ankit_mehta_88
Ankit Mehta
HISTORY OF AIRLINE INDUSTRY
Aviation refers to activities involving man-made flying devices (aircraft), including the people, organizations, and regulatory bodies involved with them.
Civil aviation includes all non-military flying, both general aviation and scheduled air transport.
General aviation includes all non-scheduled civil flying, both private and commercial. General aviation may include business flights, air charter, private aviation, flight training, ballooning, parachuting, gliding, hang gliding, aerial photography, foot-launched powered hang gliders, air ambulance, crop dusting, charter flights, traffic reporting, police air patrols and forest fire fighting.
There are five major manufacturers of civil transport aircraft:-
Airbus, based in France
Boeing, based in the United States
Bombardier, based in Canada
Embraer, based in Brazil
Tupolev, based in Russia
Scheduled Air Transport
Like it is known that the Airline Industry is one the vastest industry with its presence all around the world. Though it started with its presence only in large countries then slowly expanding to other states and currently its presence can be felt in the smallest of cities also.
This industry came into existence with the development of the world’s first airline on 16 November 1909 by DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft with its headquarters situated at Frankfurt. It was developed with the assistance of the government and operated ships manufactured by Zeppelin Corporation.
Later as time passed by and people started becoming aware of the existing technology and the potential of the market they moved their attention to this sector. It was the then that Tony Jannus conducted the United States' first scheduled commercial airline flight on 1 January 1914 for the Saint Petersburg-routes, Braniff Airways, American Airlines, Delta Air Lines, United Airlines (originally a division of Boeing), Trans World Airlines, Northwest Airlines, and Eastern Air Lines
This was just the start of the airline industry. Slowly and steadily it caught the pace of development and advancement. By the 1920’s this industry mainly focused on only carrying of mails. It was in the year 1925 that the Ford Motor Company bought out the Stout Aircraft Company and began construction of the all-metal Ford Trimotor, which became the first successful American airliner. With a 12-passenger capacity, the Trimotor made passenger service potentially profitable.
Till then Air service was seen as a supplement to rail service in the American transportation network. It was by this time that a few major countries understood the concept and believed in it. it was the same time when Juan Trippe began a crusade to create an air network that would link America to the world, and he achieved this goal through his airline, Pan American World Airways, with a fleet of flying boats that linked Los Angeles to Shanghai and Boston to London.
In fact even during the great depression due to the introduction of the Boeing 247 and Douglas DC-3 in the 1930s, they were able to generate profits. This clearly stated the importance of the airline sector.
After this the expansion of this industry was always on a high. In the 1950s, the De Havilland Comet, Boeing 707, Douglas DC-8, and Sud Aviation Caravelle became the first flagships of the Jet Age in the West, while the Soviet Union bloc countered with the Tupolev Tu-104 and Tupolev Tu-124 in the fleets of state-owned carriers such as Aeroflot and Interflug.
The next big boost for the airlines would come in the 1970s, when the Boeing 747, McDonnell Douglas DC-10, and Lockheed L-1011 inaugurated wide body ("jumbo jet") service, which is still the standard in international travel. By the 1980s, almost half of the total flying in the world took place in the U.S.
The first countries in Europe to embrace air transport were Finland, France, Germany, the Netherlands and the United Kingdom.
KLM, the oldest carrier still operating under its original name, was founded in 1919. The first flight (operated on behalf of KLM by Aircraft Transport and Travel) transported two English passengers to Schiphol, Amsterdam from London in 1920.
France began an air mail service to Morocco in 1919 that was bought out in 1927. Germany's Lufthansa began in 1926. The British company Aircraft Transport and Travel commenced a London to Paris service on 25 August 1919, this was the world's first regular international flight.
India, Hong Kong, Indonesia, Malaysia and the Philippines are one of the first few Asian Countries of enter the airline industry.
Philippine Airlines was founded on February 26, 1941, making it one of the first countries in Asia to embrace air transport. The airline’s first flight was made on March 15, 1941 with a single Beech Model 18 NPC-54 aircraft, which started its daily services between Manila (from Nielson Field) and Baguio, later to expand with larger aircraft such as the DC-3 and Vickers Viscount. It was started by a group of businessmen led by Andres Soriano.
In the year 1932 a new airline came into existence knows as the Tata Airline, lead by JRD Tata. Now it is known as Air India.
Later in the years Pakistan began Orient Airways Ltd (Pakistan International Airlines), Cathay Pacific founded in 1946, Singapore Airlines and Malaysian Airlines in 1947 (as Malayan Airways), Garuda Indonesia in 1949, Japan Airlines in 1951, and Korean Air in 1962.
INTRODUCTION
The basic function of an airline is to accommodate for passengers and cargo while taking them to far-off places between two major cities or towns within a country or beyond geographical borders.
The aviation industry in India has grown by leaps and bounds in recent years in terms of kilometers flown as well as customers serviced. The economy of a country is substantially determined by the quality of air transport.
Air transport is also considered to be the swiftest mode of transport. Almost all the states have one or more airports, which are regularly serviced by several airlines. There are a number of international airports, which also serve as domestic airport too. Others are only domestic airports.
The Air Transport Companies are both in the public sector and in the private sector. In the public sector, there are Air India, Indian Airlines, Air India Charters Limited (Air India Express) and Alliance Air. In addition to this there are at present eight private scheduled operators, viz. Jet Airways (India) Ltd., Sahara Airlines Ltd., Deccan Aviation (P) Ltd., Go Airways, Kingfisher Airlines, Paramount Airways Pvt. Ltd., Go Airlines (India) Pvt Ltd., and Inter Globe Aviation Ltd. (Indigo) operating on the domestic sector providing a wide choice of flights and connectivity to various parts of India. One cargo airline viz. Blue Dart Aviation Pvt. Ltd. is also operating scheduled cargo services in the country. At present there are 59 companies holding nonscheduled air transport operators permit.
The airlines are not the owners of the airports. The owner of these airports is the Airports Authority of India. The Airports Authority of India (AAI) was formed on 1st April 1995 by merging the International Airports Authority of India and the National Airports Authority with a view to accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports in the country conforming to international standards.
All major air-routes over Indian landmass are Radar covered (24 Radar installations at 11 locations) along with VOR/DVOR coverage (72 installations) co-located with Distance Measuring Equipment (71 installations), 39 runways provided with ILS installations with Night Landing Facilities at 36 airports and Automatic Message Switching System at 15 airports.
Few functions of the AAI are as follows:-
ƒ Control and management of the Indian airspace extending beyond the territorial limits of the country, as accepted by ICAO
ƒ Design, Development, Operation and Maintenance of International and Domestic Airports and Civil Enclaves
ƒ Construction, Modification and Management of Passenger Terminals
ƒ Development and Management of Cargo Terminals at International and Domestic airports
ƒ Provision of Passenger Facilities and Information System at the Passenger Terminals at airports
ƒ Expansion and strengthening of operation area viz. Runways, Aprons, Taxiway, etc
ƒ Provision of visual aids
ƒ Provision of Communication and Navigational aids viz. ILS, DVOR, DME, Radar, etc.
THE DOMESTIC PLAYERS
Airlines Founded/ Headquarters/ key people The Logo
Air India 1932, Mumbai – India, Raghu Menon, Chairman & Managing Director
Amod Sharma, Director
Alliance Air 1996, New Delhi and Mumbai, Capt. Mehbub Butt.
Indian Airlines 1953, New Delhi, Mr. Raghu Menon.
Jet Airways 1993, Mumbai- India, Naresh Goyal, Founder and Chairman.
Jet Lite (Formerly Air Sahara) 1991, New Delhi, Subrata Roy (founder), Naresh Goyal (Owner, Jet airways & Jet Lite.
Kingfisher Airlines 2004, Bangalore, India, Dr. Vijay Mallya, CMD
Air Deccan August 25, 2003 Bangalore, India. G.R.Gopinath, Vijay Mallaya.
Indigo Airlines 2005, New Delhi, Bruce
Spice Jet May 2005, New Delhi, India, Siddhanta Sharma (Executive Chairman).
Jagson Airlines 1991, Delhi- India
Go Air Airlines June 2004, Mumbai- India, Jehangir (Jeh) Wadia
AIR INDIA
Air India International entered the jet age in 1960 when it’s first Boeing 707, named Nandadevi and registered VT-DJJ, was delivered. Jet services to New York via London were inaugurated that same year in May 1960.
On 8 June 1962, the airline's name was officially truncated to Air India. On 11 June 1962, Air India became the world's first all-jet airline.
Air India Limited is the national airline of India with a worldwide network of passenger and cargo services.
Air India is state-owned, and administered as part of the National Aviation Company of India Limited - which was created in 2007 to facilitate Air India's merger with Indian Airlines.
Air India was founded by J. R. D. Tata in 1932 as Tata Airlines, a division of Tata Sons Ltd. (now Tata Group).
ALLIANCE AIR
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines.
Air India Regional started as Alliance Air (which was the low-cost arm of Indian Airlines. As part of Indian Airlines' merger with Air India, Alliance Air was renamed Air India Regional.
INDIAN AIRLINES
Indian Airlines was an airline based in Delhi, India and focused primarily on domestic routes, along with several international services to neighboring countries in Asia.
Indian Airlines is state-owned, and is administered by the Ministry of Civil Aviation.
The airline operates closely with Air India, India's national carrier. Alliance Air, a fully-owned subsidiary of Indian Airlines, was renamed Air India Regional.
JET AIRWAYS
Jet Airways is an airline based in New Delhi, India and is the country's second-largest international airline after Air India and the largest domestic airline.
Jet Airways was incorporated as an air taxi operator on 1 April 1992. It started commercial airline operations on 5 May 1993 with a fleet of 4 Boeing 737-300 aircraft.
In January 1994, a change in the law enabled Jet Airways to apply for scheduled airline status, which was granted on 4 January 1995.
It began international operations to Sri Lanka in March 2004.
While the company is listed on the Bombay Stock Exchange, 80% of its stock is controlled by Naresh Goyal (through his ownership of Jet’s parent company, Tailwinds).
JET LITE
JetLite, formerly Air Sahara, is an airline based in New Delhi, India. Controlled by Jet Airways, the airline operates scheduled services connecting metropolitan centers in India.
The airline also provides helicopters which are available for charter services and aerial photography.
Jet Airways and Air Sahara were the only private airlines to survive the Indian business downturn of the early 1990s.
In January 2006, Jet Airways announced that it would buy Air Sahara for $500 million in an all-cash deal, making it the biggest takeover in Indian aviation history.
On 12 April 2007, Jet Airways agreed to buy out Air Sahara for 14.5 billion rupees ($340 million). Air Sahara was renamed JetLite, and was marketed between a low-cost carrier and a full service airline.
KINGFISHER AIRLINES
Kingfisher Airlines Limited is an airline based in Bangalore, India.
Kingfisher Airlines, through one of its holding companies United Breweries Group, has acquired 26% stake in the budget airline Air Deccan and has option to buy further of 20% stake from the secondary sector.
AIR DECCAN
Deccan is an airline based in Bangalore, India. It was India's first low-cost carrier. Formerly known as Air Deccan the airline is operated by Deccan Aviation.
On 19 December 2007 Air Deccan and Kingfisher Airlines decided to merge. Kingfisher will effectively merge into Deccan Aviation following which Deccan Aviation will be renamed ‘Kingfisher Red’.
INDIGO AIRLINES
Indigo Airlines is a private domestic low-cost airline based in Gurgaon, India. It operates domestic services linking 14 destinations. The airline is owned by InterGlobe Enterprises.
SPICE JET AIRLINES:
SpiceJet is a low-cost airline based in New Delhi, India. It began service in May 2005. It was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax in 2007. SpiceJet was earlier known as Royal Airways, a reincarnation of ModiLuft.
SpiceJet marked its entry in service with Rs. 99 fares for the first 99 days, with 9000 seats available at this rate.
Their aim is to compete with the Indian Railways passengers travelling in AC coaches.
JAGSON AIRLINES
Jagson Airlines is an airline based in Delhi, India. It operates scheduled and charter services within India and to Bhutan and Nepal. Jagson Airlines operate flights between Delhi and Rajasthan and Madhya Pradesh and Himachal Pradesh. They also operate a helicopter service between Srinagar, Baltal and Amarnath.
GO AIR AIRLINES
Go Air is a low-cost airline based in Mumbai, India and is wholly owned by the Wadia Group.
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines
Air India Regional started as Alliance Air which was the low-cost arm of Indian Airlines. As part of Indian Airlines merger with Air India, Alliance Air was renamed Air India Regional.
THE COMPETITION IN THE AIRLINES SECTOR IN INDIA – THE AERIAL WAR
Around 20 years ago, when the Airline Industry of India was Government Regulated, the airline Industry was considered to be a “natural monopoly” where only one Airline Company would be able to survive in the competitive environment and meet the demands profitably. But since deregulation, the perception is changing and there is no evidence of any sort of monopoly in the Indian Airline Industry. Foreign and private players have entered into the market offering the best at the best prices to the rising demand of the Indian traveler.
With the recent change in the Aviation Policy by the Government, several vistas in business have opened up and new opportunities have emerged. The creation of new and incumbent airlines and private sector participation in the development of Aviation infrastructure is a positive outcome of these new developments. Several global Aviation consultants and private equity players are eyeing this opportunity and are setting up their branches within the country.
Despite its unprecedented growth, the Civil Aviation industry in India is still in a relatively early stage of its development after its liberalization. Experiences from abroad, i.e., the US and Europe, show tremendous structural shifts in terms of route development, pricing, quality and frequency of traffic, as well as spatial concentration at few key airports. It can be said that market liberalization provided not only for greater opportunities in the industry, but also for greater risks. Recent waves of consolidation among airlines are only one example.
Since the deregulation, the Indian Airlines has grown tremendously. Also, average prices have fallen consistently due to the increasing number of players in the market. This fall in prices has benefited the consumers the most. If some fliers would disagree that the decline in prices have not benefited all the travelers then it can be proven that the fliers paying a high price also gets a superior product, in terms of flexibility and service. Moreover, the increasing demand for airline services is also helping airline companies to run a competitive business. People prefer air travel as a feasible option for commuting because it saves time and also because of the value added services provided by different airline companies. The competition in the Indian Airline Industry has succeeded in increasing the volume of travel and lowering average prices which has in the end benefited the final consumer and also to the airline companies.
Alliances and mergers are one of the factors which are giving a solid boost to the Airline Industry in India. Different airline companies, foreign as well as Indian, are tying up or taking over or merging to produce effective collaborations in service delivery with profitable returns. It is not the just the airline companies but also associate industries such as tours and travels agencies, hotels, transport organizations etc. which are also getting targeted by airline companies to deliver quality service to the customers.
At the end, it can be inferred that the Indian Airline Industry is growing at a fast pace and the credit goes to the effective and positive impact of the increasing competition in the industry. Factors indicating to the increasing competition in the airline industry are the pricing and promotion strategies adopted by the airline companies; value added services offered; sales promotion; product/service innovation; cost cutting strategies like downsizing; and so on. Airline companies are concentrating on the customer delight and also the costs to produce profitable returns with effective customer/market retention.
ENVIRONMENTAL SCAN
The following is an Environmental Scan of the Global as well as the Indian Airline Sector/Industry. The scan identifies the trends impacting the demand in the Airline Industry and the capability of the service providers to meet the expected demand. While the current events are important, the focus of the scan is on the trends likely to be important and effective in five to ten years from now. Apart from identifying the demand trends, the scan also identifies the constraints and issues of the airline industry, the key players, resources and the outcomes for the various service providers.
In India, the service airline business is in trouble. Many airlines companies are struggling to establish a business model which is viable to the business and profitable. Most of the companies are running into losses quarter after quarter due to the increasing costs etc. The recent high volume of passenger and freight flow has not been able to return profits. The low-fare airlines business model has been a success but has not been able to recover the increasing costs. The following factors represent the business environments for the airlines companies.
Political Factors
Liberalization of Air Services
Many economies have now adopted a forward looking approach in matters of policies for the liberalization of the civil aviation sector. Many economies are opening up with regards to bilateral agreements and are attracting more foreign passengers. Also, the air traffic between nations such as India-US, China-US, and many more strategic nations is on an increase. These liberalization policies are surely a boost to the airlines sector since the demand goes up and also service providers can take advantage such the fuel cost advantage (fuel prices in foreign nations are lesser), Globalization, Mergers and Acquisition etc.
Modernization of Infrastructure
With the availability of word class, improved technology, the infrastructure has been modernized to the maximum extent possible providing the best possible experience to the travelers. Airports are getting modernized with the entry of foreign investments. The best example is the airports in India, which have undergone modernization and are as beautiful and well-managed as the Heathrow airport. Airports in tourist places such Udaipur have also undergone beautification in order to give the foreign passenger a global experience.
Investments, Resourcing and Outsourcing
The promotion of Foreign Direct Investments by liberalizing the investment policies in the airline sector is relevant from the increasing number of people traveling by air and this has lead to generation of investment opportunities in the aviation sector. Foreign players are now not hesitating from investing in the airline sector of India and other developing nations. Due to Globalization, the demand is present in every part of the world be it in the U.S.A. or South Africa or Indonesia. Also, with the entry of foreign players is leading to tremendous outsourcing which is in a way reducing cost due to effective logistics decisions.
Economical Factors
Transportation Gateways to World trade
The global Airline Industry has developed as such that the infrastructure is facilitating World Trade, the export and import of goods, services and people. The world trade trends and the economic conditions of different nations indeed have an impact on the airline industry, the demand and the outcomes. Amongst the Asian nations, Japan is facing stagnation because of which the foreign investments and the demand for trade in goods and services have fallen. Whereas, in China and South Korea, the import demands from various nations have increased. These economic conditions are affecting the airline industries of these nations.
Price and Availability of Petroleum Products
Rising and the volatile world process of Petroleum Products represent trends that have profound impact on the airline industry and the costs to the service provider. Higher fuel costs affect the demand and the operating costs thus changing the travel pattern. They also affect the infrastructure such as amenities like sky-walks etc. higher petroleum prices stem for a mix of factors which are complex in nature such as supply interruptions, geopolitics, change in usage patterns etc. The effects of high petroleum prices on airlines can be seen clearly in the balance-sheets of airlines such as the Kingfisher which has recorded losses in Quarters I and II along with many other airlines which are unable to recover their rising costs.
Cost and Availability of Skilled Labor
The airline industry demands extreme skilled labor such as the pilots, ground staff and the flight crew. The labor not only has to be skilled and available but has to be efficient because of the heterogeneous nature of the services provided. No airline can recruit a trainee pilot and directly assign him to fly a Boeing-777 or an Airbus-319 airplane carrying around 500 passengers. The labor-force has to be trained and then assigned with tasks to perform after proper evaluation. Airlines have their own subsidiary training centers which concentrate completely on the grooming and training of the labor-force. The selection, recruitment, evaluation and training are costly in nature and thus the company’s costs goes up which get transferred to the customer or the market thus affecting the market and the demand. Also, skilled personnel in aviation occupations (particularly pilots) are being attracted to overseas airlines and airports, creating training demand on top of projected domestic labor requirements.
Also, a matter of concern to the airlines companies is the aging work-force which is low on efficiency and productivity. Accommodating such an aging and un-productive workforce in the organization structure is difficult.
Cost and Availability of Strategic Raw Material
Strategic raw material with respect to the airline industry is steel and cement which are required for the manufacture of airplanes and other infrastructure required. The prices of steel and cement are growing at an alarming rate. Thus, making these materials available is a difficult and an expensive task resulting in the increase in the costs to the service provider.
Mergers and Acquisition
Strategic M & A between airline providers are another boosting factor to the airline industry. The Star Alliance which was founded in 1997 with only 5 Airline Companies now has 21 Airlines Companies. Also, the merger of Air India and Indian Airlines is a good example of a Strategic merger. These mergers make the airline companies stronger and efficient with respect to service providing. A better co-ordination between different airline companies results in a joint effort in tackling supply problems of fuel, aw material, labor etc. The merger of Air India and Indian Airlines was a strategic merger to tackle the competition from the private players in the Indian Aviation sector.
Changing industry structures and market
The global market is highly volatile and undergoes dynamic changes such as in the demand, the supply, investments etc. This dynamic nature of the market affects not one or two service provider but the entire sector. The changing business models effect into a shift of demand which has to be catered to by the entire industry. For example, the low-cost airline business model gave birth to an all-together different class of flier, the best bargain available wherein bookings are made 3 months in advance and that too in auctions etc. This led to a steep increase in demand and the number of travelers almost doubled. The strain was felt by the service provider. The low-cost airline model was not only forcing other airlines to lower their fairs and fight the competition but also cater to the demand. Thus, the volatile nature of the industry does take a toll on the airline service providers.
Competition
Two factors which worry the airline companies are the demand and the competition. With the liberalization of policies, foreign players and private players have entered the market giving a tough time to the Government companies. Also, the foreign and the private players have an edge due to the exposure to a global standard, world class infrastructure and thus provide better services to the passengers in cost-effective manner. Local and Public players have to face the heat and cope up with the competition which result into mergers and acquisition which altogether is a positive for the Airline sector.
Sociological Factors
Population and Urbanization
Demographics are an important factor determining the demand and the key markets for the airline industry. The migration of population from nation to nation either for lifestyle as well as economic reasons has led to the growth of the demand. The population growth leads to increased demand for people movement and for support services such as the hospitality and tourism services. Also, an important feature of the growing population is that the growth is taking place in the urban area and thus further creating demand for movement and air transportation from city to city. For example, the increasing movement of people from major international cities has led to the increase in the number of flights between these key cities, such as Mumbai-London; Mumbai-Paris etc.
Technological Factors
Improving Technology
With Globalization, technology is going through tremendous change with the special emphasis by companies in Research and Development. Every service provider is looking for a cost effective method, world class infrastructure, best of the best service providing to passengers etc. technology is surely another boosting factor the airline industry. Facilities such as E-ticketing, Kiosk Check-in, internet connectivity in-flight etc. are due to the improving the technology. These facilities are resulting into customer-delight.
Other Factors
Apart from the ‘PEST’ Factors affecting the Business Environments of the Airline Industry, there are many more factors which are affecting the demands and determining the market trends for the sector. The following factors are a part of the of the ‘PEST’ factors but they have an all-round impact on the sector thus cannot be allocated under a specific heading.
Following the ‘Other Factors’:
Tourism
Since the last ten years, world tourism has been struggling due to the frequent terrorist attacks and natural calamities happening in key economic destinations. The 9/11 bombing of the twin towers in New York had the most destructive effect to the tourism in the entire of the United States. Tourism in the U.S.A. has not yet recovered. Because of the fall of tourism, the international travelling has reduced thus directly affecting the airline industry. Nations now are concentrating on promoting tourism in order to improve revenues in the related sectors, most important being the airlines sector. ‘Incredible India’ is one such initiative by the Government of India to promote national as well as international tourism.
Safety and Security Concerns
Events such as the 9/11 blasts, blasts at the London Airport, blasts at the Madrid Railway Station and the serial blasts in the Mumbai local trains confirm that transport facilities are being targeted by terrorists. These events have led an increase in the safety and security issues in major cities. These issues are affecting the demand of airlines services for travelling by people.
Environmental Concerns
It is now recognized that the rise in temperature due to climate changes are because of the human activities such as Globalization, agriculture, burning of fossil fuels, deforestation etc. all these activities are to meet the increasing demand of the increasing population. The airline industry needs these activities in order to fulfill the demand of the movement of the population from one place to another. Environmental issues and concerns are obstructing in developing infrastructure such as new airports etc. the airline industry without a proper infrastructure cannot create profits for the players in the market.
Workload
We just mentioned volatile nature of the market and demand and its effect on the industry. This effect is felt in the hanging workload for the employees. In peak season times, the workload is tremendous. Also, the labor-force is not available as required by the industry. Thus, the existing work-force has to bear the brunt of excess workload. Pilots, flight crew getting stressed are a common issue now and the stress is resulting into hazardous effects for the airline companies.
SWOT ANALYSIS
STRENGTHS
Open Economies
The world is getting smaller. Thanks to the opening up of economies like India. The developing nations have a lot of potential with regards to industrial growth. Opening up policies regarding the airline services initiates MNCs to venture into developing markets.
Efficient Marketing
Due to the heavy competition in the sector, airline companies are initiating on dynamic marketing strategies. These strategies are encouraging people to fly who were once scared of flying and also considered it an expensive mode of commuting.
Networking
The Airline Sector on the Global as well as the National level is well-networked and have efficient resources put into the networking infrastructure. Travelling from any destination to another destination is possible with varied options available to the traveler.
WEAKNESSES
Threat of New Entrants
At the first glance, the Airline sector looks very profitable and full of opportunities. No doubt, there are a lot of opportunities but there are many candidates fighting for the opportunities. The competition is so intense that no player can be profitable along with being an effective player in the market. Capital intensive businesses like an Airline Company cannot afford to forego iota’s profits for market share.
Power of Suppliers
The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there is a sort of monopoly of the suppliers which takes a toll on the costs. Also, a stagnant supply poses as a weakness to the increasing demand for airplanes.
Power of Buyers (The service providers)
The bargaining power of buyers in the airline industry is quite low. Obviously, there are high costs involved with switching airplanes, but in order to give the best to the traveler, companies have no option but to buy at a high price.
Availability of Substitutes
Other modes of commuting, may it be people or cargo, are definitely cheaper as compared to air-travel. As a result, the airlines sector often loses market due to these substitute means. Especially, in the freight carriage sector, the business is falling due to increasing prices of airline companies.
Competitive Rivalry
The airline sector is highly competitive. Highly competitive sectors fetch minimum returns. Also, low returns in the airline business in the long run can pose as threat because of the businesses being capital-intensive.
OPPORTUNITIES
Emerging Technologies
The latest technologies and the innovations in the technologies are improving service delivery internal as well as external, minimizing costs, enabling mobile computing for booking, check-ins etc. and enabling businesses for capitalization of economies of scale and scope offered by government wide approaches.
Government Initiatives
Businesses can be able to capitalize on resources constraints and achieve resource cost efficiencies. Improvement of Inter-Government Partnership and Delegating of work-load is possible.
Resourcing and Investments
Outsourcing and investments help the businesses to further support the departmental objectives thus resulting in the achievement of the company’s goal. Other advantages are knowledge sharing / continuous learning, increased career bridging opportunities, ability to identify and justify resource requirements, ability to balance workloads, improved management of the costs etc.
THREATS
Poaching
The labor-force management is very costly with respect to the airlines sector. Also, due to the liberalization of policies, foreign and private players often poach work-force of competitors which leads to talent-drain and thus losses.
Inefficient Planning
Inefficient planning results into in-effective decisions which result into difficult situations. Also, planning in the airline sector is also tough wherein one has to consider every other element of service delivery and cost management.
Government Interference
Extensive Government Interference can affect the accountability of the organization wherein the Government influences decision making and also planning. One incident can be recalled of the Government Interference during the Privatization of the Airline sector.
THE PRODUCT MIX
Product is the core thing which every enterprise tries to deliver. Product is of course, the service that companies have to offer to the customer. Getting the product right is the single most important activity of marketing. If the product isn't what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to buy it. The airline product is quite a complex one since it comprises of a service of incorporating the temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty free spirit to encourage booking. The product here refers to Airline service offering. Although service products are essentially intangible, there are certain pyhsical characteristics which consumer assess in their evaluation of product choice.
Attractiveness of the offering in terms of pyhsical features such as consumers have high expectation, the food & drinks offered , entertainment.Facilities available, associated level of services such as, quality of seats & interior decoration.
The airline product includes of two types of services:
1. On the ground services,
2. In-flight services.
The on-the-ground services include a convenient airport with car parking facilities, duty free' ¬shopping quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport, etc.
The service provided inside is intangible and is highly variable. The airhostesses are trained to provide polite, warm and courteous service. The courteous service that the representatives at the baggage counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of the airlines also need to be efficient and polite.
Differentiating the Product
It is important to recognize that what the consumers are demanding are not products, or features of products but the benefits they offer. Producing added benefits thus helps the marketer to distinguish one product from another. Good design or style of service can form the basis of differentiation. This enables the company to create a personality for its service. The design and decor of the aircraft provides opportunities to personalize their product as well as periodically to update them when differentiation under IATA regulations was virtually excluded, nonetheless, certain airlines were able to develop distinct personalities. Eagle Airlines created an entirely new market between New York and Bermuda, for e.g. by developing an image of a friendly airline distinctive from other airline serving the route. A similar style was evident in Richard Branson's Virgin Airways.
CORE PRODUCT AND SUPPLEMENTARY SERVICES
Many services products consist of a bundle that includes a variety of service elements and even some physical goods. It is important to distinguish between the core product that the customer buys and the supplementary services that accompany that product.
THE FLOWER OF SERVICE
Core product surrounded by clusters of supplementary services.
The core service of an airline is the service of transport. The supplementary services are classified into eight clusters & each one is analyzed with respect to the airline industry:
* Facilitating elements
* Enhancing elements
Information
This aspect of supplementary service is common for every person that needs information about the organization. In case of airline industry, up to date information regarding flight schedules, ticket fares, information about promotion schemes etc must be available to customers.
Customers can avail of this information literally at their fingertips today with every airline starting its own website which gives complete details to the customer & also entertains queries.
It also includes providing information to employees regarding new policies affecting the airline & equipping them with enough information, which the customers might demand. Extensive training is provided to in-flight attendants regarding handling customer queries, knowledge about the airplane itself, knowledge about cuisine etc.
Consultation
This aspect of supplementary services can be customized according to the needs of the customer. It is more in the case of people processing and high personnel-contact services.
Airlines are moving more actively into the role of consultant today. They are doing away with the travel agents & designing & selling packaged tours to consumers directly. In this aspect they often act as consultants to the customer, by giving him advice & suggestions regarding the type of plan he can choose, the benefits he will get the mode of travel he should choose etc.
Another aspect to consultation at airlines is when the customer approaches the airline regarding traveling to particular destination, the airline gives him a variety of choices of routes that he can take.
In some cases airline may also design special menus & benefits in consultation with its frequent fliers by keeping in constant touch with them & asking them for suggestion as to what they want in their airline which will make their experience more comfortable.
Order taking
The order taking procedure is essentially the booking procedure of the airlines. The important aspect to be noted here is that the procedure is smooth, easily understood & fast. Reservation of airline tickets is now easy and reliable since it is fully computerized. There are 24 hours reservations. Passengers can specify their seat preferences at the time of reservation.
Most airlines use the telephone, fax, and email methods of booking. The emphasis here is on fast booking & at the same time getting the required information form the customer. This is done by establishing a standard reservation procedure & format thus reducing the risk of inconsistent service delivery. The online booking system also facilitates better order taking & processing.
The scheduling aspect assumes importance as reservations on the wrong flight to the wrong place are likely to be unpopular.
Hospitality & Caretaking
With the increased competition today in the airline industry & the increasing similarity of services offered by each airline, hospitality has emerged as a key-differentiating factor between one airline & the other.
The hospitality aspect of an airline is tested right form the time of the reservation (courtesy of the booking official) to the airline’s desk at the airport to the actual in-flight travel (the attitude of the flight attendants) to the post flight help extended.
Safekeeping
In airlines the safekeeping issue is that of safeguarding the customer’s baggage.
Baggage allowances are offered about 30 kgs of check-in baggage is allowed. Passengers carrying international tickets are given further allowance of around an added 30 kgs Priority baggage delivery is offered to members. The customers entrust his baggage to the airline & it is the airline’s responsibility to keep it in a proper condition.
Children and infants usually travel along with their parents and guardian. In case of unaccompanied minors, customer service staff renders all assistance like checking in and escorting up to the aircraft and handing over to the senior-most cabin attendant on board the flight. He is looked after on board the flight right up to the point flight reaches the destination and he is received by his guardian.
Exceptions
Special requests – airline very often receive special requests form customers with regards to meal preferences, special amenities for elderly people or children., medical needs etc. these needs have to considered & acceded to wherever possible.
Handling of customer suggestions / complaints – every airline today has a customer service centre which entertains customer suggestions & complaints. On the flight, customers are often asked for their opinion regarding service equality. Many corporate frequent travelers are consulted when the airline decides to make any new change.
Billing & payment
The billing procedure in airlines is simple. The options available to the customer are plenty including credit card & travelers cheque. Airlines use the open account system with their corporate clients. Frequent fliers are also given special payment privileges.
LEVELS OF PRODUCT
FOUR PRODUCT LEVELS
The Core Service
The core service of the airlines industry is to transport goods and services to various destinations. As the needs of the people increased the entire system became more organized and formal. After this stage come the various supplementary services.
The Supplementary Services
The airline industry has many players they had a brand name like ‘Air India’,’ Jet Airways’,’ British Airways’. All of them had some common services to offer like connecting flights, through check-in, tele-check in, food on board, and complementary gifts etc.
Different classes like economy class, business class were introduced. Air concessions are given to school students, old people etc. Singapore airlines were the first to introduce small 8”television screen for every passenger. The freebies are actually win-win deals between airlines and other services.
Sahara, for example, offers its passengers a ‘business-plan’ on two-way economy class ticket, which includes a night’s stay with breakfast, STD facility for 3 minutes and boardroom facility at the Park Hotel, New Delhi. To Delhi based fliers to Mumbai, it offers a night’s stay with breakfast, airport transfers and VIP amenities at The Orchid, Mumbai. For business class, the plan includes a stay at The Leela, with buffet breakfast and late checkout.
All these added service helps the customer to decide upon which airlines he wants to travel. As competition increased and the customers wanted more the next phase evolved and that is the augmented service.
The Augmented Service
This phase is where the customer’s expectations are met; the service providers kept working on new methods to meet the ever-changing customers’ demands. The players introduced online booking, which was very convenient for the service users.
British Airways business class has showers; it’s more spacious and comfortable. Sahara airlines offer its passengers six different types of cuisine like vegetarian, fat free, diabetic etc. They also have auction going on board. Virgin airlines have gambling on board, they also have body massage to offer to their passengers. Air Emirates has something called cab service, they have customized pick up and drop cab service.
This phase is the most crucial one; with increased competition service will become the final differentiation.
Future Service
As mentioned above the customer needs keep changing, the future is unknown. The customers may be looking in for more frequent inexpensive air travel, something like air taxis, super sonic speed. This decreases the time thus reducing the cost.
The diagrammatical representation of the core and supplementary services in the airline industry is shown below:
BRAND POSITIONING
Brand positioning is all about identifying the optimal location in our customers’ minds for our Brand and our competitors. Proper positioning makes it easier to facilitate understanding of the Brand. Proper positioning clarifies what the Brand is all about, how it is both unique and similar to competitive brands, why customers should purchase and use the Brand.
Creating brand awareness is one of the most important aspects for any product or service. Due to the intense competition in the market every airline has to position them in the market. It is only if they position themselves well can they create a Brand image, brand relationship as well as brand responses.
Each and every airline would want to have a market for them as well as have a good name in the minds of the customers.
Airlines use unique attributes to position their brands in the minds of the potential customers. Thus consumers strongly associate those attributes with that particular brand, positively evaluate it and believe that they can not find those attributes to the same extent with a competitive brand.
Re- branding has also become an important concept. It is evident that the mergers and acquisitions have become an important part of the airline industry. Thus they need to re-brand themselves under one common name.
Examples of Re- Branding:
KINGFISHER AND AIR DECCAN
Kingfisher’s acquisition of Air Deccan would lead to the latter being re-branded under a new name. The new brand positioning will be a shift from being a low-cost airline to a value-based airline. It will re-emerge with a new revamped stylish look. The emphasis will be on creating a stylish airline keeping with the UB Group’s brand image.
The branding exercise will encompass areas such as changing the look and feel of the aircraft, including interiors, ticketing and check-in counters and staff uniforms. The colors red and white will dominate the changes, with the aircraft, leather seats, carpet, boarding passes and airport counters painted red.
INDIAN AIRLINES AND AIR INDIA
When Indian Airlines and Air India merged, they retained the brand name of the latter due to its better brand positioning. The logo was evolved out of a combination of the two airlines. The red colored flying swan with the Konarak Chakra in orange became the new brand logo.
SAHARA AND JET AIRWAYS
However, in case of Sahara airlines being branded Jet Lite by Jet Airways, there could well are a dichotomy in the consumer’s mind of the new brand’s positioning. Jet has a premium connotation while Sahara was a low-priced air carrier. The Jet Lite brand might end up confusing its customers.
Thus it can be said that if the transition is smooth and the integrity of core values retained, then any re-branding exercise can be successful. The new brand has to be updated and not outdated.”
The Integrated GAPs Model of Service Quality
The Gaps Model positions the key service concepts, strategies and decisions in service marketing in a manner that begins with the customer and builds the organization’s tasks around what is needed to close the gap between the customer expectations perceptions. The airline provider needs to study the Gaps model to maintain a service quality which delights the customer. The main concentration has to be on the customer gap, the difference between customer expectations and perception. Every Airline Company has the task of closing every gap through its effective application of marketing mix strategies.
Customer Perceptions are subjective assessments of actual service experiences; customer expectations are the standards of, or reference points for, performance against which services are compared. The factors determining customer expectations are personal needs, word of mouth communication, advertisements and past experiences of the service.
Gap 1: Expected Service and Management Perceptions of consumer Expectations – Not Knowing What Customers Expect.
Gap 1 is the difference between customer expectations of the service and the company understanding of those expectations. For example, a customer expects adequate information to be provided to him about his baggage and limitations of the weight to be carried. If an airline provider fails to effectively inform the flier, then the gap gets formed where the customer’s basic expectations are not met by the company management itself.
Key Factors leading to Gap 1 are:
• Inadequate Marketing Research orientation.
Insufficient Market Research
Research not focused on Service Quality
Inadequate use of Marketing Research tools
• Lack of Upward Communication.
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
• Insufficient Relationship Focus.
Lack of market segmentation
Focus on transactions rather than customer relations
Focus on new customers rather than relationship customers
• Inadequate Service Recovery.
The above factors need to be addressed properly to close Gap 1. Strategies fore closing Gap 1 include Market Research; Promotion Mix Strategies; Communication Mix Strategies; People Mix Strategies.
Gap 2: Management Perception of Consumer Expectations and Service Standards – Not having the right Service Quality Designs and Standards
Gap 2 reflects the difference between companies understanding of customer expectations and development of customer-driven service designs and standards. For example, during long distance flights, a flier expects stabilizer drinks to maintain his body pressure and avoid restlessness but if the service provider fails to keep this in mind while processing the service, then a gap is created.
Factors leading to Gap 2 are:
• Poor Service design.
Unsystematic new Service Development Process
Vague, undefined Service Designs
Failure to connect Service Design to Service positioning
• Absence of Customer defined Standards.
Lack of customer-defined service standards
Absence of process management to focus on customer requirements
Absence of formal process of setting service quality goals
• Inappropriate physical evidence and servicescape.
Gap 2 can be closed by implementing strategies such as Process Mix strategies; Market Research; Physical evidence Mix Strategies; Productivity and Quality Strategies.
Gap 3: Service Standards and Service Delivery – Not Delivering to Service Standards
Gap 3 is the discrepancy between development of customer-driven service standards and actual service performance by company employees. Service Standards must be backed by appropriate resources and also need to be enforced to be effective in service delivery. For example, fliers when pay a relatively high price, expect a better service quality which is perceived to be a standard for the price paid. But, if the airline company fails to deliver a service which is up to the mark and does not satisfy the customer and not deliver the value worth the price charged, then Gap 3 is created.
Factors Leading to Gap 3:
• Deficiencies in Human Resource Policies.
Ineffective Recruitment
Role of ambiguity and role conflict
Poor employee – technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control, and team work
• Failure to match supply and demand.
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Over reliance on price to smooth demand
• Customers not fulfilling roles.
Customer ignorance of roles and responsibilities
Customers negatively affecting each other
• Problems with service intermediaries.
Channel conflict over objectives and performance
Channel conflict over costs and rewards
Difficulty controlling quality and consistency
Tension between empowerment and control
Gap 3 can be closed by implementing effective selection and recruitment strategies; effective outbound communication with customers; effective market research; effective distribution strategies.
Gap 4: Service Delivery and External Communication to Customers – When promises do not match Performance
Gap 4 illustrates the difference between the service delivery and the service provider’s external communication. Promises made by airline companies through advertisements, sales promotion and other communication tools raise the flier’s expectations from the airline company. These expectations form as a service standard for the flier which is then assessed and determines the customer’s satisfaction level. The discrepancy between the actual and the promised service therefore has an adverse effect on the customer gap.
Factors resulting into the Gap 4 are:
• Lack of Integrated Services Marketing Communications.
Tendency to view each external communication as independent
Not including interactive marketing in communication plan
Absence of strong internal marketing program
• Ineffective management of customer expectations.
Not managing customer expectations through all forma of communication
Not adequately educating customers.
• Over promising.
Over promising in advertising
Over promising in personal selling
Over promising through physical evidence cues
• Inadequate horizontal communication.
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches units
Gap 4 is all about the communication to the customer about the service. No airline company can afford to over promise and then not meet with the expected standard of the customer. In order to close the Gap 4, strategies need to be implemented in effective communication and informing the customers.
Gap 5: Perceived Service and Expected Service – The Final Gap
Gap 5 is about the difference in the perception of the customer/flier about the service and the expected service. Gap 5 is a result of the above mentioned four gaps. If the Gaps 1 to 4 are closed effectively and strategically, then the Gap 5 automatically is closed and the perceived service becomes the expected service and results into customer delight and retention.
PRICING MIX
Pricing decisions play a crucial role in managing the business of air transportation. The increasing operational costs, the rising competition, the falling occupancy ratio, the imbalances in demand and supply, the increasing pressure of inflation are some of the important factors influencing the decisions for setting fare and freight rates in the air transport business. The Ministry of Tourism and Civil Aviation, the Indian Airlines Corporation, the National Airports Authority, the International Airports Authority of India, the Air India Corporation are the bodies directly or indirectly influencing the process of making the pricing decisions. The main problem is to make the pricing decisions competitive because it is found that even the private air transport organizations are involved in the process too. It is seen that the following are the features in price i.e.: 1.Flexibility; 2. Price Level; 3. Differentiation; 4. Discounts and Allowances.
While price is tactical, it has localized implementation, it is temporary in nature and therefore price is flexible.
Pricing plays a vital role in the marketing mix of any airline. The ‘fair price’ concept is supreme, mainly because more than anything else most potential customers will base their purchase decisions on the basis of price of the ticket. Passengers tend to seek value for the money they are spending.
For example, below is the table showing price of tickets for Indian, Jet airways and Rajdhani express.
Sector
Indian Jet AC–I* AC-II *
Delhi-Mumbai 3,400 3,620 4,180 2,404
Delhi-Bangalore 4,500 5,053 6,385 3,470
Mumbai –Bangalore 2,700 2,839 2,943 1,954
*Rajdhani fares
All figure in Rs
As seen in the table, in every route whether it is Mumbai to Bangalore, Delhi to Mumbai the rates of 1tire A.C. is more than Air fare of Indian and Jet Airways. Travelers will most definitely choose to travel by airways as it is cheaper compared to railways plus it gives the added advantage of reaching the desired destination much sooner. Here, by offering a lower price, the respected airline is trying to snatch the customers who would otherwise be traveling by 2nd tier A.C.
The final price that the passengers pay is made up of various components. The air fare charged by private scheduled domestic airlines comprises of basic fare, fuel surcharge, congestion surcharge, passenger service fee and transaction fee (if the ticket is booked other than the Website). Out of these, only passenger service fee is the component collected by the airlines on behalf of the airport operators.
Pricing Strategies
1. Demand-based pricing: The pricing of air fares under this strategy is simple. It is based on the demand from the customers’. It involves setting prices consistent with customer perceptions of value, i.e., prices are what customers will pay for the services provided.
For example: The person sitting next to u might not have paid the same price for the ticket. If a person wanting to travel in Business class does not get the ticket for the same when tried to book at the last minute, will travel in Economy class paying more than what the other travelers must’ve paid. The pricing in airline industry is never fixed or same. It’s fluctuating in nature depending upon time, demand and other such attributes. So when, the demand exceeds supply for the seats in an airplane, the price charged on the ticket is much higher than other passengers.
2. Season-based pricing:
The pricing of airline industry largely depends on seasons. For example, if a person is travelling by Indigo from Mumbai to Bangalore, the pricing will be different for different time periods. It will be cheaper in monsoon while comparatively expensive in winter. Also, it depends when the person is booking the ticket.
If he books the ticket 3months before the date he’ll travel he might avail the ticket at a cost that is 30-40% less than what the person may be charged if he books the ticket 20days before.
For example: if a traveler books a ticket during normal weekdays the prices would not be too high. Whereas, if the same traveler books the tickets during Diwali or Christmas, he will be charged more than what he was charged earlier for the same destination. And this strategy remains the same for all kinds of airlines. The prices may not be exactly same but it’ll be quite similar.
Also, Jet airways provide tickets at a comparatively lower rate during the vacations for student-passengers. This helps them tap the population travelling abroad for education purposes as well as increase occupancy ratio.
3. Competition-based pricing:
This strategy focuses on the prices charged by other airlines. Competition-based pricing does not always imply having the same price strategy as the competitors. It means keeping one’s pricing strategy such that it is cheaper in cost or it offers the same price as competitors with better and/or more facilities. Thus its basic purpose is to have a competitive edge over the rival airlines.
For example, Indian airline industry is filled with low-cost airlines. So Air Deccan before getting acquired by Kingfisher had many competitors like Indian airlines, Air India (before merger), Indigo airlines and Go air. And now Spicejet had entered the already filled jammed low-cost airline bandwagon. This brings about a competition in the pricing of the tickets. Spice jet on completion of three years on May 23rd 2008 offered 3 lakh tickets just for Rs. 3 starting from July 1st to 21st September 2008 across its 18 destinations in India. This was a very smart move to attract passengers especially those travelling by Economy class who are very cost conscious.
4. Pricing strategies when customer means “Value is Low price”:
This strategy can be applied when the most important determinant of value to a customer is money. But this does not imply that the level and standard of service, facilities and other attributes should be looked upon. It just means that pricing takes a forward stand as compared to the other attributes. To establish a price for this strategy, the marketer should understand and know the objective of charging low prices, how the customers’ interpret prices and how they value their travelling experience on the basis of prices.
There are various methods of applying this strategy:
i. Discounting: The service provider or marketer may offer discounts or price cuts to communicate to the price-sensitive buyers/ customers’ that they are receiving value for which their money is spent. For example: Spice jet has a special group discounting scheme wherein groups of over 15 guests may be provided with consideration for special fares.
Another example would be that of Indian, that offers discounts to passengers on site collaborated with India times by offering a bid for international destinations at low fares.
ii. Odd pricing: This is another strategy wherein the service providers offer prices at an amount which seems comparatively lower than the normal rates. It is based on U.S. dollar price-strategy wherein instead of charging $500 they will charge $489 or so. So in case on Spicejet. Instead of offering a ticket from Mumbai to Goa at Rs. 2400 they would offer at Rs. 2299. So, on looking at the figure the price difference seems to be more which in fact is just hundred and eleven rupees.
iii. Penetration pricing: This is a strategy in which new services are introduced at low prices to stimulate trial and widespread use. This strategy is appropriate when the sale of tickets is price-sensitive.
In order to make, travel by air more affordable to the common man, a couple of years ago Jet Airways announced a new offer `Everyone can fly' which offered a major reduction in economy class air fares on certain selected routes across the country. In most of the airlines, the reduction enables economy class air fares being competitive to rail fares being charged for the same journey.
5. Pricing Strategies when the customer means “ Value is everything I want in a service”:
When the customer is concerned more in the ‘get’ component of the service, monetary price is not of primary concern. The more desirable attributes that an airline provides, the more highly valued that service is likely to be and higher the price that the marketer can set.
Skimming strategy: This is a strategy in which new services are introduced at high prices with large promotional expenditures. It is an effective approach when services have undergone major improvement over past services. In this situation the customer is more concerned about obtaining the service than the cost of the service, thus allowing the service providers to skim the customers most willing to pay the highest prices.
An example of this would be that of Virgin Atlantic airlines that has gambling on board. They also provide in-flight body massage to their passengers. There is a bar in the air craft. Also, they provide lounge facility at the airport to the frequent flyers.
Also, when Kingfisher had newly started first class with Kingfisher first, the rates of the tickets were very high compared to other airlines’ tickets. But travelers still opted for it as they wanted to have the new flying experience with Kingfisher.
THE PLACE MIX
In Airlines, they utilise more than one method of distribution.for e.g they sell tickets through travel agents & sell seats on flights to tour operators , whilst also operating direct marketing. Whichever distribution strategy is selected, channel management plays a key role. For channels to be effective they need realiable updated information. For these reason, I.T has been widely adopted such as on-line booking system.
This dimension of marketing mix focuses on processing of services and selecting the location points for airways and airlines offices keeping in view the comforts and conveniences of the end users. By the processing of services, our emphasis is on the involvement of channels, front-line-staff, travel agency offices; offices of the tour operators or so from where service flow and reach the ultimate users.
1. The air transport needs to make sure that the prospects don’t face any difficulty in buying the tickets and make necessary arrangements for the confirmation of booking.
2. It is also to be confirmed that the users booking their luggage are not to face inconvenience.
3. The behavioral profile of the personnel working in offices of travel agents and in the offices of the airways and airlines require due attention. It is almost clear that airhostess looking attractive, smart, well dressed are at your disposal to make available to you the defined services.
4. It is also to be sure that the information network of the offices of the travel agents is technology-driven and user-friendly.
5. The security checking, custom checking of passport, visa, income tax clearance or so. It is essential that all the windows or the counters offer the services as per the provision and promises.
6. Keeping in view the duration and nature of flights, the users are made available lunch/ dinner, breakfast and drinks inside the aircrafts.
7. If in course of the journey, you are supposed to change the aircrafts and the duration of stay is long, it is the responsibility of the airport authorities and concerned airway and airlines to make available the accommodation facilities.
Another dimension of place mix is related to location and management of the offices of the airways, travel agents, tour operates, transport operators or so.
1. The main thing in the selection of a place is easy accessibility. The prospect customer should get an easy access to the office and ticket counters. The place is required to be safe, well connected with all-weather proof roads where all the required infrastructural facilities are to be available.
2. The technology-driven booking system is to be ensured. The online booking facility should be user friendly and all the information regarding the company should be available on the company site so that customer can get all the information at it ease.
3. The water and sanitation facilities for the users and comfortable seating arrangements need due care of the travel agents or airways offices. The lighting, ventilation facilities need to be made available.
4. The interior decoration, furnishing, plantation need aesthetic sense so that the users from a positive opinion regarding the airways services. The interiors should be creative so that people can enjoy their ride and make their trip a memorable one.
5. The positioning of posters of airways and airlines which look attractive and draw the attention of the users attending the offices for chartered flights, packaged tour need due care.
6. It is in this context that they find management of place an important component of the marketing mix.
In view of the above, it is right to mention that air transportation business is linked with a number of allied services offered by a number of agencies and organizations. If they don’t find cohesion and coordination the promised services would hardly reach to the end users.
Indian Airline Network
Jet Airways Network
THE SERVICE MARKETING TRIANGLE
ENABLING PROMISES MAKING PROMISES
KEEPING
One can better understand the working of airlines by looking at its marketing triangle. There are three entities in the entire transaction:
1. Customer: He is the person who wishes to satisfy his needs i.e, transportation from one destination to another. Here, the customer is a passenger or a potential passenger.
2. Company: This is both the dreamer and the offerer. It here refers to the various airlines which offer its aviation services to the customers to satisfy their demand for transportation from one destination to another, for example: The Indian Airlines. Here, the company makes a promise to its customers to deliver the right quality service.
3. Provider: The service providers are finally the people who interact with customers. They keep the promise that the airline operator has made to its customers by delivering the finest services. They are the ones who carry out final transactions. The customer actually comes in contact with the service provider and not the company. For example: the air-hostess and the crew.
The interaction between these three parties while providing the service takes place in the following manner:
The company is established with the basic objective of providing the specific transport service. Thus the airline industry with players like Indian airlines, Jet airways, Sahara airways etc came into being.
The air service provider that is the company communicates with the customer and makes him aware of the services. It makes promises to the customer by advertising through various media’s. For e.g.: the TV ad of Indian airlines advertising its new sleep-in seats.
The customer who gathers knowledge about the service approaches the company for availing his service in order to satisfy his need. This interface of the customer with the company is through the customer’s interaction with the providers of the company. The company enables its promises to the customers through setting up facilities to deliver the promises by setting up ticket and enquiry counters. The outcome of the “to be transaction” is determined by the interaction between the provider and the customer. Hence the company aims at offering its providers with the required infrastructure and training to optimize the quality of the transaction. For e.g.: Yearly employee training programs and performance appraisals are done by Sahara airlines.
The three strategic points where the provider and the customer interact are:
Ticket purchase at the airline counter or the ticket agency.
Checking in
While boarding
During disembarkation
All three sides are essential to complete the triangle. All three marketing activities represented by the sides of the triangle are critical to efficient delivery of the service, even if one of the sides is out of place, the triangle will be distorted; in other words the total marketing effort cannot be optimally supported.
THE PROMOTION MIX
The formulation of an ideal promotion mix is essential to inform sense and persuade the users. The business magnets, business executives, politicians, cine artists, high spending tourists, business houses using expensive inputs and trading the same, the Department of Posts, domestic and international tourists are some of the users of the air services. The users appear to be more conscious, aware of their rights and in a majority of the cases are found sophisticated.
However, majority of the users are sophisticated and therefore the promotional efforts are required to be more creative. The professionals engaged in the air services bear the responsibility of blending the different components of promotion in such a way that the task of increasing the business is simplified. Since a number of airways and airlines have been facing problem of financial crunch, it is pertinent that they make possible an optimal use of the different components of promotion.
PROMOTION MIX VARIABLES
Since domestic deregulation occurred in 1978, competition in the airline industry has intensified and become more concentrated. The respective airline needs to provide certain benefits that the other airlines do not. Promotion has become a big aspect since the arrival of numerous private airlines. The way this industry has attracted people to them has changed. Airline companies have struggled with making new ways to market their products. Today airline advertising focuses on price, rather than the pleasure of the flying experience. Companies use the radio, newspapers, and billboards in big cities, tops of taxicabs and sides of buses to put their ads on. Even coffee cups in restaurants are starting to be used for advertisement.
Promotion should be done keeping in mind the competitor’s product. This helps in promoting own product/service with a message that has an edge over the others. Kingfisher understands its competitors well and promotes their service accordingly.
Vijay Mallya's Kingfisher Airlines adopts an innovative marketing strategy to snatch attention from Jet Airways' advertisement.
In the ad displayed on the hoarding above, Jet Airways say, "We've changed." Kingfisher Airlines comes up with a cheeky billboard above Jet's hoarding that says, "We made them change!” This was a very innovative and smart move on kingfisher’s part to promote their service thereby denoting that their own service is so much better that Jet Airways had to change and improvise them to reach their standards. This needs presence of mind on part of marketing and promotion heads.
Spice Jet, India’s most preferred low – frills airline, has announced a unique offer of 3,00,000 tickets at a special price of Rs 3/- per ticket. This special offer flags off the third anniversary celebration of the airline. Booking for this special promotion, was opened on May 9, 2008 and will continue till the tickets are sold out.
Tickets bought will be valid for travel from July 1 to September 21, 2008 on all flights covering its 18 destinations. This offer is available only on SpiceJet - Low Cost Indian Airlines, Book Indian Flight Tickets Online, Cheap Fares Air Travel in India - SpiceJet offers Discount Airline Ticket Fares Online. In the last three years Spice jet has flown over8.1 million people across all their destinations. They have helped Spice jet gets over 10.3% market share. This special promotion is Spice jet’s way of thanking them for their support.
PROMOTIONAL MIX AND ADVERTISING
Advertising
As any other service, the air transportation service needs creative advertisements to promote their business. This is the first component of the promotion mix, which is based on professional excellence of the advertising agencies. In view of the rising cost of inputs and increasing the impact of worldwide economic depression on the air transportation, there is a need to make the advertisement budget optimistic Vis-a- Vis optimal.
This is essential to regulate the multi-dimensional expenses found of unproductive nature and instrumental in making the service expensive. The telecast media and the print media are found important while promoting the air business.
While advertising through the telecast media, budgetary constraints and budgetary provisions should be considered. Also the quality and nature of target market and level of expectations should be kept in mind. The advertising professionals need to make the advertisement slogans campaigns and messages proactive to the generation of business. Kingfisher is a good example for advertising its services. They advertised kingfisher not merely into the business of transporting people from point A to point B. They have created a new category of Aviation Hospitality Space thus making service and hospitality their main focus. Their slogan is kingfisher airlines- “Fly the good times.” This is how they are differentiating their product from other airlines. The airlines also have to make sure that whatever the strategic decisions they make to promote the business are in a position to establish an edge over the promotional measures of the competitors. They are also required to assign due weightage to the efforts made for the projection of a positive image. The Indian Airlines as well as Air India have been facing the image problem but the advertisement may be efficacious in transmitting the facts and removing the image problem.
As mentioned earlier, Indian airlines started promoting its first class fully reclining seats to as a tool to improve the image problem and attract more passengers in its first class. It is essential that while advertising one has to keep in mind the image of the country, the natural scenes, the tourist attractions, rich cultural heritage or so which would energize the process of motivating the tourists. For example: Thai Airways have air-hostess wearing colorful long and flowery dresses and greet by joining hands and bowing to their passengers as a part of their culture. While advertising, it is impact generating that we select an opportune moment of flight, an attractive scene of take-off, high attractiveness of personnel in general and the air hostess in particular, the landscape of an attractive tourist center, wild life sanctuaries, lake, park and so on. The air transportation services can also use the broadcast media.
For example: In times of rising fuel prices and lower occupancy rates Jet Airways has come out with a lavish ad featuring the most expensive brand ambassador of time Shahrukh Khan. The Shahrukh Khan TVC, which broke on September 1, 2008 is the first of three campaigns Jet has planned (the ones on economy and premier class will follow), and is running across most news channels and some specialized travel channels. The ad marks the television debut of Jet Airways which had previously relied heavily on the print medium. While competitor Kingfisher relies on showcasing complete range of Consumer experience Jet is trying to highlight its product superiority. Jet had come out with Boeing 777 last year, which has some superior features and this ad is merely an aim to highlight those features besides trying to latch on to the celebrity appeal of Shahrukh Khan.
Another example would be that of Indigo airlines that uses Internet and print media as a visual medium to advertise itself. What is interesting is the fact that the ad is not flashy and it just conveys simple facts.
An important source of visibility for Indigo is the internet where e-ticketing give it a chance to come up with its offers.
The launch and subsequent editorial patronage and newspaper support that Indigo carved out for itself helped it set itself up as a brand.
Online reviews on MOVIE Review, HOTEL Review, MOBILE PHONE Review, BOOK Review, CAR Review, CAMERA Review - MouthShut.com and other blog sites are all directed toward creating a brand reckoning for Indigo Airlines.
Evenly spaced out PR activities help Indigo to be on top of the minds of the people and gives it instant brand recall value.
Indigo goes for extensive print coverage every month or so.
Publicity
Publicity is a process of persuasive communication for which no payment is made. Strengthening public relations activities if found essential to promote the business airlines or airways. The Public Relations Officer, Receptionists, Travel Agents, Travel Guides, Media people are some of the sensitive points of publicizing the business. The most important point in this is the co-operation of media. The marketing professionals should have an idea of magazines, newspapers preferred by the prospects or users and they develop rapport with the correspondents concerned. The Airlines need to recruit efficient personnel for that very purpose that should have professional excellence no doubt but in addition they are also required to have the potentials of attracting the users, prospects.
For e.g.: Indian Airlines helped the cancer patients and took them for a small outing as part of their public relation campaign. Similarly, Sahara linked up with Close- up by taking Hrithik Roshan. Here for Close-up it is a promotional strategy while for Sahara a publicity that an airline is linking up with FMCG by using an entity.
Kingfisher is right now running a print campaign in major business publications. The new series of campaigns are focused on the functional attributes of the airlines.
Deviating from the usual flashy ads, Kingfisher is now appealing to the Left- brain of the consumers. The ads are targeting the three segments of user’s i.e Children, Ladies and Males but the ads are talking to Men who are the key decision makers.
The ad for the young travelers talks about special kids’ meal, wide seats and games. The ad ends with an appeal to the father that “Your little prince deserves to feel like a King ". The ad for the lady travelers talks about the seats that bend all the way back, the footrest that will pop up, life valets when your lady lands at the airport at midnight and helping hands that lift her bag. The ad ends with the message “Queen of your heart deserves to fly like one ". The third in the series aims at the decision maker himself. The ad aimed at male traveler as usual talks about the 'flying models ", the smile that tastes better than the ice-cream, spectacle cleaner and the air-boutique. The ad ends with the message ' Every man's seat feels like his throne'.
With regard to the quality of campaign, it may miss some eyeballs because of not being an eye catchy ad. But the message surely is smart. The basic premise in this ad campaign is that Men are the decision makers with regard to this service. May be a campaign aimed at lady executives may also come in the future.
On the promotional front, Kingfisher has signed up the latest diva of Bollywood, Ms Deepika Padukone as the brand ambassador.
Sales Promotion
A component of promotion adopted for a particular period to touch the target and withdraw the measures when the time is over is known as sales promotion. The tool based on incentives is found instrumental in sensitizing the users. The travel agents contribute a lot to the promotion of air transport business and therefore we need to think in their favor on a priority basis. The tour operators also contribute to the process and therefore need to think in their favor. The front- line-staff in the offices of the airways and the receptionists working there also play the same role. This makes it significant that they are given some incentives which are in the form of a holiday trip to a particular place, concessional services to their children or spouse or so. Also offering them with innovative gifts, which have not been offered by their competitors, can be given. The nature and type of incentives would depend on the contributions of providers. If they make immense contributions, the incentives would be in good quality and volume. There are incentives given called the promotional incentives on the basis of the frequency of using the services.
For e.g: Through Jet Airways, return ticket passengers on metro flights (both economy and business) can avail a discount at all Taj and ITC hotels in South India. Also Sahara has a fanatical assortment of gifts being handed out (its’ Take Offer). Braun Mixer grinders, CTVs, cameras, handy cams, mobile phones and even free holiday packages are up for grabs as a part of their sales promotion campaign.
Also, there’s something called marketing bonanzas. Some airlines give free tickets to customer so as to make them aware of their services. These tickets or any other gift voucher are given so as to attract a lot of people. This is a very interesting way of catching the headlines of customers. Example Go Air was sending SMSs to any number that they have won a free ticket from Mumbai to Goa or Delhi. Kingfisher has also sent messages to people for free ticket.
Jet lite announced its ‘Summer Special Bonanza’ promotion for online bookings through its website. Even Air Deccan used this approach of giving gift voucher worth Rs.250 and a saving of Rs.99 per ticket if booked thorugh Air Deccan’s site. The offer was valid for bookings made between 22-May-08 and 10-Jun-08 and for travel in the same period. There was also a 2 nights, 3 day holiday package to be won in the offer period.
Jet Airways, India's premier international airline, has announced a special promotional package for students flying to its destinations in the United States, Canada, United Kingdom, Europe or Asia. Jet Airways' special promotional package is valid for outbound travel on or before October 31, 2008. Existing, as well as new, students will receive a whole host of benefits including excess baggage allowance and special fares. Students availing of this offer will be allowed to carry an extra piece of baggage, with each piece not exceeding 23 kilos, on flights to the US, Canada, UK & Europe; and an additional 10 kilos on flights to Asia (Shanghai, Hong Kong, Singapore, Kuala Lumpur and Bangkok), on Jet Airways' online destinations.
With Jet Airways special promotional package, students will also receive exclusively designed Student Kits', in association with its partners. These may be collected after the purchase of a ticket at any of Jet Airways' city sales offices around India. Each kit contains a Matrix mobile connection with free talk-time worth Rs.4000 in the US, UK, Singapore and Australia, ICICI Bank Travel Cards for hassle free transactions across the world, a free Tata Indicom Wi-Fi Roam Card enabling internet connectivity from over 50,000 hotspots in the US ,UK, Austria, Czech Republic, Germany, Netherlands, Switzerland, France and Japan; Bajaj Allianz Travel Insurance with special privileges and low premiums and VIP vouchers worth Rs.500/- on purchase of VIP travel accessories.
Jet Airways also offers students an ergonomically-designed seat with hammock style head rest and foot support, the airline also provides its Economy passengers a personal reading light, on demand In-Flight Entertainment and access to over 200 hours of Hollywood and Bollywood movies, regional films, and television and short programmes. Thus Jet Airway plans to tap mass-students travelling abroad during this period.
Personal Selling
The air transport organizations find personal selling which is the mix of promotion mix helpful in increasing the business. An art to influence, stimulate, sensitize the impulse buying is known as personal selling. The air transport-marketing professionals are supposed to know about the behavioral profile of persons who act as personal promoters. The travel agents, tour operators, transport operators, travel guides, front-line staff on the booking counters, receptionists contribute substantially to the process of promotion. If they stop selling, the offices of airways would find it difficult to sell. This makes it clear that even the quality services fail in attracting the users, if the channels are not co-operated. This makes it essential that the airlines offer incentives to them so that they keep on moving the process of stimulation.
To better understand the concept of personal selling, the airline in question needs to follow the diagram given above. It explains all the things that the people involved in the process of selling should know and do. Starting with the first point, customer’s value for time, money and energy should be considered. Their comfort and suitability should be addressed to. They should be provided service in such a way that they get more than they expect to. It can be said that the customer’s should be pampered.
For instance, giving chocolates on arrival and departure or welcome drinks or discounts during off-season to name a few. The delivery of tickets should be made on time this enhances the effect of personal selling.
The entire aim of personal selling is to provide customer’s easy access and hassle-free journey and that is what should be done by the airlines and that is where the circle of personal selling ends. To fulfill the above mentioned criteria the airline industry must select persons, agencies having a positive image.
The travel agencies having a well established business can help substantially and therefore it is the prime responsibility that while selecting the travel agents one must assign due weight age to the image of the agencies. The tour and transport operators help considerably and one needs to think about the incentives to be offered to the promoters. In personal selling, the front-line staff or personnel at the booking or reservation counter of airlines office playing an incremental role in promoting the business. Here, it is essential that one is aware of the credentials of persons supposed to discharge the business responsibility and try his best to brush up their faculties as and when opportunities come.
Word-of-mouth Promotion
This happens to be an important constituent of promotion mix in which the promoters act as a hidden sales force. The air transport organization depends on this type of promotion if they feel that the quality of services offered by them is of world class. In the Indian perspective, the Indian Airlines, Air India, Sahara India, Jet Airways and others may use this component of promotion if they realize that providers have not been distorting the quality of services promised. If you are traveling by kingfisher and you really like the experience then you will definitely recommend your friends, relatives, etc to travel by the same airlines. Word of mouth is the best promotional strategy as it does not incur any cost for the company and also a positive image is built in the market by their loyal customers.
Indigo airline being a low-cost airline does not allocate much fund to advertising hence, it entirely relies on word-of-mouth promotional tool to spread a word about their services and thus communication is established and brand is recognized by the people who are potential flyers rather than the entire country which is an expensive affair.
PEOPLE
The commercial airlines service industry extremely competitive, safety sensitive and high technology. People, employees and customers must be the arena of an organization’s core competence.
In the service industry, service personnel come in direct contact with their customers in the course of production and consumption of the services.
Because people provide most services, the selection, training, and motivation of employees can make a huge difference in attaining customer satisfaction. Ideally, employees should exhibit competence, caring attitude, responsiveness, initiative, problem solving ability, and goodwill.
The airlines hire the right personnel with the essential requirements. They recruit the right people develop, and train them to deliver quality service. These employees are motivated in a manner that they stick to the organization; they are treated more as customers, rather than employees
For Example: Delta Airways recruits an employee and moulds him to cater to their demands. These employees are sent to US and Frankfurt on a 21 days training programme. The successful completion of this motivated the employee to stay on with the airline. They are provided with many incentive programmes and also with a one- month bonus incentive on completion of the sales target.
The Airline sector is divided into two categories, Internal and External customers.
Customers refer to the persons who have certain needs, wants and desires. The company makes promises to its customers. In the Airline industry, the customers refer to those persons who feel the need of travelling from one destination to another. The customers are further classified as Internal and External customers.
Internal Customers:
While delivering services the airline ensures that the services are delivered as promised and this rendering of service satisfaction is often totally in control of the frontline staff. The quality of service that the frontline staff provides is highly dependant on his/her ability to communicate their credibility.
Being a Hospitality line the employees are given extensive training to provide caring and individualized attention to customers. There are many people involved with the successful working of the airline industry.
The various types of airline personnel include:
FLIGHT CREWS: These are the trained people who play a very important role from the time when you check in your baggage till you board the aircraft. They ensure the smooth functioning of everything and guide you through the entire process. They form 85 percent of the airlines labour force.
The Flight crew includes:
Pilots
Flight Attendants
Reservation Clerks
Airport check-in and gate personnel
Security guards and In-flight security personnel
The service contact personnel in the airline industry are the Flight Attendants who are expected to have a pleasing personality and must also be polite while service handling.
While on the other hand the cock pit crew/ Pilots are considered as low contact personnel hence they are required to posses highly technical and analytical skills.
The Reservation clerks play a very important role as they check the tickets, allot the seat numbers and also place the destination tags on the baggage; hence they should be highly attentive while doing their work.
The Airport check-in staff must be extremely helpful as that is where the evaluation of the hospitality of the airline can be gauged from at first
GROUND STAFF: These are the main people who work behind the scenes and play a very important role to ensure smooth functioning of the entire procedure right from handling the formalities on the airport to helping the passengers board the aircraft. All these functions are handled impeccably by the ground staff.
The Ground Staff includes:
Avionics technicians/ engineers
Flight dispatchers who track all the airline’s flights
Baggage handlers
Gate Agents
PDC (Prolog development center)
The PDC (Prolog development center) has implemented a Staff Scheduling System; this system was adopted for the ground staff as creating good staff schedules is often a complicated process. It is difficult to clearly appreciate the many possible combinations of duty periods, duty hours, time-off-in-lieu requirements, holidays etc. that will ensure each person works the correct number of hours.
First and foremost it is important that internal and external rules are correctly implemented while maintaining adequate manning levels and ensuring a fair distribution of the various shift types. Scheduling restrictions (financial or other) may exist and must be taken into account.
Why Use a Staff Scheduling System?
Creating a good staff schedule is often a complicated process. Especially when the airline industry “never sleeps”. Manning is 24x7x360. The business involves many employees with different agreements and they must be confident that they get paid correctly.
First and foremost it is important that internal and external rules are applied, there has to be adequate manning and lastly the personnel must be available when the traffic requires it.
On an Organizational level PDC- Staff Plan, provides their clients many Advantages in the terms of:
Cost savings in terms of less salary bonus, over time and time-off-in-lieu
Significant reductions of administration
Efficient cost management through a flexible staff scheduling (no over manning and no under manning)
The Advantages that PDC-Staff plan provides the employees are in the terms of:
Fast and safe scheduling of duties and shifts
Better overview of manning, time expenditure, time-off-in-lieu, etc.
Relief of administrative work
Thus, efficient staff scheduling saves great resources and thus time to focus the efforts on other areas. In addition, time will be saved in the scheduling process itself
What are airlines looking for?
In making a decision about the employment of cabin crew, all airlines consider three prime elements:
Eligibility
An airline may have eligibility tests depending upon its own specific requirements. These are facts that can be determined either by physical or by documentary Evidence. Some of the Eligibility checks likely to be included are:
Does the candidate meet the required age profile?
Does the candidate meet the required height/weight profile?
Has the candidate attained required educational (or other) qualifications?
Is there documentary evidence to support the qualifications the candidate claims to have?
Has the candidate acquired adequate experience in a customer service or public contact role?
Can the candidate speak a second language? To what level of proficiency can the second language be spoken?
Suitability
This is clearly more difficult to assess than eligibility. Airline managers will be looking for people who can best fulfill the role of a Cabin Crew .The minimum requirement is for:
1. Technical knowledge
2. Maturity
3. Adaptability
4. Judgment
5. Tact
6. Diplomacy
7. Grooming
8. Attitude
Airlines will also be looking for people whose performance will not be adversely affected by the disadvantages of the job and will readily accept direction/training.
Specific requirements
Eligibility and Suitability are relatively basic requirements, which must be met in all cases.
Every Airline sets its own specific requirements; some airlines pay much emphasis on the appearance and personality of the person while others may look at the experience and knowledge. Some airlines may prefer have trained and experienced personnel while others may want fresh recruits.
Put simply, airlines are looking for the right people for their current circumstances. Do not be too disheartened if you do not get in at the first attempt. You can always try again - or apply to another airline! It is also true that candidates fail to be recruited by an airline at one attempt, and then succeed at a later date. This is usually because the candidate has acquired better interview technique, or extra skills, experience or confidence. It can also be because the airline itself has revised its person specification.
CREW PROFILE AND COMPLIMENT
The senior most person on any flight is the Commander. His is the last word where the flight & its crew or the passengers are concerned. The Cabin crew Senior or the In Flight Supervisor is the senior most Cabin Crew, but takes orders from the Commander.
The Crew complement on board is the total number of crew including both the Cockpit & the Cabin Crew. This number is preset where the Cockpit/ Flight deck crew is concerned for a particular type of aircraft. The number of Cabin Crew an airline has on an aircraft depends on a number of factors:-
1. Type of aircraft - for any aircraft there is a minimum Cabin crew complement required depending on:
The number of emergency exits on the aircraft
The number of passengers on board the aircraft.
2. The type of food & beverage service to be provided to the passengers.
3. Right duty time length of the flight. On some long haul flights when the flying time exceeds the flight duty time (the max number of hours a crew can be on duty), then there are two sets of crew on board. This is found ONLY on International sectors on extremely long sectors.
4. Today a few airlines have started new services like baby-sitting, on-board masseurs, tailors etc, which require extra crewmembers on board. More often than not, airlines start new service procedures that do not require additional crew or other staff, but to capture a good market share, Airlines often launch such services that are NOT sustained over a period of time.
The Hierarchy where the Cabin Crew is concerned may vary a little from airline to airline depending on their individual policies. For example in some airlines the air hostesses retire much before
Advantages of the Job
As with the role itself, the perceived advantages of being a cabin crewmember are often quite different from the actual benefits. Below is a list of what cabin crew & others see as being the real advantages:
Travel
This is what attracts many people to the job in the first place. Cabin crew goes to places they always dreamed of, and find interest in destinations they would not necessarily have chosen to go to.
Camaraderie-Solidarity & Friendship with other Crew members
The camaraderie, team spirit, and sense of belonging together that the majority of crew has when they are flying is unique. Despite being a very diverse group of people, your colleagues are likely to be sociable and out-going, and will help to make the job a lot of fun.
Variety and Interest - Absence of monotony
This is certainly not a 9 - 5 jobs, and no two working days are likely to be the same. The sheer dynamics of different crew, passenger profiles, destinations and roster structures ensure that there will always be variety.
Appreciation
This is one career where the appreciation is almost instant after a 'good job done'. Despite all the things that can go wrong on a flight, many passengers do show their gratitude of the crews' efforts, either when someone has done their best for them individually, or especially when the whole team has pulled together well. The better airline management teams also acknowledge consistently good performance, or outstanding individual service.
Personal Development
Airlines usually have high standards of initial and follow up training, and some provide self-learning facilities or schemes thus helping the crew to develop their personalities and all develop themselves in other aspects.
Other benefits
Most Airlines provide a number of other 'perks' along with the usual handsome salary they give a crewmember. Most major airlines to provide ground transportation and a good standard of accommodation for crews who are staying overnight at destinations away from their 'home base'. Free medical attention for cabin crew I their family members (in some cases) are also provided. Free staff travel tickets are another BIG bonus given. Airlines have schemes whereby all their staff are able to travel free on the 'employer' airline or at extremely advantageous prices on other airlines. Airline staff also benefit from a range of discounts, from hotel chains, shopping malls, duty free shops, insurance companies and financial service institutions.
Uniform
Airlines usually provide items of uniform clothing to all their public contact staff free of charge.
Disadvantages of the job
Air cabin crew is a wonderful job, and can provide an interesting and rewarding career, but as with any job there are drawbacks as well.
Travel Limitations and Risks
This is almost the reverse of Travel' as an advantage of the job. As a crew member you do not choose where you go to, or how long you stay there. Crew also face the usual risks present for any other traveler, such as theft of personal belongings, mugging, poor hygiene standards in other stations/cities, bites/stings from insects and animals, and risk of contacting infectious disease.
Customer Service Negatives
Good customer service is a prime role pf cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Good customer service is a prime role of cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Dependence upon the support of other departments, including planning, maintenance, and catering, cleaning and logistical units is very high. Any breakdown in the chain (for example dirty toilets or insufficient catering) lead to a feeling of being “let down and having to take the burnt of passenger complaints.
External Customers:
These are the main customers for the airline industry as they generate revenue to the same. Hence Customer Satisfaction plays a very important role. The customers should always be kept at pedestal by looking into their needs and acting on them immediately and also providing them with exclusive services. This would earn goodwill for the airline and ensure the smooth running of the business.
The customers are categorized on the basis of their need and preferences:
Customer Segmentation
Most airlines use a very traditional segmentation strategy, dividing passengers into first class, business travelers and economy travelers. But, nowadays most of the airlines offer only two classes – the business class and the economy class.
The customers subsequently also be divided as per the scope of the market .This ia a process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinct marketing strategy.
This includes preparing a method of identifying a group of consumers, within a broader market, that has similar characteristics and needs. Segments can be identified by examining geographical, demographic, psychographic, and behavioral differences.
Segmentation of the aviation industry can be done under the following factors:
Geographic segmentation
Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions etc. the company can operate in one or few areas or operate in all but pay little attention to local variations.
Most of the domestic airlines, their market segment consists of the customers who’s destination are major commercial cities like Mumbai, Delhi, Kolkatta etc. apart from these the airlines also concentrate of tourists destinations like Goa, Agra etc. The reason behind this is that such sectors have major traffic and are profitable sectors. However Indian Airlines, being the National Carrier of the country, fly’s even to the unprofitable sectors and concentrates on the segment of people flying to such destinations.
Demographic segmentation
In demographic segmentation, the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion and social class. There are several reasons for the popularity of demographic variables to distinguish customer groups. One reason is that consumer needs, wants, usage rates and brand preferences are often associated with demographic variables.
