International Journal of Business and Management; Vol. 7, No. 18; 2012 ISSN 1833-3850 E-ISSN 1833-8119 Published by Canadian Center of Science and Education 149 Impact of Information Technology on Profitability of Airlines Industry: A Case Study of Royal Jordanian Airlines Omar A. A Jawabreh 1 , Mahmoud Allahham 2 , Ashraf Alrjoub 3 & Muhannad Ahmad 3 1 Department of Tourism and Hotels Sciences, Al-Balqa Applied University, Salt, Jordan 2 Faculty of Administrative and Finance Science, Medile East University, Amman, Jordan 3 Faculty of Administrative and Finance Science, Irbid National University, Irbid, Jordan Correspondence: Omar A. A Jawabreh, Department of Tourism and Hotels Sciences, Al-Balqa Applied University, Salt, Jordan. Tel: 962-777-294-671. E-mail: ojawabreh2000@yahoo.com Received: May 22, 2012 Accepted: July 16, 2012 Online Published: September 16, 2012 doi:10.5539/ijbm.v7n18p149 URL: http://dx.doi.org/10.5539/ijbm.v7n18p149 Abstract This paper explores Impact of information technology on profitability of airlines industry “a case study of Royal Jordanian Airlines, The data collected from the financial statement of Royal Jordanian Airlines is analyzed by using financial and statistical tools. The tools and techniques issued in this study are discussed here. It is very difficult to cover several of aspects of financial management of Royal Jordanian Airlines; hence, focus has been given to study the profitability, capital structure & working capital management. The financial measures of performance are well adequate to monitor returns on IT. This is important as IT specialists always require special measures for IT performance, the current results show that IT do affect the aggregate financial performance measures. Which make them suitable for IT investments assessments? Keywords: impact of information technology, profitability, royal Jordanian airlines, gross profit ratio, net profit ratio 1. Introduction Airlines’ immediate focus is on cost reductions in driving to operations that are more efficient. However many airlines are turning to customer relationship management (CRM) as a tool for managing customer relationships. Unfortunately, in many cases, they have failed to recognize CRM as a holistic strategy, instead viewing it as synonymous with their frequent flyer programs. As airlines struggle to gain market, share and sustain profitability in today's fiercely competitive and economically demanding environment, they must develop new ways to manage their customer relationships to optimize customer loyalty and revenues. What tactics should airlines use to acquire, develop and retain customers with greater precision and improved results? Over the last years, individuals and organizations in Jordan and all over the world have invested significantly in information technologies and systems. It is widely believed that strategic information technology (IT) investments will enable firms to cut costs and working effectively. However, there are concerns about the choice of these technologies and their deployment and hence the organization’s ability to successfully achieve appropriate returns from these technologies. Travel products and services possess many characteristics needed to function in the electronic environment. The ease of description and commodity-like nature of many travel products (such as airline seats or hotel rooms) suggests that the travel industry exhibits the product attributes that are favorable for electronic commerce. U.S. airlines currently spend $6.4 billion annually on travel agent commissions, although this total amount is now declining as carriers significantly reduce their payments to agencies. With online booking and E-tickets, the last physical objects needed to reserve and undertake travel disappear. Electronic ticketing therefore serves as an enabler for automated delivery of travel products. Also, any direct communication between travelers and travel suppliers such as airlines and hotels supports the collection of valuable consumer information by the supplier, which suppliers such as airlines do not wish to share with third parties. Knowledge of consumer behavior, including buying profiles and purchases of related products (such as