators. The investigation recommended that selected airline operators should be able to harness the benefits of integrating e-ticketing, e-marketing, e-cargo ordering and e-payment services. Finally, the selected airline operators in Kenya ought to improve on its e commerce infrastructure. All the other e-commerce services rests and largely depends on the effectiveness of the e commerce infrastructure in place. The study recommended regulatory authorities ought to formulate policies towards full utilization of electronic ticketing services and formulate policies that can make it possible for marketing to be done online and come up with appropriate policies that can make it possible and efficient for clients to order their cargo online safely. The regulators ought to come up with appropriate policies that make it mandatory for their customers to make payments for the airline services online. Finally, these authorities in conjunction with airline operators ought to formulate, streamline and create policies that will pave way for the adoption and implementation of e-commerce in the airline industry.