Airlines like Kingfisher targets the affluent class and the executives from multi national companies, business community etc. However in the case of Air Deccan and other low cost airlines, their segment is the population from the lower middle class and the middle class. Thus it can be said that Kingfisher targets the classes whereas the no frill airlines target the masses.
Psychographic segmentation
Psychographics is the science of using psychology and demographics to better understand consumers. In this segmentation customers are divided into different groups on the basis of psychological, personality, lifestyles or values. People within the same demographic groups can exhibit very different psychographic profiles.
The airline tries to work on the psychology of the people. Kingfisher concentrates on the segment of people who do not mind paying a higher price, but would like to have the best of comforts. Whereas the low cost airlines targets those customers, who believe in value for money services and account for every rupee that they spend.
Behavioral segmentation
In behavioral segmentation the customers are divided into groups on the basis of their knowledge of, attitude towards, use of or response to a product or a service. It refers to grouping consumers in terms of their relationship with the product, for instance their usage rate, the purpose of use, their willingness and readiness to buy, etc.
Segmentation of customers on the basis of airlines
Business Class
They are crucial for airlines' profitability. With less spare time and more cash in their pockets, they agree to pay a premium price for a premium service. The premium prices they pay provide wider and more comfortable seats, better choice of meals and seats, luxurious lounges.
If the airline is also providing the first class including the business class and the economy class then it will provide additional services to the first class travelers in addition to the other services. These services may include fully reclining seats, workstation and TV surrounded by private dividers
Economy Class
They represent a totally different market. The most important consideration for most of them is the price. The lower the airfare, the more people will fly the respective airline. By and large, with the exception of wealthy travelers, this segment will not pay extra for premium services and will agree to change several planes during their trip if this option costs less than a direct flight.
PROCESS/SERVICE MAPPING
A process map is a tool to visually illustrate how the work flows. It is also a communication tool, a business planning tool and a tool to help manage the organization.
Key elements include:
Inputs
Outputs
Activity steps
Decision points
Functions
The lines and symbols on a process map help us to record concise sentences for every step in the process that tells the reader:
What is happening?
Where it is happening?
When it is happening?
Who is doing it?
How inputs and outputs are handled and distributed?
They can be defined at many different levels and with various boundaries. Furthermore:
Processes must have a beginning and an end.
Processes are co-ordinated activities that involve people, procedures, technology and infrastructure.
Processes constitute a significant portion of organizational costs.
An organization is only as effective as its processes.
The purpose of process mapping is for better understanding. It involves the gathering and organizing of facts about the work and displaying them so that they can be questioned and improved by knowledgeable people.
Process maps help one to understand the important characteristics of a process, allowing them to generate useful analytical data in order to derive findings, draw conclusions and formulate recommendations. Furthermore, process maps allow one to systematically ask many important probing questions that lead to developing a view on business process improvement.
The basic process followed is given below. This process can be termed as process mapping in an Airline Industry.
Customers Point of View
Check which gate to enter from
Getting the ticket checked at the door
Screening of the Baggage.
Getting the boarding pass as well as boarding the luggage.
Security check and finally boarding the plane.
Employees Point of View
The initial process of checking the ticket, baggage screening, providing the boarding pass and the security check imply for the employees also but the 2 most important process that the employees have to conduct is:
Proper numbering on the baggage of the customers so that the luggage does not get interchanged and boarded into the right aircraft.
Proper allotment of the seats.
1. Check which gate to enter from. 2. Getting the ticket checked at the door
3. Screening of the Baggage 4. Getting the boarding pass as well as
boarding the luggage.
5. Security checks 6. Waiting to board the air craft.
Another important aspect that the employees have to look for is Security Process. Security relates to the security of the aircraft as well as the passengers. Security check is of utmost importance.
The Central Industrial Security Force, a paramilitary organization is in charge of airport security under the regulatory frame work and instructions of the Bureau of Civil Aviation Security (Ministry of Civil Aviation Security). CISF formed an Airport Security Group this security force is dedicated to protect Indian airports. Each and every airport has now been given an APSU (Airport Security Unit), a highly trained unit to counter unlawful interference with civil aviation; apart from the CISF every airline has a highly trained aviation security force which is a separate department.
Some of the security procedures are listed below
At major airports, the checked baggage is passed through X-ray machines and a 'security checked' sticker affixed before entering the check-in area.
Passengers are checked through personal frisking, and/or door frame metal detectors and hand held metal detectors.
The cabin baggage is either checked through X-ray machines or physically examined.
Security personnel put a security stamp on boarding passes and cabin baggage labels.
Immigration is done at this point that is just after the boarding pass is received.
In case of a 'Red-Alert', a secondary security check is also carried out near the stepladder before embarkation.
Checked baggage has to be personally identified by the passengers before it is loaded on the aircraft. Wherever the boarding is through aerobridges, passenger and baggage reconciliation is done through an internal matching system instead of physical baggage identification.
Ten percent of the checked baggage/cabin baggage is usually physically checked at random.
Passengers in transit have to remain on board during the ground halt of the aircraft.
Once the passenger reaches his destination from the airport that is when the process gets over.
BLUE PRINTING
Blue printing is a process that deals with the entire working system in an Airline Industry. It is a complete process.
Blueprinting involves identifying all the key activities, procedures and specifies the linkages between them. The working of the airport is a complex process and all the process whether visible or invisible have to be carried out effectively as well as efficiently because even if one process goes wrong the entire chain of the working system gets disturbed.
Moreover, current trends in the airport industry impose more and more efficiency and security: Hyper-regulation for safety and security; Market de-regulation in terms of liberalization, strong competitiveness, services customization, etc.; Traffic segmentation and globalization to better answer to airline needs; Reduction of profitability for handlers and airlines; Increase of airline traffic; and so on. In such a scenario, only operators and authorities who will evolve gaining a competitive position can win the market challenges asking for more efficiency, high quality service levels and security. In order to support all actors in the airport industry to reach best efficiency and quality targets, Software Design has spent huge efforts in finding solutions and services capable of bringing them the power of technology innovation in a transparent way and working with a business approach. With this a lot of changes can be made in the existing service process thus developing a blueprint
BENCHMARKING
Benchmarking is the process of comparing the cost, time or quality of what one organization does against what another organization does. The result is often a business case for making changes in order to make improvements.
Benchmarking opens organizations to new methods, ideas and tools to improve their effectiveness. It helps crack through resistance to change by demonstrating other methods of solving problems than the one currently employed, and demonstrating that they work, because they are being used by others.
Airline Association for Benchmarking & Measurement is a focused group of airline professionals that looks to identify the best practices surrounding airline industry issues for the improvement of overall operations of the members.
Mission
To identify "Best in Class" business processes, which, when implemented, will lead member companies to exceptional performance.
Objectives
To conduct benchmarking studies of important business processes.
To create a cooperative environment where full understanding of the performance and enablers of "best in class" business processes can be obtained and shared at reasonable cost.
To use the efficiency of the association to obtain process performance data and related best practices from group of companies.
To support the use of benchmarking to facilitate process improvement and the achievement of total quality.
Membership
The scope of Airline Association for Benchmarking & Measurement™ membership includes airline professionals interested in benchmarking as part of or in support of their core business.
Company membership will be considered with respect to compliance with Airline Association for Benchmarking & Measurement™ mission, goals and operating guidelines, as well as, qualification of the organization within the scope of membership.
Participation in specific efforts will be optional and open only to members with costs shared by the participants
Benefits of Membership Studies
Airline Association for Benchmarking & Measurement will identify and present to members opportunities to participate in Benchmarking studies on various topics of importance to "security" issues.
There are two types of Benchmarking studies provided
Consortium studies are offered to the membership as a whole with costs divided.
Single company sponsored studies addressing the interest of one member company can be offered to other selected members for no fee.
The association will also support process improvement benchmarking efforts
Research - Access public and private databases.
Identify study participants - Top airline companies interested in benchmarking current issues.
Collect data - Manage response collection with the participants as a third party.
Lead site visits - Structure with best participants.
PHYSICAL EVIDENCE
Physical Evidence refers to the environment in which the service is delivered and where the service industry and customer interact. It is the ability and environment in which the service is delivered. Both tangible goods that help to communicate and perform the service, and the intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers.
The aircraft by itself, the seating configuration meant to be comfortable and spacious, the in-flight food, the staff dressing, baggage handling facility, colour of the aircraft, in-flight entertainment, and ambience in the aircraft provide physical evidence to the airline service.
Nowadays, websites are another major part of the physical evidence of airlines. A recently completed survey indicates that passengers rely on major airline websites, but would like the airlines to improve those sites to better meet their specific needs and expectations.83 percent of the passengers indicated they use airline websites to book flights. The survey also identified that nearly half (48 percent) of respondents indicated they also book flights by calling the airline directly, which may be a further indication that airline websites are not sufficiently meeting the needs of small business travelers. Results show that 56 percent of respondents use travel websites to make flight arrangements, while 47 percent use a travel agent, compared to 83 percent using airlines' websites.
Hence, the websites should be updated regularly, should be less time consuming, fast processing and easily operative.
COLOUR AND STAFF DRESSING
Increasing importance is given to the cabin crew and the ground staff uniform. Designers are given contracts to design the uniform and the colors are such which symbolizes the airlines motto. Colour is a visual identifier and thus attractive color scheme catches the eye of the passenger. The staff dressing also helps to differentiate one airline from other. Just by looking at the staff, the passenger assumes the standard of the airlines. And these two are the first thing that a passenger visualizes in an airline. However, another important reason for the use of color is the expansion of a corporate culture. For example, Paramount Airways does this very well. Their use of blue color emphasizes confidence, a character trait that is important to the airline industry, especially in these times. Blue also demonstrates vastness, opportunity, a sense of modernism and openness and honesty.
KINGFISHER AIRLINES
The first thing that strikes about fly Kingfisher is the bold use of the color Red. From the tail of the aircraft with the logo of the kingfisher bird and the word Kingfisher painted boldly across the body of the aircraft in Red to the interior decor and even the Crew uniform –it‘s Red, Red, Red all the way.
The in-flight crew called 'Flying Models' are clad in short Red skirts and a trendy rolled up sleeve jacket in Red with a white shirt unlike the traditional blazers and waist coats of other airlines. There are no male pursers on board either because KF in-flight is all women.
AIR INDIA
Eminent Indian fashion designer Ritu Beri was roped in by national carrier Air India to design the new uniform for its cabin crew and ground staff. Air India went for a complete makeover to reflect its aspiration to be a “powerful” global entity.
The design of the new uniforms draw inspiration from the Sun Temple of Konark in Orissa, yet maintains a modern outlook. The colour palette of the uniform is red, orange, black and white, with red standing for strength and orange for cultural roots.
The uniform for the female employees, both ground staff and cabin crew, included sarees, tunics, scarves, jackets, coats, aprons and shoes, while there would be specially designed ties for the male staff.
JET AIRWAYS
To position itself as a global airline, Jet Airways introduced fresh airline uniform for the cabin crew designed by Italian designer Roberto Capucci. Their uniform reflects distinctive international look capturing spirit of new India and a meeting point between East and West
IN FLIGHT MEALS
Airline passengers always have a certain standard of living and are very hygienic about the food. However, in-flight meals have often been the butt of many jokes over the years for their perceived lack of nutritional value. In airlines, the passenger prefers variety in the meal offered, noticing the nutritional value. They also see as to which caterers is serving the food; the way the food is served and handled. This is one critical aspect where even the service recovery can’t help to retain the passenger because even the slightest of the mistake by the chef or by the cabin crew, or compromising on the quality of food might prove very dangerous for the passenger’s health. This, in turn, will spread a bad reputation of the company.
Hence, more and more airlines are in fact striving to make their meals more attractive by packing as much goodness as possible into them.
KINGFISHER AIRLINES
In-flight Meals or Snacks are served as part of the fare on every flight and small amenity kits distributed as well. Depending on the flight time, Kingfisher serves Breakfast, Lunch, High Tea or Dinner on all flights. An individual menu card is there on all Kingfisher flights. Kingfisher has a wide variety of multi-cuisine menu to suit the varying tastes of the local sectors. Indian, Chinese, Continental and World Cuisine is available on various sectors. Vegetarian or non-vegetarian food can be chosen on the flight. Kingfisher First Class passengers can choose from a special menu and depending on their choice, a three course gourmet meal is served on the flight.
It also provides an exclusive three course menu complete with a Kingfisher sparkling welcome drink, signature dessert and freshly brewed coffee on board.
JET AIRWAYS
Jet airways have different menu options onboard for Premiere and Economy class passengers.
The following specialty meal options are available on Jet Airways:
Strict Vegetarian (STVG)
Jain Meal (JNML)
Diabetic Meal (DBML)
Low Cholestrol (LFML)
Low Sodium (LSML)
Low Calorie (LCML)
Low Protein (LPML)
Non Lactose Meal (NLML)
No Salt (NSML)
This shows the passenger that Jet Airways do care about their health , thus creating a goodwill among the passengers.
Kosher meals
Jet Airways also offers kosher meals (KSML) on the Mumbai-London-Mumbai and Mumbai-Singapore-Mumbai sectors. Kosher Meal preference has to be notified 48 hours in advance. The Kosher Meal on Jet Airways flights consists of Western Non-Vegetarian Meal of Fish, Potatoes and Vegetables. Kosher meals are served onboard in a sealed pack. The cabin crew opens the pack in front of the passenger and shows the Kosher certificate inside the box.
This assures the passenger that there is no malfunctioning or adulteration in the meal provided , thus creating an impression in the mind that meals offered in Jet Airways are of the best quality.
AIR INDIA
Air India offers a wide variety in its in-flight meal menus, with a multi-cuisine approach to cater to the predilections of the range of passengers. The variety of food ranges from vegetarian meal, Moslem meal, Kosher meal, Low Sodium meals to something simple as a fruit platter. The meals are hygienically packed from reputed hotel chains like the Taj Group and Ambassador. Besides the regular normal vegetarian and non-vegetarian meal, Indian Airlines also provides special meals such as Jain meal, Diet meal, child meal etc.
IN FLIGHT ENTERTAINMENT
To make long flights more enjoyable, several major commercial airlines offer in-flight entertainment and information systems to their passengers. This is increasingly gaining popularity in the airlines sector because the passengers here, unlike other modes of travel do not have any other source of entertainment. In airlines, the interaction among passengers is also minimum. So, this is one of the tangible tools of attracting or pulling the passengers towards an airline. Nowadays, there are lots of innovations done in the in flight entertainment system and each airlines is daily coming up with some or the other new technology or up gradation for the passengers to have entertainment in the flight.
KINGFISHER AIRLINES
Kingfisher Airlines flights have individual LCD TV screens for each passenger. They have a choice of 5 video channels of the trendy FUN TV, or listen to Kingfisher Radio which offers a choice of 10 international radio channels. There is a separate video channel for kids too to keep them busy on the flight. All passengers are given complimentary headphones to enjoy the in-flight entertainment. For Kingfisher First Class passengers there is an extra wide 8.4 inch LCD swivel screen fitted on every seat. Kingfisher First Class passengers can also enjoy noise canceling headphones for a quiet and relaxed flight experience. Kingfisher First Class passengers can also play video games on the LCD screen and even play multiplayer games with their co-passengers.
Kingfisher Airlines has tied up with Dish TV to provide live in flight entertainment to its passengers. This shows the weightage given in flight entertainment in the airlines sector.
JET AIRWAYS
Jet Screen, Jet Airways' In-flight entertainment system is available on both business and economy class on several Jet Airways flights. Jet Airways has also installed state-of-the-art Panasonic 3000i Audio Video on Demand (AVOD) on every seat in some of its flights. In addition to video channels, up to 8 audio entertainment channels playing latest Bollywood songs, International Pop songs, Ghazals, Indian and Western Classical, etc. are also available on Jet Screen.
SEATING
In airlines, passengers mostly stay glued to their seats. So, it’s very important to have a comfortable seating in the flight. Specially , in long distance journey the passenger has to spend a lot of time on the seats, thus the passenger should have full satisfaction with the seats provided, as in, there should be enough leg space, there shouldn’t be any back problem, comfortable head space and more importantly , the seats should be clean. The seating arrangement has to be spacious as different individuals have different physique. Thus, the seats should be such wherein every passenger irrespective of his/ her size or shape should feel relaxed and comfortable on the seats and should feel refreshed after reaching the destination.
Seating is not much of a problem in airlines like Kingfisher or Jet however low cost airlines needs a lot of improvement because they usually have this problem of not having enough leg space.
KINGFISHER AIRLINES
The seats are the plush Sleeperette seats with a 48 inch pitch, 125 degree recline, adjustable headrests and fully extendable footrests. The expansive legroom, the fully lie flat bed in Kingfisher First and the widest seat pitch in the skies, allows the passenger to stretch those tired muscles to the fullest. There are also laptop chargers and mobile phone chargers in each seat.
JET AIRWAYS
Jet Airways is the first airline in the world to install new ergonomically designed seats that offer more space, reduce pressure on the passenger’s body and has adjustable "Hammock" head rest and a unique foot net which gives added support, especially on long journeys.
NEWSPAPERS AND MAGAZINES
Newspapers and in flight magazines are provided to the passengers so that even in the skies they can get information and update their knowledge.
KINGFISHER AIRLINES PARAMOUNT AIRWAYS
INDIAN AIRLINES
GENERAL RATINGS TO THE AIRLINES SECTOR
Web Site : Ease of Use
Age of Aircraft in Fleet
Web Site : Product information
Cabin Safety Standards
Web Site : Online Check-In
Cockpit Communications
Handling Delays/Cancellations
Airline Onboard Magazine
Staff Grooming & Presentation
Assisting Families & Children
PRODUCTIVITY AND QUALITY
QUALITY DIMENSIONS
RELIABILITY
It is the ability of the service provider to meet the promises made by them accurately. The customer must develop a feeling that they can depend on that particular service provider for their problem.
It is most important for an airline to depart and arrive on time since passengers want to depart and arrive on time. ‘On time’ is defined, in accordance with normal industry standards, as departure within 15 minutes of scheduled departure time. If the flight is on time, it colours everything else. Today, top airlines hold their positions because passengers recognize their consistent reliability. Reliability is not just nice to have. They impact the passenger and his satisfaction, and that impacts the bottom line of the airline.
Passengers place great importance on reliability and that's why leading airlines fly Boeing jets because they are the most reliable in the skies.
Information needs to be recorded about the scheduled and actual departure time, and, if there was a problem that caused a delayed departure, whether the problem resulted in a delay or a cancellation, whether there were passengers on board and a detailed description of problem should be given. This leads to the payoff i.e. the ability to track, analyze and improve the reliability of the aircraft.
Airlines should also be reliable in case of baggage handling. The passenger should get his luggage on time without being damaged. In case, the luggage is mishandled then the airlines should have such a system in place wherein the passenger can rely on the airlines for the safe arrival of his / her luggage. The reliability issues that this interface creates have prompted airlines, over the years, to look for ways to introduce more automation into this environment.
ASSURANCE
Assurance refers to freedom from danger, risk or doubt. It includes credibility, competence, security and courtesy. The service provider and the employees must be capable of winning the trust and confidence of the customers.
The ground staff and the cabin crew play a major role here. They are the one who can assure the passengers about any doubts they have regarding the flight and the services provided. In airlines, passengers are mostly brand loyal. Hence, once the passenger is assured and trusts a particular airline then he always prefers that airline. Thus, assurance plays a very important role in customer retention.
In high cost airlines , the passenger always thinks that whether he will get a good value for his money whereas in low cost airlines he / she always think whether the quality of the service will be good or not. Hence, the passenger is always at a risk. Here, the airlines have to put in extra efforts to remove the doubts from the mind of the passengers about their airlines. And in this competitive world, where new airlines are coming up so rapidly, the efforts made by the airlines could be seen to assure the passengers that their service is the best. Airlines go out of the way to win the trust of their customers.
E.g. The Kingfisher First experience takes off even before the passenger do at the Airport where he / she is greeted by a Personal Valet to assist at every step of the way, from baggage handling to boarding. This is done to assure the customer at the very first step that he hasn’t put his money at the wrong place; giving a VIP treatment, thus clearing any kind of doubt or the risk factor from his mind.
TANGIBLES
Tangibles are those physical features which can be seen by the customer. These are the physical proofs which help the customer to judge the quality of service. The customers evaluate the quality of these services on the basis of the tangibles provided by the service providers.
In case of airlines tangibles include:
Flight
In – flight meals
In – flight entertainment
Seats
Staff uniform and skills
Baggage handling technology
Website
In airlines, tangibles help to differentiate an airline with its competitors. This is the most important criteria in customer evaluation. The customers perceive what they see. Thus tangibles help create an impression in the customers mind the way an airline wants.
EMPATHY
Empathy basically is when the employees of the organization make the customer feel at home, at ease, making him feel wanted.
In airlines, a personal touch should be given to the services because that delights the customers the most. They should be made felt as if they are very important to them. However, for an airline to succeed it must have genuine empathy with both its employees and its customers.
The cabin crew has to be very polite, understanding and courteous. They should take genuine delight in attending the customers, in helping them and establishing warm friendly relationships. The crew should know the importance of doing things for customers from the bottom of their heart. They should believe in going beyond the routine to add emotional value to their work. As a result they would be able to delight customers. But for all this, the crew and the ground staff should be motivated; a culture should be created where the crew also supports the company’s mission and values.
The senior executives, middle managers and supervisors should demonstrate a similar 'genuine heart-felt' empathy for their various teams of employees , thus helping the organization develop a warm culture based on empathy which leads to showering of that empathy on the customers.
For e.g. if any small child is flying in the flight for the first time without any elder person along with him, the crew should see to it that the child doesn’t get scared so they should visit him regularly, give him chocolates, chat with him, thus taking his proper care and not letting him feel that he is alone.
RESPONSIVENESS
Responsiveness is willingness to help the customers and provide prompt service. The degree of responsiveness shows the level of commitment that the people of the company have towards their work. It is very necessary for the company to concentrate on prompt and the right kind of responsiveness to the needs of the customer.
In airlines, the customers are very impatient. They expect their needs to be catered promptly. Hence, any delay in responding to their needs or problems might create a very bad impression in the customers mind. The staff should see to it that each and every complaint of every individual is handled effectively and quickly.
This aspect comes into picture when there is a flight cancellation due to bad weather and the passengers can board the next flight only the next day. At this moment of crisis, a quick response by the airlines regarding their luggage, their accommodation and all the other needs can create a very good reputation.
Also, sometimes there is a case wherein the crew is helpless and it cannot fulfill the customer’s requirement, even that time the crew has to respond to the customer either by explaining him their helplessness or by providing him/her with some alternative.
Thus, nowadays where the zone of tolerance among the customers in airlines is minimum, responsiveness is one dimension which has to be really taken care of.
FISH BONE ANALYSIS
Procedures
During acquiring the boarding passes there may be delay in getting the passes which may dissatisfy the customer.
Baggage handling is not done accurately i.e. the bags are misplaced or not loaded on the flight, which may cause delay in flights.
Due to tightened security at airport the security person may take longer time to check the person.
Information
Radar at the airport is not working properly thus the correct information is not provided to the customer.
Websites – the websites may not be updated regularly which may provide wrong information to the customers.
The customers are guided wrongly by the person at inquiry counter which may add woes to the customers.
Front staff personnel
System crash when customers come to get the information or boarding passes.
Cabin crew taking ample of time for guiding people and providing the necessary requirements to customers.
Not enhancing to customer responsiveness and services.
Not all queries are sorted of the customer at enquiry counter.
Not getting warm welcome or reply from the air hostess.
Back staff personnel
Cleaning staff taking ample of time to clean the plane setting up the things right in the plane.
The materials are not loaded on plane on time.
Material supplies
The supply of food and other essential requirements does not arrive at scheduled time.
Customer
Customers coming late to board the plane may cause delay in flight.
In case, the person on flight gets ill (getting heart attack) in that case the flight. needs to be landed again which may again cause delay.
VIP customer coming late to board the flight.
Facilities / Equipments
The seat may not be proper or the seat belt may not be working properly.
The music system (headphone) not working properly.
The food and drinks are not supplied to customer on time.
Other Causes
Their may be delay in flight if a hoax call is received and intense security check-up is done which may cause some trouble to customers.
If the weather is bad there may be delay in flights.
If there is any technical flaw in the plane it may result in delay of flight.
Due to strikes by workers and organization may cause problems to customers.
SERVICE RECOVERY
While studying the Marketing Mix for the Airline Industry, we have understood the customer’s expectations, the service process, the service quality, the productivity in service delivery and building customer relations. But in all service contexts, service failure is inevitable. Service failure is inevitable for the best of the airline companies, even those with world-class service systems. Thus, in order to retain customers and also understand those, airline companies must understand what a customer expects and what can be offered to the customer when service failure occurs and thus implement strategies for an effective service recovery.
Impact of Service Failure on the Customer
Service failures occur for all kinds of reasons, some of which can be listed as service not available when promised, late delivery, incorrect outcome, poor execution or rude behavior of the workforce etc.
For an airline company, a service failure can be of the following sorts – flight delay; mismanagement of the formalities like checking-in; indifferent behavior of the flight crew; baggage problems and so on. Service failures for airline companies are due to factors which are controllable as well un-controllable by the company.
Service failure for services other than airlines have a paradox kind of an impact on the customer as well as the organization – you dissatisfy a customer once and then delight him in the service recovery process and win his loyalty which is not assured with a failure-less service delivery. But for the Airline Industry, service failure does not create positive opportunities for the organization. Incase of a service delivery in the airlines service providing, the customer is highly dissatisfied and the recovery strategy cannot be as effective to delight him. For instance, if a flight gets delayed, the customer gets late and the time he loses due to the delay cannot be brought back; or if the carrier misplaces luggage of a particular customer then no strategy is enough to delight the customer (no strategy to compensate on the lost belongings). Service failure in the airlines sector creates a negative impact for the airline company. Thus, a perfect service delivery is aimed at by a carrier.
Following a service failure, a number of negative emotions may occur in the customer’s mind such as anger, discontent, disappointment, self-pity, and anxiety. These emotions are the factors to be kept in mind while implementing specific service recovery strategy to win back the customer. Different customers respond differently to service failures. Incase of the airline industry, the customers are rather considerate by not displaying anger and discontent but by just mere complaining and seeking reprisal. Basically, the response is very passive. Such a kind of response depicts that the customer expects least consequences that will benefit the customers. Such a response is not beneficial to the airline company because the organization does get an effective feedback and cannot improve on the basis of the customer’s expectations and thus cannot retain customers effectively.
COMPLAINT HANDLING
In case the passenger has a problem with the in flight crew, they can give a written application to the In-flight Supervisor who later hands over the complaint to the COMPLAINT HANDLING CELL. The complaint handling cell is under the control of the Deputy Director In charge of supervision. Also the complaints regarding the ground staff, security and other such departments can also be given in writing to the Deputy Director In charge directly. Once the complaint is received it is forwarded to the higher authorities who decide what action needs to be taken. Usually a warning goes to the personnel who have defaulted. In rare and extreme cases the personnel may be suspended from flying for a period of 2 – 3 weeks. Once an action is taken, the company sends an apology letter to the customer along with the response to the complaint.
In case the complaint is regarding mishandling or damage to the baggage, there is compensation provided to the customers. The amount of compensation depends on the policy of the company and the degree of damage.
There are nine steps involved in handling complaints effectively. They are mentioned below:
1. The frontline employee handling complaints should stay calm under any circumstances.
2. Let the customer get the story off their chest- do not interrupt, this will only cause irritation. In this case listening skills comes into picture.
3. Avoid admitting any liability at this stage. The officer just need to show concern like, “I’m sorry for the inconvenience, let me see what I can do”. Give attention to the customer, make him feel important.
4. Get facts by using question and try to find out the real and whole story behind it.
5. After listening and collecting data, just identify appropriate action considering company’s policy and customer’s expectation.
6. Take action if you have authority or involve manager or concerned person.
7. If corrective action cannot be taken immediately, tell the customer. It’s better to give bad news rather giving false news.
8. Record the action to be taken and inform anyone else in the organization involved.
9. Look into the matter, provide a proper follow-up.
These nine approaches if followed effectively, complaints can be handled properly and possibly a customer can be retained.
SERVICE RECOVERY STRATEGIES
“Companies have made Service Delivery Idiot-proof. But Idiots cannot solve problems.”
We just realized that service recovery in the airline industry loses a little scope because of the passive nature of the customers and because of the negative impact of service failures. But, in the competitive market, Airline companies are trying their best to delight their even though service has failed in the first encounter. Some of the strategies which airline providers are implementing for service recovery are as followed
Total Quality management or “Zero Defects”
Airline companies are trying their best to make it right for the customer in the first encounter itself, give the customers what they expect and avoid the errors as much you can. For instance, avoid flight delays which occur due factors which are under the control of the management such as speedy check-in process, discipline staff to be punctual and soon. Doing it right at the first encounter saves the company the costs of redoing the service and compensating for the errors.
Effective Complaint Handling
Complaints need to be encouraged so that the Airline Company is aware of the loopholes and what the customer is expecting from the service. Complaints should be taken seriously and should be acted upon immediately. Since, the customer is of the passive nature with respect o complaints, one must ensure that it is easy for a customer to put forth his complaint and he should be assured of a treatment. Technology and its innovation should be put to use to form an effective system for complaint handling and their reprisal.
Fair Treatment to the Customers
On failure, a customer expects to be treated fairly in term of the outcome they receive after the failure. The customer should receive something more than what he has actually expected and which was met in the first encounter. Fair treatment will help in customer retention. For instance, incase of loss of baggage, a service provider might provide the traveler vouchers for shopping at international locales for free of charge.
Market Research
Not all dissatisfied customers will come up to the reception desk and post a complaint. The airline company has to make efforts in finding on itself the failures in service. Market research forms a very important tool in knowing this. For example, one can ask for feedback from a customer who is just going to board a flight. He can be asked about his experience with the ground staff, the ambience of the lounge, and other facilities.
PROFITABLE ART OF SERVICE RECOVERY
Service failures are inevitable but they don’t hit a service provider as much as the costs of service recovery and the costs of redoing the service with intent of delighting him are very relatively high. Basically, the service provider has to bear of the cost of repeating the service process that too with an added value.
With respect to the airline industry, service recovery can be made productive and profitable by the following methods.
Resolving the problem at the source itself
Suppose a failure of service takes place at the ticketing counter, the finance department head does not needs to be involved but in fact, the ticketing executive himself should address to the problem. The staff which is in direct contact with the customer and is forming a part of the critical encounter should be trained and empowered to tackle failures at the source itself.
Do not dismiss the occasional problem
It is tempting to dismiss an occasional problem but companies should avoid doing the same. Customer retention is an important task for an airline company in this period of intense competition. Occasional problems cannot just be dismissed because; it is these occasional problems which dissatisfy the customer every now and then.
Flexible Management
The management needs to be flexible and dynamic enough to take decisions with regards to service recovery. The customer’s perception and expectations should be kept in mind whilst taking a strategic decision. Treatment should be fair enough to delight the customer. Basically, the company has to give in to the expectations of the customer but at the other end also negotiate to get a fair and a profitable deal.
Measure the Costs
At every step of the service recovery process, the costs involved need to be monitored closely so that no wastage or blockage of funds happens in the process.
Train employees
Employees need to be trained perfectly in order to give the best service delivery at the first encounter itself. Also the staff needs to be trained with respect to decision making, crises management and so on.
Empower the Front Line Workforce
The front line work force is the workforce that is in direct contact with the customer and form as an important critical service encounter. The front line can be empowered with authority to take a decision incase of service failures. Companies can train their front line staff for such situations.
Service Recovery is a different management philosophy a company embraces customer delight as a primary goal of business. It is a fundamental to quality service providing and therefore it should be considered as one of the important part of a airline company’s strategy.
“To Err is to Human, to Recover, Divine”
LOW COST AIRLINE / LOW COST CARRIER
A low-cost carrier or low-cost airline (also known as a no-frills or discount carrier or airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors.
India's first low-cost airline, Air Deccan started service on August 25, 2003. The success of Air Deccan has spurred the entry of more than a dozen low-cost airlines in India. Air Deccan now faces stiff competition from other low-cost Indian carriers such as Jetlite, SpiceJet, GoAir and Paramount Airways.
Few of the features of the low cost airlines:-
A single passenger class
A single type of aero plane (commonly the Airbus A320 or Boeing 737), reducing training and servicing costs
A minimum set of optional equipment on the aero plane, often excluding conveniences such as ACARS, further reducing costs of acquisition and maintenance
A simple fare scheme, such as charging one-way tickets half that of round-trips (typically fares increase as the plane fills up, which rewards early reservations)
Unreserved seating (encouraging passengers to board early and quickly)
Flying to cheaper, less congested secondary airports and flying early in the morning or late in the evening to avoid air traffic delays and take advantage of lower landing fees.
Aggressive fuel hedging programs.
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets in promotion. Even if the advertised price may be very low, sometimes it does not include charges & taxes.
But in the past one year major changes have taken place because of the hike in the fuel prices. Like everyone is aware that the fuel prices have risen way too much. So due to this all these low cost airlines are facing a major setback.
These increases in fuel prices has caused trouble for each and every airline and they are trying to recover the losses in various forms and also trying to come up with promotional schemes and various other incentives in order to retain their customers.
They losses occurred by these airlines in the fiscal year 2006-2007 and 2007- 2008 have been tremendous. Now their ultimate aim is to recover these losses.
Earlier due to the introduction of the low cost airlines and their cheap rates which were almost similar to those of the train fares the customers blindly traveled by air as their travel time could be less but after the rise in prices the customers think twice before buying the air tickets.
Hit by galloping fuel prices, airlines the world over have started resorting to various cost cutting measures including flying aircraft at a given height on a low speed to reduce fuel burn.
India's crowded airline sector is flying into huge losses on the back of a surge in global fuel prices that have forced it to hike fares, slowing explosive passenger growth.
National carrier Air India and other carriers have started following these measures and other fuel conservation initiatives which are a standard practice undertaken by all global airlines, especially those flying on long-haul international routes.
Reduction in aircraft speed at an optimal height, called a reduced Cruise Mach policy, has been adopted by Air India for its Boeing 747-400 and Boeing 777 aircraft fleet used in long-haul operations.
The national carrier is also planning similar measures for its Airbus A-310 and Boeing 737 planes, which are meant for medium and short-haul flights and are the merged carrier's backbone for domestic operations.
Besides, undertaking the Cruise Mach policy, Air India has also started cutting on the aircraft's weight by removing certain non-essential items on board.
AIRLINES VALUE ADDED CHAIN
CONCLUSION
“I was engaged in what I believe to be the most thrilling industry in the world—aviation. My heart still leaps when I see a tiny two-seater plane soaring gracefully through the sky. Our great airlines awe me. Yet I know they were not produced in a day or a decade.”
— William A. "Pat" Patterson, CEO United Airlines.
Studying the Airline Industry gives us the same feeling as the CEO of United Airlines does. The project report talks about the Airline Industry and its most important function – MARKETING.
The project report has covered every other aspect of the Airline Service Marketing which on paper seems to be simple to implement but in practice is as tough a job as the invention of the airplane itself.
The project study has given us a great depth of intellectual learning about the sector. We hope, the project report has the same enduring for its readers as it did to us.
HISTORY OF AIRLINE INDUSTRY
Aviation refers to activities involving man-made flying devices (aircraft), including the people, organizations, and regulatory bodies involved with them.
Civil aviation includes all non-military flying, both general aviation and scheduled air transport.
General aviation includes all non-scheduled civil flying, both private and commercial. General aviation may include business flights, air charter, private aviation, flight training, ballooning, parachuting, gliding, hang gliding, aerial photography, foot-launched powered hang gliders, air ambulance, crop dusting, charter flights, traffic reporting, police air patrols and forest fire fighting.
There are five major manufacturers of civil transport aircraft:-
Airbus, based in France
Boeing, based in the United States
Bombardier, based in Canada
Embraer, based in Brazil
Tupolev, based in Russia
Scheduled Air Transport
Like it is known that the Airline Industry is one the vastest industry with its presence all around the world. Though it started with its presence only in large countries then slowly expanding to other states and currently its presence can be felt in the smallest of cities also.
This industry came into existence with the development of the world’s first airline on 16 November 1909 by DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft with its headquarters situated at Frankfurt. It was developed with the assistance of the government and operated ships manufactured by Zeppelin Corporation.
Later as time passed by and people started becoming aware of the existing technology and the potential of the market they moved their attention to this sector. It was the then that Tony Jannus conducted the United States' first scheduled commercial airline flight on 1 January 1914 for the Saint Petersburg-routes, Braniff Airways, American Airlines, Delta Air Lines, United Airlines (originally a division of Boeing), Trans World Airlines, Northwest Airlines, and Eastern Air Lines
This was just the start of the airline industry. Slowly and steadily it caught the pace of development and advancement. By the 1920’s this industry mainly focused on only carrying of mails. It was in the year 1925 that the Ford Motor Company bought out the Stout Aircraft Company and began construction of the all-metal Ford Trimotor, which became the first successful American airliner. With a 12-passenger capacity, the Trimotor made passenger service potentially profitable.
Till then Air service was seen as a supplement to rail service in the American transportation network. It was by this time that a few major countries understood the concept and believed in it. it was the same time when Juan Trippe began a crusade to create an air network that would link America to the world, and he achieved this goal through his airline, Pan American World Airways, with a fleet of flying boats that linked Los Angeles to Shanghai and Boston to London.
In fact even during the great depression due to the introduction of the Boeing 247 and Douglas DC-3 in the 1930s, they were able to generate profits. This clearly stated the importance of the airline sector.
After this the expansion of this industry was always on a high. In the 1950s, the De Havilland Comet, Boeing 707, Douglas DC-8, and Sud Aviation Caravelle became the first flagships of the Jet Age in the West, while the Soviet Union bloc countered with the Tupolev Tu-104 and Tupolev Tu-124 in the fleets of state-owned carriers such as Aeroflot and Interflug.
The next big boost for the airlines would come in the 1970s, when the Boeing 747, McDonnell Douglas DC-10, and Lockheed L-1011 inaugurated wide body ("jumbo jet") service, which is still the standard in international travel. By the 1980s, almost half of the total flying in the world took place in the U.S.
The first countries in Europe to embrace air transport were Finland, France, Germany, the Netherlands and the United Kingdom.
KLM, the oldest carrier still operating under its original name, was founded in 1919. The first flight (operated on behalf of KLM by Aircraft Transport and Travel) transported two English passengers to Schiphol, Amsterdam from London in 1920.
France began an air mail service to Morocco in 1919 that was bought out in 1927. Germany's Lufthansa began in 1926. The British company Aircraft Transport and Travel commenced a London to Paris service on 25 August 1919, this was the world's first regular international flight.
India, Hong Kong, Indonesia, Malaysia and the Philippines are one of the first few Asian Countries of enter the airline industry.
Philippine Airlines was founded on February 26, 1941, making it one of the first countries in Asia to embrace air transport. The airline’s first flight was made on March 15, 1941 with a single Beech Model 18 NPC-54 aircraft, which started its daily services between Manila (from Nielson Field) and Baguio, later to expand with larger aircraft such as the DC-3 and Vickers Viscount. It was started by a group of businessmen led by Andres Soriano.
In the year 1932 a new airline came into existence knows as the Tata Airline, lead by JRD Tata. Now it is known as Air India.
Later in the years Pakistan began Orient Airways Ltd (Pakistan International Airlines), Cathay Pacific founded in 1946, Singapore Airlines and Malaysian Airlines in 1947 (as Malayan Airways), Garuda Indonesia in 1949, Japan Airlines in 1951, and Korean Air in 1962.
INTRODUCTION
The basic function of an airline is to accommodate for passengers and cargo while taking them to far-off places between two major cities or towns within a country or beyond geographical borders.
The aviation industry in India has grown by leaps and bounds in recent years in terms of kilometers flown as well as customers serviced. The economy of a country is substantially determined by the quality of air transport.
Air transport is also considered to be the swiftest mode of transport. Almost all the states have one or more airports, which are regularly serviced by several airlines. There are a number of international airports, which also serve as domestic airport too. Others are only domestic airports.
The Air Transport Companies are both in the public sector and in the private sector. In the public sector, there are Air India, Indian Airlines, Air India Charters Limited (Air India Express) and Alliance Air. In addition to this there are at present eight private scheduled operators, viz. Jet Airways (India) Ltd., Sahara Airlines Ltd., Deccan Aviation (P) Ltd., Go Airways, Kingfisher Airlines, Paramount Airways Pvt. Ltd., Go Airlines (India) Pvt Ltd., and Inter Globe Aviation Ltd. (Indigo) operating on the domestic sector providing a wide choice of flights and connectivity to various parts of India. One cargo airline viz. Blue Dart Aviation Pvt. Ltd. is also operating scheduled cargo services in the country. At present there are 59 companies holding nonscheduled air transport operators permit.
The airlines are not the owners of the airports. The owner of these airports is the Airports Authority of India. The Airports Authority of India (AAI) was formed on 1st April 1995 by merging the International Airports Authority of India and the National Airports Authority with a view to accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports in the country conforming to international standards.
All major air-routes over Indian landmass are Radar covered (24 Radar installations at 11 locations) along with VOR/DVOR coverage (72 installations) co-located with Distance Measuring Equipment (71 installations), 39 runways provided with ILS installations with Night Landing Facilities at 36 airports and Automatic Message Switching System at 15 airports.
Few functions of the AAI are as follows:-
ƒ Control and management of the Indian airspace extending beyond the territorial limits of the country, as accepted by ICAO
ƒ Design, Development, Operation and Maintenance of International and Domestic Airports and Civil Enclaves
ƒ Construction, Modification and Management of Passenger Terminals
ƒ Development and Management of Cargo Terminals at International and Domestic airports
ƒ Provision of Passenger Facilities and Information System at the Passenger Terminals at airports
ƒ Expansion and strengthening of operation area viz. Runways, Aprons, Taxiway, etc
ƒ Provision of visual aids
ƒ Provision of Communication and Navigational aids viz. ILS, DVOR, DME, Radar, etc.
THE DOMESTIC PLAYERS
Airlines Founded/ Headquarters/ key people The Logo
Air India 1932, Mumbai – India, Raghu Menon, Chairman & Managing Director
Amod Sharma, Director
Alliance Air 1996, New Delhi and Mumbai, Capt. Mehbub Butt.
Indian Airlines 1953, New Delhi, Mr. Raghu Menon.
Jet Airways 1993, Mumbai- India, Naresh Goyal, Founder and Chairman.
Jet Lite (Formerly Air Sahara) 1991, New Delhi, Subrata Roy (founder), Naresh Goyal (Owner, Jet airways & Jet Lite.
Kingfisher Airlines 2004, Bangalore, India, Dr. Vijay Mallya, CMD
Air Deccan August 25, 2003 Bangalore, India. G.R.Gopinath, Vijay Mallaya.
Indigo Airlines 2005, New Delhi, Bruce
Spice Jet May 2005, New Delhi, India, Siddhanta Sharma (Executive Chairman).
Jagson Airlines 1991, Delhi- India
Go Air Airlines June 2004, Mumbai- India, Jehangir (Jeh) Wadia
AIR INDIA
Air India International entered the jet age in 1960 when it’s first Boeing 707, named Nandadevi and registered VT-DJJ, was delivered. Jet services to New York via London were inaugurated that same year in May 1960.
On 8 June 1962, the airline's name was officially truncated to Air India. On 11 June 1962, Air India became the world's first all-jet airline.
Air India Limited is the national airline of India with a worldwide network of passenger and cargo services.
Air India is state-owned, and administered as part of the National Aviation Company of India Limited - which was created in 2007 to facilitate Air India's merger with Indian Airlines.
Air India was founded by J. R. D. Tata in 1932 as Tata Airlines, a division of Tata Sons Ltd. (now Tata Group).
ALLIANCE AIR
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines.
Air India Regional started as Alliance Air (which was the low-cost arm of Indian Airlines. As part of Indian Airlines' merger with Air India, Alliance Air was renamed Air India Regional.
INDIAN AIRLINES
Indian Airlines was an airline based in Delhi, India and focused primarily on domestic routes, along with several international services to neighboring countries in Asia.
Indian Airlines is state-owned, and is administered by the Ministry of Civil Aviation.
The airline operates closely with Air India, India's national carrier. Alliance Air, a fully-owned subsidiary of Indian Airlines, was renamed Air India Regional.
JET AIRWAYS
Jet Airways is an airline based in New Delhi, India and is the country's second-largest international airline after Air India and the largest domestic airline.
Jet Airways was incorporated as an air taxi operator on 1 April 1992. It started commercial airline operations on 5 May 1993 with a fleet of 4 Boeing 737-300 aircraft.
In January 1994, a change in the law enabled Jet Airways to apply for scheduled airline status, which was granted on 4 January 1995.
It began international operations to Sri Lanka in March 2004.
While the company is listed on the Bombay Stock Exchange, 80% of its stock is controlled by Naresh Goyal (through his ownership of Jet’s parent company, Tailwinds).
JET LITE
JetLite, formerly Air Sahara, is an airline based in New Delhi, India. Controlled by Jet Airways, the airline operates scheduled services connecting metropolitan centers in India.
The airline also provides helicopters which are available for charter services and aerial photography.
Jet Airways and Air Sahara were the only private airlines to survive the Indian business downturn of the early 1990s.
In January 2006, Jet Airways announced that it would buy Air Sahara for $500 million in an all-cash deal, making it the biggest takeover in Indian aviation history.
On 12 April 2007, Jet Airways agreed to buy out Air Sahara for 14.5 billion rupees ($340 million). Air Sahara was renamed JetLite, and was marketed between a low-cost carrier and a full service airline.
KINGFISHER AIRLINES
Kingfisher Airlines Limited is an airline based in Bangalore, India.
Kingfisher Airlines, through one of its holding companies United Breweries Group, has acquired 26% stake in the budget airline Air Deccan and has option to buy further of 20% stake from the secondary sector.
AIR DECCAN
Deccan is an airline based in Bangalore, India. It was India's first low-cost carrier. Formerly known as Air Deccan the airline is operated by Deccan Aviation.
On 19 December 2007 Air Deccan and Kingfisher Airlines decided to merge. Kingfisher will effectively merge into Deccan Aviation following which Deccan Aviation will be renamed ‘Kingfisher Red’.
INDIGO AIRLINES
Indigo Airlines is a private domestic low-cost airline based in Gurgaon, India. It operates domestic services linking 14 destinations. The airline is owned by InterGlobe Enterprises.
SPICE JET AIRLINES:
SpiceJet is a low-cost airline based in New Delhi, India. It began service in May 2005. It was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax in 2007. SpiceJet was earlier known as Royal Airways, a reincarnation of ModiLuft.
SpiceJet marked its entry in service with Rs. 99 fares for the first 99 days, with 9000 seats available at this rate.
Their aim is to compete with the Indian Railways passengers travelling in AC coaches.
JAGSON AIRLINES
Jagson Airlines is an airline based in Delhi, India. It operates scheduled and charter services within India and to Bhutan and Nepal. Jagson Airlines operate flights between Delhi and Rajasthan and Madhya Pradesh and Himachal Pradesh. They also operate a helicopter service between Srinagar, Baltal and Amarnath.
GO AIR AIRLINES
Go Air is a low-cost airline based in Mumbai, India and is wholly owned by the Wadia Group.
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines
Air India Regional started as Alliance Air which was the low-cost arm of Indian Airlines. As part of Indian Airlines merger with Air India, Alliance Air was renamed Air India Regional.
THE COMPETITION IN THE AIRLINES SECTOR IN INDIA – THE AERIAL WAR
Around 20 years ago, when the Airline Industry of India was Government Regulated, the airline Industry was considered to be a “natural monopoly” where only one Airline Company would be able to survive in the competitive environment and meet the demands profitably. But since deregulation, the perception is changing and there is no evidence of any sort of monopoly in the Indian Airline Industry. Foreign and private players have entered into the market offering the best at the best prices to the rising demand of the Indian traveler.
With the recent change in the Aviation Policy by the Government, several vistas in business have opened up and new opportunities have emerged. The creation of new and incumbent airlines and private sector participation in the development of Aviation infrastructure is a positive outcome of these new developments. Several global Aviation consultants and private equity players are eyeing this opportunity and are setting up their branches within the country.
Despite its unprecedented growth, the Civil Aviation industry in India is still in a relatively early stage of its development after its liberalization. Experiences from abroad, i.e., the US and Europe, show tremendous structural shifts in terms of route development, pricing, quality and frequency of traffic, as well as spatial concentration at few key airports. It can be said that market liberalization provided not only for greater opportunities in the industry, but also for greater risks. Recent waves of consolidation among airlines are only one example.
Since the deregulation, the Indian Airlines has grown tremendously. Also, average prices have fallen consistently due to the increasing number of players in the market. This fall in prices has benefited the consumers the most. If some fliers would disagree that the decline in prices have not benefited all the travelers then it can be proven that the fliers paying a high price also gets a superior product, in terms of flexibility and service. Moreover, the increasing demand for airline services is also helping airline companies to run a competitive business. People prefer air travel as a feasible option for commuting because it saves time and also because of the value added services provided by different airline companies. The competition in the Indian Airline Industry has succeeded in increasing the volume of travel and lowering average prices which has in the end benefited the final consumer and also to the airline companies.
Alliances and mergers are one of the factors which are giving a solid boost to the Airline Industry in India. Different airline companies, foreign as well as Indian, are tying up or taking over or merging to produce effective collaborations in service delivery with profitable returns. It is not the just the airline companies but also associate industries such as tours and travels agencies, hotels, transport organizations etc. which are also getting targeted by airline companies to deliver quality service to the customers.
At the end, it can be inferred that the Indian Airline Industry is growing at a fast pace and the credit goes to the effective and positive impact of the increasing competition in the industry. Factors indicating to the increasing competition in the airline industry are the pricing and promotion strategies adopted by the airline companies; value added services offered; sales promotion; product/service innovation; cost cutting strategies like downsizing; and so on. Airline companies are concentrating on the customer delight and also the costs to produce profitable returns with effective customer/market retention.
ENVIRONMENTAL SCAN
The following is an Environmental Scan of the Global as well as the Indian Airline Sector/Industry. The scan identifies the trends impacting the demand in the Airline Industry and the capability of the service providers to meet the expected demand. While the current events are important, the focus of the scan is on the trends likely to be important and effective in five to ten years from now. Apart from identifying the demand trends, the scan also identifies the constraints and issues of the airline industry, the key players, resources and the outcomes for the various service providers.
In India, the service airline business is in trouble. Many airlines companies are struggling to establish a business model which is viable to the business and profitable. Most of the companies are running into losses quarter after quarter due to the increasing costs etc. The recent high volume of passenger and freight flow has not been able to return profits. The low-fare airlines business model has been a success but has not been able to recover the increasing costs. The following factors represent the business environments for the airlines companies.
Political Factors
Liberalization of Air Services
Many economies have now adopted a forward looking approach in matters of policies for the liberalization of the civil aviation sector. Many economies are opening up with regards to bilateral agreements and are attracting more foreign passengers. Also, the air traffic between nations such as India-US, China-US, and many more strategic nations is on an increase. These liberalization policies are surely a boost to the airlines sector since the demand goes up and also service providers can take advantage such the fuel cost advantage (fuel prices in foreign nations are lesser), Globalization, Mergers and Acquisition etc.
Modernization of Infrastructure
With the availability of word class, improved technology, the infrastructure has been modernized to the maximum extent possible providing the best possible experience to the travelers. Airports are getting modernized with the entry of foreign investments. The best example is the airports in India, which have undergone modernization and are as beautiful and well-managed as the Heathrow airport. Airports in tourist places such Udaipur have also undergone beautification in order to give the foreign passenger a global experience.
Investments, Resourcing and Outsourcing
The promotion of Foreign Direct Investments by liberalizing the investment policies in the airline sector is relevant from the increasing number of people traveling by air and this has lead to generation of investment opportunities in the aviation sector. Foreign players are now not hesitating from investing in the airline sector of India and other developing nations. Due to Globalization, the demand is present in every part of the world be it in the U.S.A. or South Africa or Indonesia. Also, with the entry of foreign players is leading to tremendous outsourcing which is in a way reducing cost due to effective logistics decisions.
Economical Factors
Transportation Gateways to World trade
The global Airline Industry has developed as such that the infrastructure is facilitating World Trade, the export and import of goods, services and people. The world trade trends and the economic conditions of different nations indeed have an impact on the airline industry, the demand and the outcomes. Amongst the Asian nations, Japan is facing stagnation because of which the foreign investments and the demand for trade in goods and services have fallen. Whereas, in China and South Korea, the import demands from various nations have increased. These economic conditions are affecting the airline industries of these nations.
Price and Availability of Petroleum Products
Rising and the volatile world process of Petroleum Products represent trends that have profound impact on the airline industry and the costs to the service provider. Higher fuel costs affect the demand and the operating costs thus changing the travel pattern. They also affect the infrastructure such as amenities like sky-walks etc. higher petroleum prices stem for a mix of factors which are complex in nature such as supply interruptions, geopolitics, change in usage patterns etc. The effects of high petroleum prices on airlines can be seen clearly in the balance-sheets of airlines such as the Kingfisher which has recorded losses in Quarters I and II along with many other airlines which are unable to recover their rising costs.
Cost and Availability of Skilled Labor
The airline industry demands extreme skilled labor such as the pilots, ground staff and the flight crew. The labor not only has to be skilled and available but has to be efficient because of the heterogeneous nature of the services provided. No airline can recruit a trainee pilot and directly assign him to fly a Boeing-777 or an Airbus-319 airplane carrying around 500 passengers. The labor-force has to be trained and then assigned with tasks to perform after proper evaluation. Airlines have their own subsidiary training centers which concentrate completely on the grooming and training of the labor-force. The selection, recruitment, evaluation and training are costly in nature and thus the company’s costs goes up which get transferred to the customer or the market thus affecting the market and the demand. Also, skilled personnel in aviation occupations (particularly pilots) are being attracted to overseas airlines and airports, creating training demand on top of projected domestic labor requirements.
Also, a matter of concern to the airlines companies is the aging work-force which is low on efficiency and productivity. Accommodating such an aging and un-productive workforce in the organization structure is difficult.
Cost and Availability of Strategic Raw Material
Strategic raw material with respect to the airline industry is steel and cement which are required for the manufacture of airplanes and other infrastructure required. The prices of steel and cement are growing at an alarming rate. Thus, making these materials available is a difficult and an expensive task resulting in the increase in the costs to the service provider.
Mergers and Acquisition
Strategic M & A between airline providers are another boosting factor to the airline industry. The Star Alliance which was founded in 1997 with only 5 Airline Companies now has 21 Airlines Companies. Also, the merger of Air India and Indian Airlines is a good example of a Strategic merger. These mergers make the airline companies stronger and efficient with respect to service providing. A better co-ordination between different airline companies results in a joint effort in tackling supply problems of fuel, aw material, labor etc. The merger of Air India and Indian Airlines was a strategic merger to tackle the competition from the private players in the Indian Aviation sector.
Changing industry structures and market
The global market is highly volatile and undergoes dynamic changes such as in the demand, the supply, investments etc. This dynamic nature of the market affects not one or two service provider but the entire sector. The changing business models effect into a shift of demand which has to be catered to by the entire industry. For example, the low-cost airline business model gave birth to an all-together different class of flier, the best bargain available wherein bookings are made 3 months in advance and that too in auctions etc. This led to a steep increase in demand and the number of travelers almost doubled. The strain was felt by the service provider. The low-cost airline model was not only forcing other airlines to lower their fairs and fight the competition but also cater to the demand. Thus, the volatile nature of the industry does take a toll on the airline service providers.
Competition
Two factors which worry the airline companies are the demand and the competition. With the liberalization of policies, foreign players and private players have entered the market giving a tough time to the Government companies. Also, the foreign and the private players have an edge due to the exposure to a global standard, world class infrastructure and thus provide better services to the passengers in cost-effective manner. Local and Public players have to face the heat and cope up with the competition which result into mergers and acquisition which altogether is a positive for the Airline sector.
Sociological Factors
Population and Urbanization
Demographics are an important factor determining the demand and the key markets for the airline industry. The migration of population from nation to nation either for lifestyle as well as economic reasons has led to the growth of the demand. The population growth leads to increased demand for people movement and for support services such as the hospitality and tourism services. Also, an important feature of the growing population is that the growth is taking place in the urban area and thus further creating demand for movement and air transportation from city to city. For example, the increasing movement of people from major international cities has led to the increase in the number of flights between these key cities, such as Mumbai-London; Mumbai-Paris etc.
Technological Factors
Improving Technology
With Globalization, technology is going through tremendous change with the special emphasis by companies in Research and Development. Every service provider is looking for a cost effective method, world class infrastructure, best of the best service providing to passengers etc. technology is surely another boosting factor the airline industry. Facilities such as E-ticketing, Kiosk Check-in, internet connectivity in-flight etc. are due to the improving the technology. These facilities are resulting into customer-delight.
Other Factors
Apart from the ‘PEST’ Factors affecting the Business Environments of the Airline Industry, there are many more factors which are affecting the demands and determining the market trends for the sector. The following factors are a part of the of the ‘PEST’ factors but they have an all-round impact on the sector thus cannot be allocated under a specific heading.
Following the ‘Other Factors’:
Tourism
Since the last ten years, world tourism has been struggling due to the frequent terrorist attacks and natural calamities happening in key economic destinations. The 9/11 bombing of the twin towers in New York had the most destructive effect to the tourism in the entire of the United States. Tourism in the U.S.A. has not yet recovered. Because of the fall of tourism, the international travelling has reduced thus directly affecting the airline industry. Nations now are concentrating on promoting tourism in order to improve revenues in the related sectors, most important being the airlines sector. ‘Incredible India’ is one such initiative by the Government of India to promote national as well as international tourism.
Safety and Security Concerns
Events such as the 9/11 blasts, blasts at the London Airport, blasts at the Madrid Railway Station and the serial blasts in the Mumbai local trains confirm that transport facilities are being targeted by terrorists. These events have led an increase in the safety and security issues in major cities. These issues are affecting the demand of airlines services for travelling by people.
Environmental Concerns
It is now recognized that the rise in temperature due to climate changes are because of the human activities such as Globalization, agriculture, burning of fossil fuels, deforestation etc. all these activities are to meet the increasing demand of the increasing population. The airline industry needs these activities in order to fulfill the demand of the movement of the population from one place to another. Environmental issues and concerns are obstructing in developing infrastructure such as new airports etc. the airline industry without a proper infrastructure cannot create profits for the players in the market.
Workload
We just mentioned volatile nature of the market and demand and its effect on the industry. This effect is felt in the hanging workload for the employees. In peak season times, the workload is tremendous. Also, the labor-force is not available as required by the industry. Thus, the existing work-force has to bear the brunt of excess workload. Pilots, flight crew getting stressed are a common issue now and the stress is resulting into hazardous effects for the airline companies.
SWOT ANALYSIS
STRENGTHS
Open Economies
The world is getting smaller. Thanks to the opening up of economies like India. The developing nations have a lot of potential with regards to industrial growth. Opening up policies regarding the airline services initiates MNCs to venture into developing markets.
Efficient Marketing
Due to the heavy competition in the sector, airline companies are initiating on dynamic marketing strategies. These strategies are encouraging people to fly who were once scared of flying and also considered it an expensive mode of commuting.
Networking
The Airline Sector on the Global as well as the National level is well-networked and have efficient resources put into the networking infrastructure. Travelling from any destination to another destination is possible with varied options available to the traveler.
WEAKNESSES
Threat of New Entrants
At the first glance, the Airline sector looks very profitable and full of opportunities. No doubt, there are a lot of opportunities but there are many candidates fighting for the opportunities. The competition is so intense that no player can be profitable along with being an effective player in the market. Capital intensive businesses like an Airline Company cannot afford to forego iota’s profits for market share.
Power of Suppliers
The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there is a sort of monopoly of the suppliers which takes a toll on the costs. Also, a stagnant supply poses as a weakness to the increasing demand for airplanes.
Power of Buyers (The service providers)
The bargaining power of buyers in the airline industry is quite low. Obviously, there are high costs involved with switching airplanes, but in order to give the best to the traveler, companies have no option but to buy at a high price.
Availability of Substitutes
Other modes of commuting, may it be people or cargo, are definitely cheaper as compared to air-travel. As a result, the airlines sector often loses market due to these substitute means. Especially, in the freight carriage sector, the business is falling due to increasing prices of airline companies.
Competitive Rivalry
The airline sector is highly competitive. Highly competitive sectors fetch minimum returns. Also, low returns in the airline business in the long run can pose as threat because of the businesses being capital-intensive.
OPPORTUNITIES
Emerging Technologies
The latest technologies and the innovations in the technologies are improving service delivery internal as well as external, minimizing costs, enabling mobile computing for booking, check-ins etc. and enabling businesses for capitalization of economies of scale and scope offered by government wide approaches.
Government Initiatives
Businesses can be able to capitalize on resources constraints and achieve resource cost efficiencies. Improvement of Inter-Government Partnership and Delegating of work-load is possible.
Resourcing and Investments
Outsourcing and investments help the businesses to further support the departmental objectives thus resulting in the achievement of the company’s goal. Other advantages are knowledge sharing / continuous learning, increased career bridging opportunities, ability to identify and justify resource requirements, ability to balance workloads, improved management of the costs etc.
THREATS
Poaching
The labor-force management is very costly with respect to the airlines sector. Also, due to the liberalization of policies, foreign and private players often poach work-force of competitors which leads to talent-drain and thus losses.
Inefficient Planning
Inefficient planning results into in-effective decisions which result into difficult situations. Also, planning in the airline sector is also tough wherein one has to consider every other element of service delivery and cost management.
Government Interference
Extensive Government Interference can affect the accountability of the organization wherein the Government influences decision making and also planning. One incident can be recalled of the Government Interference during the Privatization of the Airline sector.
THE PRODUCT MIX
Product is the core thing which every enterprise tries to deliver. Product is of course, the service that companies have to offer to the customer. Getting the product right is the single most important activity of marketing. If the product isn't what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to buy it. The airline product is quite a complex one since it comprises of a service of incorporating the temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty free spirit to encourage booking. The product here refers to Airline service offering. Although service products are essentially intangible, there are certain pyhsical characteristics which consumer assess in their evaluation of product choice.
Attractiveness of the offering in terms of pyhsical features such as consumers have high expectation, the food & drinks offered , entertainment.Facilities available, associated level of services such as, quality of seats & interior decoration.
The airline product includes of two types of services:
3. On the ground services,
4. In-flight services.
The on-the-ground services include a convenient airport with car parking facilities, duty free' ¬shopping quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport, etc.
The service provided inside is intangible and is highly variable. The airhostesses are trained to provide polite, warm and courteous service. The courteous service that the representatives at the baggage counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of the airlines also need to be efficient and polite.
Differentiating the Product
It is important to recognize that what the consumers are demanding are not products, or features of products but the benefits they offer. Producing added benefits thus helps the marketer to distinguish one product from another. Good design or style of service can form the basis of differentiation. This enables the company to create a personality for its service. The design and decor of the aircraft provides opportunities to personalize their product as well as periodically to update them when differentiation under IATA regulations was virtually excluded, nonetheless, certain airlines were able to develop distinct personalities. Eagle Airlines created an entirely new market between New York and Bermuda, for e.g. by developing an image of a friendly airline distinctive from other airline serving the route. A similar style was evident in Richard Branson's Virgin Airways.
CORE PRODUCT AND SUPPLEMENTARY SERVICES
Many services products consist of a bundle that includes a variety of service elements and even some physical goods. It is important to distinguish between the core product that the customer buys and the supplementary services that accompany that product.
THE FLOWER OF SERVICE
Core product surrounded by clusters of supplementary services.
The core service of an airline is the service of transport. The supplementary services are classified into eight clusters & each one is analyzed with respect to the airline industry:
* Facilitating elements
* Enhancing elements
Information
This aspect of supplementary service is common for every person that needs information about the organization. In case of airline industry, up to date information regarding flight schedules, ticket fares, information about promotion schemes etc must be available to customers.
Customers can avail of this information literally at their fingertips today with every airline starting its own website which gives complete details to the customer & also entertains queries.
It also includes providing information to employees regarding new policies affecting the airline & equipping them with enough information, which the customers might demand. Extensive training is provided to in-flight attendants regarding handling customer queries, knowledge about the airplane itself, knowledge about cuisine etc.
Consultation
This aspect of supplementary services can be customized according to the needs of the customer. It is more in the case of people processing and high personnel-contact services.
Airlines are moving more actively into the role of consultant today. They are doing away with the travel agents & designing & selling packaged tours to consumers directly. In this aspect they often act as consultants to the customer, by giving him advice & suggestions regarding the type of plan he can choose, the benefits he will get the mode of travel he should choose etc.
Another aspect to consultation at airlines is when the customer approaches the airline regarding traveling to particular destination, the airline gives him a variety of choices of routes that he can take.
In some cases airline may also design special menus & benefits in consultation with its frequent fliers by keeping in constant touch with them & asking them for suggestion as to what they want in their airline which will make their experience more comfortable.
Order taking
The order taking procedure is essentially the booking procedure of the airlines. The important aspect to be noted here is that the procedure is smooth, easily understood & fast. Reservation of airline tickets is now easy and reliable since it is fully computerized. There are 24 hours reservations. Passengers can specify their seat preferences at the time of reservation.
Most airlines use the telephone, fax, and email methods of booking. The emphasis here is on fast booking & at the same time getting the required information form the customer. This is done by establishing a standard reservation procedure & format thus reducing the risk of inconsistent service delivery. The online booking system also facilitates better order taking & processing.
The scheduling aspect assumes importance as reservations on the wrong flight to the wrong place are likely to be unpopular.
Hospitality & Caretaking
With the increased competition today in the airline industry & the increasing similarity of services offered by each airline, hospitality has emerged as a key-differentiating factor between one airline & the other.
The hospitality aspect of an airline is tested right form the time of the reservation (courtesy of the booking official) to the airline’s desk at the airport to the actual in-flight travel (the attitude of the flight attendants) to the post flight help extended.
Safekeeping
In airlines the safekeeping issue is that of safeguarding the customer’s baggage.
Baggage allowances are offered about 30 kgs of check-in baggage is allowed. Passengers carrying international tickets are given further allowance of around an added 30 kgs Priority baggage delivery is offered to members. The customers entrust his baggage to the airline & it is the airline’s responsibility to keep it in a proper condition.
Children and infants usually travel along with their parents and guardian. In case of unaccompanied minors, customer service staff renders all assistance like checking in and escorting up to the aircraft and handing over to the senior-most cabin attendant on board the flight. He is looked after on board the flight right up to the point flight reaches the destination and he is received by his guardian.
Exceptions
Special requests – airline very often receive special requests form customers with regards to meal preferences, special amenities for elderly people or children., medical needs etc. these needs have to considered & acceded to wherever possible.
Handling of customer suggestions / complaints – every airline today has a customer service centre which entertains customer suggestions & complaints. On the flight, customers are often asked for their opinion regarding service equality. Many corporate frequent travelers are consulted when the airline decides to make any new change.
Billing & payment
The billing procedure in airlines is simple. The options available to the customer are plenty including credit card & travelers cheque. Airlines use the open account system with their corporate clients. Frequent fliers are also given special payment privileges.
LEVELS OF PRODUCT
FOUR PRODUCT LEVELS
The Core Service
The core service of the airlines industry is to transport goods and services to various destinations. As the needs of the people increased the entire system became more organized and formal. After this stage come the various supplementary services.
The Supplementary Services
The airline industry has many players they had a brand name like ‘Air India’,’ Jet Airways’,’ British Airways’. All of them had some common services to offer like connecting flights, through check-in, tele-check in, food on board, and complementary gifts etc.
Different classes like economy class, business class were introduced. Air concessions are given to school students, old people etc. Singapore airlines were the first to introduce small 8”television screen for every passenger. The freebies are actually win-win deals between airlines and other services.
Sahara, for example, offers its passengers a ‘business-plan’ on two-way economy class ticket, which includes a night’s stay with breakfast, STD facility for 3 minutes and boardroom facility at the Park Hotel, New Delhi. To Delhi based fliers to Mumbai, it offers a night’s stay with breakfast, airport transfers and VIP amenities at The Orchid, Mumbai. For business class, the plan includes a stay at The Leela, with buffet breakfast and late checkout.
All these added service helps the customer to decide upon which airlines he wants to travel. As competition increased and the customers wanted more the next phase evolved and that is the augmented service.
The Augmented Service
This phase is where the customer’s expectations are met; the service providers kept working on new methods to meet the ever-changing customers’ demands. The players introduced online booking, which was very convenient for the service users.
British Airways business class has showers; it’s more spacious and comfortable. Sahara airlines offer its passengers six different types of cuisine like vegetarian, fat free, diabetic etc. They also have auction going on board. Virgin airlines have gambling on board, they also have body massage to offer to their passengers. Air Emirates has something called cab service, they have customized pick up and drop cab service.
This phase is the most crucial one; with increased competition service will become the final differentiation.
Future Service
As mentioned above the customer needs keep changing, the future is unknown. The customers may be looking in for more frequent inexpensive air travel, something like air taxis, super sonic speed. This decreases the time thus reducing the cost.
The diagrammatical representation of the core and supplementary services in the airline industry is shown below:
BRAND POSITIONING
Brand positioning is all about identifying the optimal location in our customers’ minds for our Brand and our competitors. Proper positioning makes it easier to facilitate understanding of the Brand. Proper positioning clarifies what the Brand is all about, how it is both unique and similar to competitive brands, why customers should purchase and use the Brand.
Creating brand awareness is one of the most important aspects for any product or service. Due to the intense competition in the market every airline has to position them in the market. It is only if they position themselves well can they create a Brand image, brand relationship as well as brand responses.
Each and every airline would want to have a market for them as well as have a good name in the minds of the customers.
Airlines use unique attributes to position their brands in the minds of the potential customers. Thus consumers strongly associate those attributes with that particular brand, positively evaluate it and believe that they can not find those attributes to the same extent with a competitive brand.
Re- branding has also become an important concept. It is evident that the mergers and acquisitions have become an important part of the airline industry. Thus they need to re-brand themselves under one common name.
Examples of Re- Branding:
KINGFISHER AND AIR DECCAN
Kingfisher’s acquisition of Air Deccan would lead to the latter being re-branded under a new name. The new brand positioning will be a shift from being a low-cost airline to a value-based airline. It will re-emerge with a new revamped stylish look. The emphasis will be on creating a stylish airline keeping with the UB Group’s brand image.
The branding exercise will encompass areas such as changing the look and feel of the aircraft, including interiors, ticketing and check-in counters and staff uniforms. The colors red and white will dominate the changes, with the aircraft, leather seats, carpet, boarding passes and airport counters painted red.
INDIAN AIRLINES AND AIR INDIA
When Indian Airlines and Air India merged, they retained the brand name of the latter due to its better brand positioning. The logo was evolved out of a combination of the two airlines. The red colored flying swan with the Konarak Chakra in orange became the new brand logo.
SAHARA AND JET AIRWAYS
However, in case of Sahara airlines being branded Jet Lite by Jet Airways, there could well are a dichotomy in the consumer’s mind of the new brand’s positioning. Jet has a premium connotation while Sahara was a low-priced air carrier. The Jet Lite brand might end up confusing its customers.
Thus it can be said that if the transition is smooth and the integrity of core values retained, then any re-branding exercise can be successful. The new brand has to be updated and not outdated.”
The Integrated GAPs Model of Service Quality
The Gaps Model positions the key service concepts, strategies and decisions in service marketing in a manner that begins with the customer and builds the organization’s tasks around what is needed to close the gap between the customer expectations perceptions. The airline provider needs to study the Gaps model to maintain a service quality which delights the customer. The main concentration has to be on the customer gap, the difference between customer expectations and perception. Every Airline Company has the task of closing every gap through its effective application of marketing mix strategies.
Customer Perceptions are subjective assessments of actual service experiences; customer expectations are the standards of, or reference points for, performance against which services are compared. The factors determining customer expectations are personal needs, word of mouth communication, advertisements and past experiences of the service.
Gap 1: Expected Service and Management Perceptions of consumer Expectations – Not Knowing What Customers Expect.
Gap 1 is the difference between customer expectations of the service and the company understanding of those expectations. For example, a customer expects adequate information to be provided to him about his baggage and limitations of the weight to be carried. If an airline provider fails to effectively inform the flier, then the gap gets formed where the customer’s basic expectations are not met by the company management itself.
Key Factors leading to Gap 1 are:
• Inadequate Marketing Research orientation.
Insufficient Market Research
Research not focused on Service Quality
Inadequate use of Marketing Research tools
• Lack of Upward Communication.
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
• Insufficient Relationship Focus.
Lack of market segmentation
Focus on transactions rather than customer relations
Focus on new customers rather than relationship customers
• Inadequate Service Recovery.
The above factors need to be addressed properly to close Gap 1. Strategies fore closing Gap 1 include Market Research; Promotion Mix Strategies; Communication Mix Strategies; People Mix Strategies.
Gap 2: Management Perception of Consumer Expectations and Service Standards – Not having the right Service Quality Designs and Standards
Gap 2 reflects the difference between companies understanding of customer expectations and development of customer-driven service designs and standards. For example, during long distance flights, a flier expects stabilizer drinks to maintain his body pressure and avoid restlessness but if the service provider fails to keep this in mind while processing the service, then a gap is created.
Factors leading to Gap 2 are:
• Poor Service design.
Unsystematic new Service Development Process
Vague, undefined Service Designs
Failure to connect Service Design to Service positioning
• Absence of Customer defined Standards.
Lack of customer-defined service standards
Absence of process management to focus on customer requirements
Absence of formal process of setting service quality goals
• Inappropriate physical evidence and servicescape.
Gap 2 can be closed by implementing strategies such as Process Mix strategies; Market Research; Physical evidence Mix Strategies; Productivity and Quality Strategies.
Gap 3: Service Standards and Service Delivery – Not Delivering to Service Standards
Gap 3 is the discrepancy between development of customer-driven service standards and actual service performance by company employees. Service Standards must be backed by appropriate resources and also need to be enforced to be effective in service delivery. For example, fliers when pay a relatively high price, expect a better service quality which is perceived to be a standard for the price paid. But, if the airline company fails to deliver a service which is up to the mark and does not satisfy the customer and not deliver the value worth the price charged, then Gap 3 is created.
Factors Leading to Gap 3:
• Deficiencies in Human Resource Policies.
Ineffective Recruitment
Role of ambiguity and role conflict
Poor employee – technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control, and team work
• Failure to match supply and demand.
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Over reliance on price to smooth demand
• Customers not fulfilling roles.
Customer ignorance of roles and responsibilities
Customers negatively affecting each other
• Problems with service intermediaries.
Channel conflict over objectives and performance
Channel conflict over costs and rewards
Difficulty controlling quality and consistency
Tension between empowerment and control
Gap 3 can be closed by implementing effective selection and recruitment strategies; effective outbound communication with customers; effective market research; effective distribution strategies.
Gap 4: Service Delivery and External Communication to Customers – When promises do not match Performance
Gap 4 illustrates the difference between the service delivery and the service provider’s external communication. Promises made by airline companies through advertisements, sales promotion and other communication tools raise the flier’s expectations from the airline company. These expectations form as a service standard for the flier which is then assessed and determines the customer’s satisfaction level. The discrepancy between the actual and the promised service therefore has an adverse effect on the customer gap.
Factors resulting into the Gap 4 are:
• Lack of Integrated Services Marketing Communications.
Tendency to view each external communication as independent
Not including interactive marketing in communication plan
Absence of strong internal marketing program
• Ineffective management of customer expectations.
Not managing customer expectations through all forma of communication
Not adequately educating customers.
• Over promising.
Over promising in advertising
Over promising in personal selling
Over promising through physical evidence cues
• Inadequate horizontal communication.
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches units
Gap 4 is all about the communication to the customer about the service. No airline company can afford to over promise and then not meet with the expected standard of the customer. In order to close the Gap 4, strategies need to be implemented in effective communication and informing the customers.
Gap 5: Perceived Service and Expected Service – The Final Gap
Gap 5 is about the difference in the perception of the customer/flier about the service and the expected service. Gap 5 is a result of the above mentioned four gaps. If the Gaps 1 to 4 are closed effectively and strategically, then the Gap 5 automatically is closed and the perceived service becomes the expected service and results into customer delight and retention.
PRICING MIX
Pricing decisions play a crucial role in managing the business of air transportation. The increasing operational costs, the rising competition, the falling occupancy ratio, the imbalances in demand and supply, the increasing pressure of inflation are some of the important factors influencing the decisions for setting fare and freight rates in the air transport business. The Ministry of Tourism and Civil Aviation, the Indian Airlines Corporation, the National Airports Authority, the International Airports Authority of India, the Air India Corporation are the bodies directly or indirectly influencing the process of making the pricing decisions. The main problem is to make the pricing decisions competitive because it is found that even the private air transport organizations are involved in the process too. It is seen that the following are the features in price i.e.: 1.Flexibility; 2. Price Level; 3. Differentiation; 4. Discounts and Allowances.
While price is tactical, it has localized implementation, it is temporary in nature and therefore price is flexible.
Pricing plays a vital role in the marketing mix of any airline. The ‘fair price’ concept is supreme, mainly because more than anything else most potential customers will base their purchase decisions on the basis of price of the ticket. Passengers tend to seek value for the money they are spending.
For example, below is the table showing price of tickets for Indian, Jet airways and Rajdhani express.
Sector
Indian Jet AC–I* AC-II *
Delhi-Mumbai 3,400 3,620 4,180 2,404
Delhi-Bangalore 4,500 5,053 6,385 3,470
Mumbai –Bangalore 2,700 2,839 2,943 1,954
*Rajdhani fares
All figure in Rs
As seen in the table, in every route whether it is Mumbai to Bangalore, Delhi to Mumbai the rates of 1tire A.C. is more than Air fare of Indian and Jet Airways. Travelers will most definitely choose to travel by airways as it is cheaper compared to railways plus it gives the added advantage of reaching the desired destination much sooner. Here, by offering a lower price, the respected airline is trying to snatch the customers who would otherwise be traveling by 2nd tier A.C.
The final price that the passengers pay is made up of various components. The air fare charged by private scheduled domestic airlines comprises of basic fare, fuel surcharge, congestion surcharge, passenger service fee and transaction fee (if the ticket is booked other than the Website). Out of these, only passenger service fee is the component collected by the airlines on behalf of the airport operators.
