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Tech Industry

Airlines take off with Net marketplace plans

A group of six major airlines plans to build a business-to-business online marketplace to handle supply purchases, a process that costs about $32 billion a year.

    A group of six major airlines said today it plans to build a business-to-business online marketplace to handle supply purchases, a process that costs about $32 billion a year.

    Founding members of the company, which will be named and launched in the coming weeks, are American Airlines, Air France, British Airways, Continental Airlines, Delta Air Lines and United Airlines. A technology partner will be picked in coming weeks as well, the airlines said in a statement.

    They are forming a U.S.-based company to create and operate a Web site that will handle purchases and sales of items such as fuel and fuel services, airframes, avionics and engine components, and maintenance equipment and services. The Net marketplace will not include air transportation services or big-ticket items such as aircraft.

    The financial investment of each airline was not announced.

    Several airlines involved have launched other Web-centric initiatives. United earlier this year said it will create a unit dedicated to online strategies and an environment attractive to Web-savvy workers and executives.

    The airlines follow companies in other industries, such as automotive, chemical, construction and retail food, that have adopted similar strategies to trim the costs of purchasing supplies.

    Aviation and aerospace players have also jumped on the business-to-business bandwagon in the past few months. Deals include Ariba and Partsbase.com's aerospace and aviation marketplace; United Technologies, Honeywell and i2 Technologies' MyAircraft.com; and start-up AviationX's recently debuted prototype of its portal for suppliers and manufacturers.

    The rapid popularity of the business-to-business sector, which is expected to surpass the trillion-dollar mark in the next three years, has created several hurdles. Some companies have voiced concerns about the potential need for government regulation of marketplaces, which concentrate tremendous purchasing clout among a handful of large companies.