Pricing Strategies
6. Demand-based pricing: The pricing of air fares under this strategy is simple. It is based on the demand from the customers’. It involves setting prices consistent with customer perceptions of value, i.e., prices are what customers will pay for the services provided.
For example: The person sitting next to u might not have paid the same price for the ticket. If a person wanting to travel in Business class does not get the ticket for the same when tried to book at the last minute, will travel in Economy class paying more than what the other travelers must’ve paid. The pricing in airline industry is never fixed or same. It’s fluctuating in nature depending upon time, demand and other such attributes. So when, the demand exceeds supply for the seats in an airplane, the price charged on the ticket is much higher than other passengers.
7. Season-based pricing:
The pricing of airline industry largely depends on seasons. For example, if a person is travelling by Indigo from Mumbai to Bangalore, the pricing will be different for different time periods. It will be cheaper in monsoon while comparatively expensive in winter. Also, it depends when the person is booking the ticket.
If he books the ticket 3months before the date he’ll travel he might avail the ticket at a cost that is 30-40% less than what the person may be charged if he books the ticket 20days before.
For example: if a traveler books a ticket during normal weekdays the prices would not be too high. Whereas, if the same traveler books the tickets during Diwali or Christmas, he will be charged more than what he was charged earlier for the same destination. And this strategy remains the same for all kinds of airlines. The prices may not be exactly same but it’ll be quite similar.
Also, Jet airways provide tickets at a comparatively lower rate during the vacations for student-passengers. This helps them tap the population travelling abroad for education purposes as well as increase occupancy ratio.
8. Competition-based pricing:
This strategy focuses on the prices charged by other airlines. Competition-based pricing does not always imply having the same price strategy as the competitors. It means keeping one’s pricing strategy such that it is cheaper in cost or it offers the same price as competitors with better and/or more facilities. Thus its basic purpose is to have a competitive edge over the rival airlines.
For example, Indian airline industry is filled with low-cost airlines. So Air Deccan before getting acquired by Kingfisher had many competitors like Indian airlines, Air India (before merger), Indigo airlines and Go air. And now Spicejet had entered the already filled jammed low-cost airline bandwagon. This brings about a competition in the pricing of the tickets. Spice jet on completion of three years on May 23rd 2008 offered 3 lakh tickets just for Rs. 3 starting from July 1st to 21st September 2008 across its 18 destinations in India. This was a very smart move to attract passengers especially those travelling by Economy class who are very cost conscious.
9. Pricing strategies when customer means “Value is Low price”:
This strategy can be applied when the most important determinant of value to a customer is money. But this does not imply that the level and standard of service, facilities and other attributes should be looked upon. It just means that pricing takes a forward stand as compared to the other attributes. To establish a price for this strategy, the marketer should understand and know the objective of charging low prices, how the customers’ interpret prices and how they value their travelling experience on the basis of prices.
There are various methods of applying this strategy:
iv. Discounting: The service provider or marketer may offer discounts or price cuts to communicate to the price-sensitive buyers/ customers’ that they are receiving value for which their money is spent. For example: Spice jet has a special group discounting scheme wherein groups of over 15 guests may be provided with consideration for special fares.
Another example would be that of Indian, that offers discounts to passengers on site collaborated with India times by offering a bid for international destinations at low fares.
v. Odd pricing: This is another strategy wherein the service providers offer prices at an amount which seems comparatively lower than the normal rates. It is based on U.S. dollar price-strategy wherein instead of charging $500 they will charge $489 or so. So in case on Spicejet. Instead of offering a ticket from Mumbai to Goa at Rs. 2400 they would offer at Rs. 2299. So, on looking at the figure the price difference seems to be more which in fact is just hundred and eleven rupees.
vi. Penetration pricing: This is a strategy in which new services are introduced at low prices to stimulate trial and widespread use. This strategy is appropriate when the sale of tickets is price-sensitive.
In order to make, travel by air more affordable to the common man, a couple of years ago Jet Airways announced a new offer `Everyone can fly' which offered a major reduction in economy class air fares on certain selected routes across the country. In most of the airlines, the reduction enables economy class air fares being competitive to rail fares being charged for the same journey.
10. Pricing Strategies when the customer means “ Value is everything I want in a service”:
When the customer is concerned more in the ‘get’ component of the service, monetary price is not of primary concern. The more desirable attributes that an airline provides, the more highly valued that service is likely to be and higher the price that the marketer can set.
Skimming strategy: This is a strategy in which new services are introduced at high prices with large promotional expenditures. It is an effective approach when services have undergone major improvement over past services. In this situation the customer is more concerned about obtaining the service than the cost of the service, thus allowing the service providers to skim the customers most willing to pay the highest prices.
An example of this would be that of Virgin Atlantic airlines that has gambling on board. They also provide in-flight body massage to their passengers. There is a bar in the air craft. Also, they provide lounge facility at the airport to the frequent flyers.
Also, when Kingfisher had newly started first class with Kingfisher first, the rates of the tickets were very high compared to other airlines’ tickets. But travelers still opted for it as they wanted to have the new flying experience with Kingfisher.
THE PLACE MIX
In Airlines, they utilise more than one method of distribution.for e.g they sell tickets through travel agents & sell seats on flights to tour operators , whilst also operating direct marketing. Whichever distribution strategy is selected, channel management plays a key role. For channels to be effective they need realiable updated information. For these reason, I.T has been widely adopted such as on-line booking system.
This dimension of marketing mix focuses on processing of services and selecting the location points for airways and airlines offices keeping in view the comforts and conveniences of the end users. By the processing of services, our emphasis is on the involvement of channels, front-line-staff, travel agency offices; offices of the tour operators or so from where service flow and reach the ultimate users.
8. The air transport needs to make sure that the prospects don’t face any difficulty in buying the tickets and make necessary arrangements for the confirmation of booking.
9. It is also to be confirmed that the users booking their luggage are not to face inconvenience.
10. The behavioral profile of the personnel working in offices of travel agents and in the offices of the airways and airlines require due attention. It is almost clear that airhostess looking attractive, smart, well dressed are at your disposal to make available to you the defined services.
11. It is also to be sure that the information network of the offices of the travel agents is technology-driven and user-friendly.
12. The security checking, custom checking of passport, visa, income tax clearance or so. It is essential that all the windows or the counters offer the services as per the provision and promises.
13. Keeping in view the duration and nature of flights, the users are made available lunch/ dinner, breakfast and drinks inside the aircrafts.
14. If in course of the journey, you are supposed to change the aircrafts and the duration of stay is long, it is the responsibility of the airport authorities and concerned airway and airlines to make available the accommodation facilities.
Another dimension of place mix is related to location and management of the offices of the airways, travel agents, tour operates, transport operators or so.
7. The main thing in the selection of a place is easy accessibility. The prospect customer should get an easy access to the office and ticket counters. The place is required to be safe, well connected with all-weather proof roads where all the required infrastructural facilities are to be available.
8. The technology-driven booking system is to be ensured. The online booking facility should be user friendly and all the information regarding the company should be available on the company site so that customer can get all the information at it ease.
9. The water and sanitation facilities for the users and comfortable seating arrangements need due care of the travel agents or airways offices. The lighting, ventilation facilities need to be made available.
10. The interior decoration, furnishing, plantation need aesthetic sense so that the users from a positive opinion regarding the airways services. The interiors should be creative so that people can enjoy their ride and make their trip a memorable one.
11. The positioning of posters of airways and airlines which look attractive and draw the attention of the users attending the offices for chartered flights, packaged tour need due care.
12. It is in this context that they find management of place an important component of the marketing mix.
In view of the above, it is right to mention that air transportation business is linked with a number of allied services offered by a number of agencies and organizations. If they don’t find cohesion and coordination the promised services would hardly reach to the end users.
Indian Airline Network
Jet Airways Network
THE SERVICE MARKETING TRIANGLE
ENABLING PROMISES MAKING PROMISES
KEEPING
One can better understand the working of airlines by looking at its marketing triangle. There are three entities in the entire transaction:
4. Customer: He is the person who wishes to satisfy his needs i.e, transportation from one destination to another. Here, the customer is a passenger or a potential passenger.
5. Company: This is both the dreamer and the offerer. It here refers to the various airlines which offer its aviation services to the customers to satisfy their demand for transportation from one destination to another, for example: The Indian Airlines. Here, the company makes a promise to its customers to deliver the right quality service.
6. Provider: The service providers are finally the people who interact with customers. They keep the promise that the airline operator has made to its customers by delivering the finest services. They are the ones who carry out final transactions. The customer actually comes in contact with the service provider and not the company. For example: the air-hostess and the crew.
The interaction between these three parties while providing the service takes place in the following manner:
The company is established with the basic objective of providing the specific transport service. Thus the airline industry with players like Indian airlines, Jet airways, Sahara airways etc came into being.
The air service provider that is the company communicates with the customer and makes him aware of the services. It makes promises to the customer by advertising through various media’s. For e.g.: the TV ad of Indian airlines advertising its new sleep-in seats.
The customer who gathers knowledge about the service approaches the company for availing his service in order to satisfy his need. This interface of the customer with the company is through the customer’s interaction with the providers of the company. The company enables its promises to the customers through setting up facilities to deliver the promises by setting up ticket and enquiry counters. The outcome of the “to be transaction” is determined by the interaction between the provider and the customer. Hence the company aims at offering its providers with the required infrastructure and training to optimize the quality of the transaction. For e.g.: Yearly employee training programs and performance appraisals are done by Sahara airlines.
The three strategic points where the provider and the customer interact are:
Ticket purchase at the airline counter or the ticket agency.
Checking in
While boarding
During disembarkation
All three sides are essential to complete the triangle. All three marketing activities represented by the sides of the triangle are critical to efficient delivery of the service, even if one of the sides is out of place, the triangle will be distorted; in other words the total marketing effort cannot be optimally supported.
THE PROMOTION MIX
The formulation of an ideal promotion mix is essential to inform sense and persuade the users. The business magnets, business executives, politicians, cine artists, high spending tourists, business houses using expensive inputs and trading the same, the Department of Posts, domestic and international tourists are some of the users of the air services. The users appear to be more conscious, aware of their rights and in a majority of the cases are found sophisticated.
However, majority of the users are sophisticated and therefore the promotional efforts are required to be more creative. The professionals engaged in the air services bear the responsibility of blending the different components of promotion in such a way that the task of increasing the business is simplified. Since a number of airways and airlines have been facing problem of financial crunch, it is pertinent that they make possible an optimal use of the different components of promotion.
PROMOTION MIX VARIABLES
Since domestic deregulation occurred in 1978, competition in the airline industry has intensified and become more concentrated. The respective airline needs to provide certain benefits that the other airlines do not. Promotion has become a big aspect since the arrival of numerous private airlines. The way this industry has attracted people to them has changed. Airline companies have struggled with making new ways to market their products. Today airline advertising focuses on price, rather than the pleasure of the flying experience. Companies use the radio, newspapers, and billboards in big cities, tops of taxicabs and sides of buses to put their ads on. Even coffee cups in restaurants are starting to be used for advertisement.
Promotion should be done keeping in mind the competitor’s product. This helps in promoting own product/service with a message that has an edge over the others. Kingfisher understands its competitors well and promotes their service accordingly.
Vijay Mallya's Kingfisher Airlines adopts an innovative marketing strategy to snatch attention from Jet Airways' advertisement.
In the ad displayed on the hoarding above, Jet Airways say, "We've changed." Kingfisher Airlines comes up with a cheeky billboard above Jet's hoarding that says, "We made them change!” This was a very innovative and smart move on kingfisher’s part to promote their service thereby denoting that their own service is so much better that Jet Airways had to change and improvise them to reach their standards. This needs presence of mind on part of marketing and promotion heads.
Spice Jet, India’s most preferred low – frills airline, has announced a unique offer of 3,00,000 tickets at a special price of Rs 3/- per ticket. This special offer flags off the third anniversary celebration of the airline. Booking for this special promotion, was opened on May 9, 2008 and will continue till the tickets are sold out.
Tickets bought will be valid for travel from July 1 to September 21, 2008 on all flights covering its 18 destinations. This offer is available only on SpiceJet - Low Cost Indian Airlines, Book Indian Flight Tickets Online, Cheap Fares Air Travel in India - SpiceJet offers Discount Airline Ticket Fares Online. In the last three years Spice jet has flown over8.1 million people across all their destinations. They have helped Spice jet gets over 10.3% market share. This special promotion is Spice jet’s way of thanking them for their support.
PROMOTIONAL MIX AND ADVERTISING
Advertising
As any other service, the air transportation service needs creative advertisements to promote their business. This is the first component of the promotion mix, which is based on professional excellence of the advertising agencies. In view of the rising cost of inputs and increasing the impact of worldwide economic depression on the air transportation, there is a need to make the advertisement budget optimistic Vis-a- Vis optimal.
This is essential to regulate the multi-dimensional expenses found of unproductive nature and instrumental in making the service expensive. The telecast media and the print media are found important while promoting the air business.
While advertising through the telecast media, budgetary constraints and budgetary provisions should be considered. Also the quality and nature of target market and level of expectations should be kept in mind. The advertising professionals need to make the advertisement slogans campaigns and messages proactive to the generation of business. Kingfisher is a good example for advertising its services. They advertised kingfisher not merely into the business of transporting people from point A to point B. They have created a new category of Aviation Hospitality Space thus making service and hospitality their main focus. Their slogan is kingfisher airlines- “Fly the good times.” This is how they are differentiating their product from other airlines. The airlines also have to make sure that whatever the strategic decisions they make to promote the business are in a position to establish an edge over the promotional measures of the competitors. They are also required to assign due weightage to the efforts made for the projection of a positive image. The Indian Airlines as well as Air India have been facing the image problem but the advertisement may be efficacious in transmitting the facts and removing the image problem.
As mentioned earlier, Indian airlines started promoting its first class fully reclining seats to as a tool to improve the image problem and attract more passengers in its first class. It is essential that while advertising one has to keep in mind the image of the country, the natural scenes, the tourist attractions, rich cultural heritage or so which would energize the process of motivating the tourists. For example: Thai Airways have air-hostess wearing colorful long and flowery dresses and greet by joining hands and bowing to their passengers as a part of their culture. While advertising, it is impact generating that we select an opportune moment of flight, an attractive scene of take-off, high attractiveness of personnel in general and the air hostess in particular, the landscape of an attractive tourist center, wild life sanctuaries, lake, park and so on. The air transportation services can also use the broadcast media.
For example: In times of rising fuel prices and lower occupancy rates Jet Airways has come out with a lavish ad featuring the most expensive brand ambassador of time Shahrukh Khan. The Shahrukh Khan TVC, which broke on September 1, 2008 is the first of three campaigns Jet has planned (the ones on economy and premier class will follow), and is running across most news channels and some specialized travel channels. The ad marks the television debut of Jet Airways which had previously relied heavily on the print medium. While competitor Kingfisher relies on showcasing complete range of Consumer experience Jet is trying to highlight its product superiority. Jet had come out with Boeing 777 last year, which has some superior features and this ad is merely an aim to highlight those features besides trying to latch on to the celebrity appeal of Shahrukh Khan.
Another example would be that of Indigo airlines that uses Internet and print media as a visual medium to advertise itself. What is interesting is the fact that the ad is not flashy and it just conveys simple facts.
An important source of visibility for Indigo is the internet where e-ticketing give it a chance to come up with its offers.
The launch and subsequent editorial patronage and newspaper support that Indigo carved out for itself helped it set itself up as a brand.
Online reviews on MOVIE Review, HOTEL Review, MOBILE PHONE Review, BOOK Review, CAR Review, CAMERA Review - MouthShut.com and other blog sites are all directed toward creating a brand reckoning for Indigo Airlines.
Evenly spaced out PR activities help Indigo to be on top of the minds of the people and gives it instant brand recall value.
Indigo goes for extensive print coverage every month or so.
Publicity
Publicity is a process of persuasive communication for which no payment is made. Strengthening public relations activities if found essential to promote the business airlines or airways. The Public Relations Officer, Receptionists, Travel Agents, Travel Guides, Media people are some of the sensitive points of publicizing the business. The most important point in this is the co-operation of media. The marketing professionals should have an idea of magazines, newspapers preferred by the prospects or users and they develop rapport with the correspondents concerned. The Airlines need to recruit efficient personnel for that very purpose that should have professional excellence no doubt but in addition they are also required to have the potentials of attracting the users, prospects.
For e.g.: Indian Airlines helped the cancer patients and took them for a small outing as part of their public relation campaign. Similarly, Sahara linked up with Close- up by taking Hrithik Roshan. Here for Close-up it is a promotional strategy while for Sahara a publicity that an airline is linking up with FMCG by using an entity.
Kingfisher is right now running a print campaign in major business publications. The new series of campaigns are focused on the functional attributes of the airlines.
Deviating from the usual flashy ads, Kingfisher is now appealing to the Left- brain of the consumers. The ads are targeting the three segments of user’s i.e Children, Ladies and Males but the ads are talking to Men who are the key decision makers.
The ad for the young travelers talks about special kids’ meal, wide seats and games. The ad ends with an appeal to the father that “Your little prince deserves to feel like a King ". The ad for the lady travelers talks about the seats that bend all the way back, the footrest that will pop up, life valets when your lady lands at the airport at midnight and helping hands that lift her bag. The ad ends with the message “Queen of your heart deserves to fly like one ". The third in the series aims at the decision maker himself. The ad aimed at male traveler as usual talks about the 'flying models ", the smile that tastes better than the ice-cream, spectacle cleaner and the air-boutique. The ad ends with the message ' Every man's seat feels like his throne'.
With regard to the quality of campaign, it may miss some eyeballs because of not being an eye catchy ad. But the message surely is smart. The basic premise in this ad campaign is that Men are the decision makers with regard to this service. May be a campaign aimed at lady executives may also come in the future.
On the promotional front, Kingfisher has signed up the latest diva of Bollywood, Ms Deepika Padukone as the brand ambassador.
Sales Promotion
A component of promotion adopted for a particular period to touch the target and withdraw the measures when the time is over is known as sales promotion. The tool based on incentives is found instrumental in sensitizing the users. The travel agents contribute a lot to the promotion of air transport business and therefore we need to think in their favor on a priority basis. The tour operators also contribute to the process and therefore need to think in their favor. The front- line-staff in the offices of the airways and the receptionists working there also play the same role. This makes it significant that they are given some incentives which are in the form of a holiday trip to a particular place, concessional services to their children or spouse or so. Also offering them with innovative gifts, which have not been offered by their competitors, can be given. The nature and type of incentives would depend on the contributions of providers. If they make immense contributions, the incentives would be in good quality and volume. There are incentives given called the promotional incentives on the basis of the frequency of using the services.
For e.g: Through Jet Airways, return ticket passengers on metro flights (both economy and business) can avail a discount at all Taj and ITC hotels in South India. Also Sahara has a fanatical assortment of gifts being handed out (its’ Take Offer). Braun Mixer grinders, CTVs, cameras, handy cams, mobile phones and even free holiday packages are up for grabs as a part of their sales promotion campaign.
Also, there’s something called marketing bonanzas. Some airlines give free tickets to customer so as to make them aware of their services. These tickets or any other gift voucher are given so as to attract a lot of people. This is a very interesting way of catching the headlines of customers. Example Go Air was sending SMSs to any number that they have won a free ticket from Mumbai to Goa or Delhi. Kingfisher has also sent messages to people for free ticket.
Jet lite announced its ‘Summer Special Bonanza’ promotion for online bookings through its website. Even Air Deccan used this approach of giving gift voucher worth Rs.250 and a saving of Rs.99 per ticket if booked thorugh Air Deccan’s site. The offer was valid for bookings made between 22-May-08 and 10-Jun-08 and for travel in the same period. There was also a 2 nights, 3 day holiday package to be won in the offer period.
Jet Airways, India's premier international airline, has announced a special promotional package for students flying to its destinations in the United States, Canada, United Kingdom, Europe or Asia. Jet Airways' special promotional package is valid for outbound travel on or before October 31, 2008. Existing, as well as new, students will receive a whole host of benefits including excess baggage allowance and special fares. Students availing of this offer will be allowed to carry an extra piece of baggage, with each piece not exceeding 23 kilos, on flights to the US, Canada, UK & Europe; and an additional 10 kilos on flights to Asia (Shanghai, Hong Kong, Singapore, Kuala Lumpur and Bangkok), on Jet Airways' online destinations.
With Jet Airways special promotional package, students will also receive exclusively designed Student Kits', in association with its partners. These may be collected after the purchase of a ticket at any of Jet Airways' city sales offices around India. Each kit contains a Matrix mobile connection with free talk-time worth Rs.4000 in the US, UK, Singapore and Australia, ICICI Bank Travel Cards for hassle free transactions across the world, a free Tata Indicom Wi-Fi Roam Card enabling internet connectivity from over 50,000 hotspots in the US ,UK, Austria, Czech Republic, Germany, Netherlands, Switzerland, France and Japan; Bajaj Allianz Travel Insurance with special privileges and low premiums and VIP vouchers worth Rs.500/- on purchase of VIP travel accessories.
Jet Airways also offers students an ergonomically-designed seat with hammock style head rest and foot support, the airline also provides its Economy passengers a personal reading light, on demand In-Flight Entertainment and access to over 200 hours of Hollywood and Bollywood movies, regional films, and television and short programmes. Thus Jet Airway plans to tap mass-students travelling abroad during this period.
Personal Selling
The air transport organizations find personal selling which is the mix of promotion mix helpful in increasing the business. An art to influence, stimulate, sensitize the impulse buying is known as personal selling. The air transport-marketing professionals are supposed to know about the behavioral profile of persons who act as personal promoters. The travel agents, tour operators, transport operators, travel guides, front-line staff on the booking counters, receptionists contribute substantially to the process of promotion. If they stop selling, the offices of airways would find it difficult to sell. This makes it clear that even the quality services fail in attracting the users, if the channels are not co-operated. This makes it essential that the airlines offer incentives to them so that they keep on moving the process of stimulation.
To better understand the concept of personal selling, the airline in question needs to follow the diagram given above. It explains all the things that the people involved in the process of selling should know and do. Starting with the first point, customer’s value for time, money and energy should be considered. Their comfort and suitability should be addressed to. They should be provided service in such a way that they get more than they expect to. It can be said that the customer’s should be pampered.
For instance, giving chocolates on arrival and departure or welcome drinks or discounts during off-season to name a few. The delivery of tickets should be made on time this enhances the effect of personal selling.
The entire aim of personal selling is to provide customer’s easy access and hassle-free journey and that is what should be done by the airlines and that is where the circle of personal selling ends. To fulfill the above mentioned criteria the airline industry must select persons, agencies having a positive image.
The travel agencies having a well established business can help substantially and therefore it is the prime responsibility that while selecting the travel agents one must assign due weight age to the image of the agencies. The tour and transport operators help considerably and one needs to think about the incentives to be offered to the promoters. In personal selling, the front-line staff or personnel at the booking or reservation counter of airlines office playing an incremental role in promoting the business. Here, it is essential that one is aware of the credentials of persons supposed to discharge the business responsibility and try his best to brush up their faculties as and when opportunities come.
Word-of-mouth Promotion
This happens to be an important constituent of promotion mix in which the promoters act as a hidden sales force. The air transport organization depends on this type of promotion if they feel that the quality of services offered by them is of world class. In the Indian perspective, the Indian Airlines, Air India, Sahara India, Jet Airways and others may use this component of promotion if they realize that providers have not been distorting the quality of services promised. If you are traveling by kingfisher and you really like the experience then you will definitely recommend your friends, relatives, etc to travel by the same airlines. Word of mouth is the best promotional strategy as it does not incur any cost for the company and also a positive image is built in the market by their loyal customers.
Indigo airline being a low-cost airline does not allocate much fund to advertising hence, it entirely relies on word-of-mouth promotional tool to spread a word about their services and thus communication is established and brand is recognized by the people who are potential flyers rather than the entire country which is an expensive affair.
PEOPLE
The commercial airlines service industry extremely competitive, safety sensitive and high technology. People, employees and customers must be the arena of an organization’s core competence.
In the service industry, service personnel come in direct contact with their customers in the course of production and consumption of the services.
Because people provide most services, the selection, training, and motivation of employees can make a huge difference in attaining customer satisfaction. Ideally, employees should exhibit competence, caring attitude, responsiveness, initiative, problem solving ability, and goodwill.
The airlines hire the right personnel with the essential requirements. They recruit the right people develop, and train them to deliver quality service. These employees are motivated in a manner that they stick to the organization; they are treated more as customers, rather than employees
For Example: Delta Airways recruits an employee and moulds him to cater to their demands. These employees are sent to US and Frankfurt on a 21 days training programme. The successful completion of this motivated the employee to stay on with the airline. They are provided with many incentive programmes and also with a one- month bonus incentive on completion of the sales target.
The Airline sector is divided into two categories, Internal and External customers.
Customers refer to the persons who have certain needs, wants and desires. The company makes promises to its customers. In the Airline industry, the customers refer to those persons who feel the need of travelling from one destination to another. The customers are further classified as Internal and External customers.
Internal Customers:
While delivering services the airline ensures that the services are delivered as promised and this rendering of service satisfaction is often totally in control of the frontline staff. The quality of service that the frontline staff provides is highly dependant on his/her ability to communicate their credibility.
Being a Hospitality line the employees are given extensive training to provide caring and individualized attention to customers. There are many people involved with the successful working of the airline industry.
The various types of airline personnel include:
FLIGHT CREWS: These are the trained people who play a very important role from the time when you check in your baggage till you board the aircraft. They ensure the smooth functioning of everything and guide you through the entire process. They form 85 percent of the airlines labour force.
The Flight crew includes:
Pilots
Flight Attendants
Reservation Clerks
Airport check-in and gate personnel
Security guards and In-flight security personnel
The service contact personnel in the airline industry are the Flight Attendants who are expected to have a pleasing personality and must also be polite while service handling.
While on the other hand the cock pit crew/ Pilots are considered as low contact personnel hence they are required to posses highly technical and analytical skills.
The Reservation clerks play a very important role as they check the tickets, allot the seat numbers and also place the destination tags on the baggage; hence they should be highly attentive while doing their work.
The Airport check-in staff must be extremely helpful as that is where the evaluation of the hospitality of the airline can be gauged from at first
GROUND STAFF: These are the main people who work behind the scenes and play a very important role to ensure smooth functioning of the entire procedure right from handling the formalities on the airport to helping the passengers board the aircraft. All these functions are handled impeccably by the ground staff.
The Ground Staff includes:
Avionics technicians/ engineers
Flight dispatchers who track all the airline’s flights
Baggage handlers
Gate Agents
PDC (Prolog development center)
The PDC (Prolog development center) has implemented a Staff Scheduling System; this system was adopted for the ground staff as creating good staff schedules is often a complicated process. It is difficult to clearly appreciate the many possible combinations of duty periods, duty hours, time-off-in-lieu requirements, holidays etc. that will ensure each person works the correct number of hours.
First and foremost it is important that internal and external rules are correctly implemented while maintaining adequate manning levels and ensuring a fair distribution of the various shift types. Scheduling restrictions (financial or other) may exist and must be taken into account.
Why Use a Staff Scheduling System?
Creating a good staff schedule is often a complicated process. Especially when the airline industry “never sleeps”. Manning is 24x7x360. The business involves many employees with different agreements and they must be confident that they get paid correctly.
First and foremost it is important that internal and external rules are applied, there has to be adequate manning and lastly the personnel must be available when the traffic requires it.
On an Organizational level PDC- Staff Plan, provides their clients many Advantages in the terms of:
Cost savings in terms of less salary bonus, over time and time-off-in-lieu
Significant reductions of administration
Efficient cost management through a flexible staff scheduling (no over manning and no under manning)
The Advantages that PDC-Staff plan provides the employees are in the terms of:
Fast and safe scheduling of duties and shifts
Better overview of manning, time expenditure, time-off-in-lieu, etc.
Relief of administrative work
Thus, efficient staff scheduling saves great resources and thus time to focus the efforts on other areas. In addition, time will be saved in the scheduling process itself
What are airlines looking for?
In making a decision about the employment of cabin crew, all airlines consider three prime elements:
Eligibility
An airline may have eligibility tests depending upon its own specific requirements. These are facts that can be determined either by physical or by documentary Evidence. Some of the Eligibility checks likely to be included are:
Does the candidate meet the required age profile?
Does the candidate meet the required height/weight profile?
Has the candidate attained required educational (or other) qualifications?
Is there documentary evidence to support the qualifications the candidate claims to have?
Has the candidate acquired adequate experience in a customer service or public contact role?
Can the candidate speak a second language? To what level of proficiency can the second language be spoken?
Suitability
This is clearly more difficult to assess than eligibility. Airline managers will be looking for people who can best fulfill the role of a Cabin Crew .The minimum requirement is for:
9. Technical knowledge
10. Maturity
11. Adaptability
12. Judgment
13. Tact
14. Diplomacy
15. Grooming
16. Attitude
Airlines will also be looking for people whose performance will not be adversely affected by the disadvantages of the job and will readily accept direction/training.
Specific requirements
Eligibility and Suitability are relatively basic requirements, which must be met in all cases.
Every Airline sets its own specific requirements; some airlines pay much emphasis on the appearance and personality of the person while others may look at the experience and knowledge. Some airlines may prefer have trained and experienced personnel while others may want fresh recruits.
Put simply, airlines are looking for the right people for their current circumstances. Do not be too disheartened if you do not get in at the first attempt. You can always try again - or apply to another airline! It is also true that candidates fail to be recruited by an airline at one attempt, and then succeed at a later date. This is usually because the candidate has acquired better interview technique, or extra skills, experience or confidence. It can also be because the airline itself has revised its person specification.
CREW PROFILE AND COMPLIMENT
The senior most person on any flight is the Commander. His is the last word where the flight & its crew or the passengers are concerned. The Cabin crew Senior or the In Flight Supervisor is the senior most Cabin Crew, but takes orders from the Commander.
The Crew complement on board is the total number of crew including both the Cockpit & the Cabin Crew. This number is preset where the Cockpit/ Flight deck crew is concerned for a particular type of aircraft. The number of Cabin Crew an airline has on an aircraft depends on a number of factors:-
2. Type of aircraft - for any aircraft there is a minimum Cabin crew complement required depending on:
The number of emergency exits on the aircraft
The number of passengers on board the aircraft.
5. The type of food & beverage service to be provided to the passengers.
6. Right duty time length of the flight. On some long haul flights when the flying time exceeds the flight duty time (the max number of hours a crew can be on duty), then there are two sets of crew on board. This is found ONLY on International sectors on extremely long sectors.
7. Today a few airlines have started new services like baby-sitting, on-board masseurs, tailors etc, which require extra crewmembers on board. More often than not, airlines start new service procedures that do not require additional crew or other staff, but to capture a good market share, Airlines often launch such services that are NOT sustained over a period of time.
The Hierarchy where the Cabin Crew is concerned may vary a little from airline to airline depending on their individual policies. For example in some airlines the air hostesses retire much before
Advantages of the Job
As with the role itself, the perceived advantages of being a cabin crewmember are often quite different from the actual benefits. Below is a list of what cabin crew & others see as being the real advantages:
Travel
This is what attracts many people to the job in the first place. Cabin crew goes to places they always dreamed of, and find interest in destinations they would not necessarily have chosen to go to.
Camaraderie-Solidarity & Friendship with other Crew members
The camaraderie, team spirit, and sense of belonging together that the majority of crew has when they are flying is unique. Despite being a very diverse group of people, your colleagues are likely to be sociable and out-going, and will help to make the job a lot of fun.
Variety and Interest - Absence of monotony
This is certainly not a 9 - 5 jobs, and no two working days are likely to be the same. The sheer dynamics of different crew, passenger profiles, destinations and roster structures ensure that there will always be variety.
Appreciation
This is one career where the appreciation is almost instant after a 'good job done'. Despite all the things that can go wrong on a flight, many passengers do show their gratitude of the crews' efforts, either when someone has done their best for them individually, or especially when the whole team has pulled together well. The better airline management teams also acknowledge consistently good performance, or outstanding individual service.
Personal Development
Airlines usually have high standards of initial and follow up training, and some provide self-learning facilities or schemes thus helping the crew to develop their personalities and all develop themselves in other aspects.
Other benefits
Most Airlines provide a number of other 'perks' along with the usual handsome salary they give a crewmember. Most major airlines to provide ground transportation and a good standard of accommodation for crews who are staying overnight at destinations away from their 'home base'. Free medical attention for cabin crew I their family members (in some cases) are also provided. Free staff travel tickets are another BIG bonus given. Airlines have schemes whereby all their staff are able to travel free on the 'employer' airline or at extremely advantageous prices on other airlines. Airline staff also benefit from a range of discounts, from hotel chains, shopping malls, duty free shops, insurance companies and financial service institutions.
Uniform
Airlines usually provide items of uniform clothing to all their public contact staff free of charge.
Disadvantages of the job
Air cabin crew is a wonderful job, and can provide an interesting and rewarding career, but as with any job there are drawbacks as well.
Travel Limitations and Risks
This is almost the reverse of Travel' as an advantage of the job. As a crew member you do not choose where you go to, or how long you stay there. Crew also face the usual risks present for any other traveler, such as theft of personal belongings, mugging, poor hygiene standards in other stations/cities, bites/stings from insects and animals, and risk of contacting infectious disease.
Customer Service Negatives
Good customer service is a prime role pf cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Good customer service is a prime role of cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Dependence upon the support of other departments, including planning, maintenance, and catering, cleaning and logistical units is very high. Any breakdown in the chain (for example dirty toilets or insufficient catering) lead to a feeling of being “let down and having to take the burnt of passenger complaints.
External Customers:
These are the main customers for the airline industry as they generate revenue to the same. Hence Customer Satisfaction plays a very important role. The customers should always be kept at pedestal by looking into their needs and acting on them immediately and also providing them with exclusive services. This would earn goodwill for the airline and ensure the smooth running of the business.
The customers are categorized on the basis of their need and preferences:
Customer Segmentation
Most airlines use a very traditional segmentation strategy, dividing passengers into first class, business travelers and economy travelers. But, nowadays most of the airlines offer only two classes – the business class and the economy class.
The customers subsequently also be divided as per the scope of the market .This ia a process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinct marketing strategy.
This includes preparing a method of identifying a group of consumers, within a broader market, that has similar characteristics and needs. Segments can be identified by examining geographical, demographic, psychographic, and behavioral differences.
Segmentation of the aviation industry can be done under the following factors:
Geographic segmentation
Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions etc. the company can operate in one or few areas or operate in all but pay little attention to local variations.
Most of the domestic airlines, their market segment consists of the customers who’s destination are major commercial cities like Mumbai, Delhi, Kolkatta etc. apart from these the airlines also concentrate of tourists destinations like Goa, Agra etc. The reason behind this is that such sectors have major traffic and are profitable sectors. However Indian Airlines, being the National Carrier of the country, fly’s even to the unprofitable sectors and concentrates on the segment of people flying to such destinations.
Demographic segmentation
In demographic segmentation, the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion and social class. There are several reasons for the popularity of demographic variables to distinguish customer groups. One reason is that consumer needs, wants, usage rates and brand preferences are often associated with demographic variables.
Airlines like Kingfisher targets the affluent class and the executives from multi national companies, business community etc. However in the case of Air Deccan and other low cost airlines, their segment is the population from the lower middle class and the middle class. Thus it can be said that Kingfisher targets the classes whereas the no frill airlines target the masses.
Psychographic segmentation
Psychographics is the science of using psychology and demographics to better understand consumers. In this segmentation customers are divided into different groups on the basis of psychological, personality, lifestyles or values. People within the same demographic groups can exhibit very different psychographic profiles.
The airline tries to work on the psychology of the people. Kingfisher concentrates on the segment of people who do not mind paying a higher price, but would like to have the best of comforts. Whereas the low cost airlines targets those customers, who believe in value for money services and account for every rupee that they spend.
Behavioral segmentation
In behavioral segmentation the customers are divided into groups on the basis of their knowledge of, attitude towards, use of or response to a product or a service. It refers to grouping consumers in terms of their relationship with the product, for instance their usage rate, the purpose of use, their willingness and readiness to buy, etc.
Segmentation of customers on the basis of airlines
Business Class
They are crucial for airlines' profitability. With less spare time and more cash in their pockets, they agree to pay a premium price for a premium service. The premium prices they pay provide wider and more comfortable seats, better choice of meals and seats, luxurious lounges.
If the airline is also providing the first class including the business class and the economy class then it will provide additional services to the first class travelers in addition to the other services. These services may include fully reclining seats, workstation and TV surrounded by private dividers
Economy Class
They represent a totally different market. The most important consideration for most of them is the price. The lower the airfare, the more people will fly the respective airline. By and large, with the exception of wealthy travelers, this segment will not pay extra for premium services and will agree to change several planes during their trip if this option costs less than a direct flight.
PROCESS/SERVICE MAPPING
A process map is a tool to visually illustrate how the work flows. It is also a communication tool, a business planning tool and a tool to help manage the organization.
Key elements include:
Inputs
Outputs
Activity steps
Decision points
Functions
The lines and symbols on a process map help us to record concise sentences for every step in the process that tells the reader:
What is happening?
Where it is happening?
When it is happening?
Who is doing it?
How inputs and outputs are handled and distributed?
They can be defined at many different levels and with various boundaries. Furthermore:
Processes must have a beginning and an end.
Processes are co-ordinated activities that involve people, procedures, technology and infrastructure.
Processes constitute a significant portion of organizational costs.
An organization is only as effective as its processes.
The purpose of process mapping is for better understanding. It involves the gathering and organizing of facts about the work and displaying them so that they can be questioned and improved by knowledgeable people.
Process maps help one to understand the important characteristics of a process, allowing them to generate useful analytical data in order to derive findings, draw conclusions and formulate recommendations. Furthermore, process maps allow one to systematically ask many important probing questions that lead to developing a view on business process improvement.
The basic process followed is given below. This process can be termed as process mapping in an Airline Industry.
Customers Point of View
Check which gate to enter from
Getting the ticket checked at the door
Screening of the Baggage.
Getting the boarding pass as well as boarding the luggage.
Security check and finally boarding the plane.
Employees Point of View
The initial process of checking the ticket, baggage screening, providing the boarding pass and the security check imply for the employees also but the 2 most important process that the employees have to conduct is:
Proper numbering on the baggage of the customers so that the luggage does not get interchanged and boarded into the right aircraft.
Proper allotment of the seats.
1. Check which gate to enter from. 2. Getting the ticket checked at the door
3. Screening of the Baggage 4. Getting the boarding pass as well as
boarding the luggage.
5. Security checks 6. Waiting to board the air craft.
Another important aspect that the employees have to look for is Security Process. Security relates to the security of the aircraft as well as the passengers. Security check is of utmost importance.
The Central Industrial Security Force, a paramilitary organization is in charge of airport security under the regulatory frame work and instructions of the Bureau of Civil Aviation Security (Ministry of Civil Aviation Security). CISF formed an Airport Security Group this security force is dedicated to protect Indian airports. Each and every airport has now been given an APSU (Airport Security Unit), a highly trained unit to counter unlawful interference with civil aviation; apart from the CISF every airline has a highly trained aviation security force which is a separate department.
Some of the security procedures are listed below
At major airports, the checked baggage is passed through X-ray machines and a 'security checked' sticker affixed before entering the check-in area.
Passengers are checked through personal frisking, and/or door frame metal detectors and hand held metal detectors.
The cabin baggage is either checked through X-ray machines or physically examined.
Security personnel put a security stamp on boarding passes and cabin baggage labels.
Immigration is done at this point that is just after the boarding pass is received.
In case of a 'Red-Alert', a secondary security check is also carried out near the stepladder before embarkation.
Checked baggage has to be personally identified by the passengers before it is loaded on the aircraft. Wherever the boarding is through aerobridges, passenger and baggage reconciliation is done through an internal matching system instead of physical baggage identification.
Ten percent of the checked baggage/cabin baggage is usually physically checked at random.
Passengers in transit have to remain on board during the ground halt of the aircraft.
Once the passenger reaches his destination from the airport that is when the process gets over.
BLUE PRINTING
Blue printing is a process that deals with the entire working system in an Airline Industry. It is a complete process.
Blueprinting involves identifying all the key activities, procedures and specifies the linkages between them. The working of the airport is a complex process and all the process whether visible or invisible have to be carried out effectively as well as efficiently because even if one process goes wrong the entire chain of the working system gets disturbed.
Moreover, current trends in the airport industry impose more and more efficiency and security: Hyper-regulation for safety and security; Market de-regulation in terms of liberalization, strong competitiveness, services customization, etc.; Traffic segmentation and globalization to better answer to airline needs; Reduction of profitability for handlers and airlines; Increase of airline traffic; and so on. In such a scenario, only operators and authorities who will evolve gaining a competitive position can win the market challenges asking for more efficiency, high quality service levels and security. In order to support all actors in the airport industry to reach best efficiency and quality targets, Software Design has spent huge efforts in finding solutions and services capable of bringing them the power of technology innovation in a transparent way and working with a business approach. With this a lot of changes can be made in the existing service process thus developing a blueprint
BENCHMARKING
Benchmarking is the process of comparing the cost, time or quality of what one organization does against what another organization does. The result is often a business case for making changes in order to make improvements.
Benchmarking opens organizations to new methods, ideas and tools to improve their effectiveness. It helps crack through resistance to change by demonstrating other methods of solving problems than the one currently employed, and demonstrating that they work, because they are being used by others.
Airline Association for Benchmarking & Measurement is a focused group of airline professionals that looks to identify the best practices surrounding airline industry issues for the improvement of overall operations of the members.
Mission
To identify "Best in Class" business processes, which, when implemented, will lead member companies to exceptional performance.
Objectives
To conduct benchmarking studies of important business processes.
To create a cooperative environment where full understanding of the performance and enablers of "best in class" business processes can be obtained and shared at reasonable cost.
To use the efficiency of the association to obtain process performance data and related best practices from group of companies.
To support the use of benchmarking to facilitate process improvement and the achievement of total quality.
Membership
The scope of Airline Association for Benchmarking & Measurement™ membership includes airline professionals interested in benchmarking as part of or in support of their core business.
Company membership will be considered with respect to compliance with Airline Association for Benchmarking & Measurement™ mission, goals and operating guidelines, as well as, qualification of the organization within the scope of membership.
Participation in specific efforts will be optional and open only to members with costs shared by the participants
Benefits of Membership Studies
Airline Association for Benchmarking & Measurement will identify and present to members opportunities to participate in Benchmarking studies on various topics of importance to "security" issues.
There are two types of Benchmarking studies provided
Consortium studies are offered to the membership as a whole with costs divided.
Single company sponsored studies addressing the interest of one member company can be offered to other selected members for no fee.
The association will also support process improvement benchmarking efforts
Research - Access public and private databases.
Identify study participants - Top airline companies interested in benchmarking current issues.
Collect data - Manage response collection with the participants as a third party.
Lead site visits - Structure with best participants.
PHYSICAL EVIDENCE
Physical Evidence refers to the environment in which the service is delivered and where the service industry and customer interact. It is the ability and environment in which the service is delivered. Both tangible goods that help to communicate and perform the service, and the intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers.
The aircraft by itself, the seating configuration meant to be comfortable and spacious, the in-flight food, the staff dressing, baggage handling facility, colour of the aircraft, in-flight entertainment, and ambience in the aircraft provide physical evidence to the airline service.
Nowadays, websites are another major part of the physical evidence of airlines. A recently completed survey indicates that passengers rely on major airline websites, but would like the airlines to improve those sites to better meet their specific needs and expectations.83 percent of the passengers indicated they use airline websites to book flights. The survey also identified that nearly half (48 percent) of respondents indicated they also book flights by calling the airline directly, which may be a further indication that airline websites are not sufficiently meeting the needs of small business travelers. Results show that 56 percent of respondents use travel websites to make flight arrangements, while 47 percent use a travel agent, compared to 83 percent using airlines' websites.
Hence, the websites should be updated regularly, should be less time consuming, fast processing and easily operative.
COLOUR AND STAFF DRESSING
Increasing importance is given to the cabin crew and the ground staff uniform. Designers are given contracts to design the uniform and the colors are such which symbolizes the airlines motto. Colour is a visual identifier and thus attractive color scheme catches the eye of the passenger. The staff dressing also helps to differentiate one airline from other. Just by looking at the staff, the passenger assumes the standard of the airlines. And these two are the first thing that a passenger visualizes in an airline. However, another important reason for the use of color is the expansion of a corporate culture. For example, Paramount Airways does this very well. Their use of blue color emphasizes confidence, a character trait that is important to the airline industry, especially in these times. Blue also demonstrates vastness, opportunity, a sense of modernism and openness and honesty.
KINGFISHER AIRLINES
The first thing that strikes about fly Kingfisher is the bold use of the color Red. From the tail of the aircraft with the logo of the kingfisher bird and the word Kingfisher painted boldly across the body of the aircraft in Red to the interior decor and even the Crew uniform –it‘s Red, Red, Red all the way.
The in-flight crew called 'Flying Models' are clad in short Red skirts and a trendy rolled up sleeve jacket in Red with a white shirt unlike the traditional blazers and waist coats of other airlines. There are no male pursers on board either because KF in-flight is all women.
AIR INDIA
Eminent Indian fashion designer Ritu Beri was roped in by national carrier Air India to design the new uniform for its cabin crew and ground staff. Air India went for a complete makeover to reflect its aspiration to be a “powerful” global entity.
The design of the new uniforms draw inspiration from the Sun Temple of Konark in Orissa, yet maintains a modern outlook. The colour palette of the uniform is red, orange, black and white, with red standing for strength and orange for cultural roots.
The uniform for the female employees, both ground staff and cabin crew, included sarees, tunics, scarves, jackets, coats, aprons and shoes, while there would be specially designed ties for the male staff.
JET AIRWAYS
To position itself as a global airline, Jet Airways introduced fresh airline uniform for the cabin crew designed by Italian designer Roberto Capucci. Their uniform reflects distinctive international look capturing spirit of new India and a meeting point between East and West
IN FLIGHT MEALS
Airline passengers always have a certain standard of living and are very hygienic about the food. However, in-flight meals have often been the butt of many jokes over the years for their perceived lack of nutritional value. In airlines, the passenger prefers variety in the meal offered, noticing the nutritional value. They also see as to which caterers is serving the food; the way the food is served and handled. This is one critical aspect where even the service recovery can’t help to retain the passenger because even the slightest of the mistake by the chef or by the cabin crew, or compromising on the quality of food might prove very dangerous for the passenger’s health. This, in turn, will spread a bad reputation of the company.
Hence, more and more airlines are in fact striving to make their meals more attractive by packing as much goodness as possible into them.
KINGFISHER AIRLINES
In-flight Meals or Snacks are served as part of the fare on every flight and small amenity kits distributed as well. Depending on the flight time, Kingfisher serves Breakfast, Lunch, High Tea or Dinner on all flights. An individual menu card is there on all Kingfisher flights. Kingfisher has a wide variety of multi-cuisine menu to suit the varying tastes of the local sectors. Indian, Chinese, Continental and World Cuisine is available on various sectors. Vegetarian or non-vegetarian food can be chosen on the flight. Kingfisher First Class passengers can choose from a special menu and depending on their choice, a three course gourmet meal is served on the flight.
It also provides an exclusive three course menu complete with a Kingfisher sparkling welcome drink, signature dessert and freshly brewed coffee on board.
JET AIRWAYS
Jet airways have different menu options onboard for Premiere and Economy class passengers.
The following specialty meal options are available on Jet Airways:
Strict Vegetarian (STVG)
Jain Meal (JNML)
Diabetic Meal (DBML)
Low Cholestrol (LFML)
Low Sodium (LSML)
Low Calorie (LCML)
Low Protein (LPML)
Non Lactose Meal (NLML)
No Salt (NSML)
This shows the passenger that Jet Airways do care about their health , thus creating a goodwill among the passengers.
Kosher meals
Jet Airways also offers kosher meals (KSML) on the Mumbai-London-Mumbai and Mumbai-Singapore-Mumbai sectors. Kosher Meal preference has to be notified 48 hours in advance. The Kosher Meal on Jet Airways flights consists of Western Non-Vegetarian Meal of Fish, Potatoes and Vegetables. Kosher meals are served onboard in a sealed pack. The cabin crew opens the pack in front of the passenger and shows the Kosher certificate inside the box.
This assures the passenger that there is no malfunctioning or adulteration in the meal provided , thus creating an impression in the mind that meals offered in Jet Airways are of the best quality.
AIR INDIA
Air India offers a wide variety in its in-flight meal menus, with a multi-cuisine approach to cater to the predilections of the range of passengers. The variety of food ranges from vegetarian meal, Moslem meal, Kosher meal, Low Sodium meals to something simple as a fruit platter. The meals are hygienically packed from reputed hotel chains like the Taj Group and Ambassador. Besides the regular normal vegetarian and non-vegetarian meal, Indian Airlines also provides special meals such as Jain meal, Diet meal, child meal etc.
IN FLIGHT ENTERTAINMENT
To make long flights more enjoyable, several major commercial airlines offer in-flight entertainment and information systems to their passengers. This is increasingly gaining popularity in the airlines sector because the passengers here, unlike other modes of travel do not have any other source of entertainment. In airlines, the interaction among passengers is also minimum. So, this is one of the tangible tools of attracting or pulling the passengers towards an airline. Nowadays, there are lots of innovations done in the in flight entertainment system and each airlines is daily coming up with some or the other new technology or up gradation for the passengers to have entertainment in the flight.
KINGFISHER AIRLINES
Kingfisher Airlines flights have individual LCD TV screens for each passenger. They have a choice of 5 video channels of the trendy FUN TV, or listen to Kingfisher Radio which offers a choice of 10 international radio channels. There is a separate video channel for kids too to keep them busy on the flight. All passengers are given complimentary headphones to enjoy the in-flight entertainment. For Kingfisher First Class passengers there is an extra wide 8.4 inch LCD swivel screen fitted on every seat. Kingfisher First Class passengers can also enjoy noise canceling headphones for a quiet and relaxed flight experience. Kingfisher First Class passengers can also play video games on the LCD screen and even play multiplayer games with their co-passengers.
Kingfisher Airlines has tied up with Dish TV to provide live in flight entertainment to its passengers. This shows the weightage given in flight entertainment in the airlines sector.
JET AIRWAYS
Jet Screen, Jet Airways' In-flight entertainment system is available on both business and economy class on several Jet Airways flights. Jet Airways has also installed state-of-the-art Panasonic 3000i Audio Video on Demand (AVOD) on every seat in some of its flights. In addition to video channels, up to 8 audio entertainment channels playing latest Bollywood songs, International Pop songs, Ghazals, Indian and Western Classical, etc. are also available on Jet Screen.
SEATING
In airlines, passengers mostly stay glued to their seats. So, it’s very important to have a comfortable seating in the flight. Specially , in long distance journey the passenger has to spend a lot of time on the seats, thus the passenger should have full satisfaction with the seats provided, as in, there should be enough leg space, there shouldn’t be any back problem, comfortable head space and more importantly , the seats should be clean. The seating arrangement has to be spacious as different individuals have different physique. Thus, the seats should be such wherein every passenger irrespective of his/ her size or shape should feel relaxed and comfortable on the seats and should feel refreshed after reaching the destination.
Seating is not much of a problem in airlines like Kingfisher or Jet however low cost airlines needs a lot of improvement because they usually have this problem of not having enough leg space.
KINGFISHER AIRLINES
The seats are the plush Sleeperette seats with a 48 inch pitch, 125 degree recline, adjustable headrests and fully extendable footrests. The expansive legroom, the fully lie flat bed in Kingfisher First and the widest seat pitch in the skies, allows the passenger to stretch those tired muscles to the fullest. There are also laptop chargers and mobile phone chargers in each seat.
JET AIRWAYS
Jet Airways is the first airline in the world to install new ergonomically designed seats that offer more space, reduce pressure on the passenger’s body and has adjustable "Hammock" head rest and a unique foot net which gives added support, especially on long journeys.
NEWSPAPERS AND MAGAZINES
Newspapers and in flight magazines are provided to the passengers so that even in the skies they can get information and update their knowledge.
KINGFISHER AIRLINES PARAMOUNT AIRWAYS
INDIAN AIRLINES
GENERAL RATINGS TO THE AIRLINES SECTOR
Web Site : Ease of Use
Age of Aircraft in Fleet
Web Site : Product information
Cabin Safety Standards
Web Site : Online Check-In
Cockpit Communications
Handling Delays/Cancellations
Airline Onboard Magazine
Staff Grooming & Presentation
Assisting Families & Children
PRODUCTIVITY AND QUALITY
QUALITY DIMENSIONS
RELIABILITY
It is the ability of the service provider to meet the promises made by them accurately. The customer must develop a feeling that they can depend on that particular service provider for their problem.
It is most important for an airline to depart and arrive on time since passengers want to depart and arrive on time. ‘On time’ is defined, in accordance with normal industry standards, as departure within 15 minutes of scheduled departure time. If the flight is on time, it colours everything else. Today, top airlines hold their positions because passengers recognize their consistent reliability. Reliability is not just nice to have. They impact the passenger and his satisfaction, and that impacts the bottom line of the airline.
Passengers place great importance on reliability and that's why leading airlines fly Boeing jets because they are the most reliable in the skies.
Information needs to be recorded about the scheduled and actual departure time, and, if there was a problem that caused a delayed departure, whether the problem resulted in a delay or a cancellation, whether there were passengers on board and a detailed description of problem should be given. This leads to the payoff i.e. the ability to track, analyze and improve the reliability of the aircraft.
Airlines should also be reliable in case of baggage handling. The passenger should get his luggage on time without being damaged. In case, the luggage is mishandled then the airlines should have such a system in place wherein the passenger can rely on the airlines for the safe arrival of his / her luggage. The reliability issues that this interface creates have prompted airlines, over the years, to look for ways to introduce more automation into this environment.
ASSURANCE
Assurance refers to freedom from danger, risk or doubt. It includes credibility, competence, security and courtesy. The service provider and the employees must be capable of winning the trust and confidence of the customers.
The ground staff and the cabin crew play a major role here. They are the one who can assure the passengers about any doubts they have regarding the flight and the services provided. In airlines, passengers are mostly brand loyal. Hence, once the passenger is assured and trusts a particular airline then he always prefers that airline. Thus, assurance plays a very important role in customer retention.
In high cost airlines , the passenger always thinks that whether he will get a good value for his money whereas in low cost airlines he / she always think whether the quality of the service will be good or not. Hence, the passenger is always at a risk. Here, the airlines have to put in extra efforts to remove the doubts from the mind of the passengers about their airlines. And in this competitive world, where new airlines are coming up so rapidly, the efforts made by the airlines could be seen to assure the passengers that their service is the best. Airlines go out of the way to win the trust of their customers.
E.g. The Kingfisher First experience takes off even before the passenger do at the Airport where he / she is greeted by a Personal Valet to assist at every step of the way, from baggage handling to boarding. This is done to assure the customer at the very first step that he hasn’t put his money at the wrong place; giving a VIP treatment, thus clearing any kind of doubt or the risk factor from his mind.
TANGIBLES
Tangibles are those physical features which can be seen by the customer. These are the physical proofs which help the customer to judge the quality of service. The customers evaluate the quality of these services on the basis of the tangibles provided by the service providers.
In case of airlines tangibles include:
Flight
In – flight meals
In – flight entertainment
Seats
Staff uniform and skills
Baggage handling technology
Website
In airlines, tangibles help to differentiate an airline with its competitors. This is the most important criteria in customer evaluation. The customers perceive what they see. Thus tangibles help create an impression in the customers mind the way an airline wants.
EMPATHY
Empathy basically is when the employees of the organization make the customer feel at home, at ease, making him feel wanted.
In airlines, a personal touch should be given to the services because that delights the customers the most. They should be made felt as if they are very important to them. However, for an airline to succeed it must have genuine empathy with both its employees and its customers.
The cabin crew has to be very polite, understanding and courteous. They should take genuine delight in attending the customers, in helping them and establishing warm friendly relationships. The crew should know the importance of doing things for customers from the bottom of their heart. They should believe in going beyond the routine to add emotional value to their work. As a result they would be able to delight customers. But for all this, the crew and the ground staff should be motivated; a culture should be created where the crew also supports the company’s mission and values.
The senior executives, middle managers and supervisors should demonstrate a similar 'genuine heart-felt' empathy for their various teams of employees , thus helping the organization develop a warm culture based on empathy which leads to showering of that empathy on the customers.
For e.g. if any small child is flying in the flight for the first time without any elder person along with him, the crew should see to it that the child doesn’t get scared so they should visit him regularly, give him chocolates, chat with him, thus taking his proper care and not letting him feel that he is alone.
RESPONSIVENESS
Responsiveness is willingness to help the customers and provide prompt service. The degree of responsiveness shows the level of commitment that the people of the company have towards their work. It is very necessary for the company to concentrate on prompt and the right kind of responsiveness to the needs of the customer.
In airlines, the customers are very impatient. They expect their needs to be catered promptly. Hence, any delay in responding to their needs or problems might create a very bad impression in the customers mind. The staff should see to it that each and every complaint of every individual is handled effectively and quickly.
This aspect comes into picture when there is a flight cancellation due to bad weather and the passengers can board the next flight only the next day. At this moment of crisis, a quick response by the airlines regarding their luggage, their accommodation and all the other needs can create a very good reputation.
Also, sometimes there is a case wherein the crew is helpless and it cannot fulfill the customer’s requirement, even that time the crew has to respond to the customer either by explaining him their helplessness or by providing him/her with some alternative.
Thus, nowadays where the zone of tolerance among the customers in airlines is minimum, responsiveness is one dimension which has to be really taken care of.
FISH BONE ANALYSIS
Procedures
During acquiring the boarding passes there may be delay in getting the passes which may dissatisfy the customer.
Baggage handling is not done accurately i.e. the bags are misplaced or not loaded on the flight, which may cause delay in flights.
Due to tightened security at airport the security person may take longer time to check the person.
Information
Radar at the airport is not working properly thus the correct information is not provided to the customer.
Websites – the websites may not be updated regularly which may provide wrong information to the customers.
The customers are guided wrongly by the person at inquiry counter which may add woes to the customers.
Front staff personnel
System crash when customers come to get the information or boarding passes.
Cabin crew taking ample of time for guiding people and providing the necessary requirements to customers.
Not enhancing to customer responsiveness and services.
Not all queries are sorted of the customer at enquiry counter.
Not getting warm welcome or reply from the air hostess.
Back staff personnel
Cleaning staff taking ample of time to clean the plane setting up the things right in the plane.
The materials are not loaded on plane on time.
Material supplies
The supply of food and other essential requirements does not arrive at scheduled time.
Customer
Customers coming late to board the plane may cause delay in flight.
In case, the person on flight gets ill (getting heart attack) in that case the flight. needs to be landed again which may again cause delay.
VIP customer coming late to board the flight.
Facilities / Equipments
The seat may not be proper or the seat belt may not be working properly.
The music system (headphone) not working properly.
The food and drinks are not supplied to customer on time.
Other Causes
Their may be delay in flight if a hoax call is received and intense security check-up is done which may cause some trouble to customers.
If the weather is bad there may be delay in flights.
If there is any technical flaw in the plane it may result in delay of flight.
Due to strikes by workers and organization may cause problems to customers.
SERVICE RECOVERY
While studying the Marketing Mix for the Airline Industry, we have understood the customer’s expectations, the service process, the service quality, the productivity in service delivery and building customer relations. But in all service contexts, service failure is inevitable. Service failure is inevitable for the best of the airline companies, even those with world-class service systems. Thus, in order to retain customers and also understand those, airline companies must understand what a customer expects and what can be offered to the customer when service failure occurs and thus implement strategies for an effective service recovery.
Impact of Service Failure on the Customer
Service failures occur for all kinds of reasons, some of which can be listed as service not available when promised, late delivery, incorrect outcome, poor execution or rude behavior of the workforce etc.
For an airline company, a service failure can be of the following sorts – flight delay; mismanagement of the formalities like checking-in; indifferent behavior of the flight crew; baggage problems and so on. Service failures for airline companies are due to factors which are controllable as well un-controllable by the company.
Service failure for services other than airlines have a paradox kind of an impact on the customer as well as the organization – you dissatisfy a customer once and then delight him in the service recovery process and win his loyalty which is not assured with a failure-less service delivery. But for the Airline Industry, service failure does not create positive opportunities for the organization. Incase of a service delivery in the airlines service providing, the customer is highly dissatisfied and the recovery strategy cannot be as effective to delight him. For instance, if a flight gets delayed, the customer gets late and the time he loses due to the delay cannot be brought back; or if the carrier misplaces luggage of a particular customer then no strategy is enough to delight the customer (no strategy to compensate on the lost belongings). Service failure in the airlines sector creates a negative impact for the airline company. Thus, a perfect service delivery is aimed at by a carrier.
Following a service failure, a number of negative emotions may occur in the customer’s mind such as anger, discontent, disappointment, self-pity, and anxiety. These emotions are the factors to be kept in mind while implementing specific service recovery strategy to win back the customer. Different customers respond differently to service failures. Incase of the airline industry, the customers are rather considerate by not displaying anger and discontent but by just mere complaining and seeking reprisal. Basically, the response is very passive. Such a kind of response depicts that the customer expects least consequences that will benefit the customers. Such a response is not beneficial to the airline company because the organization does get an effective feedback and cannot improve on the basis of the customer’s expectations and thus cannot retain customers effectively.
COMPLAINT HANDLING
In case the passenger has a problem with the in flight crew, they can give a written application to the In-flight Supervisor who later hands over the complaint to the COMPLAINT HANDLING CELL. The complaint handling cell is under the control of the Deputy Director In charge of supervision. Also the complaints regarding the ground staff, security and other such departments can also be given in writing to the Deputy Director In charge directly. Once the complaint is received it is forwarded to the higher authorities who decide what action needs to be taken. Usually a warning goes to the personnel who have defaulted. In rare and extreme cases the personnel may be suspended from flying for a period of 2 – 3 weeks. Once an action is taken, the company sends an apology letter to the customer along with the response to the complaint.
In case the complaint is regarding mishandling or damage to the baggage, there is compensation provided to the customers. The amount of compensation depends on the policy of the company and the degree of damage.
There are nine steps involved in handling complaints effectively. They are mentioned below:
10. The frontline employee handling complaints should stay calm under any circumstances.
11. Let the customer get the story off their chest- do not interrupt, this will only cause irritation. In this case listening skills comes into picture.
12. Avoid admitting any liability at this stage. The officer just need to show concern like, “I’m sorry for the inconvenience, let me see what I can do”. Give attention to the customer, make him feel important.
13. Get facts by using question and try to find out the real and whole story behind it.
14. After listening and collecting data, just identify appropriate action considering company’s policy and customer’s expectation.
15. Take action if you have authority or involve manager or concerned person.
16. If corrective action cannot be taken immediately, tell the customer. It’s better to give bad news rather giving false news.
17. Record the action to be taken and inform anyone else in the organization involved.
18. Look into the matter, provide a proper follow-up.
These nine approaches if followed effectively, complaints can be handled properly and possibly a customer can be retained.
SERVICE RECOVERY STRATEGIES
“Companies have made Service Delivery Idiot-proof. But Idiots cannot solve problems.”
We just realized that service recovery in the airline industry loses a little scope because of the passive nature of the customers and because of the negative impact of service failures. But, in the competitive market, Airline companies are trying their best to delight their even though service has failed in the first encounter. Some of the strategies which airline providers are implementing for service recovery are as followed
Total Quality management or “Zero Defects”
Airline companies are trying their best to make it right for the customer in the first encounter itself, give the customers what they expect and avoid the errors as much you can. For instance, avoid flight delays which occur due factors which are under the control of the management such as speedy check-in process, discipline staff to be punctual and soon. Doing it right at the first encounter saves the company the costs of redoing the service and compensating for the errors.
Effective Complaint Handling
Complaints need to be encouraged so that the Airline Company is aware of the loopholes and what the customer is expecting from the service. Complaints should be taken seriously and should be acted upon immediately. Since, the customer is of the passive nature with respect o complaints, one must ensure that it is easy for a customer to put forth his complaint and he should be assured of a treatment. Technology and its innovation should be put to use to form an effective system for complaint handling and their reprisal.
Fair Treatment to the Customers
On failure, a customer expects to be treated fairly in term of the outcome they receive after the failure. The customer should receive something more than what he has actually expected and which was met in the first encounter. Fair treatment will help in customer retention. For instance, incase of loss of baggage, a service provider might provide the traveler vouchers for shopping at international locales for free of charge.
Market Research
Not all dissatisfied customers will come up to the reception desk and post a complaint. The airline company has to make efforts in finding on itself the failures in service. Market research forms a very important tool in knowing this. For example, one can ask for feedback from a customer who is just going to board a flight. He can be asked about his experience with the ground staff, the ambience of the lounge, and other facilities.
PROFITABLE ART OF SERVICE RECOVERY
Service failures are inevitable but they don’t hit a service provider as much as the costs of service recovery and the costs of redoing the service with intent of delighting him are very relatively high. Basically, the service provider has to bear of the cost of repeating the service process that too with an added value.
With respect to the airline industry, service recovery can be made productive and profitable by the following methods.
Resolving the problem at the source itself
Suppose a failure of service takes place at the ticketing counter, the finance department head does not needs to be involved but in fact, the ticketing executive himself should address to the problem. The staff which is in direct contact with the customer and is forming a part of the critical encounter should be trained and empowered to tackle failures at the source itself.
Do not dismiss the occasional problem
It is tempting to dismiss an occasional problem but companies should avoid doing the same. Customer retention is an important task for an airline company in this period of intense competition. Occasional problems cannot just be dismissed because; it is these occasional problems which dissatisfy the customer every now and then.
Flexible Management
The management needs to be flexible and dynamic enough to take decisions with regards to service recovery. The customer’s perception and expectations should be kept in mind whilst taking a strategic decision. Treatment should be fair enough to delight the customer. Basically, the company has to give in to the expectations of the customer but at the other end also negotiate to get a fair and a profitable deal.
Measure the Costs
At every step of the service recovery process, the costs involved need to be monitored closely so that no wastage or blockage of funds happens in the process.
Train employees
Employees need to be trained perfectly in order to give the best service delivery at the first encounter itself. Also the staff needs to be trained with respect to decision making, crises management and so on.
Empower the Front Line Workforce
The front line work force is the workforce that is in direct contact with the customer and form as an important critical service encounter. The front line can be empowered with authority to take a decision incase of service failures. Companies can train their front line staff for such situations.
Service Recovery is a different management philosophy a company embraces customer delight as a primary goal of business. It is a fundamental to quality service providing and therefore it should be considered as one of the important part of a airline company’s strategy.
“To Err is to Human, to Recover, Divine”
LOW COST AIRLINE / LOW COST CARRIER
A low-cost carrier or low-cost airline (also known as a no-frills or discount carrier or airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors.
India's first low-cost airline, Air Deccan started service on August 25, 2003. The success of Air Deccan has spurred the entry of more than a dozen low-cost airlines in India. Air Deccan now faces stiff competition from other low-cost Indian carriers such as Jetlite, SpiceJet, GoAir and Paramount Airways.
Few of the features of the low cost airlines:-
A single passenger class
A single type of aero plane (commonly the Airbus A320 or Boeing 737), reducing training and servicing costs
A minimum set of optional equipment on the aero plane, often excluding conveniences such as ACARS, further reducing costs of acquisition and maintenance
A simple fare scheme, such as charging one-way tickets half that of round-trips (typically fares increase as the plane fills up, which rewards early reservations)
Unreserved seating (encouraging passengers to board early and quickly)
Flying to cheaper, less congested secondary airports and flying early in the morning or late in the evening to avoid air traffic delays and take advantage of lower landing fees.
Aggressive fuel hedging programs.
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets in promotion. Even if the advertised price may be very low, sometimes it does not include charges & taxes.
But in the past one year major changes have taken place because of the hike in the fuel prices. Like everyone is aware that the fuel prices have risen way too much. So due to this all these low cost airlines are facing a major setback.
These increases in fuel prices has caused trouble for each and every airline and they are trying to recover the losses in various forms and also trying to come up with promotional schemes and various other incentives in order to retain their customers.
They losses occurred by these airlines in the fiscal year 2006-2007 and 2007- 2008 have been tremendous. Now their ultimate aim is to recover these losses.
Earlier due to the introduction of the low cost airlines and their cheap rates which were almost similar to those of the train fares the customers blindly traveled by air as their travel time could be less but after the rise in prices the customers think twice before buying the air tickets.
Hit by galloping fuel prices, airlines the world over have started resorting to various cost cutting measures including flying aircraft at a given height on a low speed to reduce fuel burn.
India's crowded airline sector is flying into huge losses on the back of a surge in global fuel prices that have forced it to hike fares, slowing explosive passenger growth.
National carrier Air India and other carriers have started following these measures and other fuel conservation initiatives which are a standard practice undertaken by all global airlines, especially those flying on long-haul international routes.
Reduction in aircraft speed at an optimal height, called a reduced Cruise Mach policy, has been adopted by Air India for its Boeing 747-400 and Boeing 777 aircraft fleet used in long-haul operations.
The national carrier is also planning similar measures for its Airbus A-310 and Boeing 737 planes, which are meant for medium and short-haul flights and are the merged carrier's backbone for domestic operations.
Besides, undertaking the Cruise Mach policy, Air India has also started cutting on the aircraft's weight by removing certain non-essential items on board.
AIRLINES VALUE ADDED CHAIN
CONCLUSION
“I was engaged in what I believe to be the most thrilling industry in the world—aviation. My heart still leaps when I see a tiny two-seater plane soaring gracefully through the sky. Our great airlines awe me. Yet I know they were not produced in a day or a decade.”
— William A. "Pat" Patterson, CEO United Airlines.
Studying the Airline Industry gives us the same feeling as the CEO of United Airlines does. The project report talks about the Airline Industry and its most important function – MARKETING.
The project report has covered every other aspect of the Airline Service Marketing which on paper seems to be simple to implement but in practice is as tough a job as the invention of the airplane itself.
The project study has given us a great depth of intellectual learning about the sector. We hope, the project report has the same enduring for its readers as it did to us.
HISTORY OF AIRLINE INDUSTRY
Aviation refers to activities involving man-made flying devices (aircraft), including the people, organizations, and regulatory bodies involved with them.
Civil aviation includes all non-military flying, both general aviation and scheduled air transport.
General aviation includes all non-scheduled civil flying, both private and commercial. General aviation may include business flights, air charter, private aviation, flight training, ballooning, parachuting, gliding, hang gliding, aerial photography, foot-launched powered hang gliders, air ambulance, crop dusting, charter flights, traffic reporting, police air patrols and forest fire fighting.
There are five major manufacturers of civil transport aircraft:-
Airbus, based in France
Boeing, based in the United States
Bombardier, based in Canada
Embraer, based in Brazil
Tupolev, based in Russia
Scheduled Air Transport
Like it is known that the Airline Industry is one the vastest industry with its presence all around the world. Though it started with its presence only in large countries then slowly expanding to other states and currently its presence can be felt in the smallest of cities also.
This industry came into existence with the development of the world’s first airline on 16 November 1909 by DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft with its headquarters situated at Frankfurt. It was developed with the assistance of the government and operated ships manufactured by Zeppelin Corporation.
Later as time passed by and people started becoming aware of the existing technology and the potential of the market they moved their attention to this sector. It was the then that Tony Jannus conducted the United States' first scheduled commercial airline flight on 1 January 1914 for the Saint Petersburg-routes, Braniff Airways, American Airlines, Delta Air Lines, United Airlines (originally a division of Boeing), Trans World Airlines, Northwest Airlines, and Eastern Air Lines
This was just the start of the airline industry. Slowly and steadily it caught the pace of development and advancement. By the 1920’s this industry mainly focused on only carrying of mails. It was in the year 1925 that the Ford Motor Company bought out the Stout Aircraft Company and began construction of the all-metal Ford Trimotor, which became the first successful American airliner. With a 12-passenger capacity, the Trimotor made passenger service potentially profitable.
Till then Air service was seen as a supplement to rail service in the American transportation network. It was by this time that a few major countries understood the concept and believed in it. it was the same time when Juan Trippe began a crusade to create an air network that would link America to the world, and he achieved this goal through his airline, Pan American World Airways, with a fleet of flying boats that linked Los Angeles to Shanghai and Boston to London.
In fact even during the great depression due to the introduction of the Boeing 247 and Douglas DC-3 in the 1930s, they were able to generate profits. This clearly stated the importance of the airline sector.
After this the expansion of this industry was always on a high. In the 1950s, the De Havilland Comet, Boeing 707, Douglas DC-8, and Sud Aviation Caravelle became the first flagships of the Jet Age in the West, while the Soviet Union bloc countered with the Tupolev Tu-104 and Tupolev Tu-124 in the fleets of state-owned carriers such as Aeroflot and Interflug.
The next big boost for the airlines would come in the 1970s, when the Boeing 747, McDonnell Douglas DC-10, and Lockheed L-1011 inaugurated wide body ("jumbo jet") service, which is still the standard in international travel. By the 1980s, almost half of the total flying in the world took place in the U.S.
The first countries in Europe to embrace air transport were Finland, France, Germany, the Netherlands and the United Kingdom.
KLM, the oldest carrier still operating under its original name, was founded in 1919. The first flight (operated on behalf of KLM by Aircraft Transport and Travel) transported two English passengers to Schiphol, Amsterdam from London in 1920.
France began an air mail service to Morocco in 1919 that was bought out in 1927. Germany's Lufthansa began in 1926. The British company Aircraft Transport and Travel commenced a London to Paris service on 25 August 1919, this was the world's first regular international flight.
India, Hong Kong, Indonesia, Malaysia and the Philippines are one of the first few Asian Countries of enter the airline industry.
Philippine Airlines was founded on February 26, 1941, making it one of the first countries in Asia to embrace air transport. The airline’s first flight was made on March 15, 1941 with a single Beech Model 18 NPC-54 aircraft, which started its daily services between Manila (from Nielson Field) and Baguio, later to expand with larger aircraft such as the DC-3 and Vickers Viscount. It was started by a group of businessmen led by Andres Soriano.
In the year 1932 a new airline came into existence knows as the Tata Airline, lead by JRD Tata. Now it is known as Air India.
Later in the years Pakistan began Orient Airways Ltd (Pakistan International Airlines), Cathay Pacific founded in 1946, Singapore Airlines and Malaysian Airlines in 1947 (as Malayan Airways), Garuda Indonesia in 1949, Japan Airlines in 1951, and Korean Air in 1962.
INTRODUCTION
The basic function of an airline is to accommodate for passengers and cargo while taking them to far-off places between two major cities or towns within a country or beyond geographical borders.
The aviation industry in India has grown by leaps and bounds in recent years in terms of kilometers flown as well as customers serviced. The economy of a country is substantially determined by the quality of air transport.
Air transport is also considered to be the swiftest mode of transport. Almost all the states have one or more airports, which are regularly serviced by several airlines. There are a number of international airports, which also serve as domestic airport too. Others are only domestic airports.
The Air Transport Companies are both in the public sector and in the private sector. In the public sector, there are Air India, Indian Airlines, Air India Charters Limited (Air India Express) and Alliance Air. In addition to this there are at present eight private scheduled operators, viz. Jet Airways (India) Ltd., Sahara Airlines Ltd., Deccan Aviation (P) Ltd., Go Airways, Kingfisher Airlines, Paramount Airways Pvt. Ltd., Go Airlines (India) Pvt Ltd., and Inter Globe Aviation Ltd. (Indigo) operating on the domestic sector providing a wide choice of flights and connectivity to various parts of India. One cargo airline viz. Blue Dart Aviation Pvt. Ltd. is also operating scheduled cargo services in the country. At present there are 59 companies holding nonscheduled air transport operators permit.
The airlines are not the owners of the airports. The owner of these airports is the Airports Authority of India. The Airports Authority of India (AAI) was formed on 1st April 1995 by merging the International Airports Authority of India and the National Airports Authority with a view to accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports in the country conforming to international standards.
All major air-routes over Indian landmass are Radar covered (24 Radar installations at 11 locations) along with VOR/DVOR coverage (72 installations) co-located with Distance Measuring Equipment (71 installations), 39 runways provided with ILS installations with Night Landing Facilities at 36 airports and Automatic Message Switching System at 15 airports.
Few functions of the AAI are as follows:-
ƒ Control and management of the Indian airspace extending beyond the territorial limits of the country, as accepted by ICAO
ƒ Design, Development, Operation and Maintenance of International and Domestic Airports and Civil Enclaves
ƒ Construction, Modification and Management of Passenger Terminals
ƒ Development and Management of Cargo Terminals at International and Domestic airports
ƒ Provision of Passenger Facilities and Information System at the Passenger Terminals at airports
ƒ Expansion and strengthening of operation area viz. Runways, Aprons, Taxiway, etc
ƒ Provision of visual aids
ƒ Provision of Communication and Navigational aids viz. ILS, DVOR, DME, Radar, etc.
THE DOMESTIC PLAYERS
Airlines Founded/ Headquarters/ key people The Logo
Air India 1932, Mumbai – India, Raghu Menon, Chairman & Managing Director
Amod Sharma, Director
Alliance Air 1996, New Delhi and Mumbai, Capt. Mehbub Butt.
Indian Airlines 1953, New Delhi, Mr. Raghu Menon.
Jet Airways 1993, Mumbai- India, Naresh Goyal, Founder and Chairman.
Jet Lite (Formerly Air Sahara) 1991, New Delhi, Subrata Roy (founder), Naresh Goyal (Owner, Jet airways & Jet Lite.
Kingfisher Airlines 2004, Bangalore, India, Dr. Vijay Mallya, CMD
Air Deccan August 25, 2003 Bangalore, India. G.R.Gopinath, Vijay Mallaya.
Indigo Airlines 2005, New Delhi, Bruce
Spice Jet May 2005, New Delhi, India, Siddhanta Sharma (Executive Chairman).
Jagson Airlines 1991, Delhi- India
Go Air Airlines June 2004, Mumbai- India, Jehangir (Jeh) Wadia
AIR INDIA
Air India International entered the jet age in 1960 when it’s first Boeing 707, named Nandadevi and registered VT-DJJ, was delivered. Jet services to New York via London were inaugurated that same year in May 1960.
On 8 June 1962, the airline's name was officially truncated to Air India. On 11 June 1962, Air India became the world's first all-jet airline.
Air India Limited is the national airline of India with a worldwide network of passenger and cargo services.
Air India is state-owned, and administered as part of the National Aviation Company of India Limited - which was created in 2007 to facilitate Air India's merger with Indian Airlines.
Air India was founded by J. R. D. Tata in 1932 as Tata Airlines, a division of Tata Sons Ltd. (now Tata Group).
ALLIANCE AIR
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines.
Air India Regional started as Alliance Air (which was the low-cost arm of Indian Airlines. As part of Indian Airlines' merger with Air India, Alliance Air was renamed Air India Regional.
INDIAN AIRLINES
Indian Airlines was an airline based in Delhi, India and focused primarily on domestic routes, along with several international services to neighboring countries in Asia.
Indian Airlines is state-owned, and is administered by the Ministry of Civil Aviation.
The airline operates closely with Air India, India's national carrier. Alliance Air, a fully-owned subsidiary of Indian Airlines, was renamed Air India Regional.
JET AIRWAYS
Jet Airways is an airline based in New Delhi, India and is the country's second-largest international airline after Air India and the largest domestic airline.
Jet Airways was incorporated as an air taxi operator on 1 April 1992. It started commercial airline operations on 5 May 1993 with a fleet of 4 Boeing 737-300 aircraft.
In January 1994, a change in the law enabled Jet Airways to apply for scheduled airline status, which was granted on 4 January 1995.
It began international operations to Sri Lanka in March 2004.
While the company is listed on the Bombay Stock Exchange, 80% of its stock is controlled by Naresh Goyal (through his ownership of Jet’s parent company, Tailwinds).
JET LITE
JetLite, formerly Air Sahara, is an airline based in New Delhi, India. Controlled by Jet Airways, the airline operates scheduled services connecting metropolitan centers in India.
The airline also provides helicopters which are available for charter services and aerial photography.
Jet Airways and Air Sahara were the only private airlines to survive the Indian business downturn of the early 1990s.
In January 2006, Jet Airways announced that it would buy Air Sahara for $500 million in an all-cash deal, making it the biggest takeover in Indian aviation history.
On 12 April 2007, Jet Airways agreed to buy out Air Sahara for 14.5 billion rupees ($340 million). Air Sahara was renamed JetLite, and was marketed between a low-cost carrier and a full service airline.
KINGFISHER AIRLINES
Kingfisher Airlines Limited is an airline based in Bangalore, India.
Kingfisher Airlines, through one of its holding companies United Breweries Group, has acquired 26% stake in the budget airline Air Deccan and has option to buy further of 20% stake from the secondary sector.
AIR DECCAN
Deccan is an airline based in Bangalore, India. It was India's first low-cost carrier. Formerly known as Air Deccan the airline is operated by Deccan Aviation.
On 19 December 2007 Air Deccan and Kingfisher Airlines decided to merge. Kingfisher will effectively merge into Deccan Aviation following which Deccan Aviation will be renamed ‘Kingfisher Red’.
INDIGO AIRLINES
Indigo Airlines is a private domestic low-cost airline based in Gurgaon, India. It operates domestic services linking 14 destinations. The airline is owned by InterGlobe Enterprises.
SPICE JET AIRLINES:
SpiceJet is a low-cost airline based in New Delhi, India. It began service in May 2005. It was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax in 2007. SpiceJet was earlier known as Royal Airways, a reincarnation of ModiLuft.
SpiceJet marked its entry in service with Rs. 99 fares for the first 99 days, with 9000 seats available at this rate.
Their aim is to compete with the Indian Railways passengers travelling in AC coaches.
JAGSON AIRLINES
Jagson Airlines is an airline based in Delhi, India. It operates scheduled and charter services within India and to Bhutan and Nepal. Jagson Airlines operate flights between Delhi and Rajasthan and Madhya Pradesh and Himachal Pradesh. They also operate a helicopter service between Srinagar, Baltal and Amarnath.
GO AIR AIRLINES
Go Air is a low-cost airline based in Mumbai, India and is wholly owned by the Wadia Group.
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines
Air India Regional started as Alliance Air which was the low-cost arm of Indian Airlines. As part of Indian Airlines merger with Air India, Alliance Air was renamed Air India Regional.
THE COMPETITION IN THE AIRLINES SECTOR IN INDIA – THE AERIAL WAR
Around 20 years ago, when the Airline Industry of India was Government Regulated, the airline Industry was considered to be a “natural monopoly” where only one Airline Company would be able to survive in the competitive environment and meet the demands profitably. But since deregulation, the perception is changing and there is no evidence of any sort of monopoly in the Indian Airline Industry. Foreign and private players have entered into the market offering the best at the best prices to the rising demand of the Indian traveler.
With the recent change in the Aviation Policy by the Government, several vistas in business have opened up and new opportunities have emerged. The creation of new and incumbent airlines and private sector participation in the development of Aviation infrastructure is a positive outcome of these new developments. Several global Aviation consultants and private equity players are eyeing this opportunity and are setting up their branches within the country.
Despite its unprecedented growth, the Civil Aviation industry in India is still in a relatively early stage of its development after its liberalization. Experiences from abroad, i.e., the US and Europe, show tremendous structural shifts in terms of route development, pricing, quality and frequency of traffic, as well as spatial concentration at few key airports. It can be said that market liberalization provided not only for greater opportunities in the industry, but also for greater risks. Recent waves of consolidation among airlines are only one example.
Since the deregulation, the Indian Airlines has grown tremendously. Also, average prices have fallen consistently due to the increasing number of players in the market. This fall in prices has benefited the consumers the most. If some fliers would disagree that the decline in prices have not benefited all the travelers then it can be proven that the fliers paying a high price also gets a superior product, in terms of flexibility and service. Moreover, the increasing demand for airline services is also helping airline companies to run a competitive business. People prefer air travel as a feasible option for commuting because it saves time and also because of the value added services provided by different airline companies. The competition in the Indian Airline Industry has succeeded in increasing the volume of travel and lowering average prices which has in the end benefited the final consumer and also to the airline companies.
Alliances and mergers are one of the factors which are giving a solid boost to the Airline Industry in India. Different airline companies, foreign as well as Indian, are tying up or taking over or merging to produce effective collaborations in service delivery with profitable returns. It is not the just the airline companies but also associate industries such as tours and travels agencies, hotels, transport organizations etc. which are also getting targeted by airline companies to deliver quality service to the customers.
At the end, it can be inferred that the Indian Airline Industry is growing at a fast pace and the credit goes to the effective and positive impact of the increasing competition in the industry. Factors indicating to the increasing competition in the airline industry are the pricing and promotion strategies adopted by the airline companies; value added services offered; sales promotion; product/service innovation; cost cutting strategies like downsizing; and so on. Airline companies are concentrating on the customer delight and also the costs to produce profitable returns with effective customer/market retention.
ENVIRONMENTAL SCAN
The following is an Environmental Scan of the Global as well as the Indian Airline Sector/Industry. The scan identifies the trends impacting the demand in the Airline Industry and the capability of the service providers to meet the expected demand. While the current events are important, the focus of the scan is on the trends likely to be important and effective in five to ten years from now. Apart from identifying the demand trends, the scan also identifies the constraints and issues of the airline industry, the key players, resources and the outcomes for the various service providers.
In India, the service airline business is in trouble. Many airlines companies are struggling to establish a business model which is viable to the business and profitable. Most of the companies are running into losses quarter after quarter due to the increasing costs etc. The recent high volume of passenger and freight flow has not been able to return profits. The low-fare airlines business model has been a success but has not been able to recover the increasing costs. The following factors represent the business environments for the airlines companies.
Political Factors
Liberalization of Air Services
Many economies have now adopted a forward looking approach in matters of policies for the liberalization of the civil aviation sector. Many economies are opening up with regards to bilateral agreements and are attracting more foreign passengers. Also, the air traffic between nations such as India-US, China-US, and many more strategic nations is on an increase. These liberalization policies are surely a boost to the airlines sector since the demand goes up and also service providers can take advantage such the fuel cost advantage (fuel prices in foreign nations are lesser), Globalization, Mergers and Acquisition etc.
Modernization of Infrastructure
With the availability of word class, improved technology, the infrastructure has been modernized to the maximum extent possible providing the best possible experience to the travelers. Airports are getting modernized with the entry of foreign investments. The best example is the airports in India, which have undergone modernization and are as beautiful and well-managed as the Heathrow airport. Airports in tourist places such Udaipur have also undergone beautification in order to give the foreign passenger a global experience.
Investments, Resourcing and Outsourcing
The promotion of Foreign Direct Investments by liberalizing the investment policies in the airline sector is relevant from the increasing number of people traveling by air and this has lead to generation of investment opportunities in the aviation sector. Foreign players are now not hesitating from investing in the airline sector of India and other developing nations. Due to Globalization, the demand is present in every part of the world be it in the U.S.A. or South Africa or Indonesia. Also, with the entry of foreign players is leading to tremendous outsourcing which is in a way reducing cost due to effective logistics decisions.
Economical Factors
Transportation Gateways to World trade
The global Airline Industry has developed as such that the infrastructure is facilitating World Trade, the export and import of goods, services and people. The world trade trends and the economic conditions of different nations indeed have an impact on the airline industry, the demand and the outcomes. Amongst the Asian nations, Japan is facing stagnation because of which the foreign investments and the demand for trade in goods and services have fallen. Whereas, in China and South Korea, the import demands from various nations have increased. These economic conditions are affecting the airline industries of these nations.
Price and Availability of Petroleum Products
Rising and the volatile world process of Petroleum Products represent trends that have profound impact on the airline industry and the costs to the service provider. Higher fuel costs affect the demand and the operating costs thus changing the travel pattern. They also affect the infrastructure such as amenities like sky-walks etc. higher petroleum prices stem for a mix of factors which are complex in nature such as supply interruptions, geopolitics, change in usage patterns etc. The effects of high petroleum prices on airlines can be seen clearly in the balance-sheets of airlines such as the Kingfisher which has recorded losses in Quarters I and II along with many other airlines which are unable to recover their rising costs.
Cost and Availability of Skilled Labor
The airline industry demands extreme skilled labor such as the pilots, ground staff and the flight crew. The labor not only has to be skilled and available but has to be efficient because of the heterogeneous nature of the services provided. No airline can recruit a trainee pilot and directly assign him to fly a Boeing-777 or an Airbus-319 airplane carrying around 500 passengers. The labor-force has to be trained and then assigned with tasks to perform after proper evaluation. Airlines have their own subsidiary training centers which concentrate completely on the grooming and training of the labor-force. The selection, recruitment, evaluation and training are costly in nature and thus the company’s costs goes up which get transferred to the customer or the market thus affecting the market and the demand. Also, skilled personnel in aviation occupations (particularly pilots) are being attracted to overseas airlines and airports, creating training demand on top of projected domestic labor requirements.
Also, a matter of concern to the airlines companies is the aging work-force which is low on efficiency and productivity. Accommodating such an aging and un-productive workforce in the organization structure is difficult.
Cost and Availability of Strategic Raw Material
Strategic raw material with respect to the airline industry is steel and cement which are required for the manufacture of airplanes and other infrastructure required. The prices of steel and cement are growing at an alarming rate. Thus, making these materials available is a difficult and an expensive task resulting in the increase in the costs to the service provider.
Mergers and Acquisition
Strategic M & A between airline providers are another boosting factor to the airline industry. The Star Alliance which was founded in 1997 with only 5 Airline Companies now has 21 Airlines Companies. Also, the merger of Air India and Indian Airlines is a good example of a Strategic merger. These mergers make the airline companies stronger and efficient with respect to service providing. A better co-ordination between different airline companies results in a joint effort in tackling supply problems of fuel, aw material, labor etc. The merger of Air India and Indian Airlines was a strategic merger to tackle the competition from the private players in the Indian Aviation sector.
Changing industry structures and market
The global market is highly volatile and undergoes dynamic changes such as in the demand, the supply, investments etc. This dynamic nature of the market affects not one or two service provider but the entire sector. The changing business models effect into a shift of demand which has to be catered to by the entire industry. For example, the low-cost airline business model gave birth to an all-together different class of flier, the best bargain available wherein bookings are made 3 months in advance and that too in auctions etc. This led to a steep increase in demand and the number of travelers almost doubled. The strain was felt by the service provider. The low-cost airline model was not only forcing other airlines to lower their fairs and fight the competition but also cater to the demand. Thus, the volatile nature of the industry does take a toll on the airline service providers.
Competition
Two factors which worry the airline companies are the demand and the competition. With the liberalization of policies, foreign players and private players have entered the market giving a tough time to the Government companies. Also, the foreign and the private players have an edge due to the exposure to a global standard, world class infrastructure and thus provide better services to the passengers in cost-effective manner. Local and Public players have to face the heat and cope up with the competition which result into mergers and acquisition which altogether is a positive for the Airline sector.
Sociological Factors
Population and Urbanization
Demographics are an important factor determining the demand and the key markets for the airline industry. The migration of population from nation to nation either for lifestyle as well as economic reasons has led to the growth of the demand. The population growth leads to increased demand for people movement and for support services such as the hospitality and tourism services. Also, an important feature of the growing population is that the growth is taking place in the urban area and thus further creating demand for movement and air transportation from city to city. For example, the increasing movement of people from major international cities has led to the increase in the number of flights between these key cities, such as Mumbai-London; Mumbai-Paris etc.
Technological Factors
Improving Technology
With Globalization, technology is going through tremendous change with the special emphasis by companies in Research and Development. Every service provider is looking for a cost effective method, world class infrastructure, best of the best service providing to passengers etc. technology is surely another boosting factor the airline industry. Facilities such as E-ticketing, Kiosk Check-in, internet connectivity in-flight etc. are due to the improving the technology. These facilities are resulting into customer-delight.
Other Factors
Apart from the ‘PEST’ Factors affecting the Business Environments of the Airline Industry, there are many more factors which are affecting the demands and determining the market trends for the sector. The following factors are a part of the of the ‘PEST’ factors but they have an all-round impact on the sector thus cannot be allocated under a specific heading.
Following the ‘Other Factors’:
Tourism
Since the last ten years, world tourism has been struggling due to the frequent terrorist attacks and natural calamities happening in key economic destinations. The 9/11 bombing of the twin towers in New York had the most destructive effect to the tourism in the entire of the United States. Tourism in the U.S.A. has not yet recovered. Because of the fall of tourism, the international travelling has reduced thus directly affecting the airline industry. Nations now are concentrating on promoting tourism in order to improve revenues in the related sectors, most important being the airlines sector. ‘Incredible India’ is one such initiative by the Government of India to promote national as well as international tourism.
Safety and Security Concerns
Events such as the 9/11 blasts, blasts at the London Airport, blasts at the Madrid Railway Station and the serial blasts in the Mumbai local trains confirm that transport facilities are being targeted by terrorists. These events have led an increase in the safety and security issues in major cities. These issues are affecting the demand of airlines services for travelling by people.
Environmental Concerns
It is now recognized that the rise in temperature due to climate changes are because of the human activities such as Globalization, agriculture, burning of fossil fuels, deforestation etc. all these activities are to meet the increasing demand of the increasing population. The airline industry needs these activities in order to fulfill the demand of the movement of the population from one place to another. Environmental issues and concerns are obstructing in developing infrastructure such as new airports etc. the airline industry without a proper infrastructure cannot create profits for the players in the market.
Workload
We just mentioned volatile nature of the market and demand and its effect on the industry. This effect is felt in the hanging workload for the employees. In peak season times, the workload is tremendous. Also, the labor-force is not available as required by the industry. Thus, the existing work-force has to bear the brunt of excess workload. Pilots, flight crew getting stressed are a common issue now and the stress is resulting into hazardous effects for the airline companies.
SWOT ANALYSIS
STRENGTHS
Open Economies
The world is getting smaller. Thanks to the opening up of economies like India. The developing nations have a lot of potential with regards to industrial growth. Opening up policies regarding the airline services initiates MNCs to venture into developing markets.
Efficient Marketing
Due to the heavy competition in the sector, airline companies are initiating on dynamic marketing strategies. These strategies are encouraging people to fly who were once scared of flying and also considered it an expensive mode of commuting.
Networking
The Airline Sector on the Global as well as the National level is well-networked and have efficient resources put into the networking infrastructure. Travelling from any destination to another destination is possible with varied options available to the traveler.
WEAKNESSES
Threat of New Entrants
At the first glance, the Airline sector looks very profitable and full of opportunities. No doubt, there are a lot of opportunities but there are many candidates fighting for the opportunities. The competition is so intense that no player can be profitable along with being an effective player in the market. Capital intensive businesses like an Airline Company cannot afford to forego iota’s profits for market share.
Power of Suppliers
The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there is a sort of monopoly of the suppliers which takes a toll on the costs. Also, a stagnant supply poses as a weakness to the increasing demand for airplanes.
Power of Buyers (The service providers)
The bargaining power of buyers in the airline industry is quite low. Obviously, there are high costs involved with switching airplanes, but in order to give the best to the traveler, companies have no option but to buy at a high price.
Availability of Substitutes
Other modes of commuting, may it be people or cargo, are definitely cheaper as compared to air-travel. As a result, the airlines sector often loses market due to these substitute means. Especially, in the freight carriage sector, the business is falling due to increasing prices of airline companies.
Competitive Rivalry
The airline sector is highly competitive. Highly competitive sectors fetch minimum returns. Also, low returns in the airline business in the long run can pose as threat because of the businesses being capital-intensive.
OPPORTUNITIES
Emerging Technologies
The latest technologies and the innovations in the technologies are improving service delivery internal as well as external, minimizing costs, enabling mobile computing for booking, check-ins etc. and enabling businesses for capitalization of economies of scale and scope offered by government wide approaches.
Government Initiatives
Businesses can be able to capitalize on resources constraints and achieve resource cost efficiencies. Improvement of Inter-Government Partnership and Delegating of work-load is possible.
Resourcing and Investments
Outsourcing and investments help the businesses to further support the departmental objectives thus resulting in the achievement of the company’s goal. Other advantages are knowledge sharing / continuous learning, increased career bridging opportunities, ability to identify and justify resource requirements, ability to balance workloads, improved management of the costs etc.
THREATS
Poaching
The labor-force management is very costly with respect to the airlines sector. Also, due to the liberalization of policies, foreign and private players often poach work-force of competitors which leads to talent-drain and thus losses.
Inefficient Planning
Inefficient planning results into in-effective decisions which result into difficult situations. Also, planning in the airline sector is also tough wherein one has to consider every other element of service delivery and cost management.
Government Interference
Extensive Government Interference can affect the accountability of the organization wherein the Government influences decision making and also planning. One incident can be recalled of the Government Interference during the Privatization of the Airline sector.
THE PRODUCT MIX
Product is the core thing which every enterprise tries to deliver. Product is of course, the service that companies have to offer to the customer. Getting the product right is the single most important activity of marketing. If the product isn't what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to buy it. The airline product is quite a complex one since it comprises of a service of incorporating the temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty free spirit to encourage booking. The product here refers to Airline service offering. Although service products are essentially intangible, there are certain pyhsical characteristics which consumer assess in their evaluation of product choice.
Attractiveness of the offering in terms of pyhsical features such as consumers have high expectation, the food & drinks offered , entertainment.Facilities available, associated level of services such as, quality of seats & interior decoration.
The airline product includes of two types of services:
5. On the ground services,
6. In-flight services.
The on-the-ground services include a convenient airport with car parking facilities, duty free' ¬shopping quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport, etc.
The service provided inside is intangible and is highly variable. The airhostesses are trained to provide polite, warm and courteous service. The courteous service that the representatives at the baggage counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of the airlines also need to be efficient and polite.
Differentiating the Product
It is important to recognize that what the consumers are demanding are not products, or features of products but the benefits they offer. Producing added benefits thus helps the marketer to distinguish one product from another. Good design or style of service can form the basis of differentiation. This enables the company to create a personality for its service. The design and decor of the aircraft provides opportunities to personalize their product as well as periodically to update them when differentiation under IATA regulations was virtually excluded, nonetheless, certain airlines were able to develop distinct personalities. Eagle Airlines created an entirely new market between New York and Bermuda, for e.g. by developing an image of a friendly airline distinctive from other airline serving the route. A similar style was evident in Richard Branson's Virgin Airways.
CORE PRODUCT AND SUPPLEMENTARY SERVICES
Many services products consist of a bundle that includes a variety of service elements and even some physical goods. It is important to distinguish between the core product that the customer buys and the supplementary services that accompany that product.
THE FLOWER OF SERVICE
Core product surrounded by clusters of supplementary services.
The core service of an airline is the service of transport. The supplementary services are classified into eight clusters & each one is analyzed with respect to the airline industry:
* Facilitating elements
* Enhancing elements
Information
This aspect of supplementary service is common for every person that needs information about the organization. In case of airline industry, up to date information regarding flight schedules, ticket fares, information about promotion schemes etc must be available to customers.
Customers can avail of this information literally at their fingertips today with every airline starting its own website which gives complete details to the customer & also entertains queries.
It also includes providing information to employees regarding new policies affecting the airline & equipping them with enough information, which the customers might demand. Extensive training is provided to in-flight attendants regarding handling customer queries, knowledge about the airplane itself, knowledge about cuisine etc.
Consultation
This aspect of supplementary services can be customized according to the needs of the customer. It is more in the case of people processing and high personnel-contact services.
Airlines are moving more actively into the role of consultant today. They are doing away with the travel agents & designing & selling packaged tours to consumers directly. In this aspect they often act as consultants to the customer, by giving him advice & suggestions regarding the type of plan he can choose, the benefits he will get the mode of travel he should choose etc.
Another aspect to consultation at airlines is when the customer approaches the airline regarding traveling to particular destination, the airline gives him a variety of choices of routes that he can take.
In some cases airline may also design special menus & benefits in consultation with its frequent fliers by keeping in constant touch with them & asking them for suggestion as to what they want in their airline which will make their experience more comfortable.
Order taking
The order taking procedure is essentially the booking procedure of the airlines. The important aspect to be noted here is that the procedure is smooth, easily understood & fast. Reservation of airline tickets is now easy and reliable since it is fully computerized. There are 24 hours reservations. Passengers can specify their seat preferences at the time of reservation.
Most airlines use the telephone, fax, and email methods of booking. The emphasis here is on fast booking & at the same time getting the required information form the customer. This is done by establishing a standard reservation procedure & format thus reducing the risk of inconsistent service delivery. The online booking system also facilitates better order taking & processing.
The scheduling aspect assumes importance as reservations on the wrong flight to the wrong place are likely to be unpopular.
Hospitality & Caretaking
With the increased competition today in the airline industry & the increasing similarity of services offered by each airline, hospitality has emerged as a key-differentiating factor between one airline & the other.
The hospitality aspect of an airline is tested right form the time of the reservation (courtesy of the booking official) to the airline’s desk at the airport to the actual in-flight travel (the attitude of the flight attendants) to the post flight help extended.
Safekeeping
In airlines the safekeeping issue is that of safeguarding the customer’s baggage.
Baggage allowances are offered about 30 kgs of check-in baggage is allowed. Passengers carrying international tickets are given further allowance of around an added 30 kgs Priority baggage delivery is offered to members. The customers entrust his baggage to the airline & it is the airline’s responsibility to keep it in a proper condition.
Children and infants usually travel along with their parents and guardian. In case of unaccompanied minors, customer service staff renders all assistance like checking in and escorting up to the aircraft and handing over to the senior-most cabin attendant on board the flight. He is looked after on board the flight right up to the point flight reaches the destination and he is received by his guardian.
Exceptions
Special requests – airline very often receive special requests form customers with regards to meal preferences, special amenities for elderly people or children., medical needs etc. these needs have to considered & acceded to wherever possible.
Handling of customer suggestions / complaints – every airline today has a customer service centre which entertains customer suggestions & complaints. On the flight, customers are often asked for their opinion regarding service equality. Many corporate frequent travelers are consulted when the airline decides to make any new change.
Billing & payment
The billing procedure in airlines is simple. The options available to the customer are plenty including credit card & travelers cheque. Airlines use the open account system with their corporate clients. Frequent fliers are also given special payment privileges.
LEVELS OF PRODUCT
FOUR PRODUCT LEVELS
The Core Service
The core service of the airlines industry is to transport goods and services to various destinations. As the needs of the people increased the entire system became more organized and formal. After this stage come the various supplementary services.
The Supplementary Services
The airline industry has many players they had a brand name like ‘Air India’,’ Jet Airways’,’ British Airways’. All of them had some common services to offer like connecting flights, through check-in, tele-check in, food on board, and complementary gifts etc.
Different classes like economy class, business class were introduced. Air concessions are given to school students, old people etc. Singapore airlines were the first to introduce small 8”television screen for every passenger. The freebies are actually win-win deals between airlines and other services.
Sahara, for example, offers its passengers a ‘business-plan’ on two-way economy class ticket, which includes a night’s stay with breakfast, STD facility for 3 minutes and boardroom facility at the Park Hotel, New Delhi. To Delhi based fliers to Mumbai, it offers a night’s stay with breakfast, airport transfers and VIP amenities at The Orchid, Mumbai. For business class, the plan includes a stay at The Leela, with buffet breakfast and late checkout.
All these added service helps the customer to decide upon which airlines he wants to travel. As competition increased and the customers wanted more the next phase evolved and that is the augmented service.
The Augmented Service
This phase is where the customer’s expectations are met; the service providers kept working on new methods to meet the ever-changing customers’ demands. The players introduced online booking, which was very convenient for the service users.
British Airways business class has showers; it’s more spacious and comfortable. Sahara airlines offer its passengers six different types of cuisine like vegetarian, fat free, diabetic etc. They also have auction going on board. Virgin airlines have gambling on board, they also have body massage to offer to their passengers. Air Emirates has something called cab service, they have customized pick up and drop cab service.
This phase is the most crucial one; with increased competition service will become the final differentiation.
Future Service
As mentioned above the customer needs keep changing, the future is unknown. The customers may be looking in for more frequent inexpensive air travel, something like air taxis, super sonic speed. This decreases the time thus reducing the cost.
The diagrammatical representation of the core and supplementary services in the airline industry is shown below:
BRAND POSITIONING
Brand positioning is all about identifying the optimal location in our customers’ minds for our Brand and our competitors. Proper positioning makes it easier to facilitate understanding of the Brand. Proper positioning clarifies what the Brand is all about, how it is both unique and similar to competitive brands, why customers should purchase and use the Brand.
Creating brand awareness is one of the most important aspects for any product or service. Due to the intense competition in the market every airline has to position them in the market. It is only if they position themselves well can they create a Brand image, brand relationship as well as brand responses.
Each and every airline would want to have a market for them as well as have a good name in the minds of the customers.
Airlines use unique attributes to position their brands in the minds of the potential customers. Thus consumers strongly associate those attributes with that particular brand, positively evaluate it and believe that they can not find those attributes to the same extent with a competitive brand.
Re- branding has also become an important concept. It is evident that the mergers and acquisitions have become an important part of the airline industry. Thus they need to re-brand themselves under one common name.
Examples of Re- Branding:
KINGFISHER AND AIR DECCAN
Kingfisher’s acquisition of Air Deccan would lead to the latter being re-branded under a new name. The new brand positioning will be a shift from being a low-cost airline to a value-based airline. It will re-emerge with a new revamped stylish look. The emphasis will be on creating a stylish airline keeping with the UB Group’s brand image.
The branding exercise will encompass areas such as changing the look and feel of the aircraft, including interiors, ticketing and check-in counters and staff uniforms. The colors red and white will dominate the changes, with the aircraft, leather seats, carpet, boarding passes and airport counters painted red.
INDIAN AIRLINES AND AIR INDIA
When Indian Airlines and Air India merged, they retained the brand name of the latter due to its better brand positioning. The logo was evolved out of a combination of the two airlines. The red colored flying swan with the Konarak Chakra in orange became the new brand logo.
SAHARA AND JET AIRWAYS
However, in case of Sahara airlines being branded Jet Lite by Jet Airways, there could well are a dichotomy in the consumer’s mind of the new brand’s positioning. Jet has a premium connotation while Sahara was a low-priced air carrier. The Jet Lite brand might end up confusing its customers.
Thus it can be said that if the transition is smooth and the integrity of core values retained, then any re-branding exercise can be successful. The new brand has to be updated and not outdated.”
The Integrated GAPs Model of Service Quality
The Gaps Model positions the key service concepts, strategies and decisions in service marketing in a manner that begins with the customer and builds the organization’s tasks around what is needed to close the gap between the customer expectations perceptions. The airline provider needs to study the Gaps model to maintain a service quality which delights the customer. The main concentration has to be on the customer gap, the difference between customer expectations and perception. Every Airline Company has the task of closing every gap through its effective application of marketing mix strategies.
Customer Perceptions are subjective assessments of actual service experiences; customer expectations are the standards of, or reference points for, performance against which services are compared. The factors determining customer expectations are personal needs, word of mouth communication, advertisements and past experiences of the service.
Gap 1: Expected Service and Management Perceptions of consumer Expectations – Not Knowing What Customers Expect.
Gap 1 is the difference between customer expectations of the service and the company understanding of those expectations. For example, a customer expects adequate information to be provided to him about his baggage and limitations of the weight to be carried. If an airline provider fails to effectively inform the flier, then the gap gets formed where the customer’s basic expectations are not met by the company management itself.
Key Factors leading to Gap 1 are:
• Inadequate Marketing Research orientation.
Insufficient Market Research
Research not focused on Service Quality
Inadequate use of Marketing Research tools
• Lack of Upward Communication.
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
• Insufficient Relationship Focus.
Lack of market segmentation
Focus on transactions rather than customer relations
Focus on new customers rather than relationship customers
• Inadequate Service Recovery.
The above factors need to be addressed properly to close Gap 1. Strategies fore closing Gap 1 include Market Research; Promotion Mix Strategies; Communication Mix Strategies; People Mix Strategies.
Gap 2: Management Perception of Consumer Expectations and Service Standards – Not having the right Service Quality Designs and Standards
Gap 2 reflects the difference between companies understanding of customer expectations and development of customer-driven service designs and standards. For example, during long distance flights, a flier expects stabilizer drinks to maintain his body pressure and avoid restlessness but if the service provider fails to keep this in mind while processing the service, then a gap is created.
Factors leading to Gap 2 are:
• Poor Service design.
Unsystematic new Service Development Process
Vague, undefined Service Designs
Failure to connect Service Design to Service positioning
• Absence of Customer defined Standards.
Lack of customer-defined service standards
Absence of process management to focus on customer requirements
Absence of formal process of setting service quality goals
• Inappropriate physical evidence and servicescape.
Gap 2 can be closed by implementing strategies such as Process Mix strategies; Market Research; Physical evidence Mix Strategies; Productivity and Quality Strategies.
Gap 3: Service Standards and Service Delivery – Not Delivering to Service Standards
Gap 3 is the discrepancy between development of customer-driven service standards and actual service performance by company employees. Service Standards must be backed by appropriate resources and also need to be enforced to be effective in service delivery. For example, fliers when pay a relatively high price, expect a better service quality which is perceived to be a standard for the price paid. But, if the airline company fails to deliver a service which is up to the mark and does not satisfy the customer and not deliver the value worth the price charged, then Gap 3 is created.
Factors Leading to Gap 3:
• Deficiencies in Human Resource Policies.
Ineffective Recruitment
Role of ambiguity and role conflict
Poor employee – technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control, and team work
• Failure to match supply and demand.
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Over reliance on price to smooth demand
• Customers not fulfilling roles.
Customer ignorance of roles and responsibilities
Customers negatively affecting each other
• Problems with service intermediaries.
Channel conflict over objectives and performance
Channel conflict over costs and rewards
Difficulty controlling quality and consistency
Tension between empowerment and control
Gap 3 can be closed by implementing effective selection and recruitment strategies; effective outbound communication with customers; effective market research; effective distribution strategies.
Gap 4: Service Delivery and External Communication to Customers – When promises do not match Performance
Gap 4 illustrates the difference between the service delivery and the service provider’s external communication. Promises made by airline companies through advertisements, sales promotion and other communication tools raise the flier’s expectations from the airline company. These expectations form as a service standard for the flier which is then assessed and determines the customer’s satisfaction level. The discrepancy between the actual and the promised service therefore has an adverse effect on the customer gap.
Factors resulting into the Gap 4 are:
• Lack of Integrated Services Marketing Communications.
Tendency to view each external communication as independent
Not including interactive marketing in communication plan
Absence of strong internal marketing program
• Ineffective management of customer expectations.
Not managing customer expectations through all forma of communication
Not adequately educating customers.
• Over promising.
Over promising in advertising
Over promising in personal selling
Over promising through physical evidence cues
• Inadequate horizontal communication.
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches units
Gap 4 is all about the communication to the customer about the service. No airline company can afford to over promise and then not meet with the expected standard of the customer. In order to close the Gap 4, strategies need to be implemented in effective communication and informing the customers.
Gap 5: Perceived Service and Expected Service – The Final Gap
Gap 5 is about the difference in the perception of the customer/flier about the service and the expected service. Gap 5 is a result of the above mentioned four gaps. If the Gaps 1 to 4 are closed effectively and strategically, then the Gap 5 automatically is closed and the perceived service becomes the expected service and results into customer delight and retention.
PRICING MIX
Pricing decisions play a crucial role in managing the business of air transportation. The increasing operational costs, the rising competition, the falling occupancy ratio, the imbalances in demand and supply, the increasing pressure of inflation are some of the important factors influencing the decisions for setting fare and freight rates in the air transport business. The Ministry of Tourism and Civil Aviation, the Indian Airlines Corporation, the National Airports Authority, the International Airports Authority of India, the Air India Corporation are the bodies directly or indirectly influencing the process of making the pricing decisions. The main problem is to make the pricing decisions competitive because it is found that even the private air transport organizations are involved in the process too. It is seen that the following are the features in price i.e.: 1.Flexibility; 2. Price Level; 3. Differentiation; 4. Discounts and Allowances.
While price is tactical, it has localized implementation, it is temporary in nature and therefore price is flexible.
Pricing plays a vital role in the marketing mix of any airline. The ‘fair price’ concept is supreme, mainly because more than anything else most potential customers will base their purchase decisions on the basis of price of the ticket. Passengers tend to seek value for the money they are spending.
For example, below is the table showing price of tickets for Indian, Jet airways and Rajdhani express.
Sector
Indian Jet AC–I* AC-II *
Delhi-Mumbai 3,400 3,620 4,180 2,404
Delhi-Bangalore 4,500 5,053 6,385 3,470
Mumbai –Bangalore 2,700 2,839 2,943 1,954
*Rajdhani fares
All figure in Rs
As seen in the table, in every route whether it is Mumbai to Bangalore, Delhi to Mumbai the rates of 1tire A.C. is more than Air fare of Indian and Jet Airways. Travelers will most definitely choose to travel by airways as it is cheaper compared to railways plus it gives the added advantage of reaching the desired destination much sooner. Here, by offering a lower price, the respected airline is trying to snatch the customers who would otherwise be traveling by 2nd tier A.C.
The final price that the passengers pay is made up of various components. The air fare charged by private scheduled domestic airlines comprises of basic fare, fuel surcharge, congestion surcharge, passenger service fee and transaction fee (if the ticket is booked other than the Website). Out of these, only passenger service fee is the component collected by the airlines on behalf of the airport operators.
Pricing Strategies
11. Demand-based pricing: The pricing of air fares under this strategy is simple. It is based on the demand from the customers’. It involves setting prices consistent with customer perceptions of value, i.e., prices are what customers will pay for the services provided.
For example: The person sitting next to u might not have paid the same price for the ticket. If a person wanting to travel in Business class does not get the ticket for the same when tried to book at the last minute, will travel in Economy class paying more than what the other travelers must’ve paid. The pricing in airline industry is never fixed or same. It’s fluctuating in nature depending upon time, demand and other such attributes. So when, the demand exceeds supply for the seats in an airplane, the price charged on the ticket is much higher than other passengers.
12. Season-based pricing:
The pricing of airline industry largely depends on seasons. For example, if a person is travelling by Indigo from Mumbai to Bangalore, the pricing will be different for different time periods. It will be cheaper in monsoon while comparatively expensive in winter. Also, it depends when the person is booking the ticket.
If he books the ticket 3months before the date he’ll travel he might avail the ticket at a cost that is 30-40% less than what the person may be charged if he books the ticket 20days before.
For example: if a traveler books a ticket during normal weekdays the prices would not be too high. Whereas, if the same traveler books the tickets during Diwali or Christmas, he will be charged more than what he was charged earlier for the same destination. And this strategy remains the same for all kinds of airlines. The prices may not be exactly same but it’ll be quite similar.
Also, Jet airways provide tickets at a comparatively lower rate during the vacations for student-passengers. This helps them tap the population travelling abroad for education purposes as well as increase occupancy ratio.
13. Competition-based pricing:
This strategy focuses on the prices charged by other airlines. Competition-based pricing does not always imply having the same price strategy as the competitors. It means keeping one’s pricing strategy such that it is cheaper in cost or it offers the same price as competitors with better and/or more facilities. Thus its basic purpose is to have a competitive edge over the rival airlines.
For example, Indian airline industry is filled with low-cost airlines. So Air Deccan before getting acquired by Kingfisher had many competitors like Indian airlines, Air India (before merger), Indigo airlines and Go air. And now Spicejet had entered the already filled jammed low-cost airline bandwagon. This brings about a competition in the pricing of the tickets. Spice jet on completion of three years on May 23rd 2008 offered 3 lakh tickets just for Rs. 3 starting from July 1st to 21st September 2008 across its 18 destinations in India. This was a very smart move to attract passengers especially those travelling by Economy class who are very cost conscious.
14. Pricing strategies when customer means “Value is Low price”:
This strategy can be applied when the most important determinant of value to a customer is money. But this does not imply that the level and standard of service, facilities and other attributes should be looked upon. It just means that pricing takes a forward stand as compared to the other attributes. To establish a price for this strategy, the marketer should understand and know the objective of charging low prices, how the customers’ interpret prices and how they value their travelling experience on the basis of prices.
There are various methods of applying this strategy:
vii. Discounting: The service provider or marketer may offer discounts or price cuts to communicate to the price-sensitive buyers/ customers’ that they are receiving value for which their money is spent. For example: Spice jet has a special group discounting scheme wherein groups of over 15 guests may be provided with consideration for special fares.
Another example would be that of Indian, that offers discounts to passengers on site collaborated with India times by offering a bid for international destinations at low fares.
viii. Odd pricing: This is another strategy wherein the service providers offer prices at an amount which seems comparatively lower than the normal rates. It is based on U.S. dollar price-strategy wherein instead of charging $500 they will charge $489 or so. So in case on Spicejet. Instead of offering a ticket from Mumbai to Goa at Rs. 2400 they would offer at Rs. 2299. So, on looking at the figure the price difference seems to be more which in fact is just hundred and eleven rupees.
ix. Penetration pricing: This is a strategy in which new services are introduced at low prices to stimulate trial and widespread use. This strategy is appropriate when the sale of tickets is price-sensitive.
In order to make, travel by air more affordable to the common man, a couple of years ago Jet Airways announced a new offer `Everyone can fly' which offered a major reduction in economy class air fares on certain selected routes across the country. In most of the airlines, the reduction enables economy class air fares being competitive to rail fares being charged for the same journey.
15. Pricing Strategies when the customer means “ Value is everything I want in a service”:
When the customer is concerned more in the ‘get’ component of the service, monetary price is not of primary concern. The more desirable attributes that an airline provides, the more highly valued that service is likely to be and higher the price that the marketer can set.
Skimming strategy: This is a strategy in which new services are introduced at high prices with large promotional expenditures. It is an effective approach when services have undergone major improvement over past services. In this situation the customer is more concerned about obtaining the service than the cost of the service, thus allowing the service providers to skim the customers most willing to pay the highest prices.
An example of this would be that of Virgin Atlantic airlines that has gambling on board. They also provide in-flight body massage to their passengers. There is a bar in the air craft. Also, they provide lounge facility at the airport to the frequent flyers.
Also, when Kingfisher had newly started first class with Kingfisher first, the rates of the tickets were very high compared to other airlines’ tickets. But travelers still opted for it as they wanted to have the new flying experience with Kingfisher.
THE PLACE MIX
In Airlines, they utilise more than one method of distribution.for e.g they sell tickets through travel agents & sell seats on flights to tour operators , whilst also operating direct marketing. Whichever distribution strategy is selected, channel management plays a key role. For channels to be effective they need realiable updated information. For these reason, I.T has been widely adopted such as on-line booking system.
This dimension of marketing mix focuses on processing of services and selecting the location points for airways and airlines offices keeping in view the comforts and conveniences of the end users. By the processing of services, our emphasis is on the involvement of channels, front-line-staff, travel agency offices; offices of the tour operators or so from where service flow and reach the ultimate users.
15. The air transport needs to make sure that the prospects don’t face any difficulty in buying the tickets and make necessary arrangements for the confirmation of booking.
16. It is also to be confirmed that the users booking their luggage are not to face inconvenience.
17. The behavioral profile of the personnel working in offices of travel agents and in the offices of the airways and airlines require due attention. It is almost clear that airhostess looking attractive, smart, well dressed are at your disposal to make available to you the defined services.
18. It is also to be sure that the information network of the offices of the travel agents is technology-driven and user-friendly.
19. The security checking, custom checking of passport, visa, income tax clearance or so. It is essential that all the windows or the counters offer the services as per the provision and promises.
20. Keeping in view the duration and nature of flights, the users are made available lunch/ dinner, breakfast and drinks inside the aircrafts.
21. If in course of the journey, you are supposed to change the aircrafts and the duration of stay is long, it is the responsibility of the airport authorities and concerned airway and airlines to make available the accommodation facilities.
Another dimension of place mix is related to location and management of the offices of the airways, travel agents, tour operates, transport operators or so.
13. The main thing in the selection of a place is easy accessibility. The prospect customer should get an easy access to the office and ticket counters. The place is required to be safe, well connected with all-weather proof roads where all the required infrastructural facilities are to be available.
14. The technology-driven booking system is to be ensured. The online booking facility should be user friendly and all the information regarding the company should be available on the company site so that customer can get all the information at it ease.
15. The water and sanitation facilities for the users and comfortable seating arrangements need due care of the travel agents or airways offices. The lighting, ventilation facilities need to be made available.
16. The interior decoration, furnishing, plantation need aesthetic sense so that the users from a positive opinion regarding the airways services. The interiors should be creative so that people can enjoy their ride and make their trip a memorable one.
17. The positioning of posters of airways and airlines which look attractive and draw the attention of the users attending the offices for chartered flights, packaged tour need due care.
18. It is in this context that they find management of place an important component of the marketing mix.
In view of the above, it is right to mention that air transportation business is linked with a number of allied services offered by a number of agencies and organizations. If they don’t find cohesion and coordination the promised services would hardly reach to the end users.
Indian Airline Network
Jet Airways Network
THE SERVICE MARKETING TRIANGLE
ENABLING PROMISES MAKING PROMISES
KEEPING
One can better understand the working of airlines by looking at its marketing triangle. There are three entities in the entire transaction:
7. Customer: He is the person who wishes to satisfy his needs i.e, transportation from one destination to another. Here, the customer is a passenger or a potential passenger.
8. Company: This is both the dreamer and the offerer. It here refers to the various airlines which offer its aviation services to the customers to satisfy their demand for transportation from one destination to another, for example: The Indian Airlines. Here, the company makes a promise to its customers to deliver the right quality service.
9. Provider: The service providers are finally the people who interact with customers. They keep the promise that the airline operator has made to its customers by delivering the finest services. They are the ones who carry out final transactions. The customer actually comes in contact with the service provider and not the company. For example: the air-hostess and the crew.
The interaction between these three parties while providing the service takes place in the following manner:
The company is established with the basic objective of providing the specific transport service. Thus the airline industry with players like Indian airlines, Jet airways, Sahara airways etc came into being.
The air service provider that is the company communicates with the customer and makes him aware of the services. It makes promises to the customer by advertising through various media’s. For e.g.: the TV ad of Indian airlines advertising its new sleep-in seats.
The customer who gathers knowledge about the service approaches the company for availing his service in order to satisfy his need. This interface of the customer with the company is through the customer’s interaction with the providers of the company. The company enables its promises to the customers through setting up facilities to deliver the promises by setting up ticket and enquiry counters. The outcome of the “to be transaction” is determined by the interaction between the provider and the customer. Hence the company aims at offering its providers with the required infrastructure and training to optimize the quality of the transaction. For e.g.: Yearly employee training programs and performance appraisals are done by Sahara airlines.
The three strategic points where the provider and the customer interact are:
Ticket purchase at the airline counter or the ticket agency.
Checking in
While boarding
During disembarkation
All three sides are essential to complete the triangle. All three marketing activities represented by the sides of the triangle are critical to efficient delivery of the service, even if one of the sides is out of place, the triangle will be distorted; in other words the total marketing effort cannot be optimally supported.
THE PROMOTION MIX
The formulation of an ideal promotion mix is essential to inform sense and persuade the users. The business magnets, business executives, politicians, cine artists, high spending tourists, business houses using expensive inputs and trading the same, the Department of Posts, domestic and international tourists are some of the users of the air services. The users appear to be more conscious, aware of their rights and in a majority of the cases are found sophisticated.
However, majority of the users are sophisticated and therefore the promotional efforts are required to be more creative. The professionals engaged in the air services bear the responsibility of blending the different components of promotion in such a way that the task of increasing the business is simplified. Since a number of airways and airlines have been facing problem of financial crunch, it is pertinent that they make possible an optimal use of the different components of promotion.
PROMOTION MIX VARIABLES
Since domestic deregulation occurred in 1978, competition in the airline industry has intensified and become more concentrated. The respective airline needs to provide certain benefits that the other airlines do not. Promotion has become a big aspect since the arrival of numerous private airlines. The way this industry has attracted people to them has changed. Airline companies have struggled with making new ways to market their products. Today airline advertising focuses on price, rather than the pleasure of the flying experience. Companies use the radio, newspapers, and billboards in big cities, tops of taxicabs and sides of buses to put their ads on. Even coffee cups in restaurants are starting to be used for advertisement.
Promotion should be done keeping in mind the competitor’s product. This helps in promoting own product/service with a message that has an edge over the others. Kingfisher understands its competitors well and promotes their service accordingly.
Vijay Mallya's Kingfisher Airlines adopts an innovative marketing strategy to snatch attention from Jet Airways' advertisement.
In the ad displayed on the hoarding above, Jet Airways say, "We've changed." Kingfisher Airlines comes up with a cheeky billboard above Jet's hoarding that says, "We made them change!” This was a very innovative and smart move on kingfisher’s part to promote their service thereby denoting that their own service is so much better that Jet Airways had to change and improvise them to reach their standards. This needs presence of mind on part of marketing and promotion heads.
Spice Jet, India’s most preferred low – frills airline, has announced a unique offer of 3,00,000 tickets at a special price of Rs 3/- per ticket. This special offer flags off the third anniversary celebration of the airline. Booking for this special promotion, was opened on May 9, 2008 and will continue till the tickets are sold out.
Tickets bought will be valid for travel from July 1 to September 21, 2008 on all flights covering its 18 destinations. This offer is available only on SpiceJet - Low Cost Indian Airlines, Book Indian Flight Tickets Online, Cheap Fares Air Travel in India - SpiceJet offers Discount Airline Ticket Fares Online. In the last three years Spice jet has flown over8.1 million people across all their destinations. They have helped Spice jet gets over 10.3% market share. This special promotion is Spice jet’s way of thanking them for their support.
PROMOTIONAL MIX AND ADVERTISING
Advertising
As any other service, the air transportation service needs creative advertisements to promote their business. This is the first component of the promotion mix, which is based on professional excellence of the advertising agencies. In view of the rising cost of inputs and increasing the impact of worldwide economic depression on the air transportation, there is a need to make the advertisement budget optimistic Vis-a- Vis optimal.
This is essential to regulate the multi-dimensional expenses found of unproductive nature and instrumental in making the service expensive. The telecast media and the print media are found important while promoting the air business.
While advertising through the telecast media, budgetary constraints and budgetary provisions should be considered. Also the quality and nature of target market and level of expectations should be kept in mind. The advertising professionals need to make the advertisement slogans campaigns and messages proactive to the generation of business. Kingfisher is a good example for advertising its services. They advertised kingfisher not merely into the business of transporting people from point A to point B. They have created a new category of Aviation Hospitality Space thus making service and hospitality their main focus. Their slogan is kingfisher airlines- “Fly the good times.” This is how they are differentiating their product from other airlines. The airlines also have to make sure that whatever the strategic decisions they make to promote the business are in a position to establish an edge over the promotional measures of the competitors. They are also required to assign due weightage to the efforts made for the projection of a positive image. The Indian Airlines as well as Air India have been facing the image problem but the advertisement may be efficacious in transmitting the facts and removing the image problem.
As mentioned earlier, Indian airlines started promoting its first class fully reclining seats to as a tool to improve the image problem and attract more passengers in its first class. It is essential that while advertising one has to keep in mind the image of the country, the natural scenes, the tourist attractions, rich cultural heritage or so which would energize the process of motivating the tourists. For example: Thai Airways have air-hostess wearing colorful long and flowery dresses and greet by joining hands and bowing to their passengers as a part of their culture. While advertising, it is impact generating that we select an opportune moment of flight, an attractive scene of take-off, high attractiveness of personnel in general and the air hostess in particular, the landscape of an attractive tourist center, wild life sanctuaries, lake, park and so on. The air transportation services can also use the broadcast media.
For example: In times of rising fuel prices and lower occupancy rates Jet Airways has come out with a lavish ad featuring the most expensive brand ambassador of time Shahrukh Khan. The Shahrukh Khan TVC, which broke on September 1, 2008 is the first of three campaigns Jet has planned (the ones on economy and premier class will follow), and is running across most news channels and some specialized travel channels. The ad marks the television debut of Jet Airways which had previously relied heavily on the print medium. While competitor Kingfisher relies on showcasing complete range of Consumer experience Jet is trying to highlight its product superiority. Jet had come out with Boeing 777 last year, which has some superior features and this ad is merely an aim to highlight those features besides trying to latch on to the celebrity appeal of Shahrukh Khan.
Another example would be that of Indigo airlines that uses Internet and print media as a visual medium to advertise itself. What is interesting is the fact that the ad is not flashy and it just conveys simple facts.
An important source of visibility for Indigo is the internet where e-ticketing give it a chance to come up with its offers.
The launch and subsequent editorial patronage and newspaper support that Indigo carved out for itself helped it set itself up as a brand.
Online reviews on MOVIE Review, HOTEL Review, MOBILE PHONE Review, BOOK Review, CAR Review, CAMERA Review - MouthShut.com and other blog sites are all directed toward creating a brand reckoning for Indigo Airlines.
Evenly spaced out PR activities help Indigo to be on top of the minds of the people and gives it instant brand recall value.
Indigo goes for extensive print coverage every month or so.
Publicity
Publicity is a process of persuasive communication for which no payment is made. Strengthening public relations activities if found essential to promote the business airlines or airways. The Public Relations Officer, Receptionists, Travel Agents, Travel Guides, Media people are some of the sensitive points of publicizing the business. The most important point in this is the co-operation of media. The marketing professionals should have an idea of magazines, newspapers preferred by the prospects or users and they develop rapport with the correspondents concerned. The Airlines need to recruit efficient personnel for that very purpose that should have professional excellence no doubt but in addition they are also required to have the potentials of attracting the users, prospects.
For e.g.: Indian Airlines helped the cancer patients and took them for a small outing as part of their public relation campaign. Similarly, Sahara linked up with Close- up by taking Hrithik Roshan. Here for Close-up it is a promotional strategy while for Sahara a publicity that an airline is linking up with FMCG by using an entity.
Kingfisher is right now running a print campaign in major business publications. The new series of campaigns are focused on the functional attributes of the airlines.
Deviating from the usual flashy ads, Kingfisher is now appealing to the Left- brain of the consumers. The ads are targeting the three segments of user’s i.e Children, Ladies and Males but the ads are talking to Men who are the key decision makers.
The ad for the young travelers talks about special kids’ meal, wide seats and games. The ad ends with an appeal to the father that “Your little prince deserves to feel like a King ". The ad for the lady travelers talks about the seats that bend all the way back, the footrest that will pop up, life valets when your lady lands at the airport at midnight and helping hands that lift her bag. The ad ends with the message “Queen of your heart deserves to fly like one ". The third in the series aims at the decision maker himself. The ad aimed at male traveler as usual talks about the 'flying models ", the smile that tastes better than the ice-cream, spectacle cleaner and the air-boutique. The ad ends with the message ' Every man's seat feels like his throne'.
With regard to the quality of campaign, it may miss some eyeballs because of not being an eye catchy ad. But the message surely is smart. The basic premise in this ad campaign is that Men are the decision makers with regard to this service. May be a campaign aimed at lady executives may also come in the future.
On the promotional front, Kingfisher has signed up the latest diva of Bollywood, Ms Deepika Padukone as the brand ambassador.
Sales Promotion
A component of promotion adopted for a particular period to touch the target and withdraw the measures when the time is over is known as sales promotion. The tool based on incentives is found instrumental in sensitizing the users. The travel agents contribute a lot to the promotion of air transport business and therefore we need to think in their favor on a priority basis. The tour operators also contribute to the process and therefore need to think in their favor. The front- line-staff in the offices of the airways and the receptionists working there also play the same role. This makes it significant that they are given some incentives which are in the form of a holiday trip to a particular place, concessional services to their children or spouse or so. Also offering them with innovative gifts, which have not been offered by their competitors, can be given. The nature and type of incentives would depend on the contributions of providers. If they make immense contributions, the incentives would be in good quality and volume. There are incentives given called the promotional incentives on the basis of the frequency of using the services.
For e.g: Through Jet Airways, return ticket passengers on metro flights (both economy and business) can avail a discount at all Taj and ITC hotels in South India. Also Sahara has a fanatical assortment of gifts being handed out (its’ Take Offer). Braun Mixer grinders, CTVs, cameras, handy cams, mobile phones and even free holiday packages are up for grabs as a part of their sales promotion campaign.
Also, there’s something called marketing bonanzas. Some airlines give free tickets to customer so as to make them aware of their services. These tickets or any other gift voucher are given so as to attract a lot of people. This is a very interesting way of catching the headlines of customers. Example Go Air was sending SMSs to any number that they have won a free ticket from Mumbai to Goa or Delhi. Kingfisher has also sent messages to people for free ticket.
Jet lite announced its ‘Summer Special Bonanza’ promotion for online bookings through its website. Even Air Deccan used this approach of giving gift voucher worth Rs.250 and a saving of Rs.99 per ticket if booked thorugh Air Deccan’s site. The offer was valid for bookings made between 22-May-08 and 10-Jun-08 and for travel in the same period. There was also a 2 nights, 3 day holiday package to be won in the offer period.
Jet Airways, India's premier international airline, has announced a special promotional package for students flying to its destinations in the United States, Canada, United Kingdom, Europe or Asia. Jet Airways' special promotional package is valid for outbound travel on or before October 31, 2008. Existing, as well as new, students will receive a whole host of benefits including excess baggage allowance and special fares. Students availing of this offer will be allowed to carry an extra piece of baggage, with each piece not exceeding 23 kilos, on flights to the US, Canada, UK & Europe; and an additional 10 kilos on flights to Asia (Shanghai, Hong Kong, Singapore, Kuala Lumpur and Bangkok), on Jet Airways' online destinations.
With Jet Airways special promotional package, students will also receive exclusively designed Student Kits', in association with its partners. These may be collected after the purchase of a ticket at any of Jet Airways' city sales offices around India. Each kit contains a Matrix mobile connection with free talk-time worth Rs.4000 in the US, UK, Singapore and Australia, ICICI Bank Travel Cards for hassle free transactions across the world, a free Tata Indicom Wi-Fi Roam Card enabling internet connectivity from over 50,000 hotspots in the US ,UK, Austria, Czech Republic, Germany, Netherlands, Switzerland, France and Japan; Bajaj Allianz Travel Insurance with special privileges and low premiums and VIP vouchers worth Rs.500/- on purchase of VIP travel accessories.
Jet Airways also offers students an ergonomically-designed seat with hammock style head rest and foot support, the airline also provides its Economy passengers a personal reading light, on demand In-Flight Entertainment and access to over 200 hours of Hollywood and Bollywood movies, regional films, and television and short programmes. Thus Jet Airway plans to tap mass-students travelling abroad during this period.
Personal Selling
The air transport organizations find personal selling which is the mix of promotion mix helpful in increasing the business. An art to influence, stimulate, sensitize the impulse buying is known as personal selling. The air transport-marketing professionals are supposed to know about the behavioral profile of persons who act as personal promoters. The travel agents, tour operators, transport operators, travel guides, front-line staff on the booking counters, receptionists contribute substantially to the process of promotion. If they stop selling, the offices of airways would find it difficult to sell. This makes it clear that even the quality services fail in attracting the users, if the channels are not co-operated. This makes it essential that the airlines offer incentives to them so that they keep on moving the process of stimulation.
To better understand the concept of personal selling, the airline in question needs to follow the diagram given above. It explains all the things that the people involved in the process of selling should know and do. Starting with the first point, customer’s value for time, money and energy should be considered. Their comfort and suitability should be addressed to. They should be provided service in such a way that they get more than they expect to. It can be said that the customer’s should be pampered.
For instance, giving chocolates on arrival and departure or welcome drinks or discounts during off-season to name a few. The delivery of tickets should be made on time this enhances the effect of personal selling.
The entire aim of personal selling is to provide customer’s easy access and hassle-free journey and that is what should be done by the airlines and that is where the circle of personal selling ends. To fulfill the above mentioned criteria the airline industry must select persons, agencies having a positive image.
The travel agencies having a well established business can help substantially and therefore it is the prime responsibility that while selecting the travel agents one must assign due weight age to the image of the agencies. The tour and transport operators help considerably and one needs to think about the incentives to be offered to the promoters. In personal selling, the front-line staff or personnel at the booking or reservation counter of airlines office playing an incremental role in promoting the business. Here, it is essential that one is aware of the credentials of persons supposed to discharge the business responsibility and try his best to brush up their faculties as and when opportunities come.
Word-of-mouth Promotion
This happens to be an important constituent of promotion mix in which the promoters act as a hidden sales force. The air transport organization depends on this type of promotion if they feel that the quality of services offered by them is of world class. In the Indian perspective, the Indian Airlines, Air India, Sahara India, Jet Airways and others may use this component of promotion if they realize that providers have not been distorting the quality of services promised. If you are traveling by kingfisher and you really like the experience then you will definitely recommend your friends, relatives, etc to travel by the same airlines. Word of mouth is the best promotional strategy as it does not incur any cost for the company and also a positive image is built in the market by their loyal customers.
Indigo airline being a low-cost airline does not allocate much fund to advertising hence, it entirely relies on word-of-mouth promotional tool to spread a word about their services and thus communication is established and brand is recognized by the people who are potential flyers rather than the entire country which is an expensive affair.
PEOPLE
The commercial airlines service industry extremely competitive, safety sensitive and high technology. People, employees and customers must be the arena of an organization’s core competence.
In the service industry, service personnel come in direct contact with their customers in the course of production and consumption of the services.
Because people provide most services, the selection, training, and motivation of employees can make a huge difference in attaining customer satisfaction. Ideally, employees should exhibit competence, caring attitude, responsiveness, initiative, problem solving ability, and goodwill.
The airlines hire the right personnel with the essential requirements. They recruit the right people develop, and train them to deliver quality service. These employees are motivated in a manner that they stick to the organization; they are treated more as customers, rather than employees
For Example: Delta Airways recruits an employee and moulds him to cater to their demands. These employees are sent to US and Frankfurt on a 21 days training programme. The successful completion of this motivated the employee to stay on with the airline. They are provided with many incentive programmes and also with a one- month bonus incentive on completion of the sales target.
The Airline sector is divided into two categories, Internal and External customers.
Customers refer to the persons who have certain needs, wants and desires. The company makes promises to its customers. In the Airline industry, the customers refer to those persons who feel the need of travelling from one destination to another. The customers are further classified as Internal and External customers.
Internal Customers:
While delivering services the airline ensures that the services are delivered as promised and this rendering of service satisfaction is often totally in control of the frontline staff. The quality of service that the frontline staff provides is highly dependant on his/her ability to communicate their credibility.
Being a Hospitality line the employees are given extensive training to provide caring and individualized attention to customers. There are many people involved with the successful working of the airline industry.
The various types of airline personnel include:
FLIGHT CREWS: These are the trained people who play a very important role from the time when you check in your baggage till you board the aircraft. They ensure the smooth functioning of everything and guide you through the entire process. They form 85 percent of the airlines labour force.
The Flight crew includes:
Pilots
Flight Attendants
Reservation Clerks
Airport check-in and gate personnel
Security guards and In-flight security personnel
The service contact personnel in the airline industry are the Flight Attendants who are expected to have a pleasing personality and must also be polite while service handling.
While on the other hand the cock pit crew/ Pilots are considered as low contact personnel hence they are required to posses highly technical and analytical skills.
The Reservation clerks play a very important role as they check the tickets, allot the seat numbers and also place the destination tags on the baggage; hence they should be highly attentive while doing their work.
The Airport check-in staff must be extremely helpful as that is where the evaluation of the hospitality of the airline can be gauged from at first
GROUND STAFF: These are the main people who work behind the scenes and play a very important role to ensure smooth functioning of the entire procedure right from handling the formalities on the airport to helping the passengers board the aircraft. All these functions are handled impeccably by the ground staff.
The Ground Staff includes:
Avionics technicians/ engineers
Flight dispatchers who track all the airline’s flights
Baggage handlers
Gate Agents
PDC (Prolog development center)
The PDC (Prolog development center) has implemented a Staff Scheduling System; this system was adopted for the ground staff as creating good staff schedules is often a complicated process. It is difficult to clearly appreciate the many possible combinations of duty periods, duty hours, time-off-in-lieu requirements, holidays etc. that will ensure each person works the correct number of hours.
First and foremost it is important that internal and external rules are correctly implemented while maintaining adequate manning levels and ensuring a fair distribution of the various shift types. Scheduling restrictions (financial or other) may exist and must be taken into account.
Why Use a Staff Scheduling System?
Creating a good staff schedule is often a complicated process. Especially when the airline industry “never sleeps”. Manning is 24x7x360. The business involves many employees with different agreements and they must be confident that they get paid correctly.
First and foremost it is important that internal and external rules are applied, there has to be adequate manning and lastly the personnel must be available when the traffic requires it.
On an Organizational level PDC- Staff Plan, provides their clients many Advantages in the terms of:
Cost savings in terms of less salary bonus, over time and time-off-in-lieu
Significant reductions of administration
Efficient cost management through a flexible staff scheduling (no over manning and no under manning)
The Advantages that PDC-Staff plan provides the employees are in the terms of:
Fast and safe scheduling of duties and shifts
Better overview of manning, time expenditure, time-off-in-lieu, etc.
Relief of administrative work
Thus, efficient staff scheduling saves great resources and thus time to focus the efforts on other areas. In addition, time will be saved in the scheduling process itself
What are airlines looking for?
In making a decision about the employment of cabin crew, all airlines consider three prime elements:
Eligibility
An airline may have eligibility tests depending upon its own specific requirements. These are facts that can be determined either by physical or by documentary Evidence. Some of the Eligibility checks likely to be included are:
Does the candidate meet the required age profile?
Does the candidate meet the required height/weight profile?
Has the candidate attained required educational (or other) qualifications?
Is there documentary evidence to support the qualifications the candidate claims to have?
Has the candidate acquired adequate experience in a customer service or public contact role?
Can the candidate speak a second language? To what level of proficiency can the second language be spoken?
Suitability
This is clearly more difficult to assess than eligibility. Airline managers will be looking for people who can best fulfill the role of a Cabin Crew .The minimum requirement is for:
17. Technical knowledge
18. Maturity
19. Adaptability
20. Judgment
21. Tact
22. Diplomacy
23. Grooming
24. Attitude
Airlines will also be looking for people whose performance will not be adversely affected by the disadvantages of the job and will readily accept direction/training.
Specific requirements
Eligibility and Suitability are relatively basic requirements, which must be met in all cases.
Every Airline sets its own specific requirements; some airlines pay much emphasis on the appearance and personality of the person while others may look at the experience and knowledge. Some airlines may prefer have trained and experienced personnel while others may want fresh recruits.
Put simply, airlines are looking for the right people for their current circumstances. Do not be too disheartened if you do not get in at the first attempt. You can always try again - or apply to another airline! It is also true that candidates fail to be recruited by an airline at one attempt, and then succeed at a later date. This is usually because the candidate has acquired better interview technique, or extra skills, experience or confidence. It can also be because the airline itself has revised its person specification.
CREW PROFILE AND COMPLIMENT
The senior most person on any flight is the Commander. His is the last word where the flight & its crew or the passengers are concerned. The Cabin crew Senior or the In Flight Supervisor is the senior most Cabin Crew, but takes orders from the Commander.
The Crew complement on board is the total number of crew including both the Cockpit & the Cabin Crew. This number is preset where the Cockpit/ Flight deck crew is concerned for a particular type of aircraft. The number of Cabin Crew an airline has on an aircraft depends on a number of factors:-
3. Type of aircraft - for any aircraft there is a minimum Cabin crew complement required depending on:
The number of emergency exits on the aircraft
The number of passengers on board the aircraft.
8. The type of food & beverage service to be provided to the passengers.
9. Right duty time length of the flight. On some long haul flights when the flying time exceeds the flight duty time (the max number of hours a crew can be on duty), then there are two sets of crew on board. This is found ONLY on International sectors on extremely long sectors.
10. Today a few airlines have started new services like baby-sitting, on-board masseurs, tailors etc, which require extra crewmembers on board. More often than not, airlines start new service procedures that do not require additional crew or other staff, but to capture a good market share, Airlines often launch such services that are NOT sustained over a period of time.
The Hierarchy where the Cabin Crew is concerned may vary a little from airline to airline depending on their individual policies. For example in some airlines the air hostesses retire much before
Advantages of the Job
As with the role itself, the perceived advantages of being a cabin crewmember are often quite different from the actual benefits. Below is a list of what cabin crew & others see as being the real advantages:
Travel
This is what attracts many people to the job in the first place. Cabin crew goes to places they always dreamed of, and find interest in destinations they would not necessarily have chosen to go to.
Camaraderie-Solidarity & Friendship with other Crew members
The camaraderie, team spirit, and sense of belonging together that the majority of crew has when they are flying is unique. Despite being a very diverse group of people, your colleagues are likely to be sociable and out-going, and will help to make the job a lot of fun.
Variety and Interest - Absence of monotony
This is certainly not a 9 - 5 jobs, and no two working days are likely to be the same. The sheer dynamics of different crew, passenger profiles, destinations and roster structures ensure that there will always be variety.
Appreciation
This is one career where the appreciation is almost instant after a 'good job done'. Despite all the things that can go wrong on a flight, many passengers do show their gratitude of the crews' efforts, either when someone has done their best for them individually, or especially when the whole team has pulled together well. The better airline management teams also acknowledge consistently good performance, or outstanding individual service.
Personal Development
Airlines usually have high standards of initial and follow up training, and some provide self-learning facilities or schemes thus helping the crew to develop their personalities and all develop themselves in other aspects.
Other benefits
Most Airlines provide a number of other 'perks' along with the usual handsome salary they give a crewmember. Most major airlines to provide ground transportation and a good standard of accommodation for crews who are staying overnight at destinations away from their 'home base'. Free medical attention for cabin crew I their family members (in some cases) are also provided. Free staff travel tickets are another BIG bonus given. Airlines have schemes whereby all their staff are able to travel free on the 'employer' airline or at extremely advantageous prices on other airlines. Airline staff also benefit from a range of discounts, from hotel chains, shopping malls, duty free shops, insurance companies and financial service institutions.
Uniform
Airlines usually provide items of uniform clothing to all their public contact staff free of charge.
Disadvantages of the job
Air cabin crew is a wonderful job, and can provide an interesting and rewarding career, but as with any job there are drawbacks as well.
Travel Limitations and Risks
This is almost the reverse of Travel' as an advantage of the job. As a crew member you do not choose where you go to, or how long you stay there. Crew also face the usual risks present for any other traveler, such as theft of personal belongings, mugging, poor hygiene standards in other stations/cities, bites/stings from insects and animals, and risk of contacting infectious disease.
Customer Service Negatives
Good customer service is a prime role pf cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Good customer service is a prime role of cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Dependence upon the support of other departments, including planning, maintenance, and catering, cleaning and logistical units is very high. Any breakdown in the chain (for example dirty toilets or insufficient catering) lead to a feeling of being “let down and having to take the burnt of passenger complaints.
External Customers:
These are the main customers for the airline industry as they generate revenue to the same. Hence Customer Satisfaction plays a very important role. The customers should always be kept at pedestal by looking into their needs and acting on them immediately and also providing them with exclusive services. This would earn goodwill for the airline and ensure the smooth running of the business.
The customers are categorized on the basis of their need and preferences:
Customer Segmentation
Most airlines use a very traditional segmentation strategy, dividing passengers into first class, business travelers and economy travelers. But, nowadays most of the airlines offer only two classes – the business class and the economy class.
The customers subsequently also be divided as per the scope of the market .This ia a process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinct marketing strategy.
This includes preparing a method of identifying a group of consumers, within a broader market, that has similar characteristics and needs. Segments can be identified by examining geographical, demographic, psychographic, and behavioral differences.
Segmentation of the aviation industry can be done under the following factors:
Geographic segmentation
Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions etc. the company can operate in one or few areas or operate in all but pay little attention to local variations.
Most of the domestic airlines, their market segment consists of the customers who’s destination are major commercial cities like Mumbai, Delhi, Kolkatta etc. apart from these the airlines also concentrate of tourists destinations like Goa, Agra etc. The reason behind this is that such sectors have major traffic and are profitable sectors. However Indian Airlines, being the National Carrier of the country, fly’s even to the unprofitable sectors and concentrates on the segment of people flying to such destinations.
Demographic segmentation
In demographic segmentation, the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion and social class. There are several reasons for the popularity of demographic variables to distinguish customer groups. One reason is that consumer needs, wants, usage rates and brand preferences are often associated with demographic variables.
Airlines like Kingfisher targets the affluent class and the executives from multi national companies, business community etc. However in the case of Air Deccan and other low cost airlines, their segment is the population from the lower middle class and the middle class. Thus it can be said that Kingfisher targets the classes whereas the no frill airlines target the masses.
Psychographic segmentation
Psychographics is the science of using psychology and demographics to better understand consumers. In this segmentation customers are divided into different groups on the basis of psychological, personality, lifestyles or values. People within the same demographic groups can exhibit very different psychographic profiles.
The airline tries to work on the psychology of the people. Kingfisher concentrates on the segment of people who do not mind paying a higher price, but would like to have the best of comforts. Whereas the low cost airlines targets those customers, who believe in value for money services and account for every rupee that they spend.
Behavioral segmentation
In behavioral segmentation the customers are divided into groups on the basis of their knowledge of, attitude towards, use of or response to a product or a service. It refers to grouping consumers in terms of their relationship with the product, for instance their usage rate, the purpose of use, their willingness and readiness to buy, etc.
Segmentation of customers on the basis of airlines
Business Class
They are crucial for airlines' profitability. With less spare time and more cash in their pockets, they agree to pay a premium price for a premium service. The premium prices they pay provide wider and more comfortable seats, better choice of meals and seats, luxurious lounges.
If the airline is also providing the first class including the business class and the economy class then it will provide additional services to the first class travelers in addition to the other services. These services may include fully reclining seats, workstation and TV surrounded by private dividers
Economy Class
They represent a totally different market. The most important consideration for most of them is the price. The lower the airfare, the more people will fly the respective airline. By and large, with the exception of wealthy travelers, this segment will not pay extra for premium services and will agree to change several planes during their trip if this option costs less than a direct flight.
PROCESS/SERVICE MAPPING
A process map is a tool to visually illustrate how the work flows. It is also a communication tool, a business planning tool and a tool to help manage the organization.
Key elements include:
Inputs
Outputs
Activity steps
Decision points
Functions
The lines and symbols on a process map help us to record concise sentences for every step in the process that tells the reader:
What is happening?
Where it is happening?
When it is happening?
Who is doing it?
How inputs and outputs are handled and distributed?
They can be defined at many different levels and with various boundaries. Furthermore:
Processes must have a beginning and an end.
Processes are co-ordinated activities that involve people, procedures, technology and infrastructure.
Processes constitute a significant portion of organizational costs.
An organization is only as effective as its processes.
The purpose of process mapping is for better understanding. It involves the gathering and organizing of facts about the work and displaying them so that they can be questioned and improved by knowledgeable people.
Process maps help one to understand the important characteristics of a process, allowing them to generate useful analytical data in order to derive findings, draw conclusions and formulate recommendations. Furthermore, process maps allow one to systematically ask many important probing questions that lead to developing a view on business process improvement.
The basic process followed is given below. This process can be termed as process mapping in an Airline Industry.
Customers Point of View
Check which gate to enter from
Getting the ticket checked at the door
Screening of the Baggage.
Getting the boarding pass as well as boarding the luggage.
Security check and finally boarding the plane.
Employees Point of View
The initial process of checking the ticket, baggage screening, providing the boarding pass and the security check imply for the employees also but the 2 most important process that the employees have to conduct is:
Proper numbering on the baggage of the customers so that the luggage does not get interchanged and boarded into the right aircraft.
Proper allotment of the seats.
1. Check which gate to enter from. 2. Getting the ticket checked at the door
3. Screening of the Baggage 4. Getting the boarding pass as well as
boarding the luggage.
5. Security checks 6. Waiting to board the air craft.
Another important aspect that the employees have to look for is Security Process. Security relates to the security of the aircraft as well as the passengers. Security check is of utmost importance.
The Central Industrial Security Force, a paramilitary organization is in charge of airport security under the regulatory frame work and instructions of the Bureau of Civil Aviation Security (Ministry of Civil Aviation Security). CISF formed an Airport Security Group this security force is dedicated to protect Indian airports. Each and every airport has now been given an APSU (Airport Security Unit), a highly trained unit to counter unlawful interference with civil aviation; apart from the CISF every airline has a highly trained aviation security force which is a separate department.
Some of the security procedures are listed below
At major airports, the checked baggage is passed through X-ray machines and a 'security checked' sticker affixed before entering the check-in area.
Passengers are checked through personal frisking, and/or door frame metal detectors and hand held metal detectors.
The cabin baggage is either checked through X-ray machines or physically examined.
Security personnel put a security stamp on boarding passes and cabin baggage labels.
Immigration is done at this point that is just after the boarding pass is received.
In case of a 'Red-Alert', a secondary security check is also carried out near the stepladder before embarkation.
Checked baggage has to be personally identified by the passengers before it is loaded on the aircraft. Wherever the boarding is through aerobridges, passenger and baggage reconciliation is done through an internal matching system instead of physical baggage identification.
Ten percent of the checked baggage/cabin baggage is usually physically checked at random.
Passengers in transit have to remain on board during the ground halt of the aircraft.
Once the passenger reaches his destination from the airport that is when the process gets over.
BLUE PRINTING
Blue printing is a process that deals with the entire working system in an Airline Industry. It is a complete process.
Blueprinting involves identifying all the key activities, procedures and specifies the linkages between them. The working of the airport is a complex process and all the process whether visible or invisible have to be carried out effectively as well as efficiently because even if one process goes wrong the entire chain of the working system gets disturbed.
Moreover, current trends in the airport industry impose more and more efficiency and security: Hyper-regulation for safety and security; Market de-regulation in terms of liberalization, strong competitiveness, services customization, etc.; Traffic segmentation and globalization to better answer to airline needs; Reduction of profitability for handlers and airlines; Increase of airline traffic; and so on. In such a scenario, only operators and authorities who will evolve gaining a competitive position can win the market challenges asking for more efficiency, high quality service levels and security. In order to support all actors in the airport industry to reach best efficiency and quality targets, Software Design has spent huge efforts in finding solutions and services capable of bringing them the power of technology innovation in a transparent way and working with a business approach. With this a lot of changes can be made in the existing service process thus developing a blueprint
BENCHMARKING
Benchmarking is the process of comparing the cost, time or quality of what one organization does against what another organization does. The result is often a business case for making changes in order to make improvements.
Benchmarking opens organizations to new methods, ideas and tools to improve their effectiveness. It helps crack through resistance to change by demonstrating other methods of solving problems than the one currently employed, and demonstrating that they work, because they are being used by others.
Airline Association for Benchmarking & Measurement is a focused group of airline professionals that looks to identify the best practices surrounding airline industry issues for the improvement of overall operations of the members.
Mission
To identify "Best in Class" business processes, which, when implemented, will lead member companies to exceptional performance.
Objectives
To conduct benchmarking studies of important business processes.
To create a cooperative environment where full understanding of the performance and enablers of "best in class" business processes can be obtained and shared at reasonable cost.
To use the efficiency of the association to obtain process performance data and related best practices from group of companies.
To support the use of benchmarking to facilitate process improvement and the achievement of total quality.
Membership
The scope of Airline Association for Benchmarking & Measurement™ membership includes airline professionals interested in benchmarking as part of or in support of their core business.
Company membership will be considered with respect to compliance with Airline Association for Benchmarking & Measurement™ mission, goals and operating guidelines, as well as, qualification of the organization within the scope of membership.
Participation in specific efforts will be optional and open only to members with costs shared by the participants
Benefits of Membership Studies
Airline Association for Benchmarking & Measurement will identify and present to members opportunities to participate in Benchmarking studies on various topics of importance to "security" issues.
There are two types of Benchmarking studies provided
Consortium studies are offered to the membership as a whole with costs divided.
Single company sponsored studies addressing the interest of one member company can be offered to other selected members for no fee.
The association will also support process improvement benchmarking efforts
Research - Access public and private databases.
Identify study participants - Top airline companies interested in benchmarking current issues.
Collect data - Manage response collection with the participants as a third party.
Lead site visits - Structure with best participants.
PHYSICAL EVIDENCE
Physical Evidence refers to the environment in which the service is delivered and where the service industry and customer interact. It is the ability and environment in which the service is delivered. Both tangible goods that help to communicate and perform the service, and the intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers.
The aircraft by itself, the seating configuration meant to be comfortable and spacious, the in-flight food, the staff dressing, baggage handling facility, colour of the aircraft, in-flight entertainment, and ambience in the aircraft provide physical evidence to the airline service.
Nowadays, websites are another major part of the physical evidence of airlines. A recently completed survey indicates that passengers rely on major airline websites, but would like the airlines to improve those sites to better meet their specific needs and expectations.83 percent of the passengers indicated they use airline websites to book flights. The survey also identified that nearly half (48 percent) of respondents indicated they also book flights by calling the airline directly, which may be a further indication that airline websites are not sufficiently meeting the needs of small business travelers. Results show that 56 percent of respondents use travel websites to make flight arrangements, while 47 percent use a travel agent, compared to 83 percent using airlines' websites.
Hence, the websites should be updated regularly, should be less time consuming, fast processing and easily operative.
COLOUR AND STAFF DRESSING
Increasing importance is given to the cabin crew and the ground staff uniform. Designers are given contracts to design the uniform and the colors are such which symbolizes the airlines motto. Colour is a visual identifier and thus attractive color scheme catches the eye of the passenger. The staff dressing also helps to differentiate one airline from other. Just by looking at the staff, the passenger assumes the standard of the airlines. And these two are the first thing that a passenger visualizes in an airline. However, another important reason for the use of color is the expansion of a corporate culture. For example, Paramount Airways does this very well. Their use of blue color emphasizes confidence, a character trait that is important to the airline industry, especially in these times. Blue also demonstrates vastness, opportunity, a sense of modernism and openness and honesty.
KINGFISHER AIRLINES
The first thing that strikes about fly Kingfisher is the bold use of the color Red. From the tail of the aircraft with the logo of the kingfisher bird and the word Kingfisher painted boldly across the body of the aircraft in Red to the interior decor and even the Crew uniform –it‘s Red, Red, Red all the way.
The in-flight crew called 'Flying Models' are clad in short Red skirts and a trendy rolled up sleeve jacket in Red with a white shirt unlike the traditional blazers and waist coats of other airlines. There are no male pursers on board either because KF in-flight is all women.
AIR INDIA
Eminent Indian fashion designer Ritu Beri was roped in by national carrier Air India to design the new uniform for its cabin crew and ground staff. Air India went for a complete makeover to reflect its aspiration to be a “powerful” global entity.
The design of the new uniforms draw inspiration from the Sun Temple of Konark in Orissa, yet maintains a modern outlook. The colour palette of the uniform is red, orange, black and white, with red standing for strength and orange for cultural roots.
The uniform for the female employees, both ground staff and cabin crew, included sarees, tunics, scarves, jackets, coats, aprons and shoes, while there would be specially designed ties for the male staff.
JET AIRWAYS
To position itself as a global airline, Jet Airways introduced fresh airline uniform for the cabin crew designed by Italian designer Roberto Capucci. Their uniform reflects distinctive international look capturing spirit of new India and a meeting point between East and West
IN FLIGHT MEALS
Airline passengers always have a certain standard of living and are very hygienic about the food. However, in-flight meals have often been the butt of many jokes over the years for their perceived lack of nutritional value. In airlines, the passenger prefers variety in the meal offered, noticing the nutritional value. They also see as to which caterers is serving the food; the way the food is served and handled. This is one critical aspect where even the service recovery can’t help to retain the passenger because even the slightest of the mistake by the chef or by the cabin crew, or compromising on the quality of food might prove very dangerous for the passenger’s health. This, in turn, will spread a bad reputation of the company.
Hence, more and more airlines are in fact striving to make their meals more attractive by packing as much goodness as possible into them.
KINGFISHER AIRLINES
In-flight Meals or Snacks are served as part of the fare on every flight and small amenity kits distributed as well. Depending on the flight time, Kingfisher serves Breakfast, Lunch, High Tea or Dinner on all flights. An individual menu card is there on all Kingfisher flights. Kingfisher has a wide variety of multi-cuisine menu to suit the varying tastes of the local sectors. Indian, Chinese, Continental and World Cuisine is available on various sectors. Vegetarian or non-vegetarian food can be chosen on the flight. Kingfisher First Class passengers can choose from a special menu and depending on their choice, a three course gourmet meal is served on the flight.
It also provides an exclusive three course menu complete with a Kingfisher sparkling welcome drink, signature dessert and freshly brewed coffee on board.
JET AIRWAYS
Jet airways have different menu options onboard for Premiere and Economy class passengers.
The following specialty meal options are available on Jet Airways:
Strict Vegetarian (STVG)
Jain Meal (JNML)
Diabetic Meal (DBML)
Low Cholestrol (LFML)
Low Sodium (LSML)
Low Calorie (LCML)
Low Protein (LPML)
Non Lactose Meal (NLML)
No Salt (NSML)
This shows the passenger that Jet Airways do care about their health , thus creating a goodwill among the passengers.
Kosher meals
Jet Airways also offers kosher meals (KSML) on the Mumbai-London-Mumbai and Mumbai-Singapore-Mumbai sectors. Kosher Meal preference has to be notified 48 hours in advance. The Kosher Meal on Jet Airways flights consists of Western Non-Vegetarian Meal of Fish, Potatoes and Vegetables. Kosher meals are served onboard in a sealed pack. The cabin crew opens the pack in front of the passenger and shows the Kosher certificate inside the box.
This assures the passenger that there is no malfunctioning or adulteration in the meal provided , thus creating an impression in the mind that meals offered in Jet Airways are of the best quality.
AIR INDIA
Air India offers a wide variety in its in-flight meal menus, with a multi-cuisine approach to cater to the predilections of the range of passengers. The variety of food ranges from vegetarian meal, Moslem meal, Kosher meal, Low Sodium meals to something simple as a fruit platter. The meals are hygienically packed from reputed hotel chains like the Taj Group and Ambassador. Besides the regular normal vegetarian and non-vegetarian meal, Indian Airlines also provides special meals such as Jain meal, Diet meal, child meal etc.
IN FLIGHT ENTERTAINMENT
To make long flights more enjoyable, several major commercial airlines offer in-flight entertainment and information systems to their passengers. This is increasingly gaining popularity in the airlines sector because the passengers here, unlike other modes of travel do not have any other source of entertainment. In airlines, the interaction among passengers is also minimum. So, this is one of the tangible tools of attracting or pulling the passengers towards an airline. Nowadays, there are lots of innovations done in the in flight entertainment system and each airlines is daily coming up with some or the other new technology or up gradation for the passengers to have entertainment in the flight.
KINGFISHER AIRLINES
Kingfisher Airlines flights have individual LCD TV screens for each passenger. They have a choice of 5 video channels of the trendy FUN TV, or listen to Kingfisher Radio which offers a choice of 10 international radio channels. There is a separate video channel for kids too to keep them busy on the flight. All passengers are given complimentary headphones to enjoy the in-flight entertainment. For Kingfisher First Class passengers there is an extra wide 8.4 inch LCD swivel screen fitted on every seat. Kingfisher First Class passengers can also enjoy noise canceling headphones for a quiet and relaxed flight experience. Kingfisher First Class passengers can also play video games on the LCD screen and even play multiplayer games with their co-passengers.
Kingfisher Airlines has tied up with Dish TV to provide live in flight entertainment to its passengers. This shows the weightage given in flight entertainment in the airlines sector.
JET AIRWAYS
Jet Screen, Jet Airways' In-flight entertainment system is available on both business and economy class on several Jet Airways flights. Jet Airways has also installed state-of-the-art Panasonic 3000i Audio Video on Demand (AVOD) on every seat in some of its flights. In addition to video channels, up to 8 audio entertainment channels playing latest Bollywood songs, International Pop songs, Ghazals, Indian and Western Classical, etc. are also available on Jet Screen.
SEATING
In airlines, passengers mostly stay glued to their seats. So, it’s very important to have a comfortable seating in the flight. Specially , in long distance journey the passenger has to spend a lot of time on the seats, thus the passenger should have full satisfaction with the seats provided, as in, there should be enough leg space, there shouldn’t be any back problem, comfortable head space and more importantly , the seats should be clean. The seating arrangement has to be spacious as different individuals have different physique. Thus, the seats should be such wherein every passenger irrespective of his/ her size or shape should feel relaxed and comfortable on the seats and should feel refreshed after reaching the destination.
Seating is not much of a problem in airlines like Kingfisher or Jet however low cost airlines needs a lot of improvement because they usually have this problem of not having enough leg space.
KINGFISHER AIRLINES
The seats are the plush Sleeperette seats with a 48 inch pitch, 125 degree recline, adjustable headrests and fully extendable footrests. The expansive legroom, the fully lie flat bed in Kingfisher First and the widest seat pitch in the skies, allows the passenger to stretch those tired muscles to the fullest. There are also laptop chargers and mobile phone chargers in each seat.
JET AIRWAYS
Jet Airways is the first airline in the world to install new ergonomically designed seats that offer more space, reduce pressure on the passenger’s body and has adjustable "Hammock" head rest and a unique foot net which gives added support, especially on long journeys.
NEWSPAPERS AND MAGAZINES
Newspapers and in flight magazines are provided to the passengers so that even in the skies they can get information and update their knowledge.
KINGFISHER AIRLINES PARAMOUNT AIRWAYS
INDIAN AIRLINES
GENERAL RATINGS TO THE AIRLINES SECTOR
Web Site : Ease of Use
Age of Aircraft in Fleet
Web Site : Product information
Cabin Safety Standards
Web Site : Online Check-In
Cockpit Communications
Handling Delays/Cancellations
Airline Onboard Magazine
Staff Grooming & Presentation
Assisting Families & Children
PRODUCTIVITY AND QUALITY
QUALITY DIMENSIONS
RELIABILITY
It is the ability of the service provider to meet the promises made by them accurately. The customer must develop a feeling that they can depend on that particular service provider for their problem.
It is most important for an airline to depart and arrive on time since passengers want to depart and arrive on time. ‘On time’ is defined, in accordance with normal industry standards, as departure within 15 minutes of scheduled departure time. If the flight is on time, it colours everything else. Today, top airlines hold their positions because passengers recognize their consistent reliability. Reliability is not just nice to have. They impact the passenger and his satisfaction, and that impacts the bottom line of the airline.
Passengers place great importance on reliability and that's why leading airlines fly Boeing jets because they are the most reliable in the skies.
Information needs to be recorded about the scheduled and actual departure time, and, if there was a problem that caused a delayed departure, whether the problem resulted in a delay or a cancellation, whether there were passengers on board and a detailed description of problem should be given. This leads to the payoff i.e. the ability to track, analyze and improve the reliability of the aircraft.
Airlines should also be reliable in case of baggage handling. The passenger should get his luggage on time without being damaged. In case, the luggage is mishandled then the airlines should have such a system in place wherein the passenger can rely on the airlines for the safe arrival of his / her luggage. The reliability issues that this interface creates have prompted airlines, over the years, to look for ways to introduce more automation into this environment.
ASSURANCE
Assurance refers to freedom from danger, risk or doubt. It includes credibility, competence, security and courtesy. The service provider and the employees must be capable of winning the trust and confidence of the customers.
The ground staff and the cabin crew play a major role here. They are the one who can assure the passengers about any doubts they have regarding the flight and the services provided. In airlines, passengers are mostly brand loyal. Hence, once the passenger is assured and trusts a particular airline then he always prefers that airline. Thus, assurance plays a very important role in customer retention.
In high cost airlines , the passenger always thinks that whether he will get a good value for his money whereas in low cost airlines he / she always think whether the quality of the service will be good or not. Hence, the passenger is always at a risk. Here, the airlines have to put in extra efforts to remove the doubts from the mind of the passengers about their airlines. And in this competitive world, where new airlines are coming up so rapidly, the efforts made by the airlines could be seen to assure the passengers that their service is the best. Airlines go out of the way to win the trust of their customers.
E.g. The Kingfisher First experience takes off even before the passenger do at the Airport where he / she is greeted by a Personal Valet to assist at every step of the way, from baggage handling to boarding. This is done to assure the customer at the very first step that he hasn’t put his money at the wrong place; giving a VIP treatment, thus clearing any kind of doubt or the risk factor from his mind.
TANGIBLES
Tangibles are those physical features which can be seen by the customer. These are the physical proofs which help the customer to judge the quality of service. The customers evaluate the quality of these services on the basis of the tangibles provided by the service providers.
In case of airlines tangibles include:
Flight
In – flight meals
In – flight entertainment
Seats
Staff uniform and skills
Baggage handling technology
Website
In airlines, tangibles help to differentiate an airline with its competitors. This is the most important criteria in customer evaluation. The customers perceive what they see. Thus tangibles help create an impression in the customers mind the way an airline wants.
EMPATHY
Empathy basically is when the employees of the organization make the customer feel at home, at ease, making him feel wanted.
In airlines, a personal touch should be given to the services because that delights the customers the most. They should be made felt as if they are very important to them. However, for an airline to succeed it must have genuine empathy with both its employees and its customers.
The cabin crew has to be very polite, understanding and courteous. They should take genuine delight in attending the customers, in helping them and establishing warm friendly relationships. The crew should know the importance of doing things for customers from the bottom of their heart. They should believe in going beyond the routine to add emotional value to their work. As a result they would be able to delight customers. But for all this, the crew and the ground staff should be motivated; a culture should be created where the crew also supports the company’s mission and values.
The senior executives, middle managers and supervisors should demonstrate a similar 'genuine heart-felt' empathy for their various teams of employees , thus helping the organization develop a warm culture based on empathy which leads to showering of that empathy on the customers.
For e.g. if any small child is flying in the flight for the first time without any elder person along with him, the crew should see to it that the child doesn’t get scared so they should visit him regularly, give him chocolates, chat with him, thus taking his proper care and not letting him feel that he is alone.
RESPONSIVENESS
Responsiveness is willingness to help the customers and provide prompt service. The degree of responsiveness shows the level of commitment that the people of the company have towards their work. It is very necessary for the company to concentrate on prompt and the right kind of responsiveness to the needs of the customer.
In airlines, the customers are very impatient. They expect their needs to be catered promptly. Hence, any delay in responding to their needs or problems might create a very bad impression in the customers mind. The staff should see to it that each and every complaint of every individual is handled effectively and quickly.
This aspect comes into picture when there is a flight cancellation due to bad weather and the passengers can board the next flight only the next day. At this moment of crisis, a quick response by the airlines regarding their luggage, their accommodation and all the other needs can create a very good reputation.
Also, sometimes there is a case wherein the crew is helpless and it cannot fulfill the customer’s requirement, even that time the crew has to respond to the customer either by explaining him their helplessness or by providing him/her with some alternative.
Thus, nowadays where the zone of tolerance among the customers in airlines is minimum, responsiveness is one dimension which has to be really taken care of.
FISH BONE ANALYSIS
Procedures
During acquiring the boarding passes there may be delay in getting the passes which may dissatisfy the customer.
Baggage handling is not done accurately i.e. the bags are misplaced or not loaded on the flight, which may cause delay in flights.
Due to tightened security at airport the security person may take longer time to check the person.
Information
Radar at the airport is not working properly thus the correct information is not provided to the customer.
Websites – the websites may not be updated regularly which may provide wrong information to the customers.
The customers are guided wrongly by the person at inquiry counter which may add woes to the customers.
Front staff personnel
System crash when customers come to get the information or boarding passes.
Cabin crew taking ample of time for guiding people and providing the necessary requirements to customers.
Not enhancing to customer responsiveness and services.
Not all queries are sorted of the customer at enquiry counter.
Not getting warm welcome or reply from the air hostess.
Back staff personnel
Cleaning staff taking ample of time to clean the plane setting up the things right in the plane.
The materials are not loaded on plane on time.
Material supplies
The supply of food and other essential requirements does not arrive at scheduled time.
Customer
Customers coming late to board the plane may cause delay in flight.
In case, the person on flight gets ill (getting heart attack) in that case the flight. needs to be landed again which may again cause delay.
VIP customer coming late to board the flight.
Facilities / Equipments
The seat may not be proper or the seat belt may not be working properly.
The music system (headphone) not working properly.
The food and drinks are not supplied to customer on time.
Other Causes
Their may be delay in flight if a hoax call is received and intense security check-up is done which may cause some trouble to customers.
If the weather is bad there may be delay in flights.
If there is any technical flaw in the plane it may result in delay of flight.
Due to strikes by workers and organization may cause problems to customers.
SERVICE RECOVERY
While studying the Marketing Mix for the Airline Industry, we have understood the customer’s expectations, the service process, the service quality, the productivity in service delivery and building customer relations. But in all service contexts, service failure is inevitable. Service failure is inevitable for the best of the airline companies, even those with world-class service systems. Thus, in order to retain customers and also understand those, airline companies must understand what a customer expects and what can be offered to the customer when service failure occurs and thus implement strategies for an effective service recovery.
Impact of Service Failure on the Customer
Service failures occur for all kinds of reasons, some of which can be listed as service not available when promised, late delivery, incorrect outcome, poor execution or rude behavior of the workforce etc.
For an airline company, a service failure can be of the following sorts – flight delay; mismanagement of the formalities like checking-in; indifferent behavior of the flight crew; baggage problems and so on. Service failures for airline companies are due to factors which are controllable as well un-controllable by the company.
Service failure for services other than airlines have a paradox kind of an impact on the customer as well as the organization – you dissatisfy a customer once and then delight him in the service recovery process and win his loyalty which is not assured with a failure-less service delivery. But for the Airline Industry, service failure does not create positive opportunities for the organization. Incase of a service delivery in the airlines service providing, the customer is highly dissatisfied and the recovery strategy cannot be as effective to delight him. For instance, if a flight gets delayed, the customer gets late and the time he loses due to the delay cannot be brought back; or if the carrier misplaces luggage of a particular customer then no strategy is enough to delight the customer (no strategy to compensate on the lost belongings). Service failure in the airlines sector creates a negative impact for the airline company. Thus, a perfect service delivery is aimed at by a carrier.
Following a service failure, a number of negative emotions may occur in the customer’s mind such as anger, discontent, disappointment, self-pity, and anxiety. These emotions are the factors to be kept in mind while implementing specific service recovery strategy to win back the customer. Different customers respond differently to service failures. Incase of the airline industry, the customers are rather considerate by not displaying anger and discontent but by just mere complaining and seeking reprisal. Basically, the response is very passive. Such a kind of response depicts that the customer expects least consequences that will benefit the customers. Such a response is not beneficial to the airline company because the organization does get an effective feedback and cannot improve on the basis of the customer’s expectations and thus cannot retain customers effectively.
COMPLAINT HANDLING
In case the passenger has a problem with the in flight crew, they can give a written application to the In-flight Supervisor who later hands over the complaint to the COMPLAINT HANDLING CELL. The complaint handling cell is under the control of the Deputy Director In charge of supervision. Also the complaints regarding the ground staff, security and other such departments can also be given in writing to the Deputy Director In charge directly. Once the complaint is received it is forwarded to the higher authorities who decide what action needs to be taken. Usually a warning goes to the personnel who have defaulted. In rare and extreme cases the personnel may be suspended from flying for a period of 2 – 3 weeks. Once an action is taken, the company sends an apology letter to the customer along with the response to the complaint.
In case the complaint is regarding mishandling or damage to the baggage, there is compensation provided to the customers. The amount of compensation depends on the policy of the company and the degree of damage.
There are nine steps involved in handling complaints effectively. They are mentioned below:
19. The frontline employee handling complaints should stay calm under any circumstances.
20. Let the customer get the story off their chest- do not interrupt, this will only cause irritation. In this case listening skills comes into picture.
21. Avoid admitting any liability at this stage. The officer just need to show concern like, “I’m sorry for the inconvenience, let me see what I can do”. Give attention to the customer, make him feel important.
22. Get facts by using question and try to find out the real and whole story behind it.
23. After listening and collecting data, just identify appropriate action considering company’s policy and customer’s expectation.
24. Take action if you have authority or involve manager or concerned person.
25. If corrective action cannot be taken immediately, tell the customer. It’s better to give bad news rather giving false news.
26. Record the action to be taken and inform anyone else in the organization involved.
27. Look into the matter, provide a proper follow-up.
These nine approaches if followed effectively, complaints can be handled properly and possibly a customer can be retained.
SERVICE RECOVERY STRATEGIES
“Companies have made Service Delivery Idiot-proof. But Idiots cannot solve problems.”
We just realized that service recovery in the airline industry loses a little scope because of the passive nature of the customers and because of the negative impact of service failures. But, in the competitive market, Airline companies are trying their best to delight their even though service has failed in the first encounter. Some of the strategies which airline providers are implementing for service recovery are as followed
Total Quality management or “Zero Defects”
Airline companies are trying their best to make it right for the customer in the first encounter itself, give the customers what they expect and avoid the errors as much you can. For instance, avoid flight delays which occur due factors which are under the control of the management such as speedy check-in process, discipline staff to be punctual and soon. Doing it right at the first encounter saves the company the costs of redoing the service and compensating for the errors.
Effective Complaint Handling
Complaints need to be encouraged so that the Airline Company is aware of the loopholes and what the customer is expecting from the service. Complaints should be taken seriously and should be acted upon immediately. Since, the customer is of the passive nature with respect o complaints, one must ensure that it is easy for a customer to put forth his complaint and he should be assured of a treatment. Technology and its innovation should be put to use to form an effective system for complaint handling and their reprisal.
Fair Treatment to the Customers
On failure, a customer expects to be treated fairly in term of the outcome they receive after the failure. The customer should receive something more than what he has actually expected and which was met in the first encounter. Fair treatment will help in customer retention. For instance, incase of loss of baggage, a service provider might provide the traveler vouchers for shopping at international locales for free of charge.
Market Research
Not all dissatisfied customers will come up to the reception desk and post a complaint. The airline company has to make efforts in finding on itself the failures in service. Market research forms a very important tool in knowing this. For example, one can ask for feedback from a customer who is just going to board a flight. He can be asked about his experience with the ground staff, the ambience of the lounge, and other facilities.
PROFITABLE ART OF SERVICE RECOVERY
Service failures are inevitable but they don’t hit a service provider as much as the costs of service recovery and the costs of redoing the service with intent of delighting him are very relatively high. Basically, the service provider has to bear of the cost of repeating the service process that too with an added value.
With respect to the airline industry, service recovery can be made productive and profitable by the following methods.
Resolving the problem at the source itself
Suppose a failure of service takes place at the ticketing counter, the finance department head does not needs to be involved but in fact, the ticketing executive himself should address to the problem. The staff which is in direct contact with the customer and is forming a part of the critical encounter should be trained and empowered to tackle failures at the source itself.
Do not dismiss the occasional problem
It is tempting to dismiss an occasional problem but companies should avoid doing the same. Customer retention is an important task for an airline company in this period of intense competition. Occasional problems cannot just be dismissed because; it is these occasional problems which dissatisfy the customer every now and then.
Flexible Management
The management needs to be flexible and dynamic enough to take decisions with regards to service recovery. The customer’s perception and expectations should be kept in mind whilst taking a strategic decision. Treatment should be fair enough to delight the customer. Basically, the company has to give in to the expectations of the customer but at the other end also negotiate to get a fair and a profitable deal.
Measure the Costs
At every step of the service recovery process, the costs involved need to be monitored closely so that no wastage or blockage of funds happens in the process.
Train employees
Employees need to be trained perfectly in order to give the best service delivery at the first encounter itself. Also the staff needs to be trained with respect to decision making, crises management and so on.
Empower the Front Line Workforce
The front line work force is the workforce that is in direct contact with the customer and form as an important critical service encounter. The front line can be empowered with authority to take a decision incase of service failures. Companies can train their front line staff for such situations.
Service Recovery is a different management philosophy a company embraces customer delight as a primary goal of business. It is a fundamental to quality service providing and therefore it should be considered as one of the important part of a airline company’s strategy.
“To Err is to Human, to Recover, Divine”
LOW COST AIRLINE / LOW COST CARRIER
A low-cost carrier or low-cost airline (also known as a no-frills or discount carrier or airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors.
India's first low-cost airline, Air Deccan started service on August 25, 2003. The success of Air Deccan has spurred the entry of more than a dozen low-cost airlines in India. Air Deccan now faces stiff competition from other low-cost Indian carriers such as Jetlite, SpiceJet, GoAir and Paramount Airways.
Few of the features of the low cost airlines:-
A single passenger class
A single type of aero plane (commonly the Airbus A320 or Boeing 737), reducing training and servicing costs
A minimum set of optional equipment on the aero plane, often excluding conveniences such as ACARS, further reducing costs of acquisition and maintenance
A simple fare scheme, such as charging one-way tickets half that of round-trips (typically fares increase as the plane fills up, which rewards early reservations)
Unreserved seating (encouraging passengers to board early and quickly)
Flying to cheaper, less congested secondary airports and flying early in the morning or late in the evening to avoid air traffic delays and take advantage of lower landing fees.
Aggressive fuel hedging programs.
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets in promotion. Even if the advertised price may be very low, sometimes it does not include charges & taxes.
But in the past one year major changes have taken place because of the hike in the fuel prices. Like everyone is aware that the fuel prices have risen way too much. So due to this all these low cost airlines are facing a major setback.
These increases in fuel prices has caused trouble for each and every airline and they are trying to recover the losses in various forms and also trying to come up with promotional schemes and various other incentives in order to retain their customers.
They losses occurred by these airlines in the fiscal year 2006-2007 and 2007- 2008 have been tremendous. Now their ultimate aim is to recover these losses.
Earlier due to the introduction of the low cost airlines and their cheap rates which were almost similar to those of the train fares the customers blindly traveled by air as their travel time could be less but after the rise in prices the customers think twice before buying the air tickets.
Hit by galloping fuel prices, airlines the world over have started resorting to various cost cutting measures including flying aircraft at a given height on a low speed to reduce fuel burn.
India's crowded airline sector is flying into huge losses on the back of a surge in global fuel prices that have forced it to hike fares, slowing explosive passenger growth.
National carrier Air India and other carriers have started following these measures and other fuel conservation initiatives which are a standard practice undertaken by all global airlines, especially those flying on long-haul international routes.
Reduction in aircraft speed at an optimal height, called a reduced Cruise Mach policy, has been adopted by Air India for its Boeing 747-400 and Boeing 777 aircraft fleet used in long-haul operations.
The national carrier is also planning similar measures for its Airbus A-310 and Boeing 737 planes, which are meant for medium and short-haul flights and are the merged carrier's backbone for domestic operations.
Besides, undertaking the Cruise Mach policy, Air India has also started cutting on the aircraft's weight by removing certain non-essential items on board.
AIRLINES VALUE ADDED CHAIN
CONCLUSION
“I was engaged in what I believe to be the most thrilling industry in the world—aviation. My heart still leaps when I see a tiny two-seater plane soaring gracefully through the sky. Our great airlines awe me. Yet I know they were not produced in a day or a decade.”
— William A. "Pat" Patterson, CEO United Airlines.
Studying the Airline Industry gives us the same feeling as the CEO of United Airlines does. The project report talks about the Airline Industry and its most important function – MARKETING.
The project report has covered every other aspect of the Airline Service Marketing which on paper seems to be simple to implement but in practice is as tough a job as the invention of the airplane itself.
The project study has given us a great depth of intellectual learning about the sector. We hope, the project report has the same enduring for its readers as it did to us.
Aviation refers to activities involving man-made flying devices (aircraft), including the people, organizations, and regulatory bodies involved with them.
Civil aviation includes all non-military flying, both general aviation and scheduled air transport.
General aviation includes all non-scheduled civil flying, both private and commercial. General aviation may include business flights, air charter, private aviation, flight training, ballooning, parachuting, gliding, hang gliding, aerial photography, foot-launched powered hang gliders, air ambulance, crop dusting, charter flights, traffic reporting, police air patrols and forest fire fighting.
There are five major manufacturers of civil transport aircraft:-
Airbus, based in France
Boeing, based in the United States
Bombardier, based in Canada
Embraer, based in Brazil
Tupolev, based in Russia
Scheduled Air Transport
Like it is known that the Airline Industry is one the vastest industry with its presence all around the world. Though it started with its presence only in large countries then slowly expanding to other states and currently its presence can be felt in the smallest of cities also.
This industry came into existence with the development of the world’s first airline on 16 November 1909 by DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft with its headquarters situated at Frankfurt. It was developed with the assistance of the government and operated ships manufactured by Zeppelin Corporation.
Later as time passed by and people started becoming aware of the existing technology and the potential of the market they moved their attention to this sector. It was the then that Tony Jannus conducted the United States' first scheduled commercial airline flight on 1 January 1914 for the Saint Petersburg-routes, Braniff Airways, American Airlines, Delta Air Lines, United Airlines (originally a division of Boeing), Trans World Airlines, Northwest Airlines, and Eastern Air Lines
This was just the start of the airline industry. Slowly and steadily it caught the pace of development and advancement. By the 1920’s this industry mainly focused on only carrying of mails. It was in the year 1925 that the Ford Motor Company bought out the Stout Aircraft Company and began construction of the all-metal Ford Trimotor, which became the first successful American airliner. With a 12-passenger capacity, the Trimotor made passenger service potentially profitable.
Till then Air service was seen as a supplement to rail service in the American transportation network. It was by this time that a few major countries understood the concept and believed in it. it was the same time when Juan Trippe began a crusade to create an air network that would link America to the world, and he achieved this goal through his airline, Pan American World Airways, with a fleet of flying boats that linked Los Angeles to Shanghai and Boston to London.
In fact even during the great depression due to the introduction of the Boeing 247 and Douglas DC-3 in the 1930s, they were able to generate profits. This clearly stated the importance of the airline sector.
After this the expansion of this industry was always on a high. In the 1950s, the De Havilland Comet, Boeing 707, Douglas DC-8, and Sud Aviation Caravelle became the first flagships of the Jet Age in the West, while the Soviet Union bloc countered with the Tupolev Tu-104 and Tupolev Tu-124 in the fleets of state-owned carriers such as Aeroflot and Interflug.
The next big boost for the airlines would come in the 1970s, when the Boeing 747, McDonnell Douglas DC-10, and Lockheed L-1011 inaugurated wide body ("jumbo jet") service, which is still the standard in international travel. By the 1980s, almost half of the total flying in the world took place in the U.S.
The first countries in Europe to embrace air transport were Finland, France, Germany, the Netherlands and the United Kingdom.
KLM, the oldest carrier still operating under its original name, was founded in 1919. The first flight (operated on behalf of KLM by Aircraft Transport and Travel) transported two English passengers to Schiphol, Amsterdam from London in 1920.
France began an air mail service to Morocco in 1919 that was bought out in 1927. Germany's Lufthansa began in 1926. The British company Aircraft Transport and Travel commenced a London to Paris service on 25 August 1919, this was the world's first regular international flight.
India, Hong Kong, Indonesia, Malaysia and the Philippines are one of the first few Asian Countries of enter the airline industry.
Philippine Airlines was founded on February 26, 1941, making it one of the first countries in Asia to embrace air transport. The airline’s first flight was made on March 15, 1941 with a single Beech Model 18 NPC-54 aircraft, which started its daily services between Manila (from Nielson Field) and Baguio, later to expand with larger aircraft such as the DC-3 and Vickers Viscount. It was started by a group of businessmen led by Andres Soriano.
In the year 1932 a new airline came into existence knows as the Tata Airline, lead by JRD Tata. Now it is known as Air India.
Later in the years Pakistan began Orient Airways Ltd (Pakistan International Airlines), Cathay Pacific founded in 1946, Singapore Airlines and Malaysian Airlines in 1947 (as Malayan Airways), Garuda Indonesia in 1949, Japan Airlines in 1951, and Korean Air in 1962.
INTRODUCTION
The basic function of an airline is to accommodate for passengers and cargo while taking them to far-off places between two major cities or towns within a country or beyond geographical borders.
The aviation industry in India has grown by leaps and bounds in recent years in terms of kilometers flown as well as customers serviced. The economy of a country is substantially determined by the quality of air transport.
Air transport is also considered to be the swiftest mode of transport. Almost all the states have one or more airports, which are regularly serviced by several airlines. There are a number of international airports, which also serve as domestic airport too. Others are only domestic airports.
The Air Transport Companies are both in the public sector and in the private sector. In the public sector, there are Air India, Indian Airlines, Air India Charters Limited (Air India Express) and Alliance Air. In addition to this there are at present eight private scheduled operators, viz. Jet Airways (India) Ltd., Sahara Airlines Ltd., Deccan Aviation (P) Ltd., Go Airways, Kingfisher Airlines, Paramount Airways Pvt. Ltd., Go Airlines (India) Pvt Ltd., and Inter Globe Aviation Ltd. (Indigo) operating on the domestic sector providing a wide choice of flights and connectivity to various parts of India. One cargo airline viz. Blue Dart Aviation Pvt. Ltd. is also operating scheduled cargo services in the country. At present there are 59 companies holding nonscheduled air transport operators permit.
The airlines are not the owners of the airports. The owner of these airports is the Airports Authority of India. The Airports Authority of India (AAI) was formed on 1st April 1995 by merging the International Airports Authority of India and the National Airports Authority with a view to accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports in the country conforming to international standards.
All major air-routes over Indian landmass are Radar covered (24 Radar installations at 11 locations) along with VOR/DVOR coverage (72 installations) co-located with Distance Measuring Equipment (71 installations), 39 runways provided with ILS installations with Night Landing Facilities at 36 airports and Automatic Message Switching System at 15 airports.
Few functions of the AAI are as follows:-
ƒ Control and management of the Indian airspace extending beyond the territorial limits of the country, as accepted by ICAO
ƒ Design, Development, Operation and Maintenance of International and Domestic Airports and Civil Enclaves
ƒ Construction, Modification and Management of Passenger Terminals
ƒ Development and Management of Cargo Terminals at International and Domestic airports
ƒ Provision of Passenger Facilities and Information System at the Passenger Terminals at airports
ƒ Expansion and strengthening of operation area viz. Runways, Aprons, Taxiway, etc
ƒ Provision of visual aids
ƒ Provision of Communication and Navigational aids viz. ILS, DVOR, DME, Radar, etc.
THE DOMESTIC PLAYERS
Airlines Founded/ Headquarters/ key people The Logo
Air India 1932, Mumbai – India, Raghu Menon, Chairman & Managing Director
Amod Sharma, Director
Alliance Air 1996, New Delhi and Mumbai, Capt. Mehbub Butt.
Indian Airlines 1953, New Delhi, Mr. Raghu Menon.
Jet Airways 1993, Mumbai- India, Naresh Goyal, Founder and Chairman.
Jet Lite (Formerly Air Sahara) 1991, New Delhi, Subrata Roy (founder), Naresh Goyal (Owner, Jet airways & Jet Lite.
Kingfisher Airlines 2004, Bangalore, India, Dr. Vijay Mallya, CMD
Air Deccan August 25, 2003 Bangalore, India. G.R.Gopinath, Vijay Mallaya.
Indigo Airlines 2005, New Delhi, Bruce
Spice Jet May 2005, New Delhi, India, Siddhanta Sharma (Executive Chairman).
Jagson Airlines 1991, Delhi- India
Go Air Airlines June 2004, Mumbai- India, Jehangir (Jeh) Wadia
AIR INDIA
Air India International entered the jet age in 1960 when it’s first Boeing 707, named Nandadevi and registered VT-DJJ, was delivered. Jet services to New York via London were inaugurated that same year in May 1960.
On 8 June 1962, the airline's name was officially truncated to Air India. On 11 June 1962, Air India became the world's first all-jet airline.
Air India Limited is the national airline of India with a worldwide network of passenger and cargo services.
Air India is state-owned, and administered as part of the National Aviation Company of India Limited - which was created in 2007 to facilitate Air India's merger with Indian Airlines.
Air India was founded by J. R. D. Tata in 1932 as Tata Airlines, a division of Tata Sons Ltd. (now Tata Group).
ALLIANCE AIR
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines.
Air India Regional started as Alliance Air (which was the low-cost arm of Indian Airlines. As part of Indian Airlines' merger with Air India, Alliance Air was renamed Air India Regional.
INDIAN AIRLINES
Indian Airlines was an airline based in Delhi, India and focused primarily on domestic routes, along with several international services to neighboring countries in Asia.
Indian Airlines is state-owned, and is administered by the Ministry of Civil Aviation.
The airline operates closely with Air India, India's national carrier. Alliance Air, a fully-owned subsidiary of Indian Airlines, was renamed Air India Regional.
JET AIRWAYS
Jet Airways is an airline based in New Delhi, India and is the country's second-largest international airline after Air India and the largest domestic airline.
Jet Airways was incorporated as an air taxi operator on 1 April 1992. It started commercial airline operations on 5 May 1993 with a fleet of 4 Boeing 737-300 aircraft.
In January 1994, a change in the law enabled Jet Airways to apply for scheduled airline status, which was granted on 4 January 1995.
It began international operations to Sri Lanka in March 2004.
While the company is listed on the Bombay Stock Exchange, 80% of its stock is controlled by Naresh Goyal (through his ownership of Jet’s parent company, Tailwinds).
JET LITE
JetLite, formerly Air Sahara, is an airline based in New Delhi, India. Controlled by Jet Airways, the airline operates scheduled services connecting metropolitan centers in India.
The airline also provides helicopters which are available for charter services and aerial photography.
Jet Airways and Air Sahara were the only private airlines to survive the Indian business downturn of the early 1990s.
In January 2006, Jet Airways announced that it would buy Air Sahara for $500 million in an all-cash deal, making it the biggest takeover in Indian aviation history.
On 12 April 2007, Jet Airways agreed to buy out Air Sahara for 14.5 billion rupees ($340 million). Air Sahara was renamed JetLite, and was marketed between a low-cost carrier and a full service airline.
KINGFISHER AIRLINES
Kingfisher Airlines Limited is an airline based in Bangalore, India.
Kingfisher Airlines, through one of its holding companies United Breweries Group, has acquired 26% stake in the budget airline Air Deccan and has option to buy further of 20% stake from the secondary sector.
AIR DECCAN
Deccan is an airline based in Bangalore, India. It was India's first low-cost carrier. Formerly known as Air Deccan the airline is operated by Deccan Aviation.
On 19 December 2007 Air Deccan and Kingfisher Airlines decided to merge. Kingfisher will effectively merge into Deccan Aviation following which Deccan Aviation will be renamed ‘Kingfisher Red’.
INDIGO AIRLINES
Indigo Airlines is a private domestic low-cost airline based in Gurgaon, India. It operates domestic services linking 14 destinations. The airline is owned by InterGlobe Enterprises.
SPICE JET AIRLINES:
SpiceJet is a low-cost airline based in New Delhi, India. It began service in May 2005. It was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax in 2007. SpiceJet was earlier known as Royal Airways, a reincarnation of ModiLuft.
SpiceJet marked its entry in service with Rs. 99 fares for the first 99 days, with 9000 seats available at this rate.
Their aim is to compete with the Indian Railways passengers travelling in AC coaches.
JAGSON AIRLINES
Jagson Airlines is an airline based in Delhi, India. It operates scheduled and charter services within India and to Bhutan and Nepal. Jagson Airlines operate flights between Delhi and Rajasthan and Madhya Pradesh and Himachal Pradesh. They also operate a helicopter service between Srinagar, Baltal and Amarnath.
GO AIR AIRLINES
Go Air is a low-cost airline based in Mumbai, India and is wholly owned by the Wadia Group.
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines
Air India Regional started as Alliance Air which was the low-cost arm of Indian Airlines. As part of Indian Airlines merger with Air India, Alliance Air was renamed Air India Regional.
THE COMPETITION IN THE AIRLINES SECTOR IN INDIA – THE AERIAL WAR
Around 20 years ago, when the Airline Industry of India was Government Regulated, the airline Industry was considered to be a “natural monopoly” where only one Airline Company would be able to survive in the competitive environment and meet the demands profitably. But since deregulation, the perception is changing and there is no evidence of any sort of monopoly in the Indian Airline Industry. Foreign and private players have entered into the market offering the best at the best prices to the rising demand of the Indian traveler.
With the recent change in the Aviation Policy by the Government, several vistas in business have opened up and new opportunities have emerged. The creation of new and incumbent airlines and private sector participation in the development of Aviation infrastructure is a positive outcome of these new developments. Several global Aviation consultants and private equity players are eyeing this opportunity and are setting up their branches within the country.
Despite its unprecedented growth, the Civil Aviation industry in India is still in a relatively early stage of its development after its liberalization. Experiences from abroad, i.e., the US and Europe, show tremendous structural shifts in terms of route development, pricing, quality and frequency of traffic, as well as spatial concentration at few key airports. It can be said that market liberalization provided not only for greater opportunities in the industry, but also for greater risks. Recent waves of consolidation among airlines are only one example.
Since the deregulation, the Indian Airlines has grown tremendously. Also, average prices have fallen consistently due to the increasing number of players in the market. This fall in prices has benefited the consumers the most. If some fliers would disagree that the decline in prices have not benefited all the travelers then it can be proven that the fliers paying a high price also gets a superior product, in terms of flexibility and service. Moreover, the increasing demand for airline services is also helping airline companies to run a competitive business. People prefer air travel as a feasible option for commuting because it saves time and also because of the value added services provided by different airline companies. The competition in the Indian Airline Industry has succeeded in increasing the volume of travel and lowering average prices which has in the end benefited the final consumer and also to the airline companies.
Alliances and mergers are one of the factors which are giving a solid boost to the Airline Industry in India. Different airline companies, foreign as well as Indian, are tying up or taking over or merging to produce effective collaborations in service delivery with profitable returns. It is not the just the airline companies but also associate industries such as tours and travels agencies, hotels, transport organizations etc. which are also getting targeted by airline companies to deliver quality service to the customers.
At the end, it can be inferred that the Indian Airline Industry is growing at a fast pace and the credit goes to the effective and positive impact of the increasing competition in the industry. Factors indicating to the increasing competition in the airline industry are the pricing and promotion strategies adopted by the airline companies; value added services offered; sales promotion; product/service innovation; cost cutting strategies like downsizing; and so on. Airline companies are concentrating on the customer delight and also the costs to produce profitable returns with effective customer/market retention.
ENVIRONMENTAL SCAN
The following is an Environmental Scan of the Global as well as the Indian Airline Sector/Industry. The scan identifies the trends impacting the demand in the Airline Industry and the capability of the service providers to meet the expected demand. While the current events are important, the focus of the scan is on the trends likely to be important and effective in five to ten years from now. Apart from identifying the demand trends, the scan also identifies the constraints and issues of the airline industry, the key players, resources and the outcomes for the various service providers.
In India, the service airline business is in trouble. Many airlines companies are struggling to establish a business model which is viable to the business and profitable. Most of the companies are running into losses quarter after quarter due to the increasing costs etc. The recent high volume of passenger and freight flow has not been able to return profits. The low-fare airlines business model has been a success but has not been able to recover the increasing costs. The following factors represent the business environments for the airlines companies.
Political Factors
Liberalization of Air Services
Many economies have now adopted a forward looking approach in matters of policies for the liberalization of the civil aviation sector. Many economies are opening up with regards to bilateral agreements and are attracting more foreign passengers. Also, the air traffic between nations such as India-US, China-US, and many more strategic nations is on an increase. These liberalization policies are surely a boost to the airlines sector since the demand goes up and also service providers can take advantage such the fuel cost advantage (fuel prices in foreign nations are lesser), Globalization, Mergers and Acquisition etc.
Modernization of Infrastructure
With the availability of word class, improved technology, the infrastructure has been modernized to the maximum extent possible providing the best possible experience to the travelers. Airports are getting modernized with the entry of foreign investments. The best example is the airports in India, which have undergone modernization and are as beautiful and well-managed as the Heathrow airport. Airports in tourist places such Udaipur have also undergone beautification in order to give the foreign passenger a global experience.
Investments, Resourcing and Outsourcing
The promotion of Foreign Direct Investments by liberalizing the investment policies in the airline sector is relevant from the increasing number of people traveling by air and this has lead to generation of investment opportunities in the aviation sector. Foreign players are now not hesitating from investing in the airline sector of India and other developing nations. Due to Globalization, the demand is present in every part of the world be it in the U.S.A. or South Africa or Indonesia. Also, with the entry of foreign players is leading to tremendous outsourcing which is in a way reducing cost due to effective logistics decisions.
Economical Factors
Transportation Gateways to World trade
The global Airline Industry has developed as such that the infrastructure is facilitating World Trade, the export and import of goods, services and people. The world trade trends and the economic conditions of different nations indeed have an impact on the airline industry, the demand and the outcomes. Amongst the Asian nations, Japan is facing stagnation because of which the foreign investments and the demand for trade in goods and services have fallen. Whereas, in China and South Korea, the import demands from various nations have increased. These economic conditions are affecting the airline industries of these nations.
Price and Availability of Petroleum Products
Rising and the volatile world process of Petroleum Products represent trends that have profound impact on the airline industry and the costs to the service provider. Higher fuel costs affect the demand and the operating costs thus changing the travel pattern. They also affect the infrastructure such as amenities like sky-walks etc. higher petroleum prices stem for a mix of factors which are complex in nature such as supply interruptions, geopolitics, change in usage patterns etc. The effects of high petroleum prices on airlines can be seen clearly in the balance-sheets of airlines such as the Kingfisher which has recorded losses in Quarters I and II along with many other airlines which are unable to recover their rising costs.
Cost and Availability of Skilled Labor
The airline industry demands extreme skilled labor such as the pilots, ground staff and the flight crew. The labor not only has to be skilled and available but has to be efficient because of the heterogeneous nature of the services provided. No airline can recruit a trainee pilot and directly assign him to fly a Boeing-777 or an Airbus-319 airplane carrying around 500 passengers. The labor-force has to be trained and then assigned with tasks to perform after proper evaluation. Airlines have their own subsidiary training centers which concentrate completely on the grooming and training of the labor-force. The selection, recruitment, evaluation and training are costly in nature and thus the company’s costs goes up which get transferred to the customer or the market thus affecting the market and the demand. Also, skilled personnel in aviation occupations (particularly pilots) are being attracted to overseas airlines and airports, creating training demand on top of projected domestic labor requirements.
Also, a matter of concern to the airlines companies is the aging work-force which is low on efficiency and productivity. Accommodating such an aging and un-productive workforce in the organization structure is difficult.
Cost and Availability of Strategic Raw Material
Strategic raw material with respect to the airline industry is steel and cement which are required for the manufacture of airplanes and other infrastructure required. The prices of steel and cement are growing at an alarming rate. Thus, making these materials available is a difficult and an expensive task resulting in the increase in the costs to the service provider.
Mergers and Acquisition
Strategic M & A between airline providers are another boosting factor to the airline industry. The Star Alliance which was founded in 1997 with only 5 Airline Companies now has 21 Airlines Companies. Also, the merger of Air India and Indian Airlines is a good example of a Strategic merger. These mergers make the airline companies stronger and efficient with respect to service providing. A better co-ordination between different airline companies results in a joint effort in tackling supply problems of fuel, aw material, labor etc. The merger of Air India and Indian Airlines was a strategic merger to tackle the competition from the private players in the Indian Aviation sector.
Changing industry structures and market
The global market is highly volatile and undergoes dynamic changes such as in the demand, the supply, investments etc. This dynamic nature of the market affects not one or two service provider but the entire sector. The changing business models effect into a shift of demand which has to be catered to by the entire industry. For example, the low-cost airline business model gave birth to an all-together different class of flier, the best bargain available wherein bookings are made 3 months in advance and that too in auctions etc. This led to a steep increase in demand and the number of travelers almost doubled. The strain was felt by the service provider. The low-cost airline model was not only forcing other airlines to lower their fairs and fight the competition but also cater to the demand. Thus, the volatile nature of the industry does take a toll on the airline service providers.
Competition
Two factors which worry the airline companies are the demand and the competition. With the liberalization of policies, foreign players and private players have entered the market giving a tough time to the Government companies. Also, the foreign and the private players have an edge due to the exposure to a global standard, world class infrastructure and thus provide better services to the passengers in cost-effective manner. Local and Public players have to face the heat and cope up with the competition which result into mergers and acquisition which altogether is a positive for the Airline sector.
Sociological Factors
Population and Urbanization
Demographics are an important factor determining the demand and the key markets for the airline industry. The migration of population from nation to nation either for lifestyle as well as economic reasons has led to the growth of the demand. The population growth leads to increased demand for people movement and for support services such as the hospitality and tourism services. Also, an important feature of the growing population is that the growth is taking place in the urban area and thus further creating demand for movement and air transportation from city to city. For example, the increasing movement of people from major international cities has led to the increase in the number of flights between these key cities, such as Mumbai-London; Mumbai-Paris etc.
Technological Factors
Improving Technology
With Globalization, technology is going through tremendous change with the special emphasis by companies in Research and Development. Every service provider is looking for a cost effective method, world class infrastructure, best of the best service providing to passengers etc. technology is surely another boosting factor the airline industry. Facilities such as E-ticketing, Kiosk Check-in, internet connectivity in-flight etc. are due to the improving the technology. These facilities are resulting into customer-delight.
Other Factors
Apart from the ‘PEST’ Factors affecting the Business Environments of the Airline Industry, there are many more factors which are affecting the demands and determining the market trends for the sector. The following factors are a part of the of the ‘PEST’ factors but they have an all-round impact on the sector thus cannot be allocated under a specific heading.
Following the ‘Other Factors’:
Tourism
Since the last ten years, world tourism has been struggling due to the frequent terrorist attacks and natural calamities happening in key economic destinations. The 9/11 bombing of the twin towers in New York had the most destructive effect to the tourism in the entire of the United States. Tourism in the U.S.A. has not yet recovered. Because of the fall of tourism, the international travelling has reduced thus directly affecting the airline industry. Nations now are concentrating on promoting tourism in order to improve revenues in the related sectors, most important being the airlines sector. ‘Incredible India’ is one such initiative by the Government of India to promote national as well as international tourism.
Safety and Security Concerns
Events such as the 9/11 blasts, blasts at the London Airport, blasts at the Madrid Railway Station and the serial blasts in the Mumbai local trains confirm that transport facilities are being targeted by terrorists. These events have led an increase in the safety and security issues in major cities. These issues are affecting the demand of airlines services for travelling by people.
Environmental Concerns
It is now recognized that the rise in temperature due to climate changes are because of the human activities such as Globalization, agriculture, burning of fossil fuels, deforestation etc. all these activities are to meet the increasing demand of the increasing population. The airline industry needs these activities in order to fulfill the demand of the movement of the population from one place to another. Environmental issues and concerns are obstructing in developing infrastructure such as new airports etc. the airline industry without a proper infrastructure cannot create profits for the players in the market.
Workload
We just mentioned volatile nature of the market and demand and its effect on the industry. This effect is felt in the hanging workload for the employees. In peak season times, the workload is tremendous. Also, the labor-force is not available as required by the industry. Thus, the existing work-force has to bear the brunt of excess workload. Pilots, flight crew getting stressed are a common issue now and the stress is resulting into hazardous effects for the airline companies.
SWOT ANALYSIS
STRENGTHS
Open Economies
The world is getting smaller. Thanks to the opening up of economies like India. The developing nations have a lot of potential with regards to industrial growth. Opening up policies regarding the airline services initiates MNCs to venture into developing markets.
Efficient Marketing
Due to the heavy competition in the sector, airline companies are initiating on dynamic marketing strategies. These strategies are encouraging people to fly who were once scared of flying and also considered it an expensive mode of commuting.
Networking
The Airline Sector on the Global as well as the National level is well-networked and have efficient resources put into the networking infrastructure. Travelling from any destination to another destination is possible with varied options available to the traveler.
WEAKNESSES
Threat of New Entrants
At the first glance, the Airline sector looks very profitable and full of opportunities. No doubt, there are a lot of opportunities but there are many candidates fighting for the opportunities. The competition is so intense that no player can be profitable along with being an effective player in the market. Capital intensive businesses like an Airline Company cannot afford to forego iota’s profits for market share.
Power of Suppliers
The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there is a sort of monopoly of the suppliers which takes a toll on the costs. Also, a stagnant supply poses as a weakness to the increasing demand for airplanes.
Power of Buyers (The service providers)
The bargaining power of buyers in the airline industry is quite low. Obviously, there are high costs involved with switching airplanes, but in order to give the best to the traveler, companies have no option but to buy at a high price.
Availability of Substitutes
Other modes of commuting, may it be people or cargo, are definitely cheaper as compared to air-travel. As a result, the airlines sector often loses market due to these substitute means. Especially, in the freight carriage sector, the business is falling due to increasing prices of airline companies.
Competitive Rivalry
The airline sector is highly competitive. Highly competitive sectors fetch minimum returns. Also, low returns in the airline business in the long run can pose as threat because of the businesses being capital-intensive.
OPPORTUNITIES
Emerging Technologies
The latest technologies and the innovations in the technologies are improving service delivery internal as well as external, minimizing costs, enabling mobile computing for booking, check-ins etc. and enabling businesses for capitalization of economies of scale and scope offered by government wide approaches.
Government Initiatives
Businesses can be able to capitalize on resources constraints and achieve resource cost efficiencies. Improvement of Inter-Government Partnership and Delegating of work-load is possible.
Resourcing and Investments
Outsourcing and investments help the businesses to further support the departmental objectives thus resulting in the achievement of the company’s goal. Other advantages are knowledge sharing / continuous learning, increased career bridging opportunities, ability to identify and justify resource requirements, ability to balance workloads, improved management of the costs etc.
THREATS
Poaching
The labor-force management is very costly with respect to the airlines sector. Also, due to the liberalization of policies, foreign and private players often poach work-force of competitors which leads to talent-drain and thus losses.
Inefficient Planning
Inefficient planning results into in-effective decisions which result into difficult situations. Also, planning in the airline sector is also tough wherein one has to consider every other element of service delivery and cost management.
Government Interference
Extensive Government Interference can affect the accountability of the organization wherein the Government influences decision making and also planning. One incident can be recalled of the Government Interference during the Privatization of the Airline sector.
THE PRODUCT MIX
Product is the core thing which every enterprise tries to deliver. Product is of course, the service that companies have to offer to the customer. Getting the product right is the single most important activity of marketing. If the product isn't what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to buy it. The airline product is quite a complex one since it comprises of a service of incorporating the temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty free spirit to encourage booking. The product here refers to Airline service offering. Although service products are essentially intangible, there are certain pyhsical characteristics which consumer assess in their evaluation of product choice.
Attractiveness of the offering in terms of pyhsical features such as consumers have high expectation, the food & drinks offered , entertainment.Facilities available, associated level of services such as, quality of seats & interior decoration.
The airline product includes of two types of services:
1. On the ground services,
2. In-flight services.
The on-the-ground services include a convenient airport with car parking facilities, duty free' ¬shopping quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport, etc.
The service provided inside is intangible and is highly variable. The airhostesses are trained to provide polite, warm and courteous service. The courteous service that the representatives at the baggage counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of the airlines also need to be efficient and polite.
Differentiating the Product
It is important to recognize that what the consumers are demanding are not products, or features of products but the benefits they offer. Producing added benefits thus helps the marketer to distinguish one product from another. Good design or style of service can form the basis of differentiation. This enables the company to create a personality for its service. The design and decor of the aircraft provides opportunities to personalize their product as well as periodically to update them when differentiation under IATA regulations was virtually excluded, nonetheless, certain airlines were able to develop distinct personalities. Eagle Airlines created an entirely new market between New York and Bermuda, for e.g. by developing an image of a friendly airline distinctive from other airline serving the route. A similar style was evident in Richard Branson's Virgin Airways.
CORE PRODUCT AND SUPPLEMENTARY SERVICES
Many services products consist of a bundle that includes a variety of service elements and even some physical goods. It is important to distinguish between the core product that the customer buys and the supplementary services that accompany that product.
THE FLOWER OF SERVICE
Core product surrounded by clusters of supplementary services.
The core service of an airline is the service of transport. The supplementary services are classified into eight clusters & each one is analyzed with respect to the airline industry:
* Facilitating elements
* Enhancing elements
Information
This aspect of supplementary service is common for every person that needs information about the organization. In case of airline industry, up to date information regarding flight schedules, ticket fares, information about promotion schemes etc must be available to customers.
Customers can avail of this information literally at their fingertips today with every airline starting its own website which gives complete details to the customer & also entertains queries.
It also includes providing information to employees regarding new policies affecting the airline & equipping them with enough information, which the customers might demand. Extensive training is provided to in-flight attendants regarding handling customer queries, knowledge about the airplane itself, knowledge about cuisine etc.
Consultation
This aspect of supplementary services can be customized according to the needs of the customer. It is more in the case of people processing and high personnel-contact services.
Airlines are moving more actively into the role of consultant today. They are doing away with the travel agents & designing & selling packaged tours to consumers directly. In this aspect they often act as consultants to the customer, by giving him advice & suggestions regarding the type of plan he can choose, the benefits he will get the mode of travel he should choose etc.
Another aspect to consultation at airlines is when the customer approaches the airline regarding traveling to particular destination, the airline gives him a variety of choices of routes that he can take.
In some cases airline may also design special menus & benefits in consultation with its frequent fliers by keeping in constant touch with them & asking them for suggestion as to what they want in their airline which will make their experience more comfortable.
Order taking
The order taking procedure is essentially the booking procedure of the airlines. The important aspect to be noted here is that the procedure is smooth, easily understood & fast. Reservation of airline tickets is now easy and reliable since it is fully computerized. There are 24 hours reservations. Passengers can specify their seat preferences at the time of reservation.
Most airlines use the telephone, fax, and email methods of booking. The emphasis here is on fast booking & at the same time getting the required information form the customer. This is done by establishing a standard reservation procedure & format thus reducing the risk of inconsistent service delivery. The online booking system also facilitates better order taking & processing.
The scheduling aspect assumes importance as reservations on the wrong flight to the wrong place are likely to be unpopular.
Hospitality & Caretaking
With the increased competition today in the airline industry & the increasing similarity of services offered by each airline, hospitality has emerged as a key-differentiating factor between one airline & the other.
The hospitality aspect of an airline is tested right form the time of the reservation (courtesy of the booking official) to the airline’s desk at the airport to the actual in-flight travel (the attitude of the flight attendants) to the post flight help extended.
Safekeeping
In airlines the safekeeping issue is that of safeguarding the customer’s baggage.
Baggage allowances are offered about 30 kgs of check-in baggage is allowed. Passengers carrying international tickets are given further allowance of around an added 30 kgs Priority baggage delivery is offered to members. The customers entrust his baggage to the airline & it is the airline’s responsibility to keep it in a proper condition.
Children and infants usually travel along with their parents and guardian. In case of unaccompanied minors, customer service staff renders all assistance like checking in and escorting up to the aircraft and handing over to the senior-most cabin attendant on board the flight. He is looked after on board the flight right up to the point flight reaches the destination and he is received by his guardian.
Exceptions
Special requests – airline very often receive special requests form customers with regards to meal preferences, special amenities for elderly people or children., medical needs etc. these needs have to considered & acceded to wherever possible.
Handling of customer suggestions / complaints – every airline today has a customer service centre which entertains customer suggestions & complaints. On the flight, customers are often asked for their opinion regarding service equality. Many corporate frequent travelers are consulted when the airline decides to make any new change.
Billing & payment
The billing procedure in airlines is simple. The options available to the customer are plenty including credit card & travelers cheque. Airlines use the open account system with their corporate clients. Frequent fliers are also given special payment privileges.
LEVELS OF PRODUCT
FOUR PRODUCT LEVELS
The Core Service
The core service of the airlines industry is to transport goods and services to various destinations. As the needs of the people increased the entire system became more organized and formal. After this stage come the various supplementary services.
The Supplementary Services
The airline industry has many players they had a brand name like ‘Air India’,’ Jet Airways’,’ British Airways’. All of them had some common services to offer like connecting flights, through check-in, tele-check in, food on board, and complementary gifts etc.
Different classes like economy class, business class were introduced. Air concessions are given to school students, old people etc. Singapore airlines were the first to introduce small 8”television screen for every passenger. The freebies are actually win-win deals between airlines and other services.
Sahara, for example, offers its passengers a ‘business-plan’ on two-way economy class ticket, which includes a night’s stay with breakfast, STD facility for 3 minutes and boardroom facility at the Park Hotel, New Delhi. To Delhi based fliers to Mumbai, it offers a night’s stay with breakfast, airport transfers and VIP amenities at The Orchid, Mumbai. For business class, the plan includes a stay at The Leela, with buffet breakfast and late checkout.
All these added service helps the customer to decide upon which airlines he wants to travel. As competition increased and the customers wanted more the next phase evolved and that is the augmented service.
The Augmented Service
This phase is where the customer’s expectations are met; the service providers kept working on new methods to meet the ever-changing customers’ demands. The players introduced online booking, which was very convenient for the service users.
British Airways business class has showers; it’s more spacious and comfortable. Sahara airlines offer its passengers six different types of cuisine like vegetarian, fat free, diabetic etc. They also have auction going on board. Virgin airlines have gambling on board, they also have body massage to offer to their passengers. Air Emirates has something called cab service, they have customized pick up and drop cab service.
This phase is the most crucial one; with increased competition service will become the final differentiation.
Future Service
As mentioned above the customer needs keep changing, the future is unknown. The customers may be looking in for more frequent inexpensive air travel, something like air taxis, super sonic speed. This decreases the time thus reducing the cost.
The diagrammatical representation of the core and supplementary services in the airline industry is shown below:
BRAND POSITIONING
Brand positioning is all about identifying the optimal location in our customers’ minds for our Brand and our competitors. Proper positioning makes it easier to facilitate understanding of the Brand. Proper positioning clarifies what the Brand is all about, how it is both unique and similar to competitive brands, why customers should purchase and use the Brand.
Creating brand awareness is one of the most important aspects for any product or service. Due to the intense competition in the market every airline has to position them in the market. It is only if they position themselves well can they create a Brand image, brand relationship as well as brand responses.
Each and every airline would want to have a market for them as well as have a good name in the minds of the customers.
Airlines use unique attributes to position their brands in the minds of the potential customers. Thus consumers strongly associate those attributes with that particular brand, positively evaluate it and believe that they can not find those attributes to the same extent with a competitive brand.
Re- branding has also become an important concept. It is evident that the mergers and acquisitions have become an important part of the airline industry. Thus they need to re-brand themselves under one common name.
Examples of Re- Branding:
KINGFISHER AND AIR DECCAN
Kingfisher’s acquisition of Air Deccan would lead to the latter being re-branded under a new name. The new brand positioning will be a shift from being a low-cost airline to a value-based airline. It will re-emerge with a new revamped stylish look. The emphasis will be on creating a stylish airline keeping with the UB Group’s brand image.
The branding exercise will encompass areas such as changing the look and feel of the aircraft, including interiors, ticketing and check-in counters and staff uniforms. The colors red and white will dominate the changes, with the aircraft, leather seats, carpet, boarding passes and airport counters painted red.
INDIAN AIRLINES AND AIR INDIA
When Indian Airlines and Air India merged, they retained the brand name of the latter due to its better brand positioning. The logo was evolved out of a combination of the two airlines. The red colored flying swan with the Konarak Chakra in orange became the new brand logo.
SAHARA AND JET AIRWAYS
However, in case of Sahara airlines being branded Jet Lite by Jet Airways, there could well are a dichotomy in the consumer’s mind of the new brand’s positioning. Jet has a premium connotation while Sahara was a low-priced air carrier. The Jet Lite brand might end up confusing its customers.
Thus it can be said that if the transition is smooth and the integrity of core values retained, then any re-branding exercise can be successful. The new brand has to be updated and not outdated.”
The Integrated GAPs Model of Service Quality
The Gaps Model positions the key service concepts, strategies and decisions in service marketing in a manner that begins with the customer and builds the organization’s tasks around what is needed to close the gap between the customer expectations perceptions. The airline provider needs to study the Gaps model to maintain a service quality which delights the customer. The main concentration has to be on the customer gap, the difference between customer expectations and perception. Every Airline Company has the task of closing every gap through its effective application of marketing mix strategies.
Customer Perceptions are subjective assessments of actual service experiences; customer expectations are the standards of, or reference points for, performance against which services are compared. The factors determining customer expectations are personal needs, word of mouth communication, advertisements and past experiences of the service.
Gap 1: Expected Service and Management Perceptions of consumer Expectations – Not Knowing What Customers Expect.
Gap 1 is the difference between customer expectations of the service and the company understanding of those expectations. For example, a customer expects adequate information to be provided to him about his baggage and limitations of the weight to be carried. If an airline provider fails to effectively inform the flier, then the gap gets formed where the customer’s basic expectations are not met by the company management itself.
Key Factors leading to Gap 1 are:
• Inadequate Marketing Research orientation.
Insufficient Market Research
Research not focused on Service Quality
Inadequate use of Marketing Research tools
• Lack of Upward Communication.
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
• Insufficient Relationship Focus.
Lack of market segmentation
Focus on transactions rather than customer relations
Focus on new customers rather than relationship customers
• Inadequate Service Recovery.
The above factors need to be addressed properly to close Gap 1. Strategies fore closing Gap 1 include Market Research; Promotion Mix Strategies; Communication Mix Strategies; People Mix Strategies.
Gap 2: Management Perception of Consumer Expectations and Service Standards – Not having the right Service Quality Designs and Standards
Gap 2 reflects the difference between companies understanding of customer expectations and development of customer-driven service designs and standards. For example, during long distance flights, a flier expects stabilizer drinks to maintain his body pressure and avoid restlessness but if the service provider fails to keep this in mind while processing the service, then a gap is created.
Factors leading to Gap 2 are:
• Poor Service design.
Unsystematic new Service Development Process
Vague, undefined Service Designs
Failure to connect Service Design to Service positioning
• Absence of Customer defined Standards.
Lack of customer-defined service standards
Absence of process management to focus on customer requirements
Absence of formal process of setting service quality goals
• Inappropriate physical evidence and servicescape.
Gap 2 can be closed by implementing strategies such as Process Mix strategies; Market Research; Physical evidence Mix Strategies; Productivity and Quality Strategies.
Gap 3: Service Standards and Service Delivery – Not Delivering to Service Standards
Gap 3 is the discrepancy between development of customer-driven service standards and actual service performance by company employees. Service Standards must be backed by appropriate resources and also need to be enforced to be effective in service delivery. For example, fliers when pay a relatively high price, expect a better service quality which is perceived to be a standard for the price paid. But, if the airline company fails to deliver a service which is up to the mark and does not satisfy the customer and not deliver the value worth the price charged, then Gap 3 is created.
Factors Leading to Gap 3:
• Deficiencies in Human Resource Policies.
Ineffective Recruitment
Role of ambiguity and role conflict
Poor employee – technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control, and team work
• Failure to match supply and demand.
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Over reliance on price to smooth demand
• Customers not fulfilling roles.
Customer ignorance of roles and responsibilities
Customers negatively affecting each other
• Problems with service intermediaries.
Channel conflict over objectives and performance
Channel conflict over costs and rewards
Difficulty controlling quality and consistency
Tension between empowerment and control
Gap 3 can be closed by implementing effective selection and recruitment strategies; effective outbound communication with customers; effective market research; effective distribution strategies.
Gap 4: Service Delivery and External Communication to Customers – When promises do not match Performance
Gap 4 illustrates the difference between the service delivery and the service provider’s external communication. Promises made by airline companies through advertisements, sales promotion and other communication tools raise the flier’s expectations from the airline company. These expectations form as a service standard for the flier which is then assessed and determines the customer’s satisfaction level. The discrepancy between the actual and the promised service therefore has an adverse effect on the customer gap.
Factors resulting into the Gap 4 are:
• Lack of Integrated Services Marketing Communications.
Tendency to view each external communication as independent
Not including interactive marketing in communication plan
Absence of strong internal marketing program
• Ineffective management of customer expectations.
Not managing customer expectations through all forma of communication
Not adequately educating customers.
• Over promising.
Over promising in advertising
Over promising in personal selling
Over promising through physical evidence cues
• Inadequate horizontal communication.
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches units
Gap 4 is all about the communication to the customer about the service. No airline company can afford to over promise and then not meet with the expected standard of the customer. In order to close the Gap 4, strategies need to be implemented in effective communication and informing the customers.
Gap 5: Perceived Service and Expected Service – The Final Gap
Gap 5 is about the difference in the perception of the customer/flier about the service and the expected service. Gap 5 is a result of the above mentioned four gaps. If the Gaps 1 to 4 are closed effectively and strategically, then the Gap 5 automatically is closed and the perceived service becomes the expected service and results into customer delight and retention.
PRICING MIX
Pricing decisions play a crucial role in managing the business of air transportation. The increasing operational costs, the rising competition, the falling occupancy ratio, the imbalances in demand and supply, the increasing pressure of inflation are some of the important factors influencing the decisions for setting fare and freight rates in the air transport business. The Ministry of Tourism and Civil Aviation, the Indian Airlines Corporation, the National Airports Authority, the International Airports Authority of India, the Air India Corporation are the bodies directly or indirectly influencing the process of making the pricing decisions. The main problem is to make the pricing decisions competitive because it is found that even the private air transport organizations are involved in the process too. It is seen that the following are the features in price i.e.: 1.Flexibility; 2. Price Level; 3. Differentiation; 4. Discounts and Allowances.
While price is tactical, it has localized implementation, it is temporary in nature and therefore price is flexible.
Pricing plays a vital role in the marketing mix of any airline. The ‘fair price’ concept is supreme, mainly because more than anything else most potential customers will base their purchase decisions on the basis of price of the ticket. Passengers tend to seek value for the money they are spending.
For example, below is the table showing price of tickets for Indian, Jet airways and Rajdhani express.
Sector
Indian Jet AC–I* AC-II *
Delhi-Mumbai 3,400 3,620 4,180 2,404
Delhi-Bangalore 4,500 5,053 6,385 3,470
Mumbai –Bangalore 2,700 2,839 2,943 1,954
*Rajdhani fares
All figure in Rs
As seen in the table, in every route whether it is Mumbai to Bangalore, Delhi to Mumbai the rates of 1tire A.C. is more than Air fare of Indian and Jet Airways. Travelers will most definitely choose to travel by airways as it is cheaper compared to railways plus it gives the added advantage of reaching the desired destination much sooner. Here, by offering a lower price, the respected airline is trying to snatch the customers who would otherwise be traveling by 2nd tier A.C.
The final price that the passengers pay is made up of various components. The air fare charged by private scheduled domestic airlines comprises of basic fare, fuel surcharge, congestion surcharge, passenger service fee and transaction fee (if the ticket is booked other than the Website). Out of these, only passenger service fee is the component collected by the airlines on behalf of the airport operators.
Pricing Strategies
1. Demand-based pricing: The pricing of air fares under this strategy is simple. It is based on the demand from the customers’. It involves setting prices consistent with customer perceptions of value, i.e., prices are what customers will pay for the services provided.
For example: The person sitting next to u might not have paid the same price for the ticket. If a person wanting to travel in Business class does not get the ticket for the same when tried to book at the last minute, will travel in Economy class paying more than what the other travelers must’ve paid. The pricing in airline industry is never fixed or same. It’s fluctuating in nature depending upon time, demand and other such attributes. So when, the demand exceeds supply for the seats in an airplane, the price charged on the ticket is much higher than other passengers.
2. Season-based pricing:
The pricing of airline industry largely depends on seasons. For example, if a person is travelling by Indigo from Mumbai to Bangalore, the pricing will be different for different time periods. It will be cheaper in monsoon while comparatively expensive in winter. Also, it depends when the person is booking the ticket.
If he books the ticket 3months before the date he’ll travel he might avail the ticket at a cost that is 30-40% less than what the person may be charged if he books the ticket 20days before.
For example: if a traveler books a ticket during normal weekdays the prices would not be too high. Whereas, if the same traveler books the tickets during Diwali or Christmas, he will be charged more than what he was charged earlier for the same destination. And this strategy remains the same for all kinds of airlines. The prices may not be exactly same but it’ll be quite similar.
Also, Jet airways provide tickets at a comparatively lower rate during the vacations for student-passengers. This helps them tap the population travelling abroad for education purposes as well as increase occupancy ratio.
3. Competition-based pricing:
This strategy focuses on the prices charged by other airlines. Competition-based pricing does not always imply having the same price strategy as the competitors. It means keeping one’s pricing strategy such that it is cheaper in cost or it offers the same price as competitors with better and/or more facilities. Thus its basic purpose is to have a competitive edge over the rival airlines.
For example, Indian airline industry is filled with low-cost airlines. So Air Deccan before getting acquired by Kingfisher had many competitors like Indian airlines, Air India (before merger), Indigo airlines and Go air. And now Spicejet had entered the already filled jammed low-cost airline bandwagon. This brings about a competition in the pricing of the tickets. Spice jet on completion of three years on May 23rd 2008 offered 3 lakh tickets just for Rs. 3 starting from July 1st to 21st September 2008 across its 18 destinations in India. This was a very smart move to attract passengers especially those travelling by Economy class who are very cost conscious.
4. Pricing strategies when customer means “Value is Low price”:
This strategy can be applied when the most important determinant of value to a customer is money. But this does not imply that the level and standard of service, facilities and other attributes should be looked upon. It just means that pricing takes a forward stand as compared to the other attributes. To establish a price for this strategy, the marketer should understand and know the objective of charging low prices, how the customers’ interpret prices and how they value their travelling experience on the basis of prices.
There are various methods of applying this strategy:
i. Discounting: The service provider or marketer may offer discounts or price cuts to communicate to the price-sensitive buyers/ customers’ that they are receiving value for which their money is spent. For example: Spice jet has a special group discounting scheme wherein groups of over 15 guests may be provided with consideration for special fares.
Another example would be that of Indian, that offers discounts to passengers on site collaborated with India times by offering a bid for international destinations at low fares.
ii. Odd pricing: This is another strategy wherein the service providers offer prices at an amount which seems comparatively lower than the normal rates. It is based on U.S. dollar price-strategy wherein instead of charging $500 they will charge $489 or so. So in case on Spicejet. Instead of offering a ticket from Mumbai to Goa at Rs. 2400 they would offer at Rs. 2299. So, on looking at the figure the price difference seems to be more which in fact is just hundred and eleven rupees.
iii. Penetration pricing: This is a strategy in which new services are introduced at low prices to stimulate trial and widespread use. This strategy is appropriate when the sale of tickets is price-sensitive.
In order to make, travel by air more affordable to the common man, a couple of years ago Jet Airways announced a new offer `Everyone can fly' which offered a major reduction in economy class air fares on certain selected routes across the country. In most of the airlines, the reduction enables economy class air fares being competitive to rail fares being charged for the same journey.
5. Pricing Strategies when the customer means “ Value is everything I want in a service”:
When the customer is concerned more in the ‘get’ component of the service, monetary price is not of primary concern. The more desirable attributes that an airline provides, the more highly valued that service is likely to be and higher the price that the marketer can set.
Skimming strategy: This is a strategy in which new services are introduced at high prices with large promotional expenditures. It is an effective approach when services have undergone major improvement over past services. In this situation the customer is more concerned about obtaining the service than the cost of the service, thus allowing the service providers to skim the customers most willing to pay the highest prices.
An example of this would be that of Virgin Atlantic airlines that has gambling on board. They also provide in-flight body massage to their passengers. There is a bar in the air craft. Also, they provide lounge facility at the airport to the frequent flyers.
Also, when Kingfisher had newly started first class with Kingfisher first, the rates of the tickets were very high compared to other airlines’ tickets. But travelers still opted for it as they wanted to have the new flying experience with Kingfisher.
THE PLACE MIX
In Airlines, they utilise more than one method of distribution.for e.g they sell tickets through travel agents & sell seats on flights to tour operators , whilst also operating direct marketing. Whichever distribution strategy is selected, channel management plays a key role. For channels to be effective they need realiable updated information. For these reason, I.T has been widely adopted such as on-line booking system.
This dimension of marketing mix focuses on processing of services and selecting the location points for airways and airlines offices keeping in view the comforts and conveniences of the end users. By the processing of services, our emphasis is on the involvement of channels, front-line-staff, travel agency offices; offices of the tour operators or so from where service flow and reach the ultimate users.
1. The air transport needs to make sure that the prospects don’t face any difficulty in buying the tickets and make necessary arrangements for the confirmation of booking.
2. It is also to be confirmed that the users booking their luggage are not to face inconvenience.
3. The behavioral profile of the personnel working in offices of travel agents and in the offices of the airways and airlines require due attention. It is almost clear that airhostess looking attractive, smart, well dressed are at your disposal to make available to you the defined services.
4. It is also to be sure that the information network of the offices of the travel agents is technology-driven and user-friendly.
5. The security checking, custom checking of passport, visa, income tax clearance or so. It is essential that all the windows or the counters offer the services as per the provision and promises.
6. Keeping in view the duration and nature of flights, the users are made available lunch/ dinner, breakfast and drinks inside the aircrafts.
7. If in course of the journey, you are supposed to change the aircrafts and the duration of stay is long, it is the responsibility of the airport authorities and concerned airway and airlines to make available the accommodation facilities.
Another dimension of place mix is related to location and management of the offices of the airways, travel agents, tour operates, transport operators or so.
1. The main thing in the selection of a place is easy accessibility. The prospect customer should get an easy access to the office and ticket counters. The place is required to be safe, well connected with all-weather proof roads where all the required infrastructural facilities are to be available.
2. The technology-driven booking system is to be ensured. The online booking facility should be user friendly and all the information regarding the company should be available on the company site so that customer can get all the information at it ease.
3. The water and sanitation facilities for the users and comfortable seating arrangements need due care of the travel agents or airways offices. The lighting, ventilation facilities need to be made available.
4. The interior decoration, furnishing, plantation need aesthetic sense so that the users from a positive opinion regarding the airways services. The interiors should be creative so that people can enjoy their ride and make their trip a memorable one.
5. The positioning of posters of airways and airlines which look attractive and draw the attention of the users attending the offices for chartered flights, packaged tour need due care.
6. It is in this context that they find management of place an important component of the marketing mix.
In view of the above, it is right to mention that air transportation business is linked with a number of allied services offered by a number of agencies and organizations. If they don’t find cohesion and coordination the promised services would hardly reach to the end users.
Indian Airline Network
Jet Airways Network
THE SERVICE MARKETING TRIANGLE
ENABLING PROMISES MAKING PROMISES
KEEPING
One can better understand the working of airlines by looking at its marketing triangle. There are three entities in the entire transaction:
1. Customer: He is the person who wishes to satisfy his needs i.e, transportation from one destination to another. Here, the customer is a passenger or a potential passenger.
2. Company: This is both the dreamer and the offerer. It here refers to the various airlines which offer its aviation services to the customers to satisfy their demand for transportation from one destination to another, for example: The Indian Airlines. Here, the company makes a promise to its customers to deliver the right quality service.
3. Provider: The service providers are finally the people who interact with customers. They keep the promise that the airline operator has made to its customers by delivering the finest services. They are the ones who carry out final transactions. The customer actually comes in contact with the service provider and not the company. For example: the air-hostess and the crew.
The interaction between these three parties while providing the service takes place in the following manner:
The company is established with the basic objective of providing the specific transport service. Thus the airline industry with players like Indian airlines, Jet airways, Sahara airways etc came into being.
The air service provider that is the company communicates with the customer and makes him aware of the services. It makes promises to the customer by advertising through various media’s. For e.g.: the TV ad of Indian airlines advertising its new sleep-in seats.
The customer who gathers knowledge about the service approaches the company for availing his service in order to satisfy his need. This interface of the customer with the company is through the customer’s interaction with the providers of the company. The company enables its promises to the customers through setting up facilities to deliver the promises by setting up ticket and enquiry counters. The outcome of the “to be transaction” is determined by the interaction between the provider and the customer. Hence the company aims at offering its providers with the required infrastructure and training to optimize the quality of the transaction. For e.g.: Yearly employee training programs and performance appraisals are done by Sahara airlines.
The three strategic points where the provider and the customer interact are:
Ticket purchase at the airline counter or the ticket agency.
Checking in
While boarding
During disembarkation
All three sides are essential to complete the triangle. All three marketing activities represented by the sides of the triangle are critical to efficient delivery of the service, even if one of the sides is out of place, the triangle will be distorted; in other words the total marketing effort cannot be optimally supported.
THE PROMOTION MIX
The formulation of an ideal promotion mix is essential to inform sense and persuade the users. The business magnets, business executives, politicians, cine artists, high spending tourists, business houses using expensive inputs and trading the same, the Department of Posts, domestic and international tourists are some of the users of the air services. The users appear to be more conscious, aware of their rights and in a majority of the cases are found sophisticated.
However, majority of the users are sophisticated and therefore the promotional efforts are required to be more creative. The professionals engaged in the air services bear the responsibility of blending the different components of promotion in such a way that the task of increasing the business is simplified. Since a number of airways and airlines have been facing problem of financial crunch, it is pertinent that they make possible an optimal use of the different components of promotion.
PROMOTION MIX VARIABLES
Since domestic deregulation occurred in 1978, competition in the airline industry has intensified and become more concentrated. The respective airline needs to provide certain benefits that the other airlines do not. Promotion has become a big aspect since the arrival of numerous private airlines. The way this industry has attracted people to them has changed. Airline companies have struggled with making new ways to market their products. Today airline advertising focuses on price, rather than the pleasure of the flying experience. Companies use the radio, newspapers, and billboards in big cities, tops of taxicabs and sides of buses to put their ads on. Even coffee cups in restaurants are starting to be used for advertisement.
Promotion should be done keeping in mind the competitor’s product. This helps in promoting own product/service with a message that has an edge over the others. Kingfisher understands its competitors well and promotes their service accordingly.
Vijay Mallya's Kingfisher Airlines adopts an innovative marketing strategy to snatch attention from Jet Airways' advertisement.
In the ad displayed on the hoarding above, Jet Airways say, "We've changed." Kingfisher Airlines comes up with a cheeky billboard above Jet's hoarding that says, "We made them change!” This was a very innovative and smart move on kingfisher’s part to promote their service thereby denoting that their own service is so much better that Jet Airways had to change and improvise them to reach their standards. This needs presence of mind on part of marketing and promotion heads.
Spice Jet, India’s most preferred low – frills airline, has announced a unique offer of 3,00,000 tickets at a special price of Rs 3/- per ticket. This special offer flags off the third anniversary celebration of the airline. Booking for this special promotion, was opened on May 9, 2008 and will continue till the tickets are sold out.
Tickets bought will be valid for travel from July 1 to September 21, 2008 on all flights covering its 18 destinations. This offer is available only on SpiceJet - Low Cost Indian Airlines, Book Indian Flight Tickets Online, Cheap Fares Air Travel in India - SpiceJet offers Discount Airline Ticket Fares Online. In the last three years Spice jet has flown over8.1 million people across all their destinations. They have helped Spice jet gets over 10.3% market share. This special promotion is Spice jet’s way of thanking them for their support.
PROMOTIONAL MIX AND ADVERTISING
Advertising
As any other service, the air transportation service needs creative advertisements to promote their business. This is the first component of the promotion mix, which is based on professional excellence of the advertising agencies. In view of the rising cost of inputs and increasing the impact of worldwide economic depression on the air transportation, there is a need to make the advertisement budget optimistic Vis-a- Vis optimal.
This is essential to regulate the multi-dimensional expenses found of unproductive nature and instrumental in making the service expensive. The telecast media and the print media are found important while promoting the air business.
While advertising through the telecast media, budgetary constraints and budgetary provisions should be considered. Also the quality and nature of target market and level of expectations should be kept in mind. The advertising professionals need to make the advertisement slogans campaigns and messages proactive to the generation of business. Kingfisher is a good example for advertising its services. They advertised kingfisher not merely into the business of transporting people from point A to point B. They have created a new category of Aviation Hospitality Space thus making service and hospitality their main focus. Their slogan is kingfisher airlines- “Fly the good times.” This is how they are differentiating their product from other airlines. The airlines also have to make sure that whatever the strategic decisions they make to promote the business are in a position to establish an edge over the promotional measures of the competitors. They are also required to assign due weightage to the efforts made for the projection of a positive image. The Indian Airlines as well as Air India have been facing the image problem but the advertisement may be efficacious in transmitting the facts and removing the image problem.
As mentioned earlier, Indian airlines started promoting its first class fully reclining seats to as a tool to improve the image problem and attract more passengers in its first class. It is essential that while advertising one has to keep in mind the image of the country, the natural scenes, the tourist attractions, rich cultural heritage or so which would energize the process of motivating the tourists. For example: Thai Airways have air-hostess wearing colorful long and flowery dresses and greet by joining hands and bowing to their passengers as a part of their culture. While advertising, it is impact generating that we select an opportune moment of flight, an attractive scene of take-off, high attractiveness of personnel in general and the air hostess in particular, the landscape of an attractive tourist center, wild life sanctuaries, lake, park and so on. The air transportation services can also use the broadcast media.
For example: In times of rising fuel prices and lower occupancy rates Jet Airways has come out with a lavish ad featuring the most expensive brand ambassador of time Shahrukh Khan. The Shahrukh Khan TVC, which broke on September 1, 2008 is the first of three campaigns Jet has planned (the ones on economy and premier class will follow), and is running across most news channels and some specialized travel channels. The ad marks the television debut of Jet Airways which had previously relied heavily on the print medium. While competitor Kingfisher relies on showcasing complete range of Consumer experience Jet is trying to highlight its product superiority. Jet had come out with Boeing 777 last year, which has some superior features and this ad is merely an aim to highlight those features besides trying to latch on to the celebrity appeal of Shahrukh Khan.
Another example would be that of Indigo airlines that uses Internet and print media as a visual medium to advertise itself. What is interesting is the fact that the ad is not flashy and it just conveys simple facts.
An important source of visibility for Indigo is the internet where e-ticketing give it a chance to come up with its offers.
The launch and subsequent editorial patronage and newspaper support that Indigo carved out for itself helped it set itself up as a brand.
Online reviews on MOVIE Review, HOTEL Review, MOBILE PHONE Review, BOOK Review, CAR Review, CAMERA Review - MouthShut.com and other blog sites are all directed toward creating a brand reckoning for Indigo Airlines.
Evenly spaced out PR activities help Indigo to be on top of the minds of the people and gives it instant brand recall value.
Indigo goes for extensive print coverage every month or so.
Publicity
Publicity is a process of persuasive communication for which no payment is made. Strengthening public relations activities if found essential to promote the business airlines or airways. The Public Relations Officer, Receptionists, Travel Agents, Travel Guides, Media people are some of the sensitive points of publicizing the business. The most important point in this is the co-operation of media. The marketing professionals should have an idea of magazines, newspapers preferred by the prospects or users and they develop rapport with the correspondents concerned. The Airlines need to recruit efficient personnel for that very purpose that should have professional excellence no doubt but in addition they are also required to have the potentials of attracting the users, prospects.
For e.g.: Indian Airlines helped the cancer patients and took them for a small outing as part of their public relation campaign. Similarly, Sahara linked up with Close- up by taking Hrithik Roshan. Here for Close-up it is a promotional strategy while for Sahara a publicity that an airline is linking up with FMCG by using an entity.
Kingfisher is right now running a print campaign in major business publications. The new series of campaigns are focused on the functional attributes of the airlines.
Deviating from the usual flashy ads, Kingfisher is now appealing to the Left- brain of the consumers. The ads are targeting the three segments of user’s i.e Children, Ladies and Males but the ads are talking to Men who are the key decision makers.
The ad for the young travelers talks about special kids’ meal, wide seats and games. The ad ends with an appeal to the father that “Your little prince deserves to feel like a King ". The ad for the lady travelers talks about the seats that bend all the way back, the footrest that will pop up, life valets when your lady lands at the airport at midnight and helping hands that lift her bag. The ad ends with the message “Queen of your heart deserves to fly like one ". The third in the series aims at the decision maker himself. The ad aimed at male traveler as usual talks about the 'flying models ", the smile that tastes better than the ice-cream, spectacle cleaner and the air-boutique. The ad ends with the message ' Every man's seat feels like his throne'.
With regard to the quality of campaign, it may miss some eyeballs because of not being an eye catchy ad. But the message surely is smart. The basic premise in this ad campaign is that Men are the decision makers with regard to this service. May be a campaign aimed at lady executives may also come in the future.
On the promotional front, Kingfisher has signed up the latest diva of Bollywood, Ms Deepika Padukone as the brand ambassador.
Sales Promotion
A component of promotion adopted for a particular period to touch the target and withdraw the measures when the time is over is known as sales promotion. The tool based on incentives is found instrumental in sensitizing the users. The travel agents contribute a lot to the promotion of air transport business and therefore we need to think in their favor on a priority basis. The tour operators also contribute to the process and therefore need to think in their favor. The front- line-staff in the offices of the airways and the receptionists working there also play the same role. This makes it significant that they are given some incentives which are in the form of a holiday trip to a particular place, concessional services to their children or spouse or so. Also offering them with innovative gifts, which have not been offered by their competitors, can be given. The nature and type of incentives would depend on the contributions of providers. If they make immense contributions, the incentives would be in good quality and volume. There are incentives given called the promotional incentives on the basis of the frequency of using the services.
For e.g: Through Jet Airways, return ticket passengers on metro flights (both economy and business) can avail a discount at all Taj and ITC hotels in South India. Also Sahara has a fanatical assortment of gifts being handed out (its’ Take Offer). Braun Mixer grinders, CTVs, cameras, handy cams, mobile phones and even free holiday packages are up for grabs as a part of their sales promotion campaign.
Also, there’s something called marketing bonanzas. Some airlines give free tickets to customer so as to make them aware of their services. These tickets or any other gift voucher are given so as to attract a lot of people. This is a very interesting way of catching the headlines of customers. Example Go Air was sending SMSs to any number that they have won a free ticket from Mumbai to Goa or Delhi. Kingfisher has also sent messages to people for free ticket.
Jet lite announced its ‘Summer Special Bonanza’ promotion for online bookings through its website. Even Air Deccan used this approach of giving gift voucher worth Rs.250 and a saving of Rs.99 per ticket if booked thorugh Air Deccan’s site. The offer was valid for bookings made between 22-May-08 and 10-Jun-08 and for travel in the same period. There was also a 2 nights, 3 day holiday package to be won in the offer period.
Jet Airways, India's premier international airline, has announced a special promotional package for students flying to its destinations in the United States, Canada, United Kingdom, Europe or Asia. Jet Airways' special promotional package is valid for outbound travel on or before October 31, 2008. Existing, as well as new, students will receive a whole host of benefits including excess baggage allowance and special fares. Students availing of this offer will be allowed to carry an extra piece of baggage, with each piece not exceeding 23 kilos, on flights to the US, Canada, UK & Europe; and an additional 10 kilos on flights to Asia (Shanghai, Hong Kong, Singapore, Kuala Lumpur and Bangkok), on Jet Airways' online destinations.
With Jet Airways special promotional package, students will also receive exclusively designed Student Kits', in association with its partners. These may be collected after the purchase of a ticket at any of Jet Airways' city sales offices around India. Each kit contains a Matrix mobile connection with free talk-time worth Rs.4000 in the US, UK, Singapore and Australia, ICICI Bank Travel Cards for hassle free transactions across the world, a free Tata Indicom Wi-Fi Roam Card enabling internet connectivity from over 50,000 hotspots in the US ,UK, Austria, Czech Republic, Germany, Netherlands, Switzerland, France and Japan; Bajaj Allianz Travel Insurance with special privileges and low premiums and VIP vouchers worth Rs.500/- on purchase of VIP travel accessories.
Jet Airways also offers students an ergonomically-designed seat with hammock style head rest and foot support, the airline also provides its Economy passengers a personal reading light, on demand In-Flight Entertainment and access to over 200 hours of Hollywood and Bollywood movies, regional films, and television and short programmes. Thus Jet Airway plans to tap mass-students travelling abroad during this period.
Personal Selling
The air transport organizations find personal selling which is the mix of promotion mix helpful in increasing the business. An art to influence, stimulate, sensitize the impulse buying is known as personal selling. The air transport-marketing professionals are supposed to know about the behavioral profile of persons who act as personal promoters. The travel agents, tour operators, transport operators, travel guides, front-line staff on the booking counters, receptionists contribute substantially to the process of promotion. If they stop selling, the offices of airways would find it difficult to sell. This makes it clear that even the quality services fail in attracting the users, if the channels are not co-operated. This makes it essential that the airlines offer incentives to them so that they keep on moving the process of stimulation.
To better understand the concept of personal selling, the airline in question needs to follow the diagram given above. It explains all the things that the people involved in the process of selling should know and do. Starting with the first point, customer’s value for time, money and energy should be considered. Their comfort and suitability should be addressed to. They should be provided service in such a way that they get more than they expect to. It can be said that the customer’s should be pampered.
For instance, giving chocolates on arrival and departure or welcome drinks or discounts during off-season to name a few. The delivery of tickets should be made on time this enhances the effect of personal selling.
The entire aim of personal selling is to provide customer’s easy access and hassle-free journey and that is what should be done by the airlines and that is where the circle of personal selling ends. To fulfill the above mentioned criteria the airline industry must select persons, agencies having a positive image.
The travel agencies having a well established business can help substantially and therefore it is the prime responsibility that while selecting the travel agents one must assign due weight age to the image of the agencies. The tour and transport operators help considerably and one needs to think about the incentives to be offered to the promoters. In personal selling, the front-line staff or personnel at the booking or reservation counter of airlines office playing an incremental role in promoting the business. Here, it is essential that one is aware of the credentials of persons supposed to discharge the business responsibility and try his best to brush up their faculties as and when opportunities come.
Word-of-mouth Promotion
This happens to be an important constituent of promotion mix in which the promoters act as a hidden sales force. The air transport organization depends on this type of promotion if they feel that the quality of services offered by them is of world class. In the Indian perspective, the Indian Airlines, Air India, Sahara India, Jet Airways and others may use this component of promotion if they realize that providers have not been distorting the quality of services promised. If you are traveling by kingfisher and you really like the experience then you will definitely recommend your friends, relatives, etc to travel by the same airlines. Word of mouth is the best promotional strategy as it does not incur any cost for the company and also a positive image is built in the market by their loyal customers.
Indigo airline being a low-cost airline does not allocate much fund to advertising hence, it entirely relies on word-of-mouth promotional tool to spread a word about their services and thus communication is established and brand is recognized by the people who are potential flyers rather than the entire country which is an expensive affair.
PEOPLE
The commercial airlines service industry extremely competitive, safety sensitive and high technology. People, employees and customers must be the arena of an organization’s core competence.
In the service industry, service personnel come in direct contact with their customers in the course of production and consumption of the services.
Because people provide most services, the selection, training, and motivation of employees can make a huge difference in attaining customer satisfaction. Ideally, employees should exhibit competence, caring attitude, responsiveness, initiative, problem solving ability, and goodwill.
The airlines hire the right personnel with the essential requirements. They recruit the right people develop, and train them to deliver quality service. These employees are motivated in a manner that they stick to the organization; they are treated more as customers, rather than employees
For Example: Delta Airways recruits an employee and moulds him to cater to their demands. These employees are sent to US and Frankfurt on a 21 days training programme. The successful completion of this motivated the employee to stay on with the airline. They are provided with many incentive programmes and also with a one- month bonus incentive on completion of the sales target.
The Airline sector is divided into two categories, Internal and External customers.
Customers refer to the persons who have certain needs, wants and desires. The company makes promises to its customers. In the Airline industry, the customers refer to those persons who feel the need of travelling from one destination to another. The customers are further classified as Internal and External customers.
Internal Customers:
While delivering services the airline ensures that the services are delivered as promised and this rendering of service satisfaction is often totally in control of the frontline staff. The quality of service that the frontline staff provides is highly dependant on his/her ability to communicate their credibility.
Being a Hospitality line the employees are given extensive training to provide caring and individualized attention to customers. There are many people involved with the successful working of the airline industry.
The various types of airline personnel include:
FLIGHT CREWS: These are the trained people who play a very important role from the time when you check in your baggage till you board the aircraft. They ensure the smooth functioning of everything and guide you through the entire process. They form 85 percent of the airlines labour force.
The Flight crew includes:
Pilots
Flight Attendants
Reservation Clerks
Airport check-in and gate personnel
Security guards and In-flight security personnel
The service contact personnel in the airline industry are the Flight Attendants who are expected to have a pleasing personality and must also be polite while service handling.
While on the other hand the cock pit crew/ Pilots are considered as low contact personnel hence they are required to posses highly technical and analytical skills.
The Reservation clerks play a very important role as they check the tickets, allot the seat numbers and also place the destination tags on the baggage; hence they should be highly attentive while doing their work.
The Airport check-in staff must be extremely helpful as that is where the evaluation of the hospitality of the airline can be gauged from at first
GROUND STAFF: These are the main people who work behind the scenes and play a very important role to ensure smooth functioning of the entire procedure right from handling the formalities on the airport to helping the passengers board the aircraft. All these functions are handled impeccably by the ground staff.
The Ground Staff includes:
Avionics technicians/ engineers
Flight dispatchers who track all the airline’s flights
Baggage handlers
Gate Agents
PDC (Prolog development center)
The PDC (Prolog development center) has implemented a Staff Scheduling System; this system was adopted for the ground staff as creating good staff schedules is often a complicated process. It is difficult to clearly appreciate the many possible combinations of duty periods, duty hours, time-off-in-lieu requirements, holidays etc. that will ensure each person works the correct number of hours.
First and foremost it is important that internal and external rules are correctly implemented while maintaining adequate manning levels and ensuring a fair distribution of the various shift types. Scheduling restrictions (financial or other) may exist and must be taken into account.
Why Use a Staff Scheduling System?
Creating a good staff schedule is often a complicated process. Especially when the airline industry “never sleeps”. Manning is 24x7x360. The business involves many employees with different agreements and they must be confident that they get paid correctly.
First and foremost it is important that internal and external rules are applied, there has to be adequate manning and lastly the personnel must be available when the traffic requires it.
On an Organizational level PDC- Staff Plan, provides their clients many Advantages in the terms of:
Cost savings in terms of less salary bonus, over time and time-off-in-lieu
Significant reductions of administration
Efficient cost management through a flexible staff scheduling (no over manning and no under manning)
The Advantages that PDC-Staff plan provides the employees are in the terms of:
Fast and safe scheduling of duties and shifts
Better overview of manning, time expenditure, time-off-in-lieu, etc.
Relief of administrative work
Thus, efficient staff scheduling saves great resources and thus time to focus the efforts on other areas. In addition, time will be saved in the scheduling process itself
What are airlines looking for?
In making a decision about the employment of cabin crew, all airlines consider three prime elements:
Eligibility
An airline may have eligibility tests depending upon its own specific requirements. These are facts that can be determined either by physical or by documentary Evidence. Some of the Eligibility checks likely to be included are:
Does the candidate meet the required age profile?
Does the candidate meet the required height/weight profile?
Has the candidate attained required educational (or other) qualifications?
Is there documentary evidence to support the qualifications the candidate claims to have?
Has the candidate acquired adequate experience in a customer service or public contact role?
Can the candidate speak a second language? To what level of proficiency can the second language be spoken?
Suitability
This is clearly more difficult to assess than eligibility. Airline managers will be looking for people who can best fulfill the role of a Cabin Crew .The minimum requirement is for:
1. Technical knowledge
2. Maturity
3. Adaptability
4. Judgment
5. Tact
6. Diplomacy
7. Grooming
8. Attitude
Airlines will also be looking for people whose performance will not be adversely affected by the disadvantages of the job and will readily accept direction/training.
Specific requirements
Eligibility and Suitability are relatively basic requirements, which must be met in all cases.
Every Airline sets its own specific requirements; some airlines pay much emphasis on the appearance and personality of the person while others may look at the experience and knowledge. Some airlines may prefer have trained and experienced personnel while others may want fresh recruits.
Put simply, airlines are looking for the right people for their current circumstances. Do not be too disheartened if you do not get in at the first attempt. You can always try again - or apply to another airline! It is also true that candidates fail to be recruited by an airline at one attempt, and then succeed at a later date. This is usually because the candidate has acquired better interview technique, or extra skills, experience or confidence. It can also be because the airline itself has revised its person specification.
CREW PROFILE AND COMPLIMENT
The senior most person on any flight is the Commander. His is the last word where the flight & its crew or the passengers are concerned. The Cabin crew Senior or the In Flight Supervisor is the senior most Cabin Crew, but takes orders from the Commander.
The Crew complement on board is the total number of crew including both the Cockpit & the Cabin Crew. This number is preset where the Cockpit/ Flight deck crew is concerned for a particular type of aircraft. The number of Cabin Crew an airline has on an aircraft depends on a number of factors:-
1. Type of aircraft - for any aircraft there is a minimum Cabin crew complement required depending on:
The number of emergency exits on the aircraft
The number of passengers on board the aircraft.
2. The type of food & beverage service to be provided to the passengers.
3. Right duty time length of the flight. On some long haul flights when the flying time exceeds the flight duty time (the max number of hours a crew can be on duty), then there are two sets of crew on board. This is found ONLY on International sectors on extremely long sectors.
4. Today a few airlines have started new services like baby-sitting, on-board masseurs, tailors etc, which require extra crewmembers on board. More often than not, airlines start new service procedures that do not require additional crew or other staff, but to capture a good market share, Airlines often launch such services that are NOT sustained over a period of time.
The Hierarchy where the Cabin Crew is concerned may vary a little from airline to airline depending on their individual policies. For example in some airlines the air hostesses retire much before
Advantages of the Job
As with the role itself, the perceived advantages of being a cabin crewmember are often quite different from the actual benefits. Below is a list of what cabin crew & others see as being the real advantages:
Travel
This is what attracts many people to the job in the first place. Cabin crew goes to places they always dreamed of, and find interest in destinations they would not necessarily have chosen to go to.
Camaraderie-Solidarity & Friendship with other Crew members
The camaraderie, team spirit, and sense of belonging together that the majority of crew has when they are flying is unique. Despite being a very diverse group of people, your colleagues are likely to be sociable and out-going, and will help to make the job a lot of fun.
Variety and Interest - Absence of monotony
This is certainly not a 9 - 5 jobs, and no two working days are likely to be the same. The sheer dynamics of different crew, passenger profiles, destinations and roster structures ensure that there will always be variety.
Appreciation
This is one career where the appreciation is almost instant after a 'good job done'. Despite all the things that can go wrong on a flight, many passengers do show their gratitude of the crews' efforts, either when someone has done their best for them individually, or especially when the whole team has pulled together well. The better airline management teams also acknowledge consistently good performance, or outstanding individual service.
Personal Development
Airlines usually have high standards of initial and follow up training, and some provide self-learning facilities or schemes thus helping the crew to develop their personalities and all develop themselves in other aspects.
Other benefits
Most Airlines provide a number of other 'perks' along with the usual handsome salary they give a crewmember. Most major airlines to provide ground transportation and a good standard of accommodation for crews who are staying overnight at destinations away from their 'home base'. Free medical attention for cabin crew I their family members (in some cases) are also provided. Free staff travel tickets are another BIG bonus given. Airlines have schemes whereby all their staff are able to travel free on the 'employer' airline or at extremely advantageous prices on other airlines. Airline staff also benefit from a range of discounts, from hotel chains, shopping malls, duty free shops, insurance companies and financial service institutions.
Uniform
Airlines usually provide items of uniform clothing to all their public contact staff free of charge.
Disadvantages of the job
Air cabin crew is a wonderful job, and can provide an interesting and rewarding career, but as with any job there are drawbacks as well.
Travel Limitations and Risks
This is almost the reverse of Travel' as an advantage of the job. As a crew member you do not choose where you go to, or how long you stay there. Crew also face the usual risks present for any other traveler, such as theft of personal belongings, mugging, poor hygiene standards in other stations/cities, bites/stings from insects and animals, and risk of contacting infectious disease.
Customer Service Negatives
Good customer service is a prime role pf cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Good customer service is a prime role of cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Dependence upon the support of other departments, including planning, maintenance, and catering, cleaning and logistical units is very high. Any breakdown in the chain (for example dirty toilets or insufficient catering) lead to a feeling of being “let down and having to take the burnt of passenger complaints.
External Customers:
These are the main customers for the airline industry as they generate revenue to the same. Hence Customer Satisfaction plays a very important role. The customers should always be kept at pedestal by looking into their needs and acting on them immediately and also providing them with exclusive services. This would earn goodwill for the airline and ensure the smooth running of the business.
The customers are categorized on the basis of their need and preferences:
Customer Segmentation
Most airlines use a very traditional segmentation strategy, dividing passengers into first class, business travelers and economy travelers. But, nowadays most of the airlines offer only two classes – the business class and the economy class.
The customers subsequently also be divided as per the scope of the market .This ia a process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinct marketing strategy.
This includes preparing a method of identifying a group of consumers, within a broader market, that has similar characteristics and needs. Segments can be identified by examining geographical, demographic, psychographic, and behavioral differences.
Segmentation of the aviation industry can be done under the following factors:
Geographic segmentation
Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions etc. the company can operate in one or few areas or operate in all but pay little attention to local variations.
Most of the domestic airlines, their market segment consists of the customers who’s destination are major commercial cities like Mumbai, Delhi, Kolkatta etc. apart from these the airlines also concentrate of tourists destinations like Goa, Agra etc. The reason behind this is that such sectors have major traffic and are profitable sectors. However Indian Airlines, being the National Carrier of the country, fly’s even to the unprofitable sectors and concentrates on the segment of people flying to such destinations.
Demographic segmentation
In demographic segmentation, the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion and social class. There are several reasons for the popularity of demographic variables to distinguish customer groups. One reason is that consumer needs, wants, usage rates and brand preferences are often associated with demographic variables.
Airlines like Kingfisher targets the affluent class and the executives from multi national companies, business community etc. However in the case of Air Deccan and other low cost airlines, their segment is the population from the lower middle class and the middle class. Thus it can be said that Kingfisher targets the classes whereas the no frill airlines target the masses.
Psychographic segmentation
Psychographics is the science of using psychology and demographics to better understand consumers. In this segmentation customers are divided into different groups on the basis of psychological, personality, lifestyles or values. People within the same demographic groups can exhibit very different psychographic profiles.
The airline tries to work on the psychology of the people. Kingfisher concentrates on the segment of people who do not mind paying a higher price, but would like to have the best of comforts. Whereas the low cost airlines targets those customers, who believe in value for money services and account for every rupee that they spend.
Behavioral segmentation
In behavioral segmentation the customers are divided into groups on the basis of their knowledge of, attitude towards, use of or response to a product or a service. It refers to grouping consumers in terms of their relationship with the product, for instance their usage rate, the purpose of use, their willingness and readiness to buy, etc.
Segmentation of customers on the basis of airlines
Business Class
They are crucial for airlines' profitability. With less spare time and more cash in their pockets, they agree to pay a premium price for a premium service. The premium prices they pay provide wider and more comfortable seats, better choice of meals and seats, luxurious lounges.
If the airline is also providing the first class including the business class and the economy class then it will provide additional services to the first class travelers in addition to the other services. These services may include fully reclining seats, workstation and TV surrounded by private dividers
Economy Class
They represent a totally different market. The most important consideration for most of them is the price. The lower the airfare, the more people will fly the respective airline. By and large, with the exception of wealthy travelers, this segment will not pay extra for premium services and will agree to change several planes during their trip if this option costs less than a direct flight.
PROCESS/SERVICE MAPPING
A process map is a tool to visually illustrate how the work flows. It is also a communication tool, a business planning tool and a tool to help manage the organization.
Key elements include:
Inputs
Outputs
Activity steps
Decision points
Functions
The lines and symbols on a process map help us to record concise sentences for every step in the process that tells the reader:
What is happening?
Where it is happening?
When it is happening?
Who is doing it?
How inputs and outputs are handled and distributed?
They can be defined at many different levels and with various boundaries. Furthermore:
Processes must have a beginning and an end.
Processes are co-ordinated activities that involve people, procedures, technology and infrastructure.
Processes constitute a significant portion of organizational costs.
An organization is only as effective as its processes.
The purpose of process mapping is for better understanding. It involves the gathering and organizing of facts about the work and displaying them so that they can be questioned and improved by knowledgeable people.
Process maps help one to understand the important characteristics of a process, allowing them to generate useful analytical data in order to derive findings, draw conclusions and formulate recommendations. Furthermore, process maps allow one to systematically ask many important probing questions that lead to developing a view on business process improvement.
The basic process followed is given below. This process can be termed as process mapping in an Airline Industry.
Customers Point of View
Check which gate to enter from
Getting the ticket checked at the door
Screening of the Baggage.
Getting the boarding pass as well as boarding the luggage.
Security check and finally boarding the plane.
Employees Point of View
The initial process of checking the ticket, baggage screening, providing the boarding pass and the security check imply for the employees also but the 2 most important process that the employees have to conduct is:
Proper numbering on the baggage of the customers so that the luggage does not get interchanged and boarded into the right aircraft.
Proper allotment of the seats.
1. Check which gate to enter from. 2. Getting the ticket checked at the door
3. Screening of the Baggage 4. Getting the boarding pass as well as
boarding the luggage.
5. Security checks 6. Waiting to board the air craft.
Another important aspect that the employees have to look for is Security Process. Security relates to the security of the aircraft as well as the passengers. Security check is of utmost importance.
The Central Industrial Security Force, a paramilitary organization is in charge of airport security under the regulatory frame work and instructions of the Bureau of Civil Aviation Security (Ministry of Civil Aviation Security). CISF formed an Airport Security Group this security force is dedicated to protect Indian airports. Each and every airport has now been given an APSU (Airport Security Unit), a highly trained unit to counter unlawful interference with civil aviation; apart from the CISF every airline has a highly trained aviation security force which is a separate department.
Some of the security procedures are listed below
At major airports, the checked baggage is passed through X-ray machines and a 'security checked' sticker affixed before entering the check-in area.
Passengers are checked through personal frisking, and/or door frame metal detectors and hand held metal detectors.
The cabin baggage is either checked through X-ray machines or physically examined.
Security personnel put a security stamp on boarding passes and cabin baggage labels.
Immigration is done at this point that is just after the boarding pass is received.
In case of a 'Red-Alert', a secondary security check is also carried out near the stepladder before embarkation.
Checked baggage has to be personally identified by the passengers before it is loaded on the aircraft. Wherever the boarding is through aerobridges, passenger and baggage reconciliation is done through an internal matching system instead of physical baggage identification.
Ten percent of the checked baggage/cabin baggage is usually physically checked at random.
Passengers in transit have to remain on board during the ground halt of the aircraft.
Once the passenger reaches his destination from the airport that is when the process gets over.
BLUE PRINTING
Blue printing is a process that deals with the entire working system in an Airline Industry. It is a complete process.
Blueprinting involves identifying all the key activities, procedures and specifies the linkages between them. The working of the airport is a complex process and all the process whether visible or invisible have to be carried out effectively as well as efficiently because even if one process goes wrong the entire chain of the working system gets disturbed.
Moreover, current trends in the airport industry impose more and more efficiency and security: Hyper-regulation for safety and security; Market de-regulation in terms of liberalization, strong competitiveness, services customization, etc.; Traffic segmentation and globalization to better answer to airline needs; Reduction of profitability for handlers and airlines; Increase of airline traffic; and so on. In such a scenario, only operators and authorities who will evolve gaining a competitive position can win the market challenges asking for more efficiency, high quality service levels and security. In order to support all actors in the airport industry to reach best efficiency and quality targets, Software Design has spent huge efforts in finding solutions and services capable of bringing them the power of technology innovation in a transparent way and working with a business approach. With this a lot of changes can be made in the existing service process thus developing a blueprint
BENCHMARKING
Benchmarking is the process of comparing the cost, time or quality of what one organization does against what another organization does. The result is often a business case for making changes in order to make improvements.
Benchmarking opens organizations to new methods, ideas and tools to improve their effectiveness. It helps crack through resistance to change by demonstrating other methods of solving problems than the one currently employed, and demonstrating that they work, because they are being used by others.
Airline Association for Benchmarking & Measurement is a focused group of airline professionals that looks to identify the best practices surrounding airline industry issues for the improvement of overall operations of the members.
Mission
To identify "Best in Class" business processes, which, when implemented, will lead member companies to exceptional performance.
Objectives
To conduct benchmarking studies of important business processes.
To create a cooperative environment where full understanding of the performance and enablers of "best in class" business processes can be obtained and shared at reasonable cost.
To use the efficiency of the association to obtain process performance data and related best practices from group of companies.
To support the use of benchmarking to facilitate process improvement and the achievement of total quality.
Membership
The scope of Airline Association for Benchmarking & Measurement™ membership includes airline professionals interested in benchmarking as part of or in support of their core business.
Company membership will be considered with respect to compliance with Airline Association for Benchmarking & Measurement™ mission, goals and operating guidelines, as well as, qualification of the organization within the scope of membership.
Participation in specific efforts will be optional and open only to members with costs shared by the participants
Benefits of Membership Studies
Airline Association for Benchmarking & Measurement will identify and present to members opportunities to participate in Benchmarking studies on various topics of importance to "security" issues.
There are two types of Benchmarking studies provided
Consortium studies are offered to the membership as a whole with costs divided.
Single company sponsored studies addressing the interest of one member company can be offered to other selected members for no fee.
The association will also support process improvement benchmarking efforts
Research - Access public and private databases.
Identify study participants - Top airline companies interested in benchmarking current issues.
Collect data - Manage response collection with the participants as a third party.
Lead site visits - Structure with best participants.
PHYSICAL EVIDENCE
Physical Evidence refers to the environment in which the service is delivered and where the service industry and customer interact. It is the ability and environment in which the service is delivered. Both tangible goods that help to communicate and perform the service, and the intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers.
The aircraft by itself, the seating configuration meant to be comfortable and spacious, the in-flight food, the staff dressing, baggage handling facility, colour of the aircraft, in-flight entertainment, and ambience in the aircraft provide physical evidence to the airline service.
Nowadays, websites are another major part of the physical evidence of airlines. A recently completed survey indicates that passengers rely on major airline websites, but would like the airlines to improve those sites to better meet their specific needs and expectations.83 percent of the passengers indicated they use airline websites to book flights. The survey also identified that nearly half (48 percent) of respondents indicated they also book flights by calling the airline directly, which may be a further indication that airline websites are not sufficiently meeting the needs of small business travelers. Results show that 56 percent of respondents use travel websites to make flight arrangements, while 47 percent use a travel agent, compared to 83 percent using airlines' websites.
Hence, the websites should be updated regularly, should be less time consuming, fast processing and easily operative.
COLOUR AND STAFF DRESSING
Increasing importance is given to the cabin crew and the ground staff uniform. Designers are given contracts to design the uniform and the colors are such which symbolizes the airlines motto. Colour is a visual identifier and thus attractive color scheme catches the eye of the passenger. The staff dressing also helps to differentiate one airline from other. Just by looking at the staff, the passenger assumes the standard of the airlines. And these two are the first thing that a passenger visualizes in an airline. However, another important reason for the use of color is the expansion of a corporate culture. For example, Paramount Airways does this very well. Their use of blue color emphasizes confidence, a character trait that is important to the airline industry, especially in these times. Blue also demonstrates vastness, opportunity, a sense of modernism and openness and honesty.
KINGFISHER AIRLINES
The first thing that strikes about fly Kingfisher is the bold use of the color Red. From the tail of the aircraft with the logo of the kingfisher bird and the word Kingfisher painted boldly across the body of the aircraft in Red to the interior decor and even the Crew uniform –it‘s Red, Red, Red all the way.
The in-flight crew called 'Flying Models' are clad in short Red skirts and a trendy rolled up sleeve jacket in Red with a white shirt unlike the traditional blazers and waist coats of other airlines. There are no male pursers on board either because KF in-flight is all women.
AIR INDIA
Eminent Indian fashion designer Ritu Beri was roped in by national carrier Air India to design the new uniform for its cabin crew and ground staff. Air India went for a complete makeover to reflect its aspiration to be a “powerful” global entity.
The design of the new uniforms draw inspiration from the Sun Temple of Konark in Orissa, yet maintains a modern outlook. The colour palette of the uniform is red, orange, black and white, with red standing for strength and orange for cultural roots.
The uniform for the female employees, both ground staff and cabin crew, included sarees, tunics, scarves, jackets, coats, aprons and shoes, while there would be specially designed ties for the male staff.
JET AIRWAYS
To position itself as a global airline, Jet Airways introduced fresh airline uniform for the cabin crew designed by Italian designer Roberto Capucci. Their uniform reflects distinctive international look capturing spirit of new India and a meeting point between East and West
IN FLIGHT MEALS
Airline passengers always have a certain standard of living and are very hygienic about the food. However, in-flight meals have often been the butt of many jokes over the years for their perceived lack of nutritional value. In airlines, the passenger prefers variety in the meal offered, noticing the nutritional value. They also see as to which caterers is serving the food; the way the food is served and handled. This is one critical aspect where even the service recovery can’t help to retain the passenger because even the slightest of the mistake by the chef or by the cabin crew, or compromising on the quality of food might prove very dangerous for the passenger’s health. This, in turn, will spread a bad reputation of the company.
Hence, more and more airlines are in fact striving to make their meals more attractive by packing as much goodness as possible into them.
KINGFISHER AIRLINES
In-flight Meals or Snacks are served as part of the fare on every flight and small amenity kits distributed as well. Depending on the flight time, Kingfisher serves Breakfast, Lunch, High Tea or Dinner on all flights. An individual menu card is there on all Kingfisher flights. Kingfisher has a wide variety of multi-cuisine menu to suit the varying tastes of the local sectors. Indian, Chinese, Continental and World Cuisine is available on various sectors. Vegetarian or non-vegetarian food can be chosen on the flight. Kingfisher First Class passengers can choose from a special menu and depending on their choice, a three course gourmet meal is served on the flight.
It also provides an exclusive three course menu complete with a Kingfisher sparkling welcome drink, signature dessert and freshly brewed coffee on board.
JET AIRWAYS
Jet airways have different menu options onboard for Premiere and Economy class passengers.
The following specialty meal options are available on Jet Airways:
Strict Vegetarian (STVG)
Jain Meal (JNML)
Diabetic Meal (DBML)
Low Cholestrol (LFML)
Low Sodium (LSML)
Low Calorie (LCML)
Low Protein (LPML)
Non Lactose Meal (NLML)
No Salt (NSML)
This shows the passenger that Jet Airways do care about their health , thus creating a goodwill among the passengers.
Kosher meals
Jet Airways also offers kosher meals (KSML) on the Mumbai-London-Mumbai and Mumbai-Singapore-Mumbai sectors. Kosher Meal preference has to be notified 48 hours in advance. The Kosher Meal on Jet Airways flights consists of Western Non-Vegetarian Meal of Fish, Potatoes and Vegetables. Kosher meals are served onboard in a sealed pack. The cabin crew opens the pack in front of the passenger and shows the Kosher certificate inside the box.
This assures the passenger that there is no malfunctioning or adulteration in the meal provided , thus creating an impression in the mind that meals offered in Jet Airways are of the best quality.
AIR INDIA
Air India offers a wide variety in its in-flight meal menus, with a multi-cuisine approach to cater to the predilections of the range of passengers. The variety of food ranges from vegetarian meal, Moslem meal, Kosher meal, Low Sodium meals to something simple as a fruit platter. The meals are hygienically packed from reputed hotel chains like the Taj Group and Ambassador. Besides the regular normal vegetarian and non-vegetarian meal, Indian Airlines also provides special meals such as Jain meal, Diet meal, child meal etc.
IN FLIGHT ENTERTAINMENT
To make long flights more enjoyable, several major commercial airlines offer in-flight entertainment and information systems to their passengers. This is increasingly gaining popularity in the airlines sector because the passengers here, unlike other modes of travel do not have any other source of entertainment. In airlines, the interaction among passengers is also minimum. So, this is one of the tangible tools of attracting or pulling the passengers towards an airline. Nowadays, there are lots of innovations done in the in flight entertainment system and each airlines is daily coming up with some or the other new technology or up gradation for the passengers to have entertainment in the flight.
KINGFISHER AIRLINES
Kingfisher Airlines flights have individual LCD TV screens for each passenger. They have a choice of 5 video channels of the trendy FUN TV, or listen to Kingfisher Radio which offers a choice of 10 international radio channels. There is a separate video channel for kids too to keep them busy on the flight. All passengers are given complimentary headphones to enjoy the in-flight entertainment. For Kingfisher First Class passengers there is an extra wide 8.4 inch LCD swivel screen fitted on every seat. Kingfisher First Class passengers can also enjoy noise canceling headphones for a quiet and relaxed flight experience. Kingfisher First Class passengers can also play video games on the LCD screen and even play multiplayer games with their co-passengers.
Kingfisher Airlines has tied up with Dish TV to provide live in flight entertainment to its passengers. This shows the weightage given in flight entertainment in the airlines sector.
JET AIRWAYS
Jet Screen, Jet Airways' In-flight entertainment system is available on both business and economy class on several Jet Airways flights. Jet Airways has also installed state-of-the-art Panasonic 3000i Audio Video on Demand (AVOD) on every seat in some of its flights. In addition to video channels, up to 8 audio entertainment channels playing latest Bollywood songs, International Pop songs, Ghazals, Indian and Western Classical, etc. are also available on Jet Screen.
SEATING
In airlines, passengers mostly stay glued to their seats. So, it’s very important to have a comfortable seating in the flight. Specially , in long distance journey the passenger has to spend a lot of time on the seats, thus the passenger should have full satisfaction with the seats provided, as in, there should be enough leg space, there shouldn’t be any back problem, comfortable head space and more importantly , the seats should be clean. The seating arrangement has to be spacious as different individuals have different physique. Thus, the seats should be such wherein every passenger irrespective of his/ her size or shape should feel relaxed and comfortable on the seats and should feel refreshed after reaching the destination.
Seating is not much of a problem in airlines like Kingfisher or Jet however low cost airlines needs a lot of improvement because they usually have this problem of not having enough leg space.
KINGFISHER AIRLINES
The seats are the plush Sleeperette seats with a 48 inch pitch, 125 degree recline, adjustable headrests and fully extendable footrests. The expansive legroom, the fully lie flat bed in Kingfisher First and the widest seat pitch in the skies, allows the passenger to stretch those tired muscles to the fullest. There are also laptop chargers and mobile phone chargers in each seat.
JET AIRWAYS
Jet Airways is the first airline in the world to install new ergonomically designed seats that offer more space, reduce pressure on the passenger’s body and has adjustable "Hammock" head rest and a unique foot net which gives added support, especially on long journeys.
NEWSPAPERS AND MAGAZINES
Newspapers and in flight magazines are provided to the passengers so that even in the skies they can get information and update their knowledge.
KINGFISHER AIRLINES PARAMOUNT AIRWAYS
INDIAN AIRLINES
GENERAL RATINGS TO THE AIRLINES SECTOR
Web Site : Ease of Use
Age of Aircraft in Fleet
Web Site : Product information
Cabin Safety Standards
Web Site : Online Check-In
Cockpit Communications
Handling Delays/Cancellations
Airline Onboard Magazine
Staff Grooming & Presentation
Assisting Families & Children
PRODUCTIVITY AND QUALITY
QUALITY DIMENSIONS
RELIABILITY
It is the ability of the service provider to meet the promises made by them accurately. The customer must develop a feeling that they can depend on that particular service provider for their problem.
It is most important for an airline to depart and arrive on time since passengers want to depart and arrive on time. ‘On time’ is defined, in accordance with normal industry standards, as departure within 15 minutes of scheduled departure time. If the flight is on time, it colours everything else. Today, top airlines hold their positions because passengers recognize their consistent reliability. Reliability is not just nice to have. They impact the passenger and his satisfaction, and that impacts the bottom line of the airline.
Passengers place great importance on reliability and that's why leading airlines fly Boeing jets because they are the most reliable in the skies.
Information needs to be recorded about the scheduled and actual departure time, and, if there was a problem that caused a delayed departure, whether the problem resulted in a delay or a cancellation, whether there were passengers on board and a detailed description of problem should be given. This leads to the payoff i.e. the ability to track, analyze and improve the reliability of the aircraft.
Airlines should also be reliable in case of baggage handling. The passenger should get his luggage on time without being damaged. In case, the luggage is mishandled then the airlines should have such a system in place wherein the passenger can rely on the airlines for the safe arrival of his / her luggage. The reliability issues that this interface creates have prompted airlines, over the years, to look for ways to introduce more automation into this environment.
ASSURANCE
Assurance refers to freedom from danger, risk or doubt. It includes credibility, competence, security and courtesy. The service provider and the employees must be capable of winning the trust and confidence of the customers.
The ground staff and the cabin crew play a major role here. They are the one who can assure the passengers about any doubts they have regarding the flight and the services provided. In airlines, passengers are mostly brand loyal. Hence, once the passenger is assured and trusts a particular airline then he always prefers that airline. Thus, assurance plays a very important role in customer retention.
In high cost airlines , the passenger always thinks that whether he will get a good value for his money whereas in low cost airlines he / she always think whether the quality of the service will be good or not. Hence, the passenger is always at a risk. Here, the airlines have to put in extra efforts to remove the doubts from the mind of the passengers about their airlines. And in this competitive world, where new airlines are coming up so rapidly, the efforts made by the airlines could be seen to assure the passengers that their service is the best. Airlines go out of the way to win the trust of their customers.
E.g. The Kingfisher First experience takes off even before the passenger do at the Airport where he / she is greeted by a Personal Valet to assist at every step of the way, from baggage handling to boarding. This is done to assure the customer at the very first step that he hasn’t put his money at the wrong place; giving a VIP treatment, thus clearing any kind of doubt or the risk factor from his mind.
TANGIBLES
Tangibles are those physical features which can be seen by the customer. These are the physical proofs which help the customer to judge the quality of service. The customers evaluate the quality of these services on the basis of the tangibles provided by the service providers.
In case of airlines tangibles include:
Flight
In – flight meals
In – flight entertainment
Seats
Staff uniform and skills
Baggage handling technology
Website
In airlines, tangibles help to differentiate an airline with its competitors. This is the most important criteria in customer evaluation. The customers perceive what they see. Thus tangibles help create an impression in the customers mind the way an airline wants.
EMPATHY
Empathy basically is when the employees of the organization make the customer feel at home, at ease, making him feel wanted.
In airlines, a personal touch should be given to the services because that delights the customers the most. They should be made felt as if they are very important to them. However, for an airline to succeed it must have genuine empathy with both its employees and its customers.
The cabin crew has to be very polite, understanding and courteous. They should take genuine delight in attending the customers, in helping them and establishing warm friendly relationships. The crew should know the importance of doing things for customers from the bottom of their heart. They should believe in going beyond the routine to add emotional value to their work. As a result they would be able to delight customers. But for all this, the crew and the ground staff should be motivated; a culture should be created where the crew also supports the company’s mission and values.
The senior executives, middle managers and supervisors should demonstrate a similar 'genuine heart-felt' empathy for their various teams of employees , thus helping the organization develop a warm culture based on empathy which leads to showering of that empathy on the customers.
For e.g. if any small child is flying in the flight for the first time without any elder person along with him, the crew should see to it that the child doesn’t get scared so they should visit him regularly, give him chocolates, chat with him, thus taking his proper care and not letting him feel that he is alone.
RESPONSIVENESS
Responsiveness is willingness to help the customers and provide prompt service. The degree of responsiveness shows the level of commitment that the people of the company have towards their work. It is very necessary for the company to concentrate on prompt and the right kind of responsiveness to the needs of the customer.
In airlines, the customers are very impatient. They expect their needs to be catered promptly. Hence, any delay in responding to their needs or problems might create a very bad impression in the customers mind. The staff should see to it that each and every complaint of every individual is handled effectively and quickly.
This aspect comes into picture when there is a flight cancellation due to bad weather and the passengers can board the next flight only the next day. At this moment of crisis, a quick response by the airlines regarding their luggage, their accommodation and all the other needs can create a very good reputation.
Also, sometimes there is a case wherein the crew is helpless and it cannot fulfill the customer’s requirement, even that time the crew has to respond to the customer either by explaining him their helplessness or by providing him/her with some alternative.
Thus, nowadays where the zone of tolerance among the customers in airlines is minimum, responsiveness is one dimension which has to be really taken care of.
FISH BONE ANALYSIS
Procedures
During acquiring the boarding passes there may be delay in getting the passes which may dissatisfy the customer.
Baggage handling is not done accurately i.e. the bags are misplaced or not loaded on the flight, which may cause delay in flights.
Due to tightened security at airport the security person may take longer time to check the person.
Information
Radar at the airport is not working properly thus the correct information is not provided to the customer.
Websites – the websites may not be updated regularly which may provide wrong information to the customers.
The customers are guided wrongly by the person at inquiry counter which may add woes to the customers.
Front staff personnel
System crash when customers come to get the information or boarding passes.
Cabin crew taking ample of time for guiding people and providing the necessary requirements to customers.
Not enhancing to customer responsiveness and services.
Not all queries are sorted of the customer at enquiry counter.
Not getting warm welcome or reply from the air hostess.
Back staff personnel
Cleaning staff taking ample of time to clean the plane setting up the things right in the plane.
The materials are not loaded on plane on time.
Material supplies
The supply of food and other essential requirements does not arrive at scheduled time.
Customer
Customers coming late to board the plane may cause delay in flight.
In case, the person on flight gets ill (getting heart attack) in that case the flight. needs to be landed again which may again cause delay.
VIP customer coming late to board the flight.
Facilities / Equipments
The seat may not be proper or the seat belt may not be working properly.
The music system (headphone) not working properly.
The food and drinks are not supplied to customer on time.
Other Causes
Their may be delay in flight if a hoax call is received and intense security check-up is done which may cause some trouble to customers.
If the weather is bad there may be delay in flights.
If there is any technical flaw in the plane it may result in delay of flight.
Due to strikes by workers and organization may cause problems to customers.
SERVICE RECOVERY
While studying the Marketing Mix for the Airline Industry, we have understood the customer’s expectations, the service process, the service quality, the productivity in service delivery and building customer relations. But in all service contexts, service failure is inevitable. Service failure is inevitable for the best of the airline companies, even those with world-class service systems. Thus, in order to retain customers and also understand those, airline companies must understand what a customer expects and what can be offered to the customer when service failure occurs and thus implement strategies for an effective service recovery.
Impact of Service Failure on the Customer
Service failures occur for all kinds of reasons, some of which can be listed as service not available when promised, late delivery, incorrect outcome, poor execution or rude behavior of the workforce etc.
For an airline company, a service failure can be of the following sorts – flight delay; mismanagement of the formalities like checking-in; indifferent behavior of the flight crew; baggage problems and so on. Service failures for airline companies are due to factors which are controllable as well un-controllable by the company.
Service failure for services other than airlines have a paradox kind of an impact on the customer as well as the organization – you dissatisfy a customer once and then delight him in the service recovery process and win his loyalty which is not assured with a failure-less service delivery. But for the Airline Industry, service failure does not create positive opportunities for the organization. Incase of a service delivery in the airlines service providing, the customer is highly dissatisfied and the recovery strategy cannot be as effective to delight him. For instance, if a flight gets delayed, the customer gets late and the time he loses due to the delay cannot be brought back; or if the carrier misplaces luggage of a particular customer then no strategy is enough to delight the customer (no strategy to compensate on the lost belongings). Service failure in the airlines sector creates a negative impact for the airline company. Thus, a perfect service delivery is aimed at by a carrier.
Following a service failure, a number of negative emotions may occur in the customer’s mind such as anger, discontent, disappointment, self-pity, and anxiety. These emotions are the factors to be kept in mind while implementing specific service recovery strategy to win back the customer. Different customers respond differently to service failures. Incase of the airline industry, the customers are rather considerate by not displaying anger and discontent but by just mere complaining and seeking reprisal. Basically, the response is very passive. Such a kind of response depicts that the customer expects least consequences that will benefit the customers. Such a response is not beneficial to the airline company because the organization does get an effective feedback and cannot improve on the basis of the customer’s expectations and thus cannot retain customers effectively.
COMPLAINT HANDLING
In case the passenger has a problem with the in flight crew, they can give a written application to the In-flight Supervisor who later hands over the complaint to the COMPLAINT HANDLING CELL. The complaint handling cell is under the control of the Deputy Director In charge of supervision. Also the complaints regarding the ground staff, security and other such departments can also be given in writing to the Deputy Director In charge directly. Once the complaint is received it is forwarded to the higher authorities who decide what action needs to be taken. Usually a warning goes to the personnel who have defaulted. In rare and extreme cases the personnel may be suspended from flying for a period of 2 – 3 weeks. Once an action is taken, the company sends an apology letter to the customer along with the response to the complaint.
In case the complaint is regarding mishandling or damage to the baggage, there is compensation provided to the customers. The amount of compensation depends on the policy of the company and the degree of damage.
There are nine steps involved in handling complaints effectively. They are mentioned below:
1. The frontline employee handling complaints should stay calm under any circumstances.
2. Let the customer get the story off their chest- do not interrupt, this will only cause irritation. In this case listening skills comes into picture.
3. Avoid admitting any liability at this stage. The officer just need to show concern like, “I’m sorry for the inconvenience, let me see what I can do”. Give attention to the customer, make him feel important.
4. Get facts by using question and try to find out the real and whole story behind it.
5. After listening and collecting data, just identify appropriate action considering company’s policy and customer’s expectation.
6. Take action if you have authority or involve manager or concerned person.
7. If corrective action cannot be taken immediately, tell the customer. It’s better to give bad news rather giving false news.
8. Record the action to be taken and inform anyone else in the organization involved.
9. Look into the matter, provide a proper follow-up.
These nine approaches if followed effectively, complaints can be handled properly and possibly a customer can be retained.
SERVICE RECOVERY STRATEGIES
“Companies have made Service Delivery Idiot-proof. But Idiots cannot solve problems.”
We just realized that service recovery in the airline industry loses a little scope because of the passive nature of the customers and because of the negative impact of service failures. But, in the competitive market, Airline companies are trying their best to delight their even though service has failed in the first encounter. Some of the strategies which airline providers are implementing for service recovery are as followed
Total Quality management or “Zero Defects”
Airline companies are trying their best to make it right for the customer in the first encounter itself, give the customers what they expect and avoid the errors as much you can. For instance, avoid flight delays which occur due factors which are under the control of the management such as speedy check-in process, discipline staff to be punctual and soon. Doing it right at the first encounter saves the company the costs of redoing the service and compensating for the errors.
Effective Complaint Handling
Complaints need to be encouraged so that the Airline Company is aware of the loopholes and what the customer is expecting from the service. Complaints should be taken seriously and should be acted upon immediately. Since, the customer is of the passive nature with respect o complaints, one must ensure that it is easy for a customer to put forth his complaint and he should be assured of a treatment. Technology and its innovation should be put to use to form an effective system for complaint handling and their reprisal.
Fair Treatment to the Customers
On failure, a customer expects to be treated fairly in term of the outcome they receive after the failure. The customer should receive something more than what he has actually expected and which was met in the first encounter. Fair treatment will help in customer retention. For instance, incase of loss of baggage, a service provider might provide the traveler vouchers for shopping at international locales for free of charge.
Market Research
Not all dissatisfied customers will come up to the reception desk and post a complaint. The airline company has to make efforts in finding on itself the failures in service. Market research forms a very important tool in knowing this. For example, one can ask for feedback from a customer who is just going to board a flight. He can be asked about his experience with the ground staff, the ambience of the lounge, and other facilities.
PROFITABLE ART OF SERVICE RECOVERY
Service failures are inevitable but they don’t hit a service provider as much as the costs of service recovery and the costs of redoing the service with intent of delighting him are very relatively high. Basically, the service provider has to bear of the cost of repeating the service process that too with an added value.
With respect to the airline industry, service recovery can be made productive and profitable by the following methods.
Resolving the problem at the source itself
Suppose a failure of service takes place at the ticketing counter, the finance department head does not needs to be involved but in fact, the ticketing executive himself should address to the problem. The staff which is in direct contact with the customer and is forming a part of the critical encounter should be trained and empowered to tackle failures at the source itself.
Do not dismiss the occasional problem
It is tempting to dismiss an occasional problem but companies should avoid doing the same. Customer retention is an important task for an airline company in this period of intense competition. Occasional problems cannot just be dismissed because; it is these occasional problems which dissatisfy the customer every now and then.
Flexible Management
The management needs to be flexible and dynamic enough to take decisions with regards to service recovery. The customer’s perception and expectations should be kept in mind whilst taking a strategic decision. Treatment should be fair enough to delight the customer. Basically, the company has to give in to the expectations of the customer but at the other end also negotiate to get a fair and a profitable deal.
Measure the Costs
At every step of the service recovery process, the costs involved need to be monitored closely so that no wastage or blockage of funds happens in the process.
Train employees
Employees need to be trained perfectly in order to give the best service delivery at the first encounter itself. Also the staff needs to be trained with respect to decision making, crises management and so on.
Empower the Front Line Workforce
The front line work force is the workforce that is in direct contact with the customer and form as an important critical service encounter. The front line can be empowered with authority to take a decision incase of service failures. Companies can train their front line staff for such situations.
Service Recovery is a different management philosophy a company embraces customer delight as a primary goal of business. It is a fundamental to quality service providing and therefore it should be considered as one of the important part of a airline company’s strategy.
“To Err is to Human, to Recover, Divine”
LOW COST AIRLINE / LOW COST CARRIER
A low-cost carrier or low-cost airline (also known as a no-frills or discount carrier or airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors.
India's first low-cost airline, Air Deccan started service on August 25, 2003. The success of Air Deccan has spurred the entry of more than a dozen low-cost airlines in India. Air Deccan now faces stiff competition from other low-cost Indian carriers such as Jetlite, SpiceJet, GoAir and Paramount Airways.
Few of the features of the low cost airlines:-
A single passenger class
A single type of aero plane (commonly the Airbus A320 or Boeing 737), reducing training and servicing costs
A minimum set of optional equipment on the aero plane, often excluding conveniences such as ACARS, further reducing costs of acquisition and maintenance
A simple fare scheme, such as charging one-way tickets half that of round-trips (typically fares increase as the plane fills up, which rewards early reservations)
Unreserved seating (encouraging passengers to board early and quickly)
Flying to cheaper, less congested secondary airports and flying early in the morning or late in the evening to avoid air traffic delays and take advantage of lower landing fees.
Aggressive fuel hedging programs.
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets in promotion. Even if the advertised price may be very low, sometimes it does not include charges & taxes.
But in the past one year major changes have taken place because of the hike in the fuel prices. Like everyone is aware that the fuel prices have risen way too much. So due to this all these low cost airlines are facing a major setback.
These increases in fuel prices has caused trouble for each and every airline and they are trying to recover the losses in various forms and also trying to come up with promotional schemes and various other incentives in order to retain their customers.
They losses occurred by these airlines in the fiscal year 2006-2007 and 2007- 2008 have been tremendous. Now their ultimate aim is to recover these losses.
Earlier due to the introduction of the low cost airlines and their cheap rates which were almost similar to those of the train fares the customers blindly traveled by air as their travel time could be less but after the rise in prices the customers think twice before buying the air tickets.
Hit by galloping fuel prices, airlines the world over have started resorting to various cost cutting measures including flying aircraft at a given height on a low speed to reduce fuel burn.
India's crowded airline sector is flying into huge losses on the back of a surge in global fuel prices that have forced it to hike fares, slowing explosive passenger growth.
National carrier Air India and other carriers have started following these measures and other fuel conservation initiatives which are a standard practice undertaken by all global airlines, especially those flying on long-haul international routes.
Reduction in aircraft speed at an optimal height, called a reduced Cruise Mach policy, has been adopted by Air India for its Boeing 747-400 and Boeing 777 aircraft fleet used in long-haul operations.
The national carrier is also planning similar measures for its Airbus A-310 and Boeing 737 planes, which are meant for medium and short-haul flights and are the merged carrier's backbone for domestic operations.
Besides, undertaking the Cruise Mach policy, Air India has also started cutting on the aircraft's weight by removing certain non-essential items on board.
AIRLINES VALUE ADDED CHAIN
CONCLUSION
“I was engaged in what I believe to be the most thrilling industry in the world—aviation. My heart still leaps when I see a tiny two-seater plane soaring gracefully through the sky. Our great airlines awe me. Yet I know they were not produced in a day or a decade.”
— William A. "Pat" Patterson, CEO United Airlines.
Studying the Airline Industry gives us the same feeling as the CEO of United Airlines does. The project report talks about the Airline Industry and its most important function – MARKETING.
The project report has covered every other aspect of the Airline Service Marketing which on paper seems to be simple to implement but in practice is as tough a job as the invention of the airplane itself.
The project study has given us a great depth of intellectual learning about the sector. We hope, the project report has the same enduring for its readers as it did to us.
HISTORY OF AIRLINE INDUSTRY
Aviation refers to activities involving man-made flying devices (aircraft), including the people, organizations, and regulatory bodies involved with them.
Civil aviation includes all non-military flying, both general aviation and scheduled air transport.
General aviation includes all non-scheduled civil flying, both private and commercial. General aviation may include business flights, air charter, private aviation, flight training, ballooning, parachuting, gliding, hang gliding, aerial photography, foot-launched powered hang gliders, air ambulance, crop dusting, charter flights, traffic reporting, police air patrols and forest fire fighting.
There are five major manufacturers of civil transport aircraft:-
Airbus, based in France
Boeing, based in the United States
Bombardier, based in Canada
Embraer, based in Brazil
Tupolev, based in Russia
Scheduled Air Transport
Like it is known that the Airline Industry is one the vastest industry with its presence all around the world. Though it started with its presence only in large countries then slowly expanding to other states and currently its presence can be felt in the smallest of cities also.
This industry came into existence with the development of the world’s first airline on 16 November 1909 by DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft with its headquarters situated at Frankfurt. It was developed with the assistance of the government and operated ships manufactured by Zeppelin Corporation.
Later as time passed by and people started becoming aware of the existing technology and the potential of the market they moved their attention to this sector. It was the then that Tony Jannus conducted the United States' first scheduled commercial airline flight on 1 January 1914 for the Saint Petersburg-routes, Braniff Airways, American Airlines, Delta Air Lines, United Airlines (originally a division of Boeing), Trans World Airlines, Northwest Airlines, and Eastern Air Lines
This was just the start of the airline industry. Slowly and steadily it caught the pace of development and advancement. By the 1920’s this industry mainly focused on only carrying of mails. It was in the year 1925 that the Ford Motor Company bought out the Stout Aircraft Company and began construction of the all-metal Ford Trimotor, which became the first successful American airliner. With a 12-passenger capacity, the Trimotor made passenger service potentially profitable.
Till then Air service was seen as a supplement to rail service in the American transportation network. It was by this time that a few major countries understood the concept and believed in it. it was the same time when Juan Trippe began a crusade to create an air network that would link America to the world, and he achieved this goal through his airline, Pan American World Airways, with a fleet of flying boats that linked Los Angeles to Shanghai and Boston to London.
In fact even during the great depression due to the introduction of the Boeing 247 and Douglas DC-3 in the 1930s, they were able to generate profits. This clearly stated the importance of the airline sector.
After this the expansion of this industry was always on a high. In the 1950s, the De Havilland Comet, Boeing 707, Douglas DC-8, and Sud Aviation Caravelle became the first flagships of the Jet Age in the West, while the Soviet Union bloc countered with the Tupolev Tu-104 and Tupolev Tu-124 in the fleets of state-owned carriers such as Aeroflot and Interflug.
The next big boost for the airlines would come in the 1970s, when the Boeing 747, McDonnell Douglas DC-10, and Lockheed L-1011 inaugurated wide body ("jumbo jet") service, which is still the standard in international travel. By the 1980s, almost half of the total flying in the world took place in the U.S.
The first countries in Europe to embrace air transport were Finland, France, Germany, the Netherlands and the United Kingdom.
KLM, the oldest carrier still operating under its original name, was founded in 1919. The first flight (operated on behalf of KLM by Aircraft Transport and Travel) transported two English passengers to Schiphol, Amsterdam from London in 1920.
France began an air mail service to Morocco in 1919 that was bought out in 1927. Germany's Lufthansa began in 1926. The British company Aircraft Transport and Travel commenced a London to Paris service on 25 August 1919, this was the world's first regular international flight.
India, Hong Kong, Indonesia, Malaysia and the Philippines are one of the first few Asian Countries of enter the airline industry.
Philippine Airlines was founded on February 26, 1941, making it one of the first countries in Asia to embrace air transport. The airline’s first flight was made on March 15, 1941 with a single Beech Model 18 NPC-54 aircraft, which started its daily services between Manila (from Nielson Field) and Baguio, later to expand with larger aircraft such as the DC-3 and Vickers Viscount. It was started by a group of businessmen led by Andres Soriano.
In the year 1932 a new airline came into existence knows as the Tata Airline, lead by JRD Tata. Now it is known as Air India.
Later in the years Pakistan began Orient Airways Ltd (Pakistan International Airlines), Cathay Pacific founded in 1946, Singapore Airlines and Malaysian Airlines in 1947 (as Malayan Airways), Garuda Indonesia in 1949, Japan Airlines in 1951, and Korean Air in 1962.
INTRODUCTION
The basic function of an airline is to accommodate for passengers and cargo while taking them to far-off places between two major cities or towns within a country or beyond geographical borders.
The aviation industry in India has grown by leaps and bounds in recent years in terms of kilometers flown as well as customers serviced. The economy of a country is substantially determined by the quality of air transport.
Air transport is also considered to be the swiftest mode of transport. Almost all the states have one or more airports, which are regularly serviced by several airlines. There are a number of international airports, which also serve as domestic airport too. Others are only domestic airports.
The Air Transport Companies are both in the public sector and in the private sector. In the public sector, there are Air India, Indian Airlines, Air India Charters Limited (Air India Express) and Alliance Air. In addition to this there are at present eight private scheduled operators, viz. Jet Airways (India) Ltd., Sahara Airlines Ltd., Deccan Aviation (P) Ltd., Go Airways, Kingfisher Airlines, Paramount Airways Pvt. Ltd., Go Airlines (India) Pvt Ltd., and Inter Globe Aviation Ltd. (Indigo) operating on the domestic sector providing a wide choice of flights and connectivity to various parts of India. One cargo airline viz. Blue Dart Aviation Pvt. Ltd. is also operating scheduled cargo services in the country. At present there are 59 companies holding nonscheduled air transport operators permit.
The airlines are not the owners of the airports. The owner of these airports is the Airports Authority of India. The Airports Authority of India (AAI) was formed on 1st April 1995 by merging the International Airports Authority of India and the National Airports Authority with a view to accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports in the country conforming to international standards.
All major air-routes over Indian landmass are Radar covered (24 Radar installations at 11 locations) along with VOR/DVOR coverage (72 installations) co-located with Distance Measuring Equipment (71 installations), 39 runways provided with ILS installations with Night Landing Facilities at 36 airports and Automatic Message Switching System at 15 airports.
Few functions of the AAI are as follows:-
ƒ Control and management of the Indian airspace extending beyond the territorial limits of the country, as accepted by ICAO
ƒ Design, Development, Operation and Maintenance of International and Domestic Airports and Civil Enclaves
ƒ Construction, Modification and Management of Passenger Terminals
ƒ Development and Management of Cargo Terminals at International and Domestic airports
ƒ Provision of Passenger Facilities and Information System at the Passenger Terminals at airports
ƒ Expansion and strengthening of operation area viz. Runways, Aprons, Taxiway, etc
ƒ Provision of visual aids
ƒ Provision of Communication and Navigational aids viz. ILS, DVOR, DME, Radar, etc.
THE DOMESTIC PLAYERS
Airlines Founded/ Headquarters/ key people The Logo
Air India 1932, Mumbai – India, Raghu Menon, Chairman & Managing Director
Amod Sharma, Director
Alliance Air 1996, New Delhi and Mumbai, Capt. Mehbub Butt.
Indian Airlines 1953, New Delhi, Mr. Raghu Menon.
Jet Airways 1993, Mumbai- India, Naresh Goyal, Founder and Chairman.
Jet Lite (Formerly Air Sahara) 1991, New Delhi, Subrata Roy (founder), Naresh Goyal (Owner, Jet airways & Jet Lite.
Kingfisher Airlines 2004, Bangalore, India, Dr. Vijay Mallya, CMD
Air Deccan August 25, 2003 Bangalore, India. G.R.Gopinath, Vijay Mallaya.
Indigo Airlines 2005, New Delhi, Bruce
Spice Jet May 2005, New Delhi, India, Siddhanta Sharma (Executive Chairman).
Jagson Airlines 1991, Delhi- India
Go Air Airlines June 2004, Mumbai- India, Jehangir (Jeh) Wadia
AIR INDIA
Air India International entered the jet age in 1960 when it’s first Boeing 707, named Nandadevi and registered VT-DJJ, was delivered. Jet services to New York via London were inaugurated that same year in May 1960.
On 8 June 1962, the airline's name was officially truncated to Air India. On 11 June 1962, Air India became the world's first all-jet airline.
Air India Limited is the national airline of India with a worldwide network of passenger and cargo services.
Air India is state-owned, and administered as part of the National Aviation Company of India Limited - which was created in 2007 to facilitate Air India's merger with Indian Airlines.
Air India was founded by J. R. D. Tata in 1932 as Tata Airlines, a division of Tata Sons Ltd. (now Tata Group).
ALLIANCE AIR
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines.
Air India Regional started as Alliance Air (which was the low-cost arm of Indian Airlines. As part of Indian Airlines' merger with Air India, Alliance Air was renamed Air India Regional.
INDIAN AIRLINES
Indian Airlines was an airline based in Delhi, India and focused primarily on domestic routes, along with several international services to neighboring countries in Asia.
Indian Airlines is state-owned, and is administered by the Ministry of Civil Aviation.
The airline operates closely with Air India, India's national carrier. Alliance Air, a fully-owned subsidiary of Indian Airlines, was renamed Air India Regional.
JET AIRWAYS
Jet Airways is an airline based in New Delhi, India and is the country's second-largest international airline after Air India and the largest domestic airline.
Jet Airways was incorporated as an air taxi operator on 1 April 1992. It started commercial airline operations on 5 May 1993 with a fleet of 4 Boeing 737-300 aircraft.
In January 1994, a change in the law enabled Jet Airways to apply for scheduled airline status, which was granted on 4 January 1995.
It began international operations to Sri Lanka in March 2004.
While the company is listed on the Bombay Stock Exchange, 80% of its stock is controlled by Naresh Goyal (through his ownership of Jet’s parent company, Tailwinds).
JET LITE
JetLite, formerly Air Sahara, is an airline based in New Delhi, India. Controlled by Jet Airways, the airline operates scheduled services connecting metropolitan centers in India.
The airline also provides helicopters which are available for charter services and aerial photography.
Jet Airways and Air Sahara were the only private airlines to survive the Indian business downturn of the early 1990s.
In January 2006, Jet Airways announced that it would buy Air Sahara for $500 million in an all-cash deal, making it the biggest takeover in Indian aviation history.
On 12 April 2007, Jet Airways agreed to buy out Air Sahara for 14.5 billion rupees ($340 million). Air Sahara was renamed JetLite, and was marketed between a low-cost carrier and a full service airline.
KINGFISHER AIRLINES
Kingfisher Airlines Limited is an airline based in Bangalore, India.
Kingfisher Airlines, through one of its holding companies United Breweries Group, has acquired 26% stake in the budget airline Air Deccan and has option to buy further of 20% stake from the secondary sector.
AIR DECCAN
Deccan is an airline based in Bangalore, India. It was India's first low-cost carrier. Formerly known as Air Deccan the airline is operated by Deccan Aviation.
On 19 December 2007 Air Deccan and Kingfisher Airlines decided to merge. Kingfisher will effectively merge into Deccan Aviation following which Deccan Aviation will be renamed ‘Kingfisher Red’.
INDIGO AIRLINES
Indigo Airlines is a private domestic low-cost airline based in Gurgaon, India. It operates domestic services linking 14 destinations. The airline is owned by InterGlobe Enterprises.
SPICE JET AIRLINES:
SpiceJet is a low-cost airline based in New Delhi, India. It began service in May 2005. It was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax in 2007. SpiceJet was earlier known as Royal Airways, a reincarnation of ModiLuft.
SpiceJet marked its entry in service with Rs. 99 fares for the first 99 days, with 9000 seats available at this rate.
Their aim is to compete with the Indian Railways passengers travelling in AC coaches.
JAGSON AIRLINES
Jagson Airlines is an airline based in Delhi, India. It operates scheduled and charter services within India and to Bhutan and Nepal. Jagson Airlines operate flights between Delhi and Rajasthan and Madhya Pradesh and Himachal Pradesh. They also operate a helicopter service between Srinagar, Baltal and Amarnath.
GO AIR AIRLINES
Go Air is a low-cost airline based in Mumbai, India and is wholly owned by the Wadia Group.
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines
Air India Regional started as Alliance Air which was the low-cost arm of Indian Airlines. As part of Indian Airlines merger with Air India, Alliance Air was renamed Air India Regional.
THE COMPETITION IN THE AIRLINES SECTOR IN INDIA – THE AERIAL WAR
Around 20 years ago, when the Airline Industry of India was Government Regulated, the airline Industry was considered to be a “natural monopoly” where only one Airline Company would be able to survive in the competitive environment and meet the demands profitably. But since deregulation, the perception is changing and there is no evidence of any sort of monopoly in the Indian Airline Industry. Foreign and private players have entered into the market offering the best at the best prices to the rising demand of the Indian traveler.
With the recent change in the Aviation Policy by the Government, several vistas in business have opened up and new opportunities have emerged. The creation of new and incumbent airlines and private sector participation in the development of Aviation infrastructure is a positive outcome of these new developments. Several global Aviation consultants and private equity players are eyeing this opportunity and are setting up their branches within the country.
Despite its unprecedented growth, the Civil Aviation industry in India is still in a relatively early stage of its development after its liberalization. Experiences from abroad, i.e., the US and Europe, show tremendous structural shifts in terms of route development, pricing, quality and frequency of traffic, as well as spatial concentration at few key airports. It can be said that market liberalization provided not only for greater opportunities in the industry, but also for greater risks. Recent waves of consolidation among airlines are only one example.
Since the deregulation, the Indian Airlines has grown tremendously. Also, average prices have fallen consistently due to the increasing number of players in the market. This fall in prices has benefited the consumers the most. If some fliers would disagree that the decline in prices have not benefited all the travelers then it can be proven that the fliers paying a high price also gets a superior product, in terms of flexibility and service. Moreover, the increasing demand for airline services is also helping airline companies to run a competitive business. People prefer air travel as a feasible option for commuting because it saves time and also because of the value added services provided by different airline companies. The competition in the Indian Airline Industry has succeeded in increasing the volume of travel and lowering average prices which has in the end benefited the final consumer and also to the airline companies.
Alliances and mergers are one of the factors which are giving a solid boost to the Airline Industry in India. Different airline companies, foreign as well as Indian, are tying up or taking over or merging to produce effective collaborations in service delivery with profitable returns. It is not the just the airline companies but also associate industries such as tours and travels agencies, hotels, transport organizations etc. which are also getting targeted by airline companies to deliver quality service to the customers.
At the end, it can be inferred that the Indian Airline Industry is growing at a fast pace and the credit goes to the effective and positive impact of the increasing competition in the industry. Factors indicating to the increasing competition in the airline industry are the pricing and promotion strategies adopted by the airline companies; value added services offered; sales promotion; product/service innovation; cost cutting strategies like downsizing; and so on. Airline companies are concentrating on the customer delight and also the costs to produce profitable returns with effective customer/market retention.
ENVIRONMENTAL SCAN
The following is an Environmental Scan of the Global as well as the Indian Airline Sector/Industry. The scan identifies the trends impacting the demand in the Airline Industry and the capability of the service providers to meet the expected demand. While the current events are important, the focus of the scan is on the trends likely to be important and effective in five to ten years from now. Apart from identifying the demand trends, the scan also identifies the constraints and issues of the airline industry, the key players, resources and the outcomes for the various service providers.
In India, the service airline business is in trouble. Many airlines companies are struggling to establish a business model which is viable to the business and profitable. Most of the companies are running into losses quarter after quarter due to the increasing costs etc. The recent high volume of passenger and freight flow has not been able to return profits. The low-fare airlines business model has been a success but has not been able to recover the increasing costs. The following factors represent the business environments for the airlines companies.
Political Factors
Liberalization of Air Services
Many economies have now adopted a forward looking approach in matters of policies for the liberalization of the civil aviation sector. Many economies are opening up with regards to bilateral agreements and are attracting more foreign passengers. Also, the air traffic between nations such as India-US, China-US, and many more strategic nations is on an increase. These liberalization policies are surely a boost to the airlines sector since the demand goes up and also service providers can take advantage such the fuel cost advantage (fuel prices in foreign nations are lesser), Globalization, Mergers and Acquisition etc.
Modernization of Infrastructure
With the availability of word class, improved technology, the infrastructure has been modernized to the maximum extent possible providing the best possible experience to the travelers. Airports are getting modernized with the entry of foreign investments. The best example is the airports in India, which have undergone modernization and are as beautiful and well-managed as the Heathrow airport. Airports in tourist places such Udaipur have also undergone beautification in order to give the foreign passenger a global experience.
Investments, Resourcing and Outsourcing
The promotion of Foreign Direct Investments by liberalizing the investment policies in the airline sector is relevant from the increasing number of people traveling by air and this has lead to generation of investment opportunities in the aviation sector. Foreign players are now not hesitating from investing in the airline sector of India and other developing nations. Due to Globalization, the demand is present in every part of the world be it in the U.S.A. or South Africa or Indonesia. Also, with the entry of foreign players is leading to tremendous outsourcing which is in a way reducing cost due to effective logistics decisions.
Economical Factors
Transportation Gateways to World trade
The global Airline Industry has developed as such that the infrastructure is facilitating World Trade, the export and import of goods, services and people. The world trade trends and the economic conditions of different nations indeed have an impact on the airline industry, the demand and the outcomes. Amongst the Asian nations, Japan is facing stagnation because of which the foreign investments and the demand for trade in goods and services have fallen. Whereas, in China and South Korea, the import demands from various nations have increased. These economic conditions are affecting the airline industries of these nations.
Price and Availability of Petroleum Products
Rising and the volatile world process of Petroleum Products represent trends that have profound impact on the airline industry and the costs to the service provider. Higher fuel costs affect the demand and the operating costs thus changing the travel pattern. They also affect the infrastructure such as amenities like sky-walks etc. higher petroleum prices stem for a mix of factors which are complex in nature such as supply interruptions, geopolitics, change in usage patterns etc. The effects of high petroleum prices on airlines can be seen clearly in the balance-sheets of airlines such as the Kingfisher which has recorded losses in Quarters I and II along with many other airlines which are unable to recover their rising costs.
Cost and Availability of Skilled Labor
The airline industry demands extreme skilled labor such as the pilots, ground staff and the flight crew. The labor not only has to be skilled and available but has to be efficient because of the heterogeneous nature of the services provided. No airline can recruit a trainee pilot and directly assign him to fly a Boeing-777 or an Airbus-319 airplane carrying around 500 passengers. The labor-force has to be trained and then assigned with tasks to perform after proper evaluation. Airlines have their own subsidiary training centers which concentrate completely on the grooming and training of the labor-force. The selection, recruitment, evaluation and training are costly in nature and thus the company’s costs goes up which get transferred to the customer or the market thus affecting the market and the demand. Also, skilled personnel in aviation occupations (particularly pilots) are being attracted to overseas airlines and airports, creating training demand on top of projected domestic labor requirements.
Also, a matter of concern to the airlines companies is the aging work-force which is low on efficiency and productivity. Accommodating such an aging and un-productive workforce in the organization structure is difficult.
Cost and Availability of Strategic Raw Material
Strategic raw material with respect to the airline industry is steel and cement which are required for the manufacture of airplanes and other infrastructure required. The prices of steel and cement are growing at an alarming rate. Thus, making these materials available is a difficult and an expensive task resulting in the increase in the costs to the service provider.
Mergers and Acquisition
Strategic M & A between airline providers are another boosting factor to the airline industry. The Star Alliance which was founded in 1997 with only 5 Airline Companies now has 21 Airlines Companies. Also, the merger of Air India and Indian Airlines is a good example of a Strategic merger. These mergers make the airline companies stronger and efficient with respect to service providing. A better co-ordination between different airline companies results in a joint effort in tackling supply problems of fuel, aw material, labor etc. The merger of Air India and Indian Airlines was a strategic merger to tackle the competition from the private players in the Indian Aviation sector.
Changing industry structures and market
The global market is highly volatile and undergoes dynamic changes such as in the demand, the supply, investments etc. This dynamic nature of the market affects not one or two service provider but the entire sector. The changing business models effect into a shift of demand which has to be catered to by the entire industry. For example, the low-cost airline business model gave birth to an all-together different class of flier, the best bargain available wherein bookings are made 3 months in advance and that too in auctions etc. This led to a steep increase in demand and the number of travelers almost doubled. The strain was felt by the service provider. The low-cost airline model was not only forcing other airlines to lower their fairs and fight the competition but also cater to the demand. Thus, the volatile nature of the industry does take a toll on the airline service providers.
Competition
Two factors which worry the airline companies are the demand and the competition. With the liberalization of policies, foreign players and private players have entered the market giving a tough time to the Government companies. Also, the foreign and the private players have an edge due to the exposure to a global standard, world class infrastructure and thus provide better services to the passengers in cost-effective manner. Local and Public players have to face the heat and cope up with the competition which result into mergers and acquisition which altogether is a positive for the Airline sector.
Sociological Factors
Population and Urbanization
Demographics are an important factor determining the demand and the key markets for the airline industry. The migration of population from nation to nation either for lifestyle as well as economic reasons has led to the growth of the demand. The population growth leads to increased demand for people movement and for support services such as the hospitality and tourism services. Also, an important feature of the growing population is that the growth is taking place in the urban area and thus further creating demand for movement and air transportation from city to city. For example, the increasing movement of people from major international cities has led to the increase in the number of flights between these key cities, such as Mumbai-London; Mumbai-Paris etc.
Technological Factors
Improving Technology
With Globalization, technology is going through tremendous change with the special emphasis by companies in Research and Development. Every service provider is looking for a cost effective method, world class infrastructure, best of the best service providing to passengers etc. technology is surely another boosting factor the airline industry. Facilities such as E-ticketing, Kiosk Check-in, internet connectivity in-flight etc. are due to the improving the technology. These facilities are resulting into customer-delight.
Other Factors
Apart from the ‘PEST’ Factors affecting the Business Environments of the Airline Industry, there are many more factors which are affecting the demands and determining the market trends for the sector. The following factors are a part of the of the ‘PEST’ factors but they have an all-round impact on the sector thus cannot be allocated under a specific heading.
Following the ‘Other Factors’:
Tourism
Since the last ten years, world tourism has been struggling due to the frequent terrorist attacks and natural calamities happening in key economic destinations. The 9/11 bombing of the twin towers in New York had the most destructive effect to the tourism in the entire of the United States. Tourism in the U.S.A. has not yet recovered. Because of the fall of tourism, the international travelling has reduced thus directly affecting the airline industry. Nations now are concentrating on promoting tourism in order to improve revenues in the related sectors, most important being the airlines sector. ‘Incredible India’ is one such initiative by the Government of India to promote national as well as international tourism.
Safety and Security Concerns
Events such as the 9/11 blasts, blasts at the London Airport, blasts at the Madrid Railway Station and the serial blasts in the Mumbai local trains confirm that transport facilities are being targeted by terrorists. These events have led an increase in the safety and security issues in major cities. These issues are affecting the demand of airlines services for travelling by people.
Environmental Concerns
It is now recognized that the rise in temperature due to climate changes are because of the human activities such as Globalization, agriculture, burning of fossil fuels, deforestation etc. all these activities are to meet the increasing demand of the increasing population. The airline industry needs these activities in order to fulfill the demand of the movement of the population from one place to another. Environmental issues and concerns are obstructing in developing infrastructure such as new airports etc. the airline industry without a proper infrastructure cannot create profits for the players in the market.
Workload
We just mentioned volatile nature of the market and demand and its effect on the industry. This effect is felt in the hanging workload for the employees. In peak season times, the workload is tremendous. Also, the labor-force is not available as required by the industry. Thus, the existing work-force has to bear the brunt of excess workload. Pilots, flight crew getting stressed are a common issue now and the stress is resulting into hazardous effects for the airline companies.
SWOT ANALYSIS
STRENGTHS
Open Economies
The world is getting smaller. Thanks to the opening up of economies like India. The developing nations have a lot of potential with regards to industrial growth. Opening up policies regarding the airline services initiates MNCs to venture into developing markets.
Efficient Marketing
Due to the heavy competition in the sector, airline companies are initiating on dynamic marketing strategies. These strategies are encouraging people to fly who were once scared of flying and also considered it an expensive mode of commuting.
Networking
The Airline Sector on the Global as well as the National level is well-networked and have efficient resources put into the networking infrastructure. Travelling from any destination to another destination is possible with varied options available to the traveler.
WEAKNESSES
Threat of New Entrants
At the first glance, the Airline sector looks very profitable and full of opportunities. No doubt, there are a lot of opportunities but there are many candidates fighting for the opportunities. The competition is so intense that no player can be profitable along with being an effective player in the market. Capital intensive businesses like an Airline Company cannot afford to forego iota’s profits for market share.
Power of Suppliers
The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there is a sort of monopoly of the suppliers which takes a toll on the costs. Also, a stagnant supply poses as a weakness to the increasing demand for airplanes.
Power of Buyers (The service providers)
The bargaining power of buyers in the airline industry is quite low. Obviously, there are high costs involved with switching airplanes, but in order to give the best to the traveler, companies have no option but to buy at a high price.
Availability of Substitutes
Other modes of commuting, may it be people or cargo, are definitely cheaper as compared to air-travel. As a result, the airlines sector often loses market due to these substitute means. Especially, in the freight carriage sector, the business is falling due to increasing prices of airline companies.
Competitive Rivalry
The airline sector is highly competitive. Highly competitive sectors fetch minimum returns. Also, low returns in the airline business in the long run can pose as threat because of the businesses being capital-intensive.
OPPORTUNITIES
Emerging Technologies
The latest technologies and the innovations in the technologies are improving service delivery internal as well as external, minimizing costs, enabling mobile computing for booking, check-ins etc. and enabling businesses for capitalization of economies of scale and scope offered by government wide approaches.
Government Initiatives
Businesses can be able to capitalize on resources constraints and achieve resource cost efficiencies. Improvement of Inter-Government Partnership and Delegating of work-load is possible.
Resourcing and Investments
Outsourcing and investments help the businesses to further support the departmental objectives thus resulting in the achievement of the company’s goal. Other advantages are knowledge sharing / continuous learning, increased career bridging opportunities, ability to identify and justify resource requirements, ability to balance workloads, improved management of the costs etc.
THREATS
Poaching
The labor-force management is very costly with respect to the airlines sector. Also, due to the liberalization of policies, foreign and private players often poach work-force of competitors which leads to talent-drain and thus losses.
Inefficient Planning
Inefficient planning results into in-effective decisions which result into difficult situations. Also, planning in the airline sector is also tough wherein one has to consider every other element of service delivery and cost management.
Government Interference
Extensive Government Interference can affect the accountability of the organization wherein the Government influences decision making and also planning. One incident can be recalled of the Government Interference during the Privatization of the Airline sector.
THE PRODUCT MIX
Product is the core thing which every enterprise tries to deliver. Product is of course, the service that companies have to offer to the customer. Getting the product right is the single most important activity of marketing. If the product isn't what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to buy it. The airline product is quite a complex one since it comprises of a service of incorporating the temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty free spirit to encourage booking. The product here refers to Airline service offering. Although service products are essentially intangible, there are certain pyhsical characteristics which consumer assess in their evaluation of product choice.
Attractiveness of the offering in terms of pyhsical features such as consumers have high expectation, the food & drinks offered , entertainment.Facilities available, associated level of services such as, quality of seats & interior decoration.
The airline product includes of two types of services:
3. On the ground services,
4. In-flight services.
The on-the-ground services include a convenient airport with car parking facilities, duty free' ¬shopping quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport, etc.
The service provided inside is intangible and is highly variable. The airhostesses are trained to provide polite, warm and courteous service. The courteous service that the representatives at the baggage counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of the airlines also need to be efficient and polite.
Differentiating the Product
It is important to recognize that what the consumers are demanding are not products, or features of products but the benefits they offer. Producing added benefits thus helps the marketer to distinguish one product from another. Good design or style of service can form the basis of differentiation. This enables the company to create a personality for its service. The design and decor of the aircraft provides opportunities to personalize their product as well as periodically to update them when differentiation under IATA regulations was virtually excluded, nonetheless, certain airlines were able to develop distinct personalities. Eagle Airlines created an entirely new market between New York and Bermuda, for e.g. by developing an image of a friendly airline distinctive from other airline serving the route. A similar style was evident in Richard Branson's Virgin Airways.
CORE PRODUCT AND SUPPLEMENTARY SERVICES
Many services products consist of a bundle that includes a variety of service elements and even some physical goods. It is important to distinguish between the core product that the customer buys and the supplementary services that accompany that product.
THE FLOWER OF SERVICE
Core product surrounded by clusters of supplementary services.
The core service of an airline is the service of transport. The supplementary services are classified into eight clusters & each one is analyzed with respect to the airline industry:
* Facilitating elements
* Enhancing elements
Information
This aspect of supplementary service is common for every person that needs information about the organization. In case of airline industry, up to date information regarding flight schedules, ticket fares, information about promotion schemes etc must be available to customers.
Customers can avail of this information literally at their fingertips today with every airline starting its own website which gives complete details to the customer & also entertains queries.
It also includes providing information to employees regarding new policies affecting the airline & equipping them with enough information, which the customers might demand. Extensive training is provided to in-flight attendants regarding handling customer queries, knowledge about the airplane itself, knowledge about cuisine etc.
Consultation
This aspect of supplementary services can be customized according to the needs of the customer. It is more in the case of people processing and high personnel-contact services.
Airlines are moving more actively into the role of consultant today. They are doing away with the travel agents & designing & selling packaged tours to consumers directly. In this aspect they often act as consultants to the customer, by giving him advice & suggestions regarding the type of plan he can choose, the benefits he will get the mode of travel he should choose etc.
Another aspect to consultation at airlines is when the customer approaches the airline regarding traveling to particular destination, the airline gives him a variety of choices of routes that he can take.
In some cases airline may also design special menus & benefits in consultation with its frequent fliers by keeping in constant touch with them & asking them for suggestion as to what they want in their airline which will make their experience more comfortable.
Order taking
The order taking procedure is essentially the booking procedure of the airlines. The important aspect to be noted here is that the procedure is smooth, easily understood & fast. Reservation of airline tickets is now easy and reliable since it is fully computerized. There are 24 hours reservations. Passengers can specify their seat preferences at the time of reservation.
Most airlines use the telephone, fax, and email methods of booking. The emphasis here is on fast booking & at the same time getting the required information form the customer. This is done by establishing a standard reservation procedure & format thus reducing the risk of inconsistent service delivery. The online booking system also facilitates better order taking & processing.
The scheduling aspect assumes importance as reservations on the wrong flight to the wrong place are likely to be unpopular.
Hospitality & Caretaking
With the increased competition today in the airline industry & the increasing similarity of services offered by each airline, hospitality has emerged as a key-differentiating factor between one airline & the other.
The hospitality aspect of an airline is tested right form the time of the reservation (courtesy of the booking official) to the airline’s desk at the airport to the actual in-flight travel (the attitude of the flight attendants) to the post flight help extended.
Safekeeping
In airlines the safekeeping issue is that of safeguarding the customer’s baggage.
Baggage allowances are offered about 30 kgs of check-in baggage is allowed. Passengers carrying international tickets are given further allowance of around an added 30 kgs Priority baggage delivery is offered to members. The customers entrust his baggage to the airline & it is the airline’s responsibility to keep it in a proper condition.
Children and infants usually travel along with their parents and guardian. In case of unaccompanied minors, customer service staff renders all assistance like checking in and escorting up to the aircraft and handing over to the senior-most cabin attendant on board the flight. He is looked after on board the flight right up to the point flight reaches the destination and he is received by his guardian.
Exceptions
Special requests – airline very often receive special requests form customers with regards to meal preferences, special amenities for elderly people or children., medical needs etc. these needs have to considered & acceded to wherever possible.
Handling of customer suggestions / complaints – every airline today has a customer service centre which entertains customer suggestions & complaints. On the flight, customers are often asked for their opinion regarding service equality. Many corporate frequent travelers are consulted when the airline decides to make any new change.
Billing & payment
The billing procedure in airlines is simple. The options available to the customer are plenty including credit card & travelers cheque. Airlines use the open account system with their corporate clients. Frequent fliers are also given special payment privileges.
LEVELS OF PRODUCT
FOUR PRODUCT LEVELS
The Core Service
The core service of the airlines industry is to transport goods and services to various destinations. As the needs of the people increased the entire system became more organized and formal. After this stage come the various supplementary services.
The Supplementary Services
The airline industry has many players they had a brand name like ‘Air India’,’ Jet Airways’,’ British Airways’. All of them had some common services to offer like connecting flights, through check-in, tele-check in, food on board, and complementary gifts etc.
Different classes like economy class, business class were introduced. Air concessions are given to school students, old people etc. Singapore airlines were the first to introduce small 8”television screen for every passenger. The freebies are actually win-win deals between airlines and other services.
Sahara, for example, offers its passengers a ‘business-plan’ on two-way economy class ticket, which includes a night’s stay with breakfast, STD facility for 3 minutes and boardroom facility at the Park Hotel, New Delhi. To Delhi based fliers to Mumbai, it offers a night’s stay with breakfast, airport transfers and VIP amenities at The Orchid, Mumbai. For business class, the plan includes a stay at The Leela, with buffet breakfast and late checkout.
All these added service helps the customer to decide upon which airlines he wants to travel. As competition increased and the customers wanted more the next phase evolved and that is the augmented service.
The Augmented Service
This phase is where the customer’s expectations are met; the service providers kept working on new methods to meet the ever-changing customers’ demands. The players introduced online booking, which was very convenient for the service users.
British Airways business class has showers; it’s more spacious and comfortable. Sahara airlines offer its passengers six different types of cuisine like vegetarian, fat free, diabetic etc. They also have auction going on board. Virgin airlines have gambling on board, they also have body massage to offer to their passengers. Air Emirates has something called cab service, they have customized pick up and drop cab service.
This phase is the most crucial one; with increased competition service will become the final differentiation.
Future Service
As mentioned above the customer needs keep changing, the future is unknown. The customers may be looking in for more frequent inexpensive air travel, something like air taxis, super sonic speed. This decreases the time thus reducing the cost.
The diagrammatical representation of the core and supplementary services in the airline industry is shown below:
BRAND POSITIONING
Brand positioning is all about identifying the optimal location in our customers’ minds for our Brand and our competitors. Proper positioning makes it easier to facilitate understanding of the Brand. Proper positioning clarifies what the Brand is all about, how it is both unique and similar to competitive brands, why customers should purchase and use the Brand.
Creating brand awareness is one of the most important aspects for any product or service. Due to the intense competition in the market every airline has to position them in the market. It is only if they position themselves well can they create a Brand image, brand relationship as well as brand responses.
Each and every airline would want to have a market for them as well as have a good name in the minds of the customers.
Airlines use unique attributes to position their brands in the minds of the potential customers. Thus consumers strongly associate those attributes with that particular brand, positively evaluate it and believe that they can not find those attributes to the same extent with a competitive brand.
Re- branding has also become an important concept. It is evident that the mergers and acquisitions have become an important part of the airline industry. Thus they need to re-brand themselves under one common name.
Examples of Re- Branding:
KINGFISHER AND AIR DECCAN
Kingfisher’s acquisition of Air Deccan would lead to the latter being re-branded under a new name. The new brand positioning will be a shift from being a low-cost airline to a value-based airline. It will re-emerge with a new revamped stylish look. The emphasis will be on creating a stylish airline keeping with the UB Group’s brand image.
The branding exercise will encompass areas such as changing the look and feel of the aircraft, including interiors, ticketing and check-in counters and staff uniforms. The colors red and white will dominate the changes, with the aircraft, leather seats, carpet, boarding passes and airport counters painted red.
INDIAN AIRLINES AND AIR INDIA
When Indian Airlines and Air India merged, they retained the brand name of the latter due to its better brand positioning. The logo was evolved out of a combination of the two airlines. The red colored flying swan with the Konarak Chakra in orange became the new brand logo.
SAHARA AND JET AIRWAYS
However, in case of Sahara airlines being branded Jet Lite by Jet Airways, there could well are a dichotomy in the consumer’s mind of the new brand’s positioning. Jet has a premium connotation while Sahara was a low-priced air carrier. The Jet Lite brand might end up confusing its customers.
Thus it can be said that if the transition is smooth and the integrity of core values retained, then any re-branding exercise can be successful. The new brand has to be updated and not outdated.”
The Integrated GAPs Model of Service Quality
The Gaps Model positions the key service concepts, strategies and decisions in service marketing in a manner that begins with the customer and builds the organization’s tasks around what is needed to close the gap between the customer expectations perceptions. The airline provider needs to study the Gaps model to maintain a service quality which delights the customer. The main concentration has to be on the customer gap, the difference between customer expectations and perception. Every Airline Company has the task of closing every gap through its effective application of marketing mix strategies.
Customer Perceptions are subjective assessments of actual service experiences; customer expectations are the standards of, or reference points for, performance against which services are compared. The factors determining customer expectations are personal needs, word of mouth communication, advertisements and past experiences of the service.
Gap 1: Expected Service and Management Perceptions of consumer Expectations – Not Knowing What Customers Expect.
Gap 1 is the difference between customer expectations of the service and the company understanding of those expectations. For example, a customer expects adequate information to be provided to him about his baggage and limitations of the weight to be carried. If an airline provider fails to effectively inform the flier, then the gap gets formed where the customer’s basic expectations are not met by the company management itself.
Key Factors leading to Gap 1 are:
• Inadequate Marketing Research orientation.
Insufficient Market Research
Research not focused on Service Quality
Inadequate use of Marketing Research tools
• Lack of Upward Communication.
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
• Insufficient Relationship Focus.
Lack of market segmentation
Focus on transactions rather than customer relations
Focus on new customers rather than relationship customers
• Inadequate Service Recovery.
The above factors need to be addressed properly to close Gap 1. Strategies fore closing Gap 1 include Market Research; Promotion Mix Strategies; Communication Mix Strategies; People Mix Strategies.
Gap 2: Management Perception of Consumer Expectations and Service Standards – Not having the right Service Quality Designs and Standards
Gap 2 reflects the difference between companies understanding of customer expectations and development of customer-driven service designs and standards. For example, during long distance flights, a flier expects stabilizer drinks to maintain his body pressure and avoid restlessness but if the service provider fails to keep this in mind while processing the service, then a gap is created.
Factors leading to Gap 2 are:
• Poor Service design.
Unsystematic new Service Development Process
Vague, undefined Service Designs
Failure to connect Service Design to Service positioning
• Absence of Customer defined Standards.
Lack of customer-defined service standards
Absence of process management to focus on customer requirements
Absence of formal process of setting service quality goals
• Inappropriate physical evidence and servicescape.
Gap 2 can be closed by implementing strategies such as Process Mix strategies; Market Research; Physical evidence Mix Strategies; Productivity and Quality Strategies.
Gap 3: Service Standards and Service Delivery – Not Delivering to Service Standards
Gap 3 is the discrepancy between development of customer-driven service standards and actual service performance by company employees. Service Standards must be backed by appropriate resources and also need to be enforced to be effective in service delivery. For example, fliers when pay a relatively high price, expect a better service quality which is perceived to be a standard for the price paid. But, if the airline company fails to deliver a service which is up to the mark and does not satisfy the customer and not deliver the value worth the price charged, then Gap 3 is created.
Factors Leading to Gap 3:
• Deficiencies in Human Resource Policies.
Ineffective Recruitment
Role of ambiguity and role conflict
Poor employee – technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control, and team work
• Failure to match supply and demand.
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Over reliance on price to smooth demand
• Customers not fulfilling roles.
Customer ignorance of roles and responsibilities
Customers negatively affecting each other
• Problems with service intermediaries.
Channel conflict over objectives and performance
Channel conflict over costs and rewards
Difficulty controlling quality and consistency
Tension between empowerment and control
Gap 3 can be closed by implementing effective selection and recruitment strategies; effective outbound communication with customers; effective market research; effective distribution strategies.
Gap 4: Service Delivery and External Communication to Customers – When promises do not match Performance
Gap 4 illustrates the difference between the service delivery and the service provider’s external communication. Promises made by airline companies through advertisements, sales promotion and other communication tools raise the flier’s expectations from the airline company. These expectations form as a service standard for the flier which is then assessed and determines the customer’s satisfaction level. The discrepancy between the actual and the promised service therefore has an adverse effect on the customer gap.
Factors resulting into the Gap 4 are:
• Lack of Integrated Services Marketing Communications.
Tendency to view each external communication as independent
Not including interactive marketing in communication plan
Absence of strong internal marketing program
• Ineffective management of customer expectations.
Not managing customer expectations through all forma of communication
Not adequately educating customers.
• Over promising.
Over promising in advertising
Over promising in personal selling
Over promising through physical evidence cues
• Inadequate horizontal communication.
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches units
Gap 4 is all about the communication to the customer about the service. No airline company can afford to over promise and then not meet with the expected standard of the customer. In order to close the Gap 4, strategies need to be implemented in effective communication and informing the customers.
Gap 5: Perceived Service and Expected Service – The Final Gap
Gap 5 is about the difference in the perception of the customer/flier about the service and the expected service. Gap 5 is a result of the above mentioned four gaps. If the Gaps 1 to 4 are closed effectively and strategically, then the Gap 5 automatically is closed and the perceived service becomes the expected service and results into customer delight and retention.
PRICING MIX
Pricing decisions play a crucial role in managing the business of air transportation. The increasing operational costs, the rising competition, the falling occupancy ratio, the imbalances in demand and supply, the increasing pressure of inflation are some of the important factors influencing the decisions for setting fare and freight rates in the air transport business. The Ministry of Tourism and Civil Aviation, the Indian Airlines Corporation, the National Airports Authority, the International Airports Authority of India, the Air India Corporation are the bodies directly or indirectly influencing the process of making the pricing decisions. The main problem is to make the pricing decisions competitive because it is found that even the private air transport organizations are involved in the process too. It is seen that the following are the features in price i.e.: 1.Flexibility; 2. Price Level; 3. Differentiation; 4. Discounts and Allowances.
While price is tactical, it has localized implementation, it is temporary in nature and therefore price is flexible.
Pricing plays a vital role in the marketing mix of any airline. The ‘fair price’ concept is supreme, mainly because more than anything else most potential customers will base their purchase decisions on the basis of price of the ticket. Passengers tend to seek value for the money they are spending.
For example, below is the table showing price of tickets for Indian, Jet airways and Rajdhani express.
Sector
Indian Jet AC–I* AC-II *
Delhi-Mumbai 3,400 3,620 4,180 2,404
Delhi-Bangalore 4,500 5,053 6,385 3,470
Mumbai –Bangalore 2,700 2,839 2,943 1,954
*Rajdhani fares
All figure in Rs
As seen in the table, in every route whether it is Mumbai to Bangalore, Delhi to Mumbai the rates of 1tire A.C. is more than Air fare of Indian and Jet Airways. Travelers will most definitely choose to travel by airways as it is cheaper compared to railways plus it gives the added advantage of reaching the desired destination much sooner. Here, by offering a lower price, the respected airline is trying to snatch the customers who would otherwise be traveling by 2nd tier A.C.
The final price that the passengers pay is made up of various components. The air fare charged by private scheduled domestic airlines comprises of basic fare, fuel surcharge, congestion surcharge, passenger service fee and transaction fee (if the ticket is booked other than the Website). Out of these, only passenger service fee is the component collected by the airlines on behalf of the airport operators.
Pricing Strategies
6. Demand-based pricing: The pricing of air fares under this strategy is simple. It is based on the demand from the customers’. It involves setting prices consistent with customer perceptions of value, i.e., prices are what customers will pay for the services provided.
For example: The person sitting next to u might not have paid the same price for the ticket. If a person wanting to travel in Business class does not get the ticket for the same when tried to book at the last minute, will travel in Economy class paying more than what the other travelers must’ve paid. The pricing in airline industry is never fixed or same. It’s fluctuating in nature depending upon time, demand and other such attributes. So when, the demand exceeds supply for the seats in an airplane, the price charged on the ticket is much higher than other passengers.
7. Season-based pricing:
The pricing of airline industry largely depends on seasons. For example, if a person is travelling by Indigo from Mumbai to Bangalore, the pricing will be different for different time periods. It will be cheaper in monsoon while comparatively expensive in winter. Also, it depends when the person is booking the ticket.
If he books the ticket 3months before the date he’ll travel he might avail the ticket at a cost that is 30-40% less than what the person may be charged if he books the ticket 20days before.
For example: if a traveler books a ticket during normal weekdays the prices would not be too high. Whereas, if the same traveler books the tickets during Diwali or Christmas, he will be charged more than what he was charged earlier for the same destination. And this strategy remains the same for all kinds of airlines. The prices may not be exactly same but it’ll be quite similar.
Also, Jet airways provide tickets at a comparatively lower rate during the vacations for student-passengers. This helps them tap the population travelling abroad for education purposes as well as increase occupancy ratio.
8. Competition-based pricing:
This strategy focuses on the prices charged by other airlines. Competition-based pricing does not always imply having the same price strategy as the competitors. It means keeping one’s pricing strategy such that it is cheaper in cost or it offers the same price as competitors with better and/or more facilities. Thus its basic purpose is to have a competitive edge over the rival airlines.
For example, Indian airline industry is filled with low-cost airlines. So Air Deccan before getting acquired by Kingfisher had many competitors like Indian airlines, Air India (before merger), Indigo airlines and Go air. And now Spicejet had entered the already filled jammed low-cost airline bandwagon. This brings about a competition in the pricing of the tickets. Spice jet on completion of three years on May 23rd 2008 offered 3 lakh tickets just for Rs. 3 starting from July 1st to 21st September 2008 across its 18 destinations in India. This was a very smart move to attract passengers especially those travelling by Economy class who are very cost conscious.
9. Pricing strategies when customer means “Value is Low price”:
This strategy can be applied when the most important determinant of value to a customer is money. But this does not imply that the level and standard of service, facilities and other attributes should be looked upon. It just means that pricing takes a forward stand as compared to the other attributes. To establish a price for this strategy, the marketer should understand and know the objective of charging low prices, how the customers’ interpret prices and how they value their travelling experience on the basis of prices.
There are various methods of applying this strategy:
iv. Discounting: The service provider or marketer may offer discounts or price cuts to communicate to the price-sensitive buyers/ customers’ that they are receiving value for which their money is spent. For example: Spice jet has a special group discounting scheme wherein groups of over 15 guests may be provided with consideration for special fares.
Another example would be that of Indian, that offers discounts to passengers on site collaborated with India times by offering a bid for international destinations at low fares.
v. Odd pricing: This is another strategy wherein the service providers offer prices at an amount which seems comparatively lower than the normal rates. It is based on U.S. dollar price-strategy wherein instead of charging $500 they will charge $489 or so. So in case on Spicejet. Instead of offering a ticket from Mumbai to Goa at Rs. 2400 they would offer at Rs. 2299. So, on looking at the figure the price difference seems to be more which in fact is just hundred and eleven rupees.
vi. Penetration pricing: This is a strategy in which new services are introduced at low prices to stimulate trial and widespread use. This strategy is appropriate when the sale of tickets is price-sensitive.
In order to make, travel by air more affordable to the common man, a couple of years ago Jet Airways announced a new offer `Everyone can fly' which offered a major reduction in economy class air fares on certain selected routes across the country. In most of the airlines, the reduction enables economy class air fares being competitive to rail fares being charged for the same journey.
10. Pricing Strategies when the customer means “ Value is everything I want in a service”:
When the customer is concerned more in the ‘get’ component of the service, monetary price is not of primary concern. The more desirable attributes that an airline provides, the more highly valued that service is likely to be and higher the price that the marketer can set.
Skimming strategy: This is a strategy in which new services are introduced at high prices with large promotional expenditures. It is an effective approach when services have undergone major improvement over past services. In this situation the customer is more concerned about obtaining the service than the cost of the service, thus allowing the service providers to skim the customers most willing to pay the highest prices.
An example of this would be that of Virgin Atlantic airlines that has gambling on board. They also provide in-flight body massage to their passengers. There is a bar in the air craft. Also, they provide lounge facility at the airport to the frequent flyers.
Also, when Kingfisher had newly started first class with Kingfisher first, the rates of the tickets were very high compared to other airlines’ tickets. But travelers still opted for it as they wanted to have the new flying experience with Kingfisher.
THE PLACE MIX
In Airlines, they utilise more than one method of distribution.for e.g they sell tickets through travel agents & sell seats on flights to tour operators , whilst also operating direct marketing. Whichever distribution strategy is selected, channel management plays a key role. For channels to be effective they need realiable updated information. For these reason, I.T has been widely adopted such as on-line booking system.
This dimension of marketing mix focuses on processing of services and selecting the location points for airways and airlines offices keeping in view the comforts and conveniences of the end users. By the processing of services, our emphasis is on the involvement of channels, front-line-staff, travel agency offices; offices of the tour operators or so from where service flow and reach the ultimate users.
8. The air transport needs to make sure that the prospects don’t face any difficulty in buying the tickets and make necessary arrangements for the confirmation of booking.
9. It is also to be confirmed that the users booking their luggage are not to face inconvenience.
10. The behavioral profile of the personnel working in offices of travel agents and in the offices of the airways and airlines require due attention. It is almost clear that airhostess looking attractive, smart, well dressed are at your disposal to make available to you the defined services.
11. It is also to be sure that the information network of the offices of the travel agents is technology-driven and user-friendly.
12. The security checking, custom checking of passport, visa, income tax clearance or so. It is essential that all the windows or the counters offer the services as per the provision and promises.
13. Keeping in view the duration and nature of flights, the users are made available lunch/ dinner, breakfast and drinks inside the aircrafts.
14. If in course of the journey, you are supposed to change the aircrafts and the duration of stay is long, it is the responsibility of the airport authorities and concerned airway and airlines to make available the accommodation facilities.
Another dimension of place mix is related to location and management of the offices of the airways, travel agents, tour operates, transport operators or so.
7. The main thing in the selection of a place is easy accessibility. The prospect customer should get an easy access to the office and ticket counters. The place is required to be safe, well connected with all-weather proof roads where all the required infrastructural facilities are to be available.
8. The technology-driven booking system is to be ensured. The online booking facility should be user friendly and all the information regarding the company should be available on the company site so that customer can get all the information at it ease.
9. The water and sanitation facilities for the users and comfortable seating arrangements need due care of the travel agents or airways offices. The lighting, ventilation facilities need to be made available.
10. The interior decoration, furnishing, plantation need aesthetic sense so that the users from a positive opinion regarding the airways services. The interiors should be creative so that people can enjoy their ride and make their trip a memorable one.
11. The positioning of posters of airways and airlines which look attractive and draw the attention of the users attending the offices for chartered flights, packaged tour need due care.
12. It is in this context that they find management of place an important component of the marketing mix.
In view of the above, it is right to mention that air transportation business is linked with a number of allied services offered by a number of agencies and organizations. If they don’t find cohesion and coordination the promised services would hardly reach to the end users.
Indian Airline Network
Jet Airways Network
THE SERVICE MARKETING TRIANGLE
ENABLING PROMISES MAKING PROMISES
KEEPING
One can better understand the working of airlines by looking at its marketing triangle. There are three entities in the entire transaction:
4. Customer: He is the person who wishes to satisfy his needs i.e, transportation from one destination to another. Here, the customer is a passenger or a potential passenger.
5. Company: This is both the dreamer and the offerer. It here refers to the various airlines which offer its aviation services to the customers to satisfy their demand for transportation from one destination to another, for example: The Indian Airlines. Here, the company makes a promise to its customers to deliver the right quality service.
6. Provider: The service providers are finally the people who interact with customers. They keep the promise that the airline operator has made to its customers by delivering the finest services. They are the ones who carry out final transactions. The customer actually comes in contact with the service provider and not the company. For example: the air-hostess and the crew.
The interaction between these three parties while providing the service takes place in the following manner:
The company is established with the basic objective of providing the specific transport service. Thus the airline industry with players like Indian airlines, Jet airways, Sahara airways etc came into being.
The air service provider that is the company communicates with the customer and makes him aware of the services. It makes promises to the customer by advertising through various media’s. For e.g.: the TV ad of Indian airlines advertising its new sleep-in seats.
The customer who gathers knowledge about the service approaches the company for availing his service in order to satisfy his need. This interface of the customer with the company is through the customer’s interaction with the providers of the company. The company enables its promises to the customers through setting up facilities to deliver the promises by setting up ticket and enquiry counters. The outcome of the “to be transaction” is determined by the interaction between the provider and the customer. Hence the company aims at offering its providers with the required infrastructure and training to optimize the quality of the transaction. For e.g.: Yearly employee training programs and performance appraisals are done by Sahara airlines.
The three strategic points where the provider and the customer interact are:
Ticket purchase at the airline counter or the ticket agency.
Checking in
While boarding
During disembarkation
All three sides are essential to complete the triangle. All three marketing activities represented by the sides of the triangle are critical to efficient delivery of the service, even if one of the sides is out of place, the triangle will be distorted; in other words the total marketing effort cannot be optimally supported.
THE PROMOTION MIX
The formulation of an ideal promotion mix is essential to inform sense and persuade the users. The business magnets, business executives, politicians, cine artists, high spending tourists, business houses using expensive inputs and trading the same, the Department of Posts, domestic and international tourists are some of the users of the air services. The users appear to be more conscious, aware of their rights and in a majority of the cases are found sophisticated.
However, majority of the users are sophisticated and therefore the promotional efforts are required to be more creative. The professionals engaged in the air services bear the responsibility of blending the different components of promotion in such a way that the task of increasing the business is simplified. Since a number of airways and airlines have been facing problem of financial crunch, it is pertinent that they make possible an optimal use of the different components of promotion.
PROMOTION MIX VARIABLES
Since domestic deregulation occurred in 1978, competition in the airline industry has intensified and become more concentrated. The respective airline needs to provide certain benefits that the other airlines do not. Promotion has become a big aspect since the arrival of numerous private airlines. The way this industry has attracted people to them has changed. Airline companies have struggled with making new ways to market their products. Today airline advertising focuses on price, rather than the pleasure of the flying experience. Companies use the radio, newspapers, and billboards in big cities, tops of taxicabs and sides of buses to put their ads on. Even coffee cups in restaurants are starting to be used for advertisement.
Promotion should be done keeping in mind the competitor’s product. This helps in promoting own product/service with a message that has an edge over the others. Kingfisher understands its competitors well and promotes their service accordingly.
Vijay Mallya's Kingfisher Airlines adopts an innovative marketing strategy to snatch attention from Jet Airways' advertisement.
In the ad displayed on the hoarding above, Jet Airways say, "We've changed." Kingfisher Airlines comes up with a cheeky billboard above Jet's hoarding that says, "We made them change!” This was a very innovative and smart move on kingfisher’s part to promote their service thereby denoting that their own service is so much better that Jet Airways had to change and improvise them to reach their standards. This needs presence of mind on part of marketing and promotion heads.
Spice Jet, India’s most preferred low – frills airline, has announced a unique offer of 3,00,000 tickets at a special price of Rs 3/- per ticket. This special offer flags off the third anniversary celebration of the airline. Booking for this special promotion, was opened on May 9, 2008 and will continue till the tickets are sold out.
Tickets bought will be valid for travel from July 1 to September 21, 2008 on all flights covering its 18 destinations. This offer is available only on SpiceJet - Low Cost Indian Airlines, Book Indian Flight Tickets Online, Cheap Fares Air Travel in India - SpiceJet offers Discount Airline Ticket Fares Online. In the last three years Spice jet has flown over8.1 million people across all their destinations. They have helped Spice jet gets over 10.3% market share. This special promotion is Spice jet’s way of thanking them for their support.
PROMOTIONAL MIX AND ADVERTISING
Advertising
As any other service, the air transportation service needs creative advertisements to promote their business. This is the first component of the promotion mix, which is based on professional excellence of the advertising agencies. In view of the rising cost of inputs and increasing the impact of worldwide economic depression on the air transportation, there is a need to make the advertisement budget optimistic Vis-a- Vis optimal.
This is essential to regulate the multi-dimensional expenses found of unproductive nature and instrumental in making the service expensive. The telecast media and the print media are found important while promoting the air business.
While advertising through the telecast media, budgetary constraints and budgetary provisions should be considered. Also the quality and nature of target market and level of expectations should be kept in mind. The advertising professionals need to make the advertisement slogans campaigns and messages proactive to the generation of business. Kingfisher is a good example for advertising its services. They advertised kingfisher not merely into the business of transporting people from point A to point B. They have created a new category of Aviation Hospitality Space thus making service and hospitality their main focus. Their slogan is kingfisher airlines- “Fly the good times.” This is how they are differentiating their product from other airlines. The airlines also have to make sure that whatever the strategic decisions they make to promote the business are in a position to establish an edge over the promotional measures of the competitors. They are also required to assign due weightage to the efforts made for the projection of a positive image. The Indian Airlines as well as Air India have been facing the image problem but the advertisement may be efficacious in transmitting the facts and removing the image problem.
As mentioned earlier, Indian airlines started promoting its first class fully reclining seats to as a tool to improve the image problem and attract more passengers in its first class. It is essential that while advertising one has to keep in mind the image of the country, the natural scenes, the tourist attractions, rich cultural heritage or so which would energize the process of motivating the tourists. For example: Thai Airways have air-hostess wearing colorful long and flowery dresses and greet by joining hands and bowing to their passengers as a part of their culture. While advertising, it is impact generating that we select an opportune moment of flight, an attractive scene of take-off, high attractiveness of personnel in general and the air hostess in particular, the landscape of an attractive tourist center, wild life sanctuaries, lake, park and so on. The air transportation services can also use the broadcast media.
For example: In times of rising fuel prices and lower occupancy rates Jet Airways has come out with a lavish ad featuring the most expensive brand ambassador of time Shahrukh Khan. The Shahrukh Khan TVC, which broke on September 1, 2008 is the first of three campaigns Jet has planned (the ones on economy and premier class will follow), and is running across most news channels and some specialized travel channels. The ad marks the television debut of Jet Airways which had previously relied heavily on the print medium. While competitor Kingfisher relies on showcasing complete range of Consumer experience Jet is trying to highlight its product superiority. Jet had come out with Boeing 777 last year, which has some superior features and this ad is merely an aim to highlight those features besides trying to latch on to the celebrity appeal of Shahrukh Khan.
Another example would be that of Indigo airlines that uses Internet and print media as a visual medium to advertise itself. What is interesting is the fact that the ad is not flashy and it just conveys simple facts.
An important source of visibility for Indigo is the internet where e-ticketing give it a chance to come up with its offers.
The launch and subsequent editorial patronage and newspaper support that Indigo carved out for itself helped it set itself up as a brand.
Online reviews on MOVIE Review, HOTEL Review, MOBILE PHONE Review, BOOK Review, CAR Review, CAMERA Review - MouthShut.com and other blog sites are all directed toward creating a brand reckoning for Indigo Airlines.
Evenly spaced out PR activities help Indigo to be on top of the minds of the people and gives it instant brand recall value.
Indigo goes for extensive print coverage every month or so.
Publicity
Publicity is a process of persuasive communication for which no payment is made. Strengthening public relations activities if found essential to promote the business airlines or airways. The Public Relations Officer, Receptionists, Travel Agents, Travel Guides, Media people are some of the sensitive points of publicizing the business. The most important point in this is the co-operation of media. The marketing professionals should have an idea of magazines, newspapers preferred by the prospects or users and they develop rapport with the correspondents concerned. The Airlines need to recruit efficient personnel for that very purpose that should have professional excellence no doubt but in addition they are also required to have the potentials of attracting the users, prospects.
For e.g.: Indian Airlines helped the cancer patients and took them for a small outing as part of their public relation campaign. Similarly, Sahara linked up with Close- up by taking Hrithik Roshan. Here for Close-up it is a promotional strategy while for Sahara a publicity that an airline is linking up with FMCG by using an entity.
Kingfisher is right now running a print campaign in major business publications. The new series of campaigns are focused on the functional attributes of the airlines.
Deviating from the usual flashy ads, Kingfisher is now appealing to the Left- brain of the consumers. The ads are targeting the three segments of user’s i.e Children, Ladies and Males but the ads are talking to Men who are the key decision makers.
The ad for the young travelers talks about special kids’ meal, wide seats and games. The ad ends with an appeal to the father that “Your little prince deserves to feel like a King ". The ad for the lady travelers talks about the seats that bend all the way back, the footrest that will pop up, life valets when your lady lands at the airport at midnight and helping hands that lift her bag. The ad ends with the message “Queen of your heart deserves to fly like one ". The third in the series aims at the decision maker himself. The ad aimed at male traveler as usual talks about the 'flying models ", the smile that tastes better than the ice-cream, spectacle cleaner and the air-boutique. The ad ends with the message ' Every man's seat feels like his throne'.
With regard to the quality of campaign, it may miss some eyeballs because of not being an eye catchy ad. But the message surely is smart. The basic premise in this ad campaign is that Men are the decision makers with regard to this service. May be a campaign aimed at lady executives may also come in the future.
On the promotional front, Kingfisher has signed up the latest diva of Bollywood, Ms Deepika Padukone as the brand ambassador.
Sales Promotion
A component of promotion adopted for a particular period to touch the target and withdraw the measures when the time is over is known as sales promotion. The tool based on incentives is found instrumental in sensitizing the users. The travel agents contribute a lot to the promotion of air transport business and therefore we need to think in their favor on a priority basis. The tour operators also contribute to the process and therefore need to think in their favor. The front- line-staff in the offices of the airways and the receptionists working there also play the same role. This makes it significant that they are given some incentives which are in the form of a holiday trip to a particular place, concessional services to their children or spouse or so. Also offering them with innovative gifts, which have not been offered by their competitors, can be given. The nature and type of incentives would depend on the contributions of providers. If they make immense contributions, the incentives would be in good quality and volume. There are incentives given called the promotional incentives on the basis of the frequency of using the services.
For e.g: Through Jet Airways, return ticket passengers on metro flights (both economy and business) can avail a discount at all Taj and ITC hotels in South India. Also Sahara has a fanatical assortment of gifts being handed out (its’ Take Offer). Braun Mixer grinders, CTVs, cameras, handy cams, mobile phones and even free holiday packages are up for grabs as a part of their sales promotion campaign.
Also, there’s something called marketing bonanzas. Some airlines give free tickets to customer so as to make them aware of their services. These tickets or any other gift voucher are given so as to attract a lot of people. This is a very interesting way of catching the headlines of customers. Example Go Air was sending SMSs to any number that they have won a free ticket from Mumbai to Goa or Delhi. Kingfisher has also sent messages to people for free ticket.
Jet lite announced its ‘Summer Special Bonanza’ promotion for online bookings through its website. Even Air Deccan used this approach of giving gift voucher worth Rs.250 and a saving of Rs.99 per ticket if booked thorugh Air Deccan’s site. The offer was valid for bookings made between 22-May-08 and 10-Jun-08 and for travel in the same period. There was also a 2 nights, 3 day holiday package to be won in the offer period.
Jet Airways, India's premier international airline, has announced a special promotional package for students flying to its destinations in the United States, Canada, United Kingdom, Europe or Asia. Jet Airways' special promotional package is valid for outbound travel on or before October 31, 2008. Existing, as well as new, students will receive a whole host of benefits including excess baggage allowance and special fares. Students availing of this offer will be allowed to carry an extra piece of baggage, with each piece not exceeding 23 kilos, on flights to the US, Canada, UK & Europe; and an additional 10 kilos on flights to Asia (Shanghai, Hong Kong, Singapore, Kuala Lumpur and Bangkok), on Jet Airways' online destinations.
With Jet Airways special promotional package, students will also receive exclusively designed Student Kits', in association with its partners. These may be collected after the purchase of a ticket at any of Jet Airways' city sales offices around India. Each kit contains a Matrix mobile connection with free talk-time worth Rs.4000 in the US, UK, Singapore and Australia, ICICI Bank Travel Cards for hassle free transactions across the world, a free Tata Indicom Wi-Fi Roam Card enabling internet connectivity from over 50,000 hotspots in the US ,UK, Austria, Czech Republic, Germany, Netherlands, Switzerland, France and Japan; Bajaj Allianz Travel Insurance with special privileges and low premiums and VIP vouchers worth Rs.500/- on purchase of VIP travel accessories.
Jet Airways also offers students an ergonomically-designed seat with hammock style head rest and foot support, the airline also provides its Economy passengers a personal reading light, on demand In-Flight Entertainment and access to over 200 hours of Hollywood and Bollywood movies, regional films, and television and short programmes. Thus Jet Airway plans to tap mass-students travelling abroad during this period.
Personal Selling
The air transport organizations find personal selling which is the mix of promotion mix helpful in increasing the business. An art to influence, stimulate, sensitize the impulse buying is known as personal selling. The air transport-marketing professionals are supposed to know about the behavioral profile of persons who act as personal promoters. The travel agents, tour operators, transport operators, travel guides, front-line staff on the booking counters, receptionists contribute substantially to the process of promotion. If they stop selling, the offices of airways would find it difficult to sell. This makes it clear that even the quality services fail in attracting the users, if the channels are not co-operated. This makes it essential that the airlines offer incentives to them so that they keep on moving the process of stimulation.
To better understand the concept of personal selling, the airline in question needs to follow the diagram given above. It explains all the things that the people involved in the process of selling should know and do. Starting with the first point, customer’s value for time, money and energy should be considered. Their comfort and suitability should be addressed to. They should be provided service in such a way that they get more than they expect to. It can be said that the customer’s should be pampered.
For instance, giving chocolates on arrival and departure or welcome drinks or discounts during off-season to name a few. The delivery of tickets should be made on time this enhances the effect of personal selling.
The entire aim of personal selling is to provide customer’s easy access and hassle-free journey and that is what should be done by the airlines and that is where the circle of personal selling ends. To fulfill the above mentioned criteria the airline industry must select persons, agencies having a positive image.
The travel agencies having a well established business can help substantially and therefore it is the prime responsibility that while selecting the travel agents one must assign due weight age to the image of the agencies. The tour and transport operators help considerably and one needs to think about the incentives to be offered to the promoters. In personal selling, the front-line staff or personnel at the booking or reservation counter of airlines office playing an incremental role in promoting the business. Here, it is essential that one is aware of the credentials of persons supposed to discharge the business responsibility and try his best to brush up their faculties as and when opportunities come.
Word-of-mouth Promotion
This happens to be an important constituent of promotion mix in which the promoters act as a hidden sales force. The air transport organization depends on this type of promotion if they feel that the quality of services offered by them is of world class. In the Indian perspective, the Indian Airlines, Air India, Sahara India, Jet Airways and others may use this component of promotion if they realize that providers have not been distorting the quality of services promised. If you are traveling by kingfisher and you really like the experience then you will definitely recommend your friends, relatives, etc to travel by the same airlines. Word of mouth is the best promotional strategy as it does not incur any cost for the company and also a positive image is built in the market by their loyal customers.
Indigo airline being a low-cost airline does not allocate much fund to advertising hence, it entirely relies on word-of-mouth promotional tool to spread a word about their services and thus communication is established and brand is recognized by the people who are potential flyers rather than the entire country which is an expensive affair.
PEOPLE
The commercial airlines service industry extremely competitive, safety sensitive and high technology. People, employees and customers must be the arena of an organization’s core competence.
In the service industry, service personnel come in direct contact with their customers in the course of production and consumption of the services.
Because people provide most services, the selection, training, and motivation of employees can make a huge difference in attaining customer satisfaction. Ideally, employees should exhibit competence, caring attitude, responsiveness, initiative, problem solving ability, and goodwill.
The airlines hire the right personnel with the essential requirements. They recruit the right people develop, and train them to deliver quality service. These employees are motivated in a manner that they stick to the organization; they are treated more as customers, rather than employees
For Example: Delta Airways recruits an employee and moulds him to cater to their demands. These employees are sent to US and Frankfurt on a 21 days training programme. The successful completion of this motivated the employee to stay on with the airline. They are provided with many incentive programmes and also with a one- month bonus incentive on completion of the sales target.
The Airline sector is divided into two categories, Internal and External customers.
Customers refer to the persons who have certain needs, wants and desires. The company makes promises to its customers. In the Airline industry, the customers refer to those persons who feel the need of travelling from one destination to another. The customers are further classified as Internal and External customers.
Internal Customers:
While delivering services the airline ensures that the services are delivered as promised and this rendering of service satisfaction is often totally in control of the frontline staff. The quality of service that the frontline staff provides is highly dependant on his/her ability to communicate their credibility.
Being a Hospitality line the employees are given extensive training to provide caring and individualized attention to customers. There are many people involved with the successful working of the airline industry.
The various types of airline personnel include:
FLIGHT CREWS: These are the trained people who play a very important role from the time when you check in your baggage till you board the aircraft. They ensure the smooth functioning of everything and guide you through the entire process. They form 85 percent of the airlines labour force.
The Flight crew includes:
Pilots
Flight Attendants
Reservation Clerks
Airport check-in and gate personnel
Security guards and In-flight security personnel
The service contact personnel in the airline industry are the Flight Attendants who are expected to have a pleasing personality and must also be polite while service handling.
While on the other hand the cock pit crew/ Pilots are considered as low contact personnel hence they are required to posses highly technical and analytical skills.
The Reservation clerks play a very important role as they check the tickets, allot the seat numbers and also place the destination tags on the baggage; hence they should be highly attentive while doing their work.
The Airport check-in staff must be extremely helpful as that is where the evaluation of the hospitality of the airline can be gauged from at first
GROUND STAFF: These are the main people who work behind the scenes and play a very important role to ensure smooth functioning of the entire procedure right from handling the formalities on the airport to helping the passengers board the aircraft. All these functions are handled impeccably by the ground staff.
The Ground Staff includes:
Avionics technicians/ engineers
Flight dispatchers who track all the airline’s flights
Baggage handlers
Gate Agents
PDC (Prolog development center)
The PDC (Prolog development center) has implemented a Staff Scheduling System; this system was adopted for the ground staff as creating good staff schedules is often a complicated process. It is difficult to clearly appreciate the many possible combinations of duty periods, duty hours, time-off-in-lieu requirements, holidays etc. that will ensure each person works the correct number of hours.
First and foremost it is important that internal and external rules are correctly implemented while maintaining adequate manning levels and ensuring a fair distribution of the various shift types. Scheduling restrictions (financial or other) may exist and must be taken into account.
Why Use a Staff Scheduling System?
Creating a good staff schedule is often a complicated process. Especially when the airline industry “never sleeps”. Manning is 24x7x360. The business involves many employees with different agreements and they must be confident that they get paid correctly.
First and foremost it is important that internal and external rules are applied, there has to be adequate manning and lastly the personnel must be available when the traffic requires it.
On an Organizational level PDC- Staff Plan, provides their clients many Advantages in the terms of:
Cost savings in terms of less salary bonus, over time and time-off-in-lieu
Significant reductions of administration
Efficient cost management through a flexible staff scheduling (no over manning and no under manning)
The Advantages that PDC-Staff plan provides the employees are in the terms of:
Fast and safe scheduling of duties and shifts
Better overview of manning, time expenditure, time-off-in-lieu, etc.
Relief of administrative work
Thus, efficient staff scheduling saves great resources and thus time to focus the efforts on other areas. In addition, time will be saved in the scheduling process itself
What are airlines looking for?
In making a decision about the employment of cabin crew, all airlines consider three prime elements:
Eligibility
An airline may have eligibility tests depending upon its own specific requirements. These are facts that can be determined either by physical or by documentary Evidence. Some of the Eligibility checks likely to be included are:
Does the candidate meet the required age profile?
Does the candidate meet the required height/weight profile?
Has the candidate attained required educational (or other) qualifications?
Is there documentary evidence to support the qualifications the candidate claims to have?
Has the candidate acquired adequate experience in a customer service or public contact role?
Can the candidate speak a second language? To what level of proficiency can the second language be spoken?
Suitability
This is clearly more difficult to assess than eligibility. Airline managers will be looking for people who can best fulfill the role of a Cabin Crew .The minimum requirement is for:
9. Technical knowledge
10. Maturity
11. Adaptability
12. Judgment
13. Tact
14. Diplomacy
15. Grooming
16. Attitude
Airlines will also be looking for people whose performance will not be adversely affected by the disadvantages of the job and will readily accept direction/training.
Specific requirements
Eligibility and Suitability are relatively basic requirements, which must be met in all cases.
Every Airline sets its own specific requirements; some airlines pay much emphasis on the appearance and personality of the person while others may look at the experience and knowledge. Some airlines may prefer have trained and experienced personnel while others may want fresh recruits.
Put simply, airlines are looking for the right people for their current circumstances. Do not be too disheartened if you do not get in at the first attempt. You can always try again - or apply to another airline! It is also true that candidates fail to be recruited by an airline at one attempt, and then succeed at a later date. This is usually because the candidate has acquired better interview technique, or extra skills, experience or confidence. It can also be because the airline itself has revised its person specification.
CREW PROFILE AND COMPLIMENT
The senior most person on any flight is the Commander. His is the last word where the flight & its crew or the passengers are concerned. The Cabin crew Senior or the In Flight Supervisor is the senior most Cabin Crew, but takes orders from the Commander.
The Crew complement on board is the total number of crew including both the Cockpit & the Cabin Crew. This number is preset where the Cockpit/ Flight deck crew is concerned for a particular type of aircraft. The number of Cabin Crew an airline has on an aircraft depends on a number of factors:-
2. Type of aircraft - for any aircraft there is a minimum Cabin crew complement required depending on:
The number of emergency exits on the aircraft
The number of passengers on board the aircraft.
5. The type of food & beverage service to be provided to the passengers.
6. Right duty time length of the flight. On some long haul flights when the flying time exceeds the flight duty time (the max number of hours a crew can be on duty), then there are two sets of crew on board. This is found ONLY on International sectors on extremely long sectors.
7. Today a few airlines have started new services like baby-sitting, on-board masseurs, tailors etc, which require extra crewmembers on board. More often than not, airlines start new service procedures that do not require additional crew or other staff, but to capture a good market share, Airlines often launch such services that are NOT sustained over a period of time.
The Hierarchy where the Cabin Crew is concerned may vary a little from airline to airline depending on their individual policies. For example in some airlines the air hostesses retire much before
Advantages of the Job
As with the role itself, the perceived advantages of being a cabin crewmember are often quite different from the actual benefits. Below is a list of what cabin crew & others see as being the real advantages:
Travel
This is what attracts many people to the job in the first place. Cabin crew goes to places they always dreamed of, and find interest in destinations they would not necessarily have chosen to go to.
Camaraderie-Solidarity & Friendship with other Crew members
The camaraderie, team spirit, and sense of belonging together that the majority of crew has when they are flying is unique. Despite being a very diverse group of people, your colleagues are likely to be sociable and out-going, and will help to make the job a lot of fun.
Variety and Interest - Absence of monotony
This is certainly not a 9 - 5 jobs, and no two working days are likely to be the same. The sheer dynamics of different crew, passenger profiles, destinations and roster structures ensure that there will always be variety.
Appreciation
This is one career where the appreciation is almost instant after a 'good job done'. Despite all the things that can go wrong on a flight, many passengers do show their gratitude of the crews' efforts, either when someone has done their best for them individually, or especially when the whole team has pulled together well. The better airline management teams also acknowledge consistently good performance, or outstanding individual service.
Personal Development
Airlines usually have high standards of initial and follow up training, and some provide self-learning facilities or schemes thus helping the crew to develop their personalities and all develop themselves in other aspects.
Other benefits
Most Airlines provide a number of other 'perks' along with the usual handsome salary they give a crewmember. Most major airlines to provide ground transportation and a good standard of accommodation for crews who are staying overnight at destinations away from their 'home base'. Free medical attention for cabin crew I their family members (in some cases) are also provided. Free staff travel tickets are another BIG bonus given. Airlines have schemes whereby all their staff are able to travel free on the 'employer' airline or at extremely advantageous prices on other airlines. Airline staff also benefit from a range of discounts, from hotel chains, shopping malls, duty free shops, insurance companies and financial service institutions.
Uniform
Airlines usually provide items of uniform clothing to all their public contact staff free of charge.
Disadvantages of the job
Air cabin crew is a wonderful job, and can provide an interesting and rewarding career, but as with any job there are drawbacks as well.
Travel Limitations and Risks
This is almost the reverse of Travel' as an advantage of the job. As a crew member you do not choose where you go to, or how long you stay there. Crew also face the usual risks present for any other traveler, such as theft of personal belongings, mugging, poor hygiene standards in other stations/cities, bites/stings from insects and animals, and risk of contacting infectious disease.
Customer Service Negatives
Good customer service is a prime role pf cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Good customer service is a prime role of cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Dependence upon the support of other departments, including planning, maintenance, and catering, cleaning and logistical units is very high. Any breakdown in the chain (for example dirty toilets or insufficient catering) lead to a feeling of being “let down and having to take the burnt of passenger complaints.
External Customers:
These are the main customers for the airline industry as they generate revenue to the same. Hence Customer Satisfaction plays a very important role. The customers should always be kept at pedestal by looking into their needs and acting on them immediately and also providing them with exclusive services. This would earn goodwill for the airline and ensure the smooth running of the business.
The customers are categorized on the basis of their need and preferences:
Customer Segmentation
Most airlines use a very traditional segmentation strategy, dividing passengers into first class, business travelers and economy travelers. But, nowadays most of the airlines offer only two classes – the business class and the economy class.
The customers subsequently also be divided as per the scope of the market .This ia a process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinct marketing strategy.
This includes preparing a method of identifying a group of consumers, within a broader market, that has similar characteristics and needs. Segments can be identified by examining geographical, demographic, psychographic, and behavioral differences.
Segmentation of the aviation industry can be done under the following factors:
Geographic segmentation
Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions etc. the company can operate in one or few areas or operate in all but pay little attention to local variations.
Most of the domestic airlines, their market segment consists of the customers who’s destination are major commercial cities like Mumbai, Delhi, Kolkatta etc. apart from these the airlines also concentrate of tourists destinations like Goa, Agra etc. The reason behind this is that such sectors have major traffic and are profitable sectors. However Indian Airlines, being the National Carrier of the country, fly’s even to the unprofitable sectors and concentrates on the segment of people flying to such destinations.
Demographic segmentation
In demographic segmentation, the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion and social class. There are several reasons for the popularity of demographic variables to distinguish customer groups. One reason is that consumer needs, wants, usage rates and brand preferences are often associated with demographic variables.
Airlines like Kingfisher targets the affluent class and the executives from multi national companies, business community etc. However in the case of Air Deccan and other low cost airlines, their segment is the population from the lower middle class and the middle class. Thus it can be said that Kingfisher targets the classes whereas the no frill airlines target the masses.
Psychographic segmentation
Psychographics is the science of using psychology and demographics to better understand consumers. In this segmentation customers are divided into different groups on the basis of psychological, personality, lifestyles or values. People within the same demographic groups can exhibit very different psychographic profiles.
The airline tries to work on the psychology of the people. Kingfisher concentrates on the segment of people who do not mind paying a higher price, but would like to have the best of comforts. Whereas the low cost airlines targets those customers, who believe in value for money services and account for every rupee that they spend.
Behavioral segmentation
In behavioral segmentation the customers are divided into groups on the basis of their knowledge of, attitude towards, use of or response to a product or a service. It refers to grouping consumers in terms of their relationship with the product, for instance their usage rate, the purpose of use, their willingness and readiness to buy, etc.
Segmentation of customers on the basis of airlines
Business Class
They are crucial for airlines' profitability. With less spare time and more cash in their pockets, they agree to pay a premium price for a premium service. The premium prices they pay provide wider and more comfortable seats, better choice of meals and seats, luxurious lounges.
If the airline is also providing the first class including the business class and the economy class then it will provide additional services to the first class travelers in addition to the other services. These services may include fully reclining seats, workstation and TV surrounded by private dividers
Economy Class
They represent a totally different market. The most important consideration for most of them is the price. The lower the airfare, the more people will fly the respective airline. By and large, with the exception of wealthy travelers, this segment will not pay extra for premium services and will agree to change several planes during their trip if this option costs less than a direct flight.
PROCESS/SERVICE MAPPING
A process map is a tool to visually illustrate how the work flows. It is also a communication tool, a business planning tool and a tool to help manage the organization.
Key elements include:
Inputs
Outputs
Activity steps
Decision points
Functions
The lines and symbols on a process map help us to record concise sentences for every step in the process that tells the reader:
What is happening?
Where it is happening?
When it is happening?
Who is doing it?
How inputs and outputs are handled and distributed?
They can be defined at many different levels and with various boundaries. Furthermore:
Processes must have a beginning and an end.
Processes are co-ordinated activities that involve people, procedures, technology and infrastructure.
Processes constitute a significant portion of organizational costs.
An organization is only as effective as its processes.
The purpose of process mapping is for better understanding. It involves the gathering and organizing of facts about the work and displaying them so that they can be questioned and improved by knowledgeable people.
Process maps help one to understand the important characteristics of a process, allowing them to generate useful analytical data in order to derive findings, draw conclusions and formulate recommendations. Furthermore, process maps allow one to systematically ask many important probing questions that lead to developing a view on business process improvement.
The basic process followed is given below. This process can be termed as process mapping in an Airline Industry.
Customers Point of View
Check which gate to enter from
Getting the ticket checked at the door
Screening of the Baggage.
Getting the boarding pass as well as boarding the luggage.
Security check and finally boarding the plane.
Employees Point of View
The initial process of checking the ticket, baggage screening, providing the boarding pass and the security check imply for the employees also but the 2 most important process that the employees have to conduct is:
Proper numbering on the baggage of the customers so that the luggage does not get interchanged and boarded into the right aircraft.
Proper allotment of the seats.
1. Check which gate to enter from. 2. Getting the ticket checked at the door
3. Screening of the Baggage 4. Getting the boarding pass as well as
boarding the luggage.
5. Security checks 6. Waiting to board the air craft.
Another important aspect that the employees have to look for is Security Process. Security relates to the security of the aircraft as well as the passengers. Security check is of utmost importance.
The Central Industrial Security Force, a paramilitary organization is in charge of airport security under the regulatory frame work and instructions of the Bureau of Civil Aviation Security (Ministry of Civil Aviation Security). CISF formed an Airport Security Group this security force is dedicated to protect Indian airports. Each and every airport has now been given an APSU (Airport Security Unit), a highly trained unit to counter unlawful interference with civil aviation; apart from the CISF every airline has a highly trained aviation security force which is a separate department.
Some of the security procedures are listed below
At major airports, the checked baggage is passed through X-ray machines and a 'security checked' sticker affixed before entering the check-in area.
Passengers are checked through personal frisking, and/or door frame metal detectors and hand held metal detectors.
The cabin baggage is either checked through X-ray machines or physically examined.
Security personnel put a security stamp on boarding passes and cabin baggage labels.
Immigration is done at this point that is just after the boarding pass is received.
In case of a 'Red-Alert', a secondary security check is also carried out near the stepladder before embarkation.
Checked baggage has to be personally identified by the passengers before it is loaded on the aircraft. Wherever the boarding is through aerobridges, passenger and baggage reconciliation is done through an internal matching system instead of physical baggage identification.
Ten percent of the checked baggage/cabin baggage is usually physically checked at random.
Passengers in transit have to remain on board during the ground halt of the aircraft.
Once the passenger reaches his destination from the airport that is when the process gets over.
BLUE PRINTING
Blue printing is a process that deals with the entire working system in an Airline Industry. It is a complete process.
Blueprinting involves identifying all the key activities, procedures and specifies the linkages between them. The working of the airport is a complex process and all the process whether visible or invisible have to be carried out effectively as well as efficiently because even if one process goes wrong the entire chain of the working system gets disturbed.
Moreover, current trends in the airport industry impose more and more efficiency and security: Hyper-regulation for safety and security; Market de-regulation in terms of liberalization, strong competitiveness, services customization, etc.; Traffic segmentation and globalization to better answer to airline needs; Reduction of profitability for handlers and airlines; Increase of airline traffic; and so on. In such a scenario, only operators and authorities who will evolve gaining a competitive position can win the market challenges asking for more efficiency, high quality service levels and security. In order to support all actors in the airport industry to reach best efficiency and quality targets, Software Design has spent huge efforts in finding solutions and services capable of bringing them the power of technology innovation in a transparent way and working with a business approach. With this a lot of changes can be made in the existing service process thus developing a blueprint
BENCHMARKING
Benchmarking is the process of comparing the cost, time or quality of what one organization does against what another organization does. The result is often a business case for making changes in order to make improvements.
Benchmarking opens organizations to new methods, ideas and tools to improve their effectiveness. It helps crack through resistance to change by demonstrating other methods of solving problems than the one currently employed, and demonstrating that they work, because they are being used by others.
Airline Association for Benchmarking & Measurement is a focused group of airline professionals that looks to identify the best practices surrounding airline industry issues for the improvement of overall operations of the members.
Mission
To identify "Best in Class" business processes, which, when implemented, will lead member companies to exceptional performance.
Objectives
To conduct benchmarking studies of important business processes.
To create a cooperative environment where full understanding of the performance and enablers of "best in class" business processes can be obtained and shared at reasonable cost.
To use the efficiency of the association to obtain process performance data and related best practices from group of companies.
To support the use of benchmarking to facilitate process improvement and the achievement of total quality.
Membership
The scope of Airline Association for Benchmarking & Measurement™ membership includes airline professionals interested in benchmarking as part of or in support of their core business.
Company membership will be considered with respect to compliance with Airline Association for Benchmarking & Measurement™ mission, goals and operating guidelines, as well as, qualification of the organization within the scope of membership.
Participation in specific efforts will be optional and open only to members with costs shared by the participants
Benefits of Membership Studies
Airline Association for Benchmarking & Measurement will identify and present to members opportunities to participate in Benchmarking studies on various topics of importance to "security" issues.
There are two types of Benchmarking studies provided
Consortium studies are offered to the membership as a whole with costs divided.
Single company sponsored studies addressing the interest of one member company can be offered to other selected members for no fee.
The association will also support process improvement benchmarking efforts
Research - Access public and private databases.
Identify study participants - Top airline companies interested in benchmarking current issues.
Collect data - Manage response collection with the participants as a third party.
Lead site visits - Structure with best participants.
PHYSICAL EVIDENCE
Physical Evidence refers to the environment in which the service is delivered and where the service industry and customer interact. It is the ability and environment in which the service is delivered. Both tangible goods that help to communicate and perform the service, and the intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers.
The aircraft by itself, the seating configuration meant to be comfortable and spacious, the in-flight food, the staff dressing, baggage handling facility, colour of the aircraft, in-flight entertainment, and ambience in the aircraft provide physical evidence to the airline service.
Nowadays, websites are another major part of the physical evidence of airlines. A recently completed survey indicates that passengers rely on major airline websites, but would like the airlines to improve those sites to better meet their specific needs and expectations.83 percent of the passengers indicated they use airline websites to book flights. The survey also identified that nearly half (48 percent) of respondents indicated they also book flights by calling the airline directly, which may be a further indication that airline websites are not sufficiently meeting the needs of small business travelers. Results show that 56 percent of respondents use travel websites to make flight arrangements, while 47 percent use a travel agent, compared to 83 percent using airlines' websites.
Hence, the websites should be updated regularly, should be less time consuming, fast processing and easily operative.
COLOUR AND STAFF DRESSING
Increasing importance is given to the cabin crew and the ground staff uniform. Designers are given contracts to design the uniform and the colors are such which symbolizes the airlines motto. Colour is a visual identifier and thus attractive color scheme catches the eye of the passenger. The staff dressing also helps to differentiate one airline from other. Just by looking at the staff, the passenger assumes the standard of the airlines. And these two are the first thing that a passenger visualizes in an airline. However, another important reason for the use of color is the expansion of a corporate culture. For example, Paramount Airways does this very well. Their use of blue color emphasizes confidence, a character trait that is important to the airline industry, especially in these times. Blue also demonstrates vastness, opportunity, a sense of modernism and openness and honesty.
KINGFISHER AIRLINES
The first thing that strikes about fly Kingfisher is the bold use of the color Red. From the tail of the aircraft with the logo of the kingfisher bird and the word Kingfisher painted boldly across the body of the aircraft in Red to the interior decor and even the Crew uniform –it‘s Red, Red, Red all the way.
The in-flight crew called 'Flying Models' are clad in short Red skirts and a trendy rolled up sleeve jacket in Red with a white shirt unlike the traditional blazers and waist coats of other airlines. There are no male pursers on board either because KF in-flight is all women.
AIR INDIA
Eminent Indian fashion designer Ritu Beri was roped in by national carrier Air India to design the new uniform for its cabin crew and ground staff. Air India went for a complete makeover to reflect its aspiration to be a “powerful” global entity.
The design of the new uniforms draw inspiration from the Sun Temple of Konark in Orissa, yet maintains a modern outlook. The colour palette of the uniform is red, orange, black and white, with red standing for strength and orange for cultural roots.
The uniform for the female employees, both ground staff and cabin crew, included sarees, tunics, scarves, jackets, coats, aprons and shoes, while there would be specially designed ties for the male staff.
JET AIRWAYS
To position itself as a global airline, Jet Airways introduced fresh airline uniform for the cabin crew designed by Italian designer Roberto Capucci. Their uniform reflects distinctive international look capturing spirit of new India and a meeting point between East and West
IN FLIGHT MEALS
Airline passengers always have a certain standard of living and are very hygienic about the food. However, in-flight meals have often been the butt of many jokes over the years for their perceived lack of nutritional value. In airlines, the passenger prefers variety in the meal offered, noticing the nutritional value. They also see as to which caterers is serving the food; the way the food is served and handled. This is one critical aspect where even the service recovery can’t help to retain the passenger because even the slightest of the mistake by the chef or by the cabin crew, or compromising on the quality of food might prove very dangerous for the passenger’s health. This, in turn, will spread a bad reputation of the company.
Hence, more and more airlines are in fact striving to make their meals more attractive by packing as much goodness as possible into them.
KINGFISHER AIRLINES
In-flight Meals or Snacks are served as part of the fare on every flight and small amenity kits distributed as well. Depending on the flight time, Kingfisher serves Breakfast, Lunch, High Tea or Dinner on all flights. An individual menu card is there on all Kingfisher flights. Kingfisher has a wide variety of multi-cuisine menu to suit the varying tastes of the local sectors. Indian, Chinese, Continental and World Cuisine is available on various sectors. Vegetarian or non-vegetarian food can be chosen on the flight. Kingfisher First Class passengers can choose from a special menu and depending on their choice, a three course gourmet meal is served on the flight.
It also provides an exclusive three course menu complete with a Kingfisher sparkling welcome drink, signature dessert and freshly brewed coffee on board.
JET AIRWAYS
Jet airways have different menu options onboard for Premiere and Economy class passengers.
The following specialty meal options are available on Jet Airways:
Strict Vegetarian (STVG)
Jain Meal (JNML)
Diabetic Meal (DBML)
Low Cholestrol (LFML)
Low Sodium (LSML)
Low Calorie (LCML)
Low Protein (LPML)
Non Lactose Meal (NLML)
No Salt (NSML)
This shows the passenger that Jet Airways do care about their health , thus creating a goodwill among the passengers.
Kosher meals
Jet Airways also offers kosher meals (KSML) on the Mumbai-London-Mumbai and Mumbai-Singapore-Mumbai sectors. Kosher Meal preference has to be notified 48 hours in advance. The Kosher Meal on Jet Airways flights consists of Western Non-Vegetarian Meal of Fish, Potatoes and Vegetables. Kosher meals are served onboard in a sealed pack. The cabin crew opens the pack in front of the passenger and shows the Kosher certificate inside the box.
This assures the passenger that there is no malfunctioning or adulteration in the meal provided , thus creating an impression in the mind that meals offered in Jet Airways are of the best quality.
AIR INDIA
Air India offers a wide variety in its in-flight meal menus, with a multi-cuisine approach to cater to the predilections of the range of passengers. The variety of food ranges from vegetarian meal, Moslem meal, Kosher meal, Low Sodium meals to something simple as a fruit platter. The meals are hygienically packed from reputed hotel chains like the Taj Group and Ambassador. Besides the regular normal vegetarian and non-vegetarian meal, Indian Airlines also provides special meals such as Jain meal, Diet meal, child meal etc.
IN FLIGHT ENTERTAINMENT
To make long flights more enjoyable, several major commercial airlines offer in-flight entertainment and information systems to their passengers. This is increasingly gaining popularity in the airlines sector because the passengers here, unlike other modes of travel do not have any other source of entertainment. In airlines, the interaction among passengers is also minimum. So, this is one of the tangible tools of attracting or pulling the passengers towards an airline. Nowadays, there are lots of innovations done in the in flight entertainment system and each airlines is daily coming up with some or the other new technology or up gradation for the passengers to have entertainment in the flight.
KINGFISHER AIRLINES
Kingfisher Airlines flights have individual LCD TV screens for each passenger. They have a choice of 5 video channels of the trendy FUN TV, or listen to Kingfisher Radio which offers a choice of 10 international radio channels. There is a separate video channel for kids too to keep them busy on the flight. All passengers are given complimentary headphones to enjoy the in-flight entertainment. For Kingfisher First Class passengers there is an extra wide 8.4 inch LCD swivel screen fitted on every seat. Kingfisher First Class passengers can also enjoy noise canceling headphones for a quiet and relaxed flight experience. Kingfisher First Class passengers can also play video games on the LCD screen and even play multiplayer games with their co-passengers.
Kingfisher Airlines has tied up with Dish TV to provide live in flight entertainment to its passengers. This shows the weightage given in flight entertainment in the airlines sector.
JET AIRWAYS
Jet Screen, Jet Airways' In-flight entertainment system is available on both business and economy class on several Jet Airways flights. Jet Airways has also installed state-of-the-art Panasonic 3000i Audio Video on Demand (AVOD) on every seat in some of its flights. In addition to video channels, up to 8 audio entertainment channels playing latest Bollywood songs, International Pop songs, Ghazals, Indian and Western Classical, etc. are also available on Jet Screen.
SEATING
In airlines, passengers mostly stay glued to their seats. So, it’s very important to have a comfortable seating in the flight. Specially , in long distance journey the passenger has to spend a lot of time on the seats, thus the passenger should have full satisfaction with the seats provided, as in, there should be enough leg space, there shouldn’t be any back problem, comfortable head space and more importantly , the seats should be clean. The seating arrangement has to be spacious as different individuals have different physique. Thus, the seats should be such wherein every passenger irrespective of his/ her size or shape should feel relaxed and comfortable on the seats and should feel refreshed after reaching the destination.
Seating is not much of a problem in airlines like Kingfisher or Jet however low cost airlines needs a lot of improvement because they usually have this problem of not having enough leg space.
KINGFISHER AIRLINES
The seats are the plush Sleeperette seats with a 48 inch pitch, 125 degree recline, adjustable headrests and fully extendable footrests. The expansive legroom, the fully lie flat bed in Kingfisher First and the widest seat pitch in the skies, allows the passenger to stretch those tired muscles to the fullest. There are also laptop chargers and mobile phone chargers in each seat.
JET AIRWAYS
Jet Airways is the first airline in the world to install new ergonomically designed seats that offer more space, reduce pressure on the passenger’s body and has adjustable "Hammock" head rest and a unique foot net which gives added support, especially on long journeys.
NEWSPAPERS AND MAGAZINES
Newspapers and in flight magazines are provided to the passengers so that even in the skies they can get information and update their knowledge.
KINGFISHER AIRLINES PARAMOUNT AIRWAYS
INDIAN AIRLINES
GENERAL RATINGS TO THE AIRLINES SECTOR
Web Site : Ease of Use
Age of Aircraft in Fleet
Web Site : Product information
Cabin Safety Standards
Web Site : Online Check-In
Cockpit Communications
Handling Delays/Cancellations
Airline Onboard Magazine
Staff Grooming & Presentation
Assisting Families & Children
PRODUCTIVITY AND QUALITY
QUALITY DIMENSIONS
RELIABILITY
It is the ability of the service provider to meet the promises made by them accurately. The customer must develop a feeling that they can depend on that particular service provider for their problem.
It is most important for an airline to depart and arrive on time since passengers want to depart and arrive on time. ‘On time’ is defined, in accordance with normal industry standards, as departure within 15 minutes of scheduled departure time. If the flight is on time, it colours everything else. Today, top airlines hold their positions because passengers recognize their consistent reliability. Reliability is not just nice to have. They impact the passenger and his satisfaction, and that impacts the bottom line of the airline.
Passengers place great importance on reliability and that's why leading airlines fly Boeing jets because they are the most reliable in the skies.
Information needs to be recorded about the scheduled and actual departure time, and, if there was a problem that caused a delayed departure, whether the problem resulted in a delay or a cancellation, whether there were passengers on board and a detailed description of problem should be given. This leads to the payoff i.e. the ability to track, analyze and improve the reliability of the aircraft.
Airlines should also be reliable in case of baggage handling. The passenger should get his luggage on time without being damaged. In case, the luggage is mishandled then the airlines should have such a system in place wherein the passenger can rely on the airlines for the safe arrival of his / her luggage. The reliability issues that this interface creates have prompted airlines, over the years, to look for ways to introduce more automation into this environment.
ASSURANCE
Assurance refers to freedom from danger, risk or doubt. It includes credibility, competence, security and courtesy. The service provider and the employees must be capable of winning the trust and confidence of the customers.
The ground staff and the cabin crew play a major role here. They are the one who can assure the passengers about any doubts they have regarding the flight and the services provided. In airlines, passengers are mostly brand loyal. Hence, once the passenger is assured and trusts a particular airline then he always prefers that airline. Thus, assurance plays a very important role in customer retention.
In high cost airlines , the passenger always thinks that whether he will get a good value for his money whereas in low cost airlines he / she always think whether the quality of the service will be good or not. Hence, the passenger is always at a risk. Here, the airlines have to put in extra efforts to remove the doubts from the mind of the passengers about their airlines. And in this competitive world, where new airlines are coming up so rapidly, the efforts made by the airlines could be seen to assure the passengers that their service is the best. Airlines go out of the way to win the trust of their customers.
E.g. The Kingfisher First experience takes off even before the passenger do at the Airport where he / she is greeted by a Personal Valet to assist at every step of the way, from baggage handling to boarding. This is done to assure the customer at the very first step that he hasn’t put his money at the wrong place; giving a VIP treatment, thus clearing any kind of doubt or the risk factor from his mind.
TANGIBLES
Tangibles are those physical features which can be seen by the customer. These are the physical proofs which help the customer to judge the quality of service. The customers evaluate the quality of these services on the basis of the tangibles provided by the service providers.
In case of airlines tangibles include:
Flight
In – flight meals
In – flight entertainment
Seats
Staff uniform and skills
Baggage handling technology
Website
In airlines, tangibles help to differentiate an airline with its competitors. This is the most important criteria in customer evaluation. The customers perceive what they see. Thus tangibles help create an impression in the customers mind the way an airline wants.
EMPATHY
Empathy basically is when the employees of the organization make the customer feel at home, at ease, making him feel wanted.
In airlines, a personal touch should be given to the services because that delights the customers the most. They should be made felt as if they are very important to them. However, for an airline to succeed it must have genuine empathy with both its employees and its customers.
The cabin crew has to be very polite, understanding and courteous. They should take genuine delight in attending the customers, in helping them and establishing warm friendly relationships. The crew should know the importance of doing things for customers from the bottom of their heart. They should believe in going beyond the routine to add emotional value to their work. As a result they would be able to delight customers. But for all this, the crew and the ground staff should be motivated; a culture should be created where the crew also supports the company’s mission and values.
The senior executives, middle managers and supervisors should demonstrate a similar 'genuine heart-felt' empathy for their various teams of employees , thus helping the organization develop a warm culture based on empathy which leads to showering of that empathy on the customers.
For e.g. if any small child is flying in the flight for the first time without any elder person along with him, the crew should see to it that the child doesn’t get scared so they should visit him regularly, give him chocolates, chat with him, thus taking his proper care and not letting him feel that he is alone.
RESPONSIVENESS
Responsiveness is willingness to help the customers and provide prompt service. The degree of responsiveness shows the level of commitment that the people of the company have towards their work. It is very necessary for the company to concentrate on prompt and the right kind of responsiveness to the needs of the customer.
In airlines, the customers are very impatient. They expect their needs to be catered promptly. Hence, any delay in responding to their needs or problems might create a very bad impression in the customers mind. The staff should see to it that each and every complaint of every individual is handled effectively and quickly.
This aspect comes into picture when there is a flight cancellation due to bad weather and the passengers can board the next flight only the next day. At this moment of crisis, a quick response by the airlines regarding their luggage, their accommodation and all the other needs can create a very good reputation.
Also, sometimes there is a case wherein the crew is helpless and it cannot fulfill the customer’s requirement, even that time the crew has to respond to the customer either by explaining him their helplessness or by providing him/her with some alternative.
Thus, nowadays where the zone of tolerance among the customers in airlines is minimum, responsiveness is one dimension which has to be really taken care of.
FISH BONE ANALYSIS
Procedures
During acquiring the boarding passes there may be delay in getting the passes which may dissatisfy the customer.
Baggage handling is not done accurately i.e. the bags are misplaced or not loaded on the flight, which may cause delay in flights.
Due to tightened security at airport the security person may take longer time to check the person.
Information
Radar at the airport is not working properly thus the correct information is not provided to the customer.
Websites – the websites may not be updated regularly which may provide wrong information to the customers.
The customers are guided wrongly by the person at inquiry counter which may add woes to the customers.
Front staff personnel
System crash when customers come to get the information or boarding passes.
Cabin crew taking ample of time for guiding people and providing the necessary requirements to customers.
Not enhancing to customer responsiveness and services.
Not all queries are sorted of the customer at enquiry counter.
Not getting warm welcome or reply from the air hostess.
Back staff personnel
Cleaning staff taking ample of time to clean the plane setting up the things right in the plane.
The materials are not loaded on plane on time.
Material supplies
The supply of food and other essential requirements does not arrive at scheduled time.
Customer
Customers coming late to board the plane may cause delay in flight.
In case, the person on flight gets ill (getting heart attack) in that case the flight. needs to be landed again which may again cause delay.
VIP customer coming late to board the flight.
Facilities / Equipments
The seat may not be proper or the seat belt may not be working properly.
The music system (headphone) not working properly.
The food and drinks are not supplied to customer on time.
Other Causes
Their may be delay in flight if a hoax call is received and intense security check-up is done which may cause some trouble to customers.
If the weather is bad there may be delay in flights.
If there is any technical flaw in the plane it may result in delay of flight.
Due to strikes by workers and organization may cause problems to customers.
SERVICE RECOVERY
While studying the Marketing Mix for the Airline Industry, we have understood the customer’s expectations, the service process, the service quality, the productivity in service delivery and building customer relations. But in all service contexts, service failure is inevitable. Service failure is inevitable for the best of the airline companies, even those with world-class service systems. Thus, in order to retain customers and also understand those, airline companies must understand what a customer expects and what can be offered to the customer when service failure occurs and thus implement strategies for an effective service recovery.
Impact of Service Failure on the Customer
Service failures occur for all kinds of reasons, some of which can be listed as service not available when promised, late delivery, incorrect outcome, poor execution or rude behavior of the workforce etc.
For an airline company, a service failure can be of the following sorts – flight delay; mismanagement of the formalities like checking-in; indifferent behavior of the flight crew; baggage problems and so on. Service failures for airline companies are due to factors which are controllable as well un-controllable by the company.
Service failure for services other than airlines have a paradox kind of an impact on the customer as well as the organization – you dissatisfy a customer once and then delight him in the service recovery process and win his loyalty which is not assured with a failure-less service delivery. But for the Airline Industry, service failure does not create positive opportunities for the organization. Incase of a service delivery in the airlines service providing, the customer is highly dissatisfied and the recovery strategy cannot be as effective to delight him. For instance, if a flight gets delayed, the customer gets late and the time he loses due to the delay cannot be brought back; or if the carrier misplaces luggage of a particular customer then no strategy is enough to delight the customer (no strategy to compensate on the lost belongings). Service failure in the airlines sector creates a negative impact for the airline company. Thus, a perfect service delivery is aimed at by a carrier.
Following a service failure, a number of negative emotions may occur in the customer’s mind such as anger, discontent, disappointment, self-pity, and anxiety. These emotions are the factors to be kept in mind while implementing specific service recovery strategy to win back the customer. Different customers respond differently to service failures. Incase of the airline industry, the customers are rather considerate by not displaying anger and discontent but by just mere complaining and seeking reprisal. Basically, the response is very passive. Such a kind of response depicts that the customer expects least consequences that will benefit the customers. Such a response is not beneficial to the airline company because the organization does get an effective feedback and cannot improve on the basis of the customer’s expectations and thus cannot retain customers effectively.
COMPLAINT HANDLING
In case the passenger has a problem with the in flight crew, they can give a written application to the In-flight Supervisor who later hands over the complaint to the COMPLAINT HANDLING CELL. The complaint handling cell is under the control of the Deputy Director In charge of supervision. Also the complaints regarding the ground staff, security and other such departments can also be given in writing to the Deputy Director In charge directly. Once the complaint is received it is forwarded to the higher authorities who decide what action needs to be taken. Usually a warning goes to the personnel who have defaulted. In rare and extreme cases the personnel may be suspended from flying for a period of 2 – 3 weeks. Once an action is taken, the company sends an apology letter to the customer along with the response to the complaint.
In case the complaint is regarding mishandling or damage to the baggage, there is compensation provided to the customers. The amount of compensation depends on the policy of the company and the degree of damage.
There are nine steps involved in handling complaints effectively. They are mentioned below:
10. The frontline employee handling complaints should stay calm under any circumstances.
11. Let the customer get the story off their chest- do not interrupt, this will only cause irritation. In this case listening skills comes into picture.
12. Avoid admitting any liability at this stage. The officer just need to show concern like, “I’m sorry for the inconvenience, let me see what I can do”. Give attention to the customer, make him feel important.
13. Get facts by using question and try to find out the real and whole story behind it.
14. After listening and collecting data, just identify appropriate action considering company’s policy and customer’s expectation.
15. Take action if you have authority or involve manager or concerned person.
16. If corrective action cannot be taken immediately, tell the customer. It’s better to give bad news rather giving false news.
17. Record the action to be taken and inform anyone else in the organization involved.
18. Look into the matter, provide a proper follow-up.
These nine approaches if followed effectively, complaints can be handled properly and possibly a customer can be retained.
SERVICE RECOVERY STRATEGIES
“Companies have made Service Delivery Idiot-proof. But Idiots cannot solve problems.”
We just realized that service recovery in the airline industry loses a little scope because of the passive nature of the customers and because of the negative impact of service failures. But, in the competitive market, Airline companies are trying their best to delight their even though service has failed in the first encounter. Some of the strategies which airline providers are implementing for service recovery are as followed
Total Quality management or “Zero Defects”
Airline companies are trying their best to make it right for the customer in the first encounter itself, give the customers what they expect and avoid the errors as much you can. For instance, avoid flight delays which occur due factors which are under the control of the management such as speedy check-in process, discipline staff to be punctual and soon. Doing it right at the first encounter saves the company the costs of redoing the service and compensating for the errors.
Effective Complaint Handling
Complaints need to be encouraged so that the Airline Company is aware of the loopholes and what the customer is expecting from the service. Complaints should be taken seriously and should be acted upon immediately. Since, the customer is of the passive nature with respect o complaints, one must ensure that it is easy for a customer to put forth his complaint and he should be assured of a treatment. Technology and its innovation should be put to use to form an effective system for complaint handling and their reprisal.
Fair Treatment to the Customers
On failure, a customer expects to be treated fairly in term of the outcome they receive after the failure. The customer should receive something more than what he has actually expected and which was met in the first encounter. Fair treatment will help in customer retention. For instance, incase of loss of baggage, a service provider might provide the traveler vouchers for shopping at international locales for free of charge.
Market Research
Not all dissatisfied customers will come up to the reception desk and post a complaint. The airline company has to make efforts in finding on itself the failures in service. Market research forms a very important tool in knowing this. For example, one can ask for feedback from a customer who is just going to board a flight. He can be asked about his experience with the ground staff, the ambience of the lounge, and other facilities.
PROFITABLE ART OF SERVICE RECOVERY
Service failures are inevitable but they don’t hit a service provider as much as the costs of service recovery and the costs of redoing the service with intent of delighting him are very relatively high. Basically, the service provider has to bear of the cost of repeating the service process that too with an added value.
With respect to the airline industry, service recovery can be made productive and profitable by the following methods.
Resolving the problem at the source itself
Suppose a failure of service takes place at the ticketing counter, the finance department head does not needs to be involved but in fact, the ticketing executive himself should address to the problem. The staff which is in direct contact with the customer and is forming a part of the critical encounter should be trained and empowered to tackle failures at the source itself.
Do not dismiss the occasional problem
It is tempting to dismiss an occasional problem but companies should avoid doing the same. Customer retention is an important task for an airline company in this period of intense competition. Occasional problems cannot just be dismissed because; it is these occasional problems which dissatisfy the customer every now and then.
Flexible Management
The management needs to be flexible and dynamic enough to take decisions with regards to service recovery. The customer’s perception and expectations should be kept in mind whilst taking a strategic decision. Treatment should be fair enough to delight the customer. Basically, the company has to give in to the expectations of the customer but at the other end also negotiate to get a fair and a profitable deal.
Measure the Costs
At every step of the service recovery process, the costs involved need to be monitored closely so that no wastage or blockage of funds happens in the process.
Train employees
Employees need to be trained perfectly in order to give the best service delivery at the first encounter itself. Also the staff needs to be trained with respect to decision making, crises management and so on.
Empower the Front Line Workforce
The front line work force is the workforce that is in direct contact with the customer and form as an important critical service encounter. The front line can be empowered with authority to take a decision incase of service failures. Companies can train their front line staff for such situations.
Service Recovery is a different management philosophy a company embraces customer delight as a primary goal of business. It is a fundamental to quality service providing and therefore it should be considered as one of the important part of a airline company’s strategy.
“To Err is to Human, to Recover, Divine”
LOW COST AIRLINE / LOW COST CARRIER
A low-cost carrier or low-cost airline (also known as a no-frills or discount carrier or airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors.
India's first low-cost airline, Air Deccan started service on August 25, 2003. The success of Air Deccan has spurred the entry of more than a dozen low-cost airlines in India. Air Deccan now faces stiff competition from other low-cost Indian carriers such as Jetlite, SpiceJet, GoAir and Paramount Airways.
Few of the features of the low cost airlines:-
A single passenger class
A single type of aero plane (commonly the Airbus A320 or Boeing 737), reducing training and servicing costs
A minimum set of optional equipment on the aero plane, often excluding conveniences such as ACARS, further reducing costs of acquisition and maintenance
A simple fare scheme, such as charging one-way tickets half that of round-trips (typically fares increase as the plane fills up, which rewards early reservations)
Unreserved seating (encouraging passengers to board early and quickly)
Flying to cheaper, less congested secondary airports and flying early in the morning or late in the evening to avoid air traffic delays and take advantage of lower landing fees.
Aggressive fuel hedging programs.
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets in promotion. Even if the advertised price may be very low, sometimes it does not include charges & taxes.
But in the past one year major changes have taken place because of the hike in the fuel prices. Like everyone is aware that the fuel prices have risen way too much. So due to this all these low cost airlines are facing a major setback.
These increases in fuel prices has caused trouble for each and every airline and they are trying to recover the losses in various forms and also trying to come up with promotional schemes and various other incentives in order to retain their customers.
They losses occurred by these airlines in the fiscal year 2006-2007 and 2007- 2008 have been tremendous. Now their ultimate aim is to recover these losses.
Earlier due to the introduction of the low cost airlines and their cheap rates which were almost similar to those of the train fares the customers blindly traveled by air as their travel time could be less but after the rise in prices the customers think twice before buying the air tickets.
Hit by galloping fuel prices, airlines the world over have started resorting to various cost cutting measures including flying aircraft at a given height on a low speed to reduce fuel burn.
India's crowded airline sector is flying into huge losses on the back of a surge in global fuel prices that have forced it to hike fares, slowing explosive passenger growth.
National carrier Air India and other carriers have started following these measures and other fuel conservation initiatives which are a standard practice undertaken by all global airlines, especially those flying on long-haul international routes.
Reduction in aircraft speed at an optimal height, called a reduced Cruise Mach policy, has been adopted by Air India for its Boeing 747-400 and Boeing 777 aircraft fleet used in long-haul operations.
The national carrier is also planning similar measures for its Airbus A-310 and Boeing 737 planes, which are meant for medium and short-haul flights and are the merged carrier's backbone for domestic operations.
Besides, undertaking the Cruise Mach policy, Air India has also started cutting on the aircraft's weight by removing certain non-essential items on board.
AIRLINES VALUE ADDED CHAIN
CONCLUSION
“I was engaged in what I believe to be the most thrilling industry in the world—aviation. My heart still leaps when I see a tiny two-seater plane soaring gracefully through the sky. Our great airlines awe me. Yet I know they were not produced in a day or a decade.”
— William A. "Pat" Patterson, CEO United Airlines.
Studying the Airline Industry gives us the same feeling as the CEO of United Airlines does. The project report talks about the Airline Industry and its most important function – MARKETING.
The project report has covered every other aspect of the Airline Service Marketing which on paper seems to be simple to implement but in practice is as tough a job as the invention of the airplane itself.
The project study has given us a great depth of intellectual learning about the sector. We hope, the project report has the same enduring for its readers as it did to us.
HISTORY OF AIRLINE INDUSTRY
Aviation refers to activities involving man-made flying devices (aircraft), including the people, organizations, and regulatory bodies involved with them.
Civil aviation includes all non-military flying, both general aviation and scheduled air transport.
General aviation includes all non-scheduled civil flying, both private and commercial. General aviation may include business flights, air charter, private aviation, flight training, ballooning, parachuting, gliding, hang gliding, aerial photography, foot-launched powered hang gliders, air ambulance, crop dusting, charter flights, traffic reporting, police air patrols and forest fire fighting.
There are five major manufacturers of civil transport aircraft:-
Airbus, based in France
Boeing, based in the United States
Bombardier, based in Canada
Embraer, based in Brazil
Tupolev, based in Russia
Scheduled Air Transport
Like it is known that the Airline Industry is one the vastest industry with its presence all around the world. Though it started with its presence only in large countries then slowly expanding to other states and currently its presence can be felt in the smallest of cities also.
This industry came into existence with the development of the world’s first airline on 16 November 1909 by DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft with its headquarters situated at Frankfurt. It was developed with the assistance of the government and operated ships manufactured by Zeppelin Corporation.
Later as time passed by and people started becoming aware of the existing technology and the potential of the market they moved their attention to this sector. It was the then that Tony Jannus conducted the United States' first scheduled commercial airline flight on 1 January 1914 for the Saint Petersburg-routes, Braniff Airways, American Airlines, Delta Air Lines, United Airlines (originally a division of Boeing), Trans World Airlines, Northwest Airlines, and Eastern Air Lines
This was just the start of the airline industry. Slowly and steadily it caught the pace of development and advancement. By the 1920’s this industry mainly focused on only carrying of mails. It was in the year 1925 that the Ford Motor Company bought out the Stout Aircraft Company and began construction of the all-metal Ford Trimotor, which became the first successful American airliner. With a 12-passenger capacity, the Trimotor made passenger service potentially profitable.
Till then Air service was seen as a supplement to rail service in the American transportation network. It was by this time that a few major countries understood the concept and believed in it. it was the same time when Juan Trippe began a crusade to create an air network that would link America to the world, and he achieved this goal through his airline, Pan American World Airways, with a fleet of flying boats that linked Los Angeles to Shanghai and Boston to London.
In fact even during the great depression due to the introduction of the Boeing 247 and Douglas DC-3 in the 1930s, they were able to generate profits. This clearly stated the importance of the airline sector.
After this the expansion of this industry was always on a high. In the 1950s, the De Havilland Comet, Boeing 707, Douglas DC-8, and Sud Aviation Caravelle became the first flagships of the Jet Age in the West, while the Soviet Union bloc countered with the Tupolev Tu-104 and Tupolev Tu-124 in the fleets of state-owned carriers such as Aeroflot and Interflug.
The next big boost for the airlines would come in the 1970s, when the Boeing 747, McDonnell Douglas DC-10, and Lockheed L-1011 inaugurated wide body ("jumbo jet") service, which is still the standard in international travel. By the 1980s, almost half of the total flying in the world took place in the U.S.
The first countries in Europe to embrace air transport were Finland, France, Germany, the Netherlands and the United Kingdom.
KLM, the oldest carrier still operating under its original name, was founded in 1919. The first flight (operated on behalf of KLM by Aircraft Transport and Travel) transported two English passengers to Schiphol, Amsterdam from London in 1920.
France began an air mail service to Morocco in 1919 that was bought out in 1927. Germany's Lufthansa began in 1926. The British company Aircraft Transport and Travel commenced a London to Paris service on 25 August 1919, this was the world's first regular international flight.
India, Hong Kong, Indonesia, Malaysia and the Philippines are one of the first few Asian Countries of enter the airline industry.
Philippine Airlines was founded on February 26, 1941, making it one of the first countries in Asia to embrace air transport. The airline’s first flight was made on March 15, 1941 with a single Beech Model 18 NPC-54 aircraft, which started its daily services between Manila (from Nielson Field) and Baguio, later to expand with larger aircraft such as the DC-3 and Vickers Viscount. It was started by a group of businessmen led by Andres Soriano.
In the year 1932 a new airline came into existence knows as the Tata Airline, lead by JRD Tata. Now it is known as Air India.
Later in the years Pakistan began Orient Airways Ltd (Pakistan International Airlines), Cathay Pacific founded in 1946, Singapore Airlines and Malaysian Airlines in 1947 (as Malayan Airways), Garuda Indonesia in 1949, Japan Airlines in 1951, and Korean Air in 1962.
INTRODUCTION
The basic function of an airline is to accommodate for passengers and cargo while taking them to far-off places between two major cities or towns within a country or beyond geographical borders.
The aviation industry in India has grown by leaps and bounds in recent years in terms of kilometers flown as well as customers serviced. The economy of a country is substantially determined by the quality of air transport.
Air transport is also considered to be the swiftest mode of transport. Almost all the states have one or more airports, which are regularly serviced by several airlines. There are a number of international airports, which also serve as domestic airport too. Others are only domestic airports.
The Air Transport Companies are both in the public sector and in the private sector. In the public sector, there are Air India, Indian Airlines, Air India Charters Limited (Air India Express) and Alliance Air. In addition to this there are at present eight private scheduled operators, viz. Jet Airways (India) Ltd., Sahara Airlines Ltd., Deccan Aviation (P) Ltd., Go Airways, Kingfisher Airlines, Paramount Airways Pvt. Ltd., Go Airlines (India) Pvt Ltd., and Inter Globe Aviation Ltd. (Indigo) operating on the domestic sector providing a wide choice of flights and connectivity to various parts of India. One cargo airline viz. Blue Dart Aviation Pvt. Ltd. is also operating scheduled cargo services in the country. At present there are 59 companies holding nonscheduled air transport operators permit.
The airlines are not the owners of the airports. The owner of these airports is the Airports Authority of India. The Airports Authority of India (AAI) was formed on 1st April 1995 by merging the International Airports Authority of India and the National Airports Authority with a view to accelerate the integrated development, expansion and modernization of the operational, terminal and cargo facilities at the airports in the country conforming to international standards.
All major air-routes over Indian landmass are Radar covered (24 Radar installations at 11 locations) along with VOR/DVOR coverage (72 installations) co-located with Distance Measuring Equipment (71 installations), 39 runways provided with ILS installations with Night Landing Facilities at 36 airports and Automatic Message Switching System at 15 airports.
Few functions of the AAI are as follows:-
ƒ Control and management of the Indian airspace extending beyond the territorial limits of the country, as accepted by ICAO
ƒ Design, Development, Operation and Maintenance of International and Domestic Airports and Civil Enclaves
ƒ Construction, Modification and Management of Passenger Terminals
ƒ Development and Management of Cargo Terminals at International and Domestic airports
ƒ Provision of Passenger Facilities and Information System at the Passenger Terminals at airports
ƒ Expansion and strengthening of operation area viz. Runways, Aprons, Taxiway, etc
ƒ Provision of visual aids
ƒ Provision of Communication and Navigational aids viz. ILS, DVOR, DME, Radar, etc.
THE DOMESTIC PLAYERS
Airlines Founded/ Headquarters/ key people The Logo
Air India 1932, Mumbai – India, Raghu Menon, Chairman & Managing Director
Amod Sharma, Director
Alliance Air 1996, New Delhi and Mumbai, Capt. Mehbub Butt.
Indian Airlines 1953, New Delhi, Mr. Raghu Menon.
Jet Airways 1993, Mumbai- India, Naresh Goyal, Founder and Chairman.
Jet Lite (Formerly Air Sahara) 1991, New Delhi, Subrata Roy (founder), Naresh Goyal (Owner, Jet airways & Jet Lite.
Kingfisher Airlines 2004, Bangalore, India, Dr. Vijay Mallya, CMD
Air Deccan August 25, 2003 Bangalore, India. G.R.Gopinath, Vijay Mallaya.
Indigo Airlines 2005, New Delhi, Bruce
Spice Jet May 2005, New Delhi, India, Siddhanta Sharma (Executive Chairman).
Jagson Airlines 1991, Delhi- India
Go Air Airlines June 2004, Mumbai- India, Jehangir (Jeh) Wadia
AIR INDIA
Air India International entered the jet age in 1960 when it’s first Boeing 707, named Nandadevi and registered VT-DJJ, was delivered. Jet services to New York via London were inaugurated that same year in May 1960.
On 8 June 1962, the airline's name was officially truncated to Air India. On 11 June 1962, Air India became the world's first all-jet airline.
Air India Limited is the national airline of India with a worldwide network of passenger and cargo services.
Air India is state-owned, and administered as part of the National Aviation Company of India Limited - which was created in 2007 to facilitate Air India's merger with Indian Airlines.
Air India was founded by J. R. D. Tata in 1932 as Tata Airlines, a division of Tata Sons Ltd. (now Tata Group).
ALLIANCE AIR
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines.
Air India Regional started as Alliance Air (which was the low-cost arm of Indian Airlines. As part of Indian Airlines' merger with Air India, Alliance Air was renamed Air India Regional.
INDIAN AIRLINES
Indian Airlines was an airline based in Delhi, India and focused primarily on domestic routes, along with several international services to neighboring countries in Asia.
Indian Airlines is state-owned, and is administered by the Ministry of Civil Aviation.
The airline operates closely with Air India, India's national carrier. Alliance Air, a fully-owned subsidiary of Indian Airlines, was renamed Air India Regional.
JET AIRWAYS
Jet Airways is an airline based in New Delhi, India and is the country's second-largest international airline after Air India and the largest domestic airline.
Jet Airways was incorporated as an air taxi operator on 1 April 1992. It started commercial airline operations on 5 May 1993 with a fleet of 4 Boeing 737-300 aircraft.
In January 1994, a change in the law enabled Jet Airways to apply for scheduled airline status, which was granted on 4 January 1995.
It began international operations to Sri Lanka in March 2004.
While the company is listed on the Bombay Stock Exchange, 80% of its stock is controlled by Naresh Goyal (through his ownership of Jet’s parent company, Tailwinds).
JET LITE
JetLite, formerly Air Sahara, is an airline based in New Delhi, India. Controlled by Jet Airways, the airline operates scheduled services connecting metropolitan centers in India.
The airline also provides helicopters which are available for charter services and aerial photography.
Jet Airways and Air Sahara were the only private airlines to survive the Indian business downturn of the early 1990s.
In January 2006, Jet Airways announced that it would buy Air Sahara for $500 million in an all-cash deal, making it the biggest takeover in Indian aviation history.
On 12 April 2007, Jet Airways agreed to buy out Air Sahara for 14.5 billion rupees ($340 million). Air Sahara was renamed JetLite, and was marketed between a low-cost carrier and a full service airline.
KINGFISHER AIRLINES
Kingfisher Airlines Limited is an airline based in Bangalore, India.
Kingfisher Airlines, through one of its holding companies United Breweries Group, has acquired 26% stake in the budget airline Air Deccan and has option to buy further of 20% stake from the secondary sector.
AIR DECCAN
Deccan is an airline based in Bangalore, India. It was India's first low-cost carrier. Formerly known as Air Deccan the airline is operated by Deccan Aviation.
On 19 December 2007 Air Deccan and Kingfisher Airlines decided to merge. Kingfisher will effectively merge into Deccan Aviation following which Deccan Aviation will be renamed ‘Kingfisher Red’.
INDIGO AIRLINES
Indigo Airlines is a private domestic low-cost airline based in Gurgaon, India. It operates domestic services linking 14 destinations. The airline is owned by InterGlobe Enterprises.
SPICE JET AIRLINES:
SpiceJet is a low-cost airline based in New Delhi, India. It began service in May 2005. It was voted as the best low-cost airline in South Asia and Central Asia region by Skytrax in 2007. SpiceJet was earlier known as Royal Airways, a reincarnation of ModiLuft.
SpiceJet marked its entry in service with Rs. 99 fares for the first 99 days, with 9000 seats available at this rate.
Their aim is to compete with the Indian Railways passengers travelling in AC coaches.
JAGSON AIRLINES
Jagson Airlines is an airline based in Delhi, India. It operates scheduled and charter services within India and to Bhutan and Nepal. Jagson Airlines operate flights between Delhi and Rajasthan and Madhya Pradesh and Himachal Pradesh. They also operate a helicopter service between Srinagar, Baltal and Amarnath.
GO AIR AIRLINES
Go Air is a low-cost airline based in Mumbai, India and is wholly owned by the Wadia Group.
The airline was established on 1 April 1996 and started operations on 21 June 1996. It is wholly owned by Indian Airlines
Air India Regional started as Alliance Air which was the low-cost arm of Indian Airlines. As part of Indian Airlines merger with Air India, Alliance Air was renamed Air India Regional.
THE COMPETITION IN THE AIRLINES SECTOR IN INDIA – THE AERIAL WAR
Around 20 years ago, when the Airline Industry of India was Government Regulated, the airline Industry was considered to be a “natural monopoly” where only one Airline Company would be able to survive in the competitive environment and meet the demands profitably. But since deregulation, the perception is changing and there is no evidence of any sort of monopoly in the Indian Airline Industry. Foreign and private players have entered into the market offering the best at the best prices to the rising demand of the Indian traveler.
With the recent change in the Aviation Policy by the Government, several vistas in business have opened up and new opportunities have emerged. The creation of new and incumbent airlines and private sector participation in the development of Aviation infrastructure is a positive outcome of these new developments. Several global Aviation consultants and private equity players are eyeing this opportunity and are setting up their branches within the country.
Despite its unprecedented growth, the Civil Aviation industry in India is still in a relatively early stage of its development after its liberalization. Experiences from abroad, i.e., the US and Europe, show tremendous structural shifts in terms of route development, pricing, quality and frequency of traffic, as well as spatial concentration at few key airports. It can be said that market liberalization provided not only for greater opportunities in the industry, but also for greater risks. Recent waves of consolidation among airlines are only one example.
Since the deregulation, the Indian Airlines has grown tremendously. Also, average prices have fallen consistently due to the increasing number of players in the market. This fall in prices has benefited the consumers the most. If some fliers would disagree that the decline in prices have not benefited all the travelers then it can be proven that the fliers paying a high price also gets a superior product, in terms of flexibility and service. Moreover, the increasing demand for airline services is also helping airline companies to run a competitive business. People prefer air travel as a feasible option for commuting because it saves time and also because of the value added services provided by different airline companies. The competition in the Indian Airline Industry has succeeded in increasing the volume of travel and lowering average prices which has in the end benefited the final consumer and also to the airline companies.
Alliances and mergers are one of the factors which are giving a solid boost to the Airline Industry in India. Different airline companies, foreign as well as Indian, are tying up or taking over or merging to produce effective collaborations in service delivery with profitable returns. It is not the just the airline companies but also associate industries such as tours and travels agencies, hotels, transport organizations etc. which are also getting targeted by airline companies to deliver quality service to the customers.
At the end, it can be inferred that the Indian Airline Industry is growing at a fast pace and the credit goes to the effective and positive impact of the increasing competition in the industry. Factors indicating to the increasing competition in the airline industry are the pricing and promotion strategies adopted by the airline companies; value added services offered; sales promotion; product/service innovation; cost cutting strategies like downsizing; and so on. Airline companies are concentrating on the customer delight and also the costs to produce profitable returns with effective customer/market retention.
ENVIRONMENTAL SCAN
The following is an Environmental Scan of the Global as well as the Indian Airline Sector/Industry. The scan identifies the trends impacting the demand in the Airline Industry and the capability of the service providers to meet the expected demand. While the current events are important, the focus of the scan is on the trends likely to be important and effective in five to ten years from now. Apart from identifying the demand trends, the scan also identifies the constraints and issues of the airline industry, the key players, resources and the outcomes for the various service providers.
In India, the service airline business is in trouble. Many airlines companies are struggling to establish a business model which is viable to the business and profitable. Most of the companies are running into losses quarter after quarter due to the increasing costs etc. The recent high volume of passenger and freight flow has not been able to return profits. The low-fare airlines business model has been a success but has not been able to recover the increasing costs. The following factors represent the business environments for the airlines companies.
Political Factors
Liberalization of Air Services
Many economies have now adopted a forward looking approach in matters of policies for the liberalization of the civil aviation sector. Many economies are opening up with regards to bilateral agreements and are attracting more foreign passengers. Also, the air traffic between nations such as India-US, China-US, and many more strategic nations is on an increase. These liberalization policies are surely a boost to the airlines sector since the demand goes up and also service providers can take advantage such the fuel cost advantage (fuel prices in foreign nations are lesser), Globalization, Mergers and Acquisition etc.
Modernization of Infrastructure
With the availability of word class, improved technology, the infrastructure has been modernized to the maximum extent possible providing the best possible experience to the travelers. Airports are getting modernized with the entry of foreign investments. The best example is the airports in India, which have undergone modernization and are as beautiful and well-managed as the Heathrow airport. Airports in tourist places such Udaipur have also undergone beautification in order to give the foreign passenger a global experience.
Investments, Resourcing and Outsourcing
The promotion of Foreign Direct Investments by liberalizing the investment policies in the airline sector is relevant from the increasing number of people traveling by air and this has lead to generation of investment opportunities in the aviation sector. Foreign players are now not hesitating from investing in the airline sector of India and other developing nations. Due to Globalization, the demand is present in every part of the world be it in the U.S.A. or South Africa or Indonesia. Also, with the entry of foreign players is leading to tremendous outsourcing which is in a way reducing cost due to effective logistics decisions.
Economical Factors
Transportation Gateways to World trade
The global Airline Industry has developed as such that the infrastructure is facilitating World Trade, the export and import of goods, services and people. The world trade trends and the economic conditions of different nations indeed have an impact on the airline industry, the demand and the outcomes. Amongst the Asian nations, Japan is facing stagnation because of which the foreign investments and the demand for trade in goods and services have fallen. Whereas, in China and South Korea, the import demands from various nations have increased. These economic conditions are affecting the airline industries of these nations.
Price and Availability of Petroleum Products
Rising and the volatile world process of Petroleum Products represent trends that have profound impact on the airline industry and the costs to the service provider. Higher fuel costs affect the demand and the operating costs thus changing the travel pattern. They also affect the infrastructure such as amenities like sky-walks etc. higher petroleum prices stem for a mix of factors which are complex in nature such as supply interruptions, geopolitics, change in usage patterns etc. The effects of high petroleum prices on airlines can be seen clearly in the balance-sheets of airlines such as the Kingfisher which has recorded losses in Quarters I and II along with many other airlines which are unable to recover their rising costs.
Cost and Availability of Skilled Labor
The airline industry demands extreme skilled labor such as the pilots, ground staff and the flight crew. The labor not only has to be skilled and available but has to be efficient because of the heterogeneous nature of the services provided. No airline can recruit a trainee pilot and directly assign him to fly a Boeing-777 or an Airbus-319 airplane carrying around 500 passengers. The labor-force has to be trained and then assigned with tasks to perform after proper evaluation. Airlines have their own subsidiary training centers which concentrate completely on the grooming and training of the labor-force. The selection, recruitment, evaluation and training are costly in nature and thus the company’s costs goes up which get transferred to the customer or the market thus affecting the market and the demand. Also, skilled personnel in aviation occupations (particularly pilots) are being attracted to overseas airlines and airports, creating training demand on top of projected domestic labor requirements.
Also, a matter of concern to the airlines companies is the aging work-force which is low on efficiency and productivity. Accommodating such an aging and un-productive workforce in the organization structure is difficult.
Cost and Availability of Strategic Raw Material
Strategic raw material with respect to the airline industry is steel and cement which are required for the manufacture of airplanes and other infrastructure required. The prices of steel and cement are growing at an alarming rate. Thus, making these materials available is a difficult and an expensive task resulting in the increase in the costs to the service provider.
Mergers and Acquisition
Strategic M & A between airline providers are another boosting factor to the airline industry. The Star Alliance which was founded in 1997 with only 5 Airline Companies now has 21 Airlines Companies. Also, the merger of Air India and Indian Airlines is a good example of a Strategic merger. These mergers make the airline companies stronger and efficient with respect to service providing. A better co-ordination between different airline companies results in a joint effort in tackling supply problems of fuel, aw material, labor etc. The merger of Air India and Indian Airlines was a strategic merger to tackle the competition from the private players in the Indian Aviation sector.
Changing industry structures and market
The global market is highly volatile and undergoes dynamic changes such as in the demand, the supply, investments etc. This dynamic nature of the market affects not one or two service provider but the entire sector. The changing business models effect into a shift of demand which has to be catered to by the entire industry. For example, the low-cost airline business model gave birth to an all-together different class of flier, the best bargain available wherein bookings are made 3 months in advance and that too in auctions etc. This led to a steep increase in demand and the number of travelers almost doubled. The strain was felt by the service provider. The low-cost airline model was not only forcing other airlines to lower their fairs and fight the competition but also cater to the demand. Thus, the volatile nature of the industry does take a toll on the airline service providers.
Competition
Two factors which worry the airline companies are the demand and the competition. With the liberalization of policies, foreign players and private players have entered the market giving a tough time to the Government companies. Also, the foreign and the private players have an edge due to the exposure to a global standard, world class infrastructure and thus provide better services to the passengers in cost-effective manner. Local and Public players have to face the heat and cope up with the competition which result into mergers and acquisition which altogether is a positive for the Airline sector.
Sociological Factors
Population and Urbanization
Demographics are an important factor determining the demand and the key markets for the airline industry. The migration of population from nation to nation either for lifestyle as well as economic reasons has led to the growth of the demand. The population growth leads to increased demand for people movement and for support services such as the hospitality and tourism services. Also, an important feature of the growing population is that the growth is taking place in the urban area and thus further creating demand for movement and air transportation from city to city. For example, the increasing movement of people from major international cities has led to the increase in the number of flights between these key cities, such as Mumbai-London; Mumbai-Paris etc.
Technological Factors
Improving Technology
With Globalization, technology is going through tremendous change with the special emphasis by companies in Research and Development. Every service provider is looking for a cost effective method, world class infrastructure, best of the best service providing to passengers etc. technology is surely another boosting factor the airline industry. Facilities such as E-ticketing, Kiosk Check-in, internet connectivity in-flight etc. are due to the improving the technology. These facilities are resulting into customer-delight.
Other Factors
Apart from the ‘PEST’ Factors affecting the Business Environments of the Airline Industry, there are many more factors which are affecting the demands and determining the market trends for the sector. The following factors are a part of the of the ‘PEST’ factors but they have an all-round impact on the sector thus cannot be allocated under a specific heading.
Following the ‘Other Factors’:
Tourism
Since the last ten years, world tourism has been struggling due to the frequent terrorist attacks and natural calamities happening in key economic destinations. The 9/11 bombing of the twin towers in New York had the most destructive effect to the tourism in the entire of the United States. Tourism in the U.S.A. has not yet recovered. Because of the fall of tourism, the international travelling has reduced thus directly affecting the airline industry. Nations now are concentrating on promoting tourism in order to improve revenues in the related sectors, most important being the airlines sector. ‘Incredible India’ is one such initiative by the Government of India to promote national as well as international tourism.
Safety and Security Concerns
Events such as the 9/11 blasts, blasts at the London Airport, blasts at the Madrid Railway Station and the serial blasts in the Mumbai local trains confirm that transport facilities are being targeted by terrorists. These events have led an increase in the safety and security issues in major cities. These issues are affecting the demand of airlines services for travelling by people.
Environmental Concerns
It is now recognized that the rise in temperature due to climate changes are because of the human activities such as Globalization, agriculture, burning of fossil fuels, deforestation etc. all these activities are to meet the increasing demand of the increasing population. The airline industry needs these activities in order to fulfill the demand of the movement of the population from one place to another. Environmental issues and concerns are obstructing in developing infrastructure such as new airports etc. the airline industry without a proper infrastructure cannot create profits for the players in the market.
Workload
We just mentioned volatile nature of the market and demand and its effect on the industry. This effect is felt in the hanging workload for the employees. In peak season times, the workload is tremendous. Also, the labor-force is not available as required by the industry. Thus, the existing work-force has to bear the brunt of excess workload. Pilots, flight crew getting stressed are a common issue now and the stress is resulting into hazardous effects for the airline companies.
SWOT ANALYSIS
STRENGTHS
Open Economies
The world is getting smaller. Thanks to the opening up of economies like India. The developing nations have a lot of potential with regards to industrial growth. Opening up policies regarding the airline services initiates MNCs to venture into developing markets.
Efficient Marketing
Due to the heavy competition in the sector, airline companies are initiating on dynamic marketing strategies. These strategies are encouraging people to fly who were once scared of flying and also considered it an expensive mode of commuting.
Networking
The Airline Sector on the Global as well as the National level is well-networked and have efficient resources put into the networking infrastructure. Travelling from any destination to another destination is possible with varied options available to the traveler.
WEAKNESSES
Threat of New Entrants
At the first glance, the Airline sector looks very profitable and full of opportunities. No doubt, there are a lot of opportunities but there are many candidates fighting for the opportunities. The competition is so intense that no player can be profitable along with being an effective player in the market. Capital intensive businesses like an Airline Company cannot afford to forego iota’s profits for market share.
Power of Suppliers
The airline supply business is mainly dominated by Boeing and Airbus. For this reason, there is a sort of monopoly of the suppliers which takes a toll on the costs. Also, a stagnant supply poses as a weakness to the increasing demand for airplanes.
Power of Buyers (The service providers)
The bargaining power of buyers in the airline industry is quite low. Obviously, there are high costs involved with switching airplanes, but in order to give the best to the traveler, companies have no option but to buy at a high price.
Availability of Substitutes
Other modes of commuting, may it be people or cargo, are definitely cheaper as compared to air-travel. As a result, the airlines sector often loses market due to these substitute means. Especially, in the freight carriage sector, the business is falling due to increasing prices of airline companies.
Competitive Rivalry
The airline sector is highly competitive. Highly competitive sectors fetch minimum returns. Also, low returns in the airline business in the long run can pose as threat because of the businesses being capital-intensive.
OPPORTUNITIES
Emerging Technologies
The latest technologies and the innovations in the technologies are improving service delivery internal as well as external, minimizing costs, enabling mobile computing for booking, check-ins etc. and enabling businesses for capitalization of economies of scale and scope offered by government wide approaches.
Government Initiatives
Businesses can be able to capitalize on resources constraints and achieve resource cost efficiencies. Improvement of Inter-Government Partnership and Delegating of work-load is possible.
Resourcing and Investments
Outsourcing and investments help the businesses to further support the departmental objectives thus resulting in the achievement of the company’s goal. Other advantages are knowledge sharing / continuous learning, increased career bridging opportunities, ability to identify and justify resource requirements, ability to balance workloads, improved management of the costs etc.
THREATS
Poaching
The labor-force management is very costly with respect to the airlines sector. Also, due to the liberalization of policies, foreign and private players often poach work-force of competitors which leads to talent-drain and thus losses.
Inefficient Planning
Inefficient planning results into in-effective decisions which result into difficult situations. Also, planning in the airline sector is also tough wherein one has to consider every other element of service delivery and cost management.
Government Interference
Extensive Government Interference can affect the accountability of the organization wherein the Government influences decision making and also planning. One incident can be recalled of the Government Interference during the Privatization of the Airline sector.
THE PRODUCT MIX
Product is the core thing which every enterprise tries to deliver. Product is of course, the service that companies have to offer to the customer. Getting the product right is the single most important activity of marketing. If the product isn't what the market wants, no amount of price adjustment or brilliant promotion will encourage consumers to buy it. The airline product is quite a complex one since it comprises of a service of incorporating the temporary user of airline seat and certain tangible products such as free flight bags or a free bottle of duty free spirit to encourage booking. The product here refers to Airline service offering. Although service products are essentially intangible, there are certain pyhsical characteristics which consumer assess in their evaluation of product choice.
Attractiveness of the offering in terms of pyhsical features such as consumers have high expectation, the food & drinks offered , entertainment.Facilities available, associated level of services such as, quality of seats & interior decoration.
The airline product includes of two types of services:
5. On the ground services,
6. In-flight services.
The on-the-ground services include a convenient airport with car parking facilities, duty free' ¬shopping quick and efficient checking of baggage, efficient service at reservation counter, transport to the airport, etc.
The service provided inside is intangible and is highly variable. The airhostesses are trained to provide polite, warm and courteous service. The courteous service that the representatives at the baggage counter, reservation counter provide goes a long way in developing customer loyalty. The travel agents of the airlines also need to be efficient and polite.
Differentiating the Product
It is important to recognize that what the consumers are demanding are not products, or features of products but the benefits they offer. Producing added benefits thus helps the marketer to distinguish one product from another. Good design or style of service can form the basis of differentiation. This enables the company to create a personality for its service. The design and decor of the aircraft provides opportunities to personalize their product as well as periodically to update them when differentiation under IATA regulations was virtually excluded, nonetheless, certain airlines were able to develop distinct personalities. Eagle Airlines created an entirely new market between New York and Bermuda, for e.g. by developing an image of a friendly airline distinctive from other airline serving the route. A similar style was evident in Richard Branson's Virgin Airways.
CORE PRODUCT AND SUPPLEMENTARY SERVICES
Many services products consist of a bundle that includes a variety of service elements and even some physical goods. It is important to distinguish between the core product that the customer buys and the supplementary services that accompany that product.
THE FLOWER OF SERVICE
Core product surrounded by clusters of supplementary services.
The core service of an airline is the service of transport. The supplementary services are classified into eight clusters & each one is analyzed with respect to the airline industry:
* Facilitating elements
* Enhancing elements
Information
This aspect of supplementary service is common for every person that needs information about the organization. In case of airline industry, up to date information regarding flight schedules, ticket fares, information about promotion schemes etc must be available to customers.
Customers can avail of this information literally at their fingertips today with every airline starting its own website which gives complete details to the customer & also entertains queries.
It also includes providing information to employees regarding new policies affecting the airline & equipping them with enough information, which the customers might demand. Extensive training is provided to in-flight attendants regarding handling customer queries, knowledge about the airplane itself, knowledge about cuisine etc.
Consultation
This aspect of supplementary services can be customized according to the needs of the customer. It is more in the case of people processing and high personnel-contact services.
Airlines are moving more actively into the role of consultant today. They are doing away with the travel agents & designing & selling packaged tours to consumers directly. In this aspect they often act as consultants to the customer, by giving him advice & suggestions regarding the type of plan he can choose, the benefits he will get the mode of travel he should choose etc.
Another aspect to consultation at airlines is when the customer approaches the airline regarding traveling to particular destination, the airline gives him a variety of choices of routes that he can take.
In some cases airline may also design special menus & benefits in consultation with its frequent fliers by keeping in constant touch with them & asking them for suggestion as to what they want in their airline which will make their experience more comfortable.
Order taking
The order taking procedure is essentially the booking procedure of the airlines. The important aspect to be noted here is that the procedure is smooth, easily understood & fast. Reservation of airline tickets is now easy and reliable since it is fully computerized. There are 24 hours reservations. Passengers can specify their seat preferences at the time of reservation.
Most airlines use the telephone, fax, and email methods of booking. The emphasis here is on fast booking & at the same time getting the required information form the customer. This is done by establishing a standard reservation procedure & format thus reducing the risk of inconsistent service delivery. The online booking system also facilitates better order taking & processing.
The scheduling aspect assumes importance as reservations on the wrong flight to the wrong place are likely to be unpopular.
Hospitality & Caretaking
With the increased competition today in the airline industry & the increasing similarity of services offered by each airline, hospitality has emerged as a key-differentiating factor between one airline & the other.
The hospitality aspect of an airline is tested right form the time of the reservation (courtesy of the booking official) to the airline’s desk at the airport to the actual in-flight travel (the attitude of the flight attendants) to the post flight help extended.
Safekeeping
In airlines the safekeeping issue is that of safeguarding the customer’s baggage.
Baggage allowances are offered about 30 kgs of check-in baggage is allowed. Passengers carrying international tickets are given further allowance of around an added 30 kgs Priority baggage delivery is offered to members. The customers entrust his baggage to the airline & it is the airline’s responsibility to keep it in a proper condition.
Children and infants usually travel along with their parents and guardian. In case of unaccompanied minors, customer service staff renders all assistance like checking in and escorting up to the aircraft and handing over to the senior-most cabin attendant on board the flight. He is looked after on board the flight right up to the point flight reaches the destination and he is received by his guardian.
Exceptions
Special requests – airline very often receive special requests form customers with regards to meal preferences, special amenities for elderly people or children., medical needs etc. these needs have to considered & acceded to wherever possible.
Handling of customer suggestions / complaints – every airline today has a customer service centre which entertains customer suggestions & complaints. On the flight, customers are often asked for their opinion regarding service equality. Many corporate frequent travelers are consulted when the airline decides to make any new change.
Billing & payment
The billing procedure in airlines is simple. The options available to the customer are plenty including credit card & travelers cheque. Airlines use the open account system with their corporate clients. Frequent fliers are also given special payment privileges.
LEVELS OF PRODUCT
FOUR PRODUCT LEVELS
The Core Service
The core service of the airlines industry is to transport goods and services to various destinations. As the needs of the people increased the entire system became more organized and formal. After this stage come the various supplementary services.
The Supplementary Services
The airline industry has many players they had a brand name like ‘Air India’,’ Jet Airways’,’ British Airways’. All of them had some common services to offer like connecting flights, through check-in, tele-check in, food on board, and complementary gifts etc.
Different classes like economy class, business class were introduced. Air concessions are given to school students, old people etc. Singapore airlines were the first to introduce small 8”television screen for every passenger. The freebies are actually win-win deals between airlines and other services.
Sahara, for example, offers its passengers a ‘business-plan’ on two-way economy class ticket, which includes a night’s stay with breakfast, STD facility for 3 minutes and boardroom facility at the Park Hotel, New Delhi. To Delhi based fliers to Mumbai, it offers a night’s stay with breakfast, airport transfers and VIP amenities at The Orchid, Mumbai. For business class, the plan includes a stay at The Leela, with buffet breakfast and late checkout.
All these added service helps the customer to decide upon which airlines he wants to travel. As competition increased and the customers wanted more the next phase evolved and that is the augmented service.
The Augmented Service
This phase is where the customer’s expectations are met; the service providers kept working on new methods to meet the ever-changing customers’ demands. The players introduced online booking, which was very convenient for the service users.
British Airways business class has showers; it’s more spacious and comfortable. Sahara airlines offer its passengers six different types of cuisine like vegetarian, fat free, diabetic etc. They also have auction going on board. Virgin airlines have gambling on board, they also have body massage to offer to their passengers. Air Emirates has something called cab service, they have customized pick up and drop cab service.
This phase is the most crucial one; with increased competition service will become the final differentiation.
Future Service
As mentioned above the customer needs keep changing, the future is unknown. The customers may be looking in for more frequent inexpensive air travel, something like air taxis, super sonic speed. This decreases the time thus reducing the cost.
The diagrammatical representation of the core and supplementary services in the airline industry is shown below:
BRAND POSITIONING
Brand positioning is all about identifying the optimal location in our customers’ minds for our Brand and our competitors. Proper positioning makes it easier to facilitate understanding of the Brand. Proper positioning clarifies what the Brand is all about, how it is both unique and similar to competitive brands, why customers should purchase and use the Brand.
Creating brand awareness is one of the most important aspects for any product or service. Due to the intense competition in the market every airline has to position them in the market. It is only if they position themselves well can they create a Brand image, brand relationship as well as brand responses.
Each and every airline would want to have a market for them as well as have a good name in the minds of the customers.
Airlines use unique attributes to position their brands in the minds of the potential customers. Thus consumers strongly associate those attributes with that particular brand, positively evaluate it and believe that they can not find those attributes to the same extent with a competitive brand.
Re- branding has also become an important concept. It is evident that the mergers and acquisitions have become an important part of the airline industry. Thus they need to re-brand themselves under one common name.
Examples of Re- Branding:
KINGFISHER AND AIR DECCAN
Kingfisher’s acquisition of Air Deccan would lead to the latter being re-branded under a new name. The new brand positioning will be a shift from being a low-cost airline to a value-based airline. It will re-emerge with a new revamped stylish look. The emphasis will be on creating a stylish airline keeping with the UB Group’s brand image.
The branding exercise will encompass areas such as changing the look and feel of the aircraft, including interiors, ticketing and check-in counters and staff uniforms. The colors red and white will dominate the changes, with the aircraft, leather seats, carpet, boarding passes and airport counters painted red.
INDIAN AIRLINES AND AIR INDIA
When Indian Airlines and Air India merged, they retained the brand name of the latter due to its better brand positioning. The logo was evolved out of a combination of the two airlines. The red colored flying swan with the Konarak Chakra in orange became the new brand logo.
SAHARA AND JET AIRWAYS
However, in case of Sahara airlines being branded Jet Lite by Jet Airways, there could well are a dichotomy in the consumer’s mind of the new brand’s positioning. Jet has a premium connotation while Sahara was a low-priced air carrier. The Jet Lite brand might end up confusing its customers.
Thus it can be said that if the transition is smooth and the integrity of core values retained, then any re-branding exercise can be successful. The new brand has to be updated and not outdated.”
The Integrated GAPs Model of Service Quality
The Gaps Model positions the key service concepts, strategies and decisions in service marketing in a manner that begins with the customer and builds the organization’s tasks around what is needed to close the gap between the customer expectations perceptions. The airline provider needs to study the Gaps model to maintain a service quality which delights the customer. The main concentration has to be on the customer gap, the difference between customer expectations and perception. Every Airline Company has the task of closing every gap through its effective application of marketing mix strategies.
Customer Perceptions are subjective assessments of actual service experiences; customer expectations are the standards of, or reference points for, performance against which services are compared. The factors determining customer expectations are personal needs, word of mouth communication, advertisements and past experiences of the service.
Gap 1: Expected Service and Management Perceptions of consumer Expectations – Not Knowing What Customers Expect.
Gap 1 is the difference between customer expectations of the service and the company understanding of those expectations. For example, a customer expects adequate information to be provided to him about his baggage and limitations of the weight to be carried. If an airline provider fails to effectively inform the flier, then the gap gets formed where the customer’s basic expectations are not met by the company management itself.
Key Factors leading to Gap 1 are:
• Inadequate Marketing Research orientation.
Insufficient Market Research
Research not focused on Service Quality
Inadequate use of Marketing Research tools
• Lack of Upward Communication.
Lack of interaction between management and customers
Insufficient communication between contact employees and managers
Too many layers between contact personnel and top management
• Insufficient Relationship Focus.
Lack of market segmentation
Focus on transactions rather than customer relations
Focus on new customers rather than relationship customers
• Inadequate Service Recovery.
The above factors need to be addressed properly to close Gap 1. Strategies fore closing Gap 1 include Market Research; Promotion Mix Strategies; Communication Mix Strategies; People Mix Strategies.
Gap 2: Management Perception of Consumer Expectations and Service Standards – Not having the right Service Quality Designs and Standards
Gap 2 reflects the difference between companies understanding of customer expectations and development of customer-driven service designs and standards. For example, during long distance flights, a flier expects stabilizer drinks to maintain his body pressure and avoid restlessness but if the service provider fails to keep this in mind while processing the service, then a gap is created.
Factors leading to Gap 2 are:
• Poor Service design.
Unsystematic new Service Development Process
Vague, undefined Service Designs
Failure to connect Service Design to Service positioning
• Absence of Customer defined Standards.
Lack of customer-defined service standards
Absence of process management to focus on customer requirements
Absence of formal process of setting service quality goals
• Inappropriate physical evidence and servicescape.
Gap 2 can be closed by implementing strategies such as Process Mix strategies; Market Research; Physical evidence Mix Strategies; Productivity and Quality Strategies.
Gap 3: Service Standards and Service Delivery – Not Delivering to Service Standards
Gap 3 is the discrepancy between development of customer-driven service standards and actual service performance by company employees. Service Standards must be backed by appropriate resources and also need to be enforced to be effective in service delivery. For example, fliers when pay a relatively high price, expect a better service quality which is perceived to be a standard for the price paid. But, if the airline company fails to deliver a service which is up to the mark and does not satisfy the customer and not deliver the value worth the price charged, then Gap 3 is created.
Factors Leading to Gap 3:
• Deficiencies in Human Resource Policies.
Ineffective Recruitment
Role of ambiguity and role conflict
Poor employee – technology job fit
Inappropriate evaluation and compensation systems
Lack of empowerment, perceived control, and team work
• Failure to match supply and demand.
Failure to smooth peaks and valleys of demand
Inappropriate customer mix
Over reliance on price to smooth demand
• Customers not fulfilling roles.
Customer ignorance of roles and responsibilities
Customers negatively affecting each other
• Problems with service intermediaries.
Channel conflict over objectives and performance
Channel conflict over costs and rewards
Difficulty controlling quality and consistency
Tension between empowerment and control
Gap 3 can be closed by implementing effective selection and recruitment strategies; effective outbound communication with customers; effective market research; effective distribution strategies.
Gap 4: Service Delivery and External Communication to Customers – When promises do not match Performance
Gap 4 illustrates the difference between the service delivery and the service provider’s external communication. Promises made by airline companies through advertisements, sales promotion and other communication tools raise the flier’s expectations from the airline company. These expectations form as a service standard for the flier which is then assessed and determines the customer’s satisfaction level. The discrepancy between the actual and the promised service therefore has an adverse effect on the customer gap.
Factors resulting into the Gap 4 are:
• Lack of Integrated Services Marketing Communications.
Tendency to view each external communication as independent
Not including interactive marketing in communication plan
Absence of strong internal marketing program
• Ineffective management of customer expectations.
Not managing customer expectations through all forma of communication
Not adequately educating customers.
• Over promising.
Over promising in advertising
Over promising in personal selling
Over promising through physical evidence cues
• Inadequate horizontal communication.
Insufficient communication between sales and operations
Insufficient communication between advertising and operations
Differences in policies and procedures across branches units
Gap 4 is all about the communication to the customer about the service. No airline company can afford to over promise and then not meet with the expected standard of the customer. In order to close the Gap 4, strategies need to be implemented in effective communication and informing the customers.
Gap 5: Perceived Service and Expected Service – The Final Gap
Gap 5 is about the difference in the perception of the customer/flier about the service and the expected service. Gap 5 is a result of the above mentioned four gaps. If the Gaps 1 to 4 are closed effectively and strategically, then the Gap 5 automatically is closed and the perceived service becomes the expected service and results into customer delight and retention.
PRICING MIX
Pricing decisions play a crucial role in managing the business of air transportation. The increasing operational costs, the rising competition, the falling occupancy ratio, the imbalances in demand and supply, the increasing pressure of inflation are some of the important factors influencing the decisions for setting fare and freight rates in the air transport business. The Ministry of Tourism and Civil Aviation, the Indian Airlines Corporation, the National Airports Authority, the International Airports Authority of India, the Air India Corporation are the bodies directly or indirectly influencing the process of making the pricing decisions. The main problem is to make the pricing decisions competitive because it is found that even the private air transport organizations are involved in the process too. It is seen that the following are the features in price i.e.: 1.Flexibility; 2. Price Level; 3. Differentiation; 4. Discounts and Allowances.
While price is tactical, it has localized implementation, it is temporary in nature and therefore price is flexible.
Pricing plays a vital role in the marketing mix of any airline. The ‘fair price’ concept is supreme, mainly because more than anything else most potential customers will base their purchase decisions on the basis of price of the ticket. Passengers tend to seek value for the money they are spending.
For example, below is the table showing price of tickets for Indian, Jet airways and Rajdhani express.
Sector
Indian Jet AC–I* AC-II *
Delhi-Mumbai 3,400 3,620 4,180 2,404
Delhi-Bangalore 4,500 5,053 6,385 3,470
Mumbai –Bangalore 2,700 2,839 2,943 1,954
*Rajdhani fares
All figure in Rs
As seen in the table, in every route whether it is Mumbai to Bangalore, Delhi to Mumbai the rates of 1tire A.C. is more than Air fare of Indian and Jet Airways. Travelers will most definitely choose to travel by airways as it is cheaper compared to railways plus it gives the added advantage of reaching the desired destination much sooner. Here, by offering a lower price, the respected airline is trying to snatch the customers who would otherwise be traveling by 2nd tier A.C.
The final price that the passengers pay is made up of various components. The air fare charged by private scheduled domestic airlines comprises of basic fare, fuel surcharge, congestion surcharge, passenger service fee and transaction fee (if the ticket is booked other than the Website). Out of these, only passenger service fee is the component collected by the airlines on behalf of the airport operators.
Pricing Strategies
11. Demand-based pricing: The pricing of air fares under this strategy is simple. It is based on the demand from the customers’. It involves setting prices consistent with customer perceptions of value, i.e., prices are what customers will pay for the services provided.
For example: The person sitting next to u might not have paid the same price for the ticket. If a person wanting to travel in Business class does not get the ticket for the same when tried to book at the last minute, will travel in Economy class paying more than what the other travelers must’ve paid. The pricing in airline industry is never fixed or same. It’s fluctuating in nature depending upon time, demand and other such attributes. So when, the demand exceeds supply for the seats in an airplane, the price charged on the ticket is much higher than other passengers.
12. Season-based pricing:
The pricing of airline industry largely depends on seasons. For example, if a person is travelling by Indigo from Mumbai to Bangalore, the pricing will be different for different time periods. It will be cheaper in monsoon while comparatively expensive in winter. Also, it depends when the person is booking the ticket.
If he books the ticket 3months before the date he’ll travel he might avail the ticket at a cost that is 30-40% less than what the person may be charged if he books the ticket 20days before.
For example: if a traveler books a ticket during normal weekdays the prices would not be too high. Whereas, if the same traveler books the tickets during Diwali or Christmas, he will be charged more than what he was charged earlier for the same destination. And this strategy remains the same for all kinds of airlines. The prices may not be exactly same but it’ll be quite similar.
Also, Jet airways provide tickets at a comparatively lower rate during the vacations for student-passengers. This helps them tap the population travelling abroad for education purposes as well as increase occupancy ratio.
13. Competition-based pricing:
This strategy focuses on the prices charged by other airlines. Competition-based pricing does not always imply having the same price strategy as the competitors. It means keeping one’s pricing strategy such that it is cheaper in cost or it offers the same price as competitors with better and/or more facilities. Thus its basic purpose is to have a competitive edge over the rival airlines.
For example, Indian airline industry is filled with low-cost airlines. So Air Deccan before getting acquired by Kingfisher had many competitors like Indian airlines, Air India (before merger), Indigo airlines and Go air. And now Spicejet had entered the already filled jammed low-cost airline bandwagon. This brings about a competition in the pricing of the tickets. Spice jet on completion of three years on May 23rd 2008 offered 3 lakh tickets just for Rs. 3 starting from July 1st to 21st September 2008 across its 18 destinations in India. This was a very smart move to attract passengers especially those travelling by Economy class who are very cost conscious.
14. Pricing strategies when customer means “Value is Low price”:
This strategy can be applied when the most important determinant of value to a customer is money. But this does not imply that the level and standard of service, facilities and other attributes should be looked upon. It just means that pricing takes a forward stand as compared to the other attributes. To establish a price for this strategy, the marketer should understand and know the objective of charging low prices, how the customers’ interpret prices and how they value their travelling experience on the basis of prices.
There are various methods of applying this strategy:
vii. Discounting: The service provider or marketer may offer discounts or price cuts to communicate to the price-sensitive buyers/ customers’ that they are receiving value for which their money is spent. For example: Spice jet has a special group discounting scheme wherein groups of over 15 guests may be provided with consideration for special fares.
Another example would be that of Indian, that offers discounts to passengers on site collaborated with India times by offering a bid for international destinations at low fares.
viii. Odd pricing: This is another strategy wherein the service providers offer prices at an amount which seems comparatively lower than the normal rates. It is based on U.S. dollar price-strategy wherein instead of charging $500 they will charge $489 or so. So in case on Spicejet. Instead of offering a ticket from Mumbai to Goa at Rs. 2400 they would offer at Rs. 2299. So, on looking at the figure the price difference seems to be more which in fact is just hundred and eleven rupees.
ix. Penetration pricing: This is a strategy in which new services are introduced at low prices to stimulate trial and widespread use. This strategy is appropriate when the sale of tickets is price-sensitive.
In order to make, travel by air more affordable to the common man, a couple of years ago Jet Airways announced a new offer `Everyone can fly' which offered a major reduction in economy class air fares on certain selected routes across the country. In most of the airlines, the reduction enables economy class air fares being competitive to rail fares being charged for the same journey.
15. Pricing Strategies when the customer means “ Value is everything I want in a service”:
When the customer is concerned more in the ‘get’ component of the service, monetary price is not of primary concern. The more desirable attributes that an airline provides, the more highly valued that service is likely to be and higher the price that the marketer can set.
Skimming strategy: This is a strategy in which new services are introduced at high prices with large promotional expenditures. It is an effective approach when services have undergone major improvement over past services. In this situation the customer is more concerned about obtaining the service than the cost of the service, thus allowing the service providers to skim the customers most willing to pay the highest prices.
An example of this would be that of Virgin Atlantic airlines that has gambling on board. They also provide in-flight body massage to their passengers. There is a bar in the air craft. Also, they provide lounge facility at the airport to the frequent flyers.
Also, when Kingfisher had newly started first class with Kingfisher first, the rates of the tickets were very high compared to other airlines’ tickets. But travelers still opted for it as they wanted to have the new flying experience with Kingfisher.
THE PLACE MIX
In Airlines, they utilise more than one method of distribution.for e.g they sell tickets through travel agents & sell seats on flights to tour operators , whilst also operating direct marketing. Whichever distribution strategy is selected, channel management plays a key role. For channels to be effective they need realiable updated information. For these reason, I.T has been widely adopted such as on-line booking system.
This dimension of marketing mix focuses on processing of services and selecting the location points for airways and airlines offices keeping in view the comforts and conveniences of the end users. By the processing of services, our emphasis is on the involvement of channels, front-line-staff, travel agency offices; offices of the tour operators or so from where service flow and reach the ultimate users.
15. The air transport needs to make sure that the prospects don’t face any difficulty in buying the tickets and make necessary arrangements for the confirmation of booking.
16. It is also to be confirmed that the users booking their luggage are not to face inconvenience.
17. The behavioral profile of the personnel working in offices of travel agents and in the offices of the airways and airlines require due attention. It is almost clear that airhostess looking attractive, smart, well dressed are at your disposal to make available to you the defined services.
18. It is also to be sure that the information network of the offices of the travel agents is technology-driven and user-friendly.
19. The security checking, custom checking of passport, visa, income tax clearance or so. It is essential that all the windows or the counters offer the services as per the provision and promises.
20. Keeping in view the duration and nature of flights, the users are made available lunch/ dinner, breakfast and drinks inside the aircrafts.
21. If in course of the journey, you are supposed to change the aircrafts and the duration of stay is long, it is the responsibility of the airport authorities and concerned airway and airlines to make available the accommodation facilities.
Another dimension of place mix is related to location and management of the offices of the airways, travel agents, tour operates, transport operators or so.
13. The main thing in the selection of a place is easy accessibility. The prospect customer should get an easy access to the office and ticket counters. The place is required to be safe, well connected with all-weather proof roads where all the required infrastructural facilities are to be available.
14. The technology-driven booking system is to be ensured. The online booking facility should be user friendly and all the information regarding the company should be available on the company site so that customer can get all the information at it ease.
15. The water and sanitation facilities for the users and comfortable seating arrangements need due care of the travel agents or airways offices. The lighting, ventilation facilities need to be made available.
16. The interior decoration, furnishing, plantation need aesthetic sense so that the users from a positive opinion regarding the airways services. The interiors should be creative so that people can enjoy their ride and make their trip a memorable one.
17. The positioning of posters of airways and airlines which look attractive and draw the attention of the users attending the offices for chartered flights, packaged tour need due care.
18. It is in this context that they find management of place an important component of the marketing mix.
In view of the above, it is right to mention that air transportation business is linked with a number of allied services offered by a number of agencies and organizations. If they don’t find cohesion and coordination the promised services would hardly reach to the end users.
Indian Airline Network
Jet Airways Network
THE SERVICE MARKETING TRIANGLE
ENABLING PROMISES MAKING PROMISES
KEEPING
One can better understand the working of airlines by looking at its marketing triangle. There are three entities in the entire transaction:
7. Customer: He is the person who wishes to satisfy his needs i.e, transportation from one destination to another. Here, the customer is a passenger or a potential passenger.
8. Company: This is both the dreamer and the offerer. It here refers to the various airlines which offer its aviation services to the customers to satisfy their demand for transportation from one destination to another, for example: The Indian Airlines. Here, the company makes a promise to its customers to deliver the right quality service.
9. Provider: The service providers are finally the people who interact with customers. They keep the promise that the airline operator has made to its customers by delivering the finest services. They are the ones who carry out final transactions. The customer actually comes in contact with the service provider and not the company. For example: the air-hostess and the crew.
The interaction between these three parties while providing the service takes place in the following manner:
The company is established with the basic objective of providing the specific transport service. Thus the airline industry with players like Indian airlines, Jet airways, Sahara airways etc came into being.
The air service provider that is the company communicates with the customer and makes him aware of the services. It makes promises to the customer by advertising through various media’s. For e.g.: the TV ad of Indian airlines advertising its new sleep-in seats.
The customer who gathers knowledge about the service approaches the company for availing his service in order to satisfy his need. This interface of the customer with the company is through the customer’s interaction with the providers of the company. The company enables its promises to the customers through setting up facilities to deliver the promises by setting up ticket and enquiry counters. The outcome of the “to be transaction” is determined by the interaction between the provider and the customer. Hence the company aims at offering its providers with the required infrastructure and training to optimize the quality of the transaction. For e.g.: Yearly employee training programs and performance appraisals are done by Sahara airlines.
The three strategic points where the provider and the customer interact are:
Ticket purchase at the airline counter or the ticket agency.
Checking in
While boarding
During disembarkation
All three sides are essential to complete the triangle. All three marketing activities represented by the sides of the triangle are critical to efficient delivery of the service, even if one of the sides is out of place, the triangle will be distorted; in other words the total marketing effort cannot be optimally supported.
THE PROMOTION MIX
The formulation of an ideal promotion mix is essential to inform sense and persuade the users. The business magnets, business executives, politicians, cine artists, high spending tourists, business houses using expensive inputs and trading the same, the Department of Posts, domestic and international tourists are some of the users of the air services. The users appear to be more conscious, aware of their rights and in a majority of the cases are found sophisticated.
However, majority of the users are sophisticated and therefore the promotional efforts are required to be more creative. The professionals engaged in the air services bear the responsibility of blending the different components of promotion in such a way that the task of increasing the business is simplified. Since a number of airways and airlines have been facing problem of financial crunch, it is pertinent that they make possible an optimal use of the different components of promotion.
PROMOTION MIX VARIABLES
Since domestic deregulation occurred in 1978, competition in the airline industry has intensified and become more concentrated. The respective airline needs to provide certain benefits that the other airlines do not. Promotion has become a big aspect since the arrival of numerous private airlines. The way this industry has attracted people to them has changed. Airline companies have struggled with making new ways to market their products. Today airline advertising focuses on price, rather than the pleasure of the flying experience. Companies use the radio, newspapers, and billboards in big cities, tops of taxicabs and sides of buses to put their ads on. Even coffee cups in restaurants are starting to be used for advertisement.
Promotion should be done keeping in mind the competitor’s product. This helps in promoting own product/service with a message that has an edge over the others. Kingfisher understands its competitors well and promotes their service accordingly.
Vijay Mallya's Kingfisher Airlines adopts an innovative marketing strategy to snatch attention from Jet Airways' advertisement.
In the ad displayed on the hoarding above, Jet Airways say, "We've changed." Kingfisher Airlines comes up with a cheeky billboard above Jet's hoarding that says, "We made them change!” This was a very innovative and smart move on kingfisher’s part to promote their service thereby denoting that their own service is so much better that Jet Airways had to change and improvise them to reach their standards. This needs presence of mind on part of marketing and promotion heads.
Spice Jet, India’s most preferred low – frills airline, has announced a unique offer of 3,00,000 tickets at a special price of Rs 3/- per ticket. This special offer flags off the third anniversary celebration of the airline. Booking for this special promotion, was opened on May 9, 2008 and will continue till the tickets are sold out.
Tickets bought will be valid for travel from July 1 to September 21, 2008 on all flights covering its 18 destinations. This offer is available only on SpiceJet - Low Cost Indian Airlines, Book Indian Flight Tickets Online, Cheap Fares Air Travel in India - SpiceJet offers Discount Airline Ticket Fares Online. In the last three years Spice jet has flown over8.1 million people across all their destinations. They have helped Spice jet gets over 10.3% market share. This special promotion is Spice jet’s way of thanking them for their support.
PROMOTIONAL MIX AND ADVERTISING
Advertising
As any other service, the air transportation service needs creative advertisements to promote their business. This is the first component of the promotion mix, which is based on professional excellence of the advertising agencies. In view of the rising cost of inputs and increasing the impact of worldwide economic depression on the air transportation, there is a need to make the advertisement budget optimistic Vis-a- Vis optimal.
This is essential to regulate the multi-dimensional expenses found of unproductive nature and instrumental in making the service expensive. The telecast media and the print media are found important while promoting the air business.
While advertising through the telecast media, budgetary constraints and budgetary provisions should be considered. Also the quality and nature of target market and level of expectations should be kept in mind. The advertising professionals need to make the advertisement slogans campaigns and messages proactive to the generation of business. Kingfisher is a good example for advertising its services. They advertised kingfisher not merely into the business of transporting people from point A to point B. They have created a new category of Aviation Hospitality Space thus making service and hospitality their main focus. Their slogan is kingfisher airlines- “Fly the good times.” This is how they are differentiating their product from other airlines. The airlines also have to make sure that whatever the strategic decisions they make to promote the business are in a position to establish an edge over the promotional measures of the competitors. They are also required to assign due weightage to the efforts made for the projection of a positive image. The Indian Airlines as well as Air India have been facing the image problem but the advertisement may be efficacious in transmitting the facts and removing the image problem.
As mentioned earlier, Indian airlines started promoting its first class fully reclining seats to as a tool to improve the image problem and attract more passengers in its first class. It is essential that while advertising one has to keep in mind the image of the country, the natural scenes, the tourist attractions, rich cultural heritage or so which would energize the process of motivating the tourists. For example: Thai Airways have air-hostess wearing colorful long and flowery dresses and greet by joining hands and bowing to their passengers as a part of their culture. While advertising, it is impact generating that we select an opportune moment of flight, an attractive scene of take-off, high attractiveness of personnel in general and the air hostess in particular, the landscape of an attractive tourist center, wild life sanctuaries, lake, park and so on. The air transportation services can also use the broadcast media.
For example: In times of rising fuel prices and lower occupancy rates Jet Airways has come out with a lavish ad featuring the most expensive brand ambassador of time Shahrukh Khan. The Shahrukh Khan TVC, which broke on September 1, 2008 is the first of three campaigns Jet has planned (the ones on economy and premier class will follow), and is running across most news channels and some specialized travel channels. The ad marks the television debut of Jet Airways which had previously relied heavily on the print medium. While competitor Kingfisher relies on showcasing complete range of Consumer experience Jet is trying to highlight its product superiority. Jet had come out with Boeing 777 last year, which has some superior features and this ad is merely an aim to highlight those features besides trying to latch on to the celebrity appeal of Shahrukh Khan.
Another example would be that of Indigo airlines that uses Internet and print media as a visual medium to advertise itself. What is interesting is the fact that the ad is not flashy and it just conveys simple facts.
An important source of visibility for Indigo is the internet where e-ticketing give it a chance to come up with its offers.
The launch and subsequent editorial patronage and newspaper support that Indigo carved out for itself helped it set itself up as a brand.
Online reviews on MOVIE Review, HOTEL Review, MOBILE PHONE Review, BOOK Review, CAR Review, CAMERA Review - MouthShut.com and other blog sites are all directed toward creating a brand reckoning for Indigo Airlines.
Evenly spaced out PR activities help Indigo to be on top of the minds of the people and gives it instant brand recall value.
Indigo goes for extensive print coverage every month or so.
Publicity
Publicity is a process of persuasive communication for which no payment is made. Strengthening public relations activities if found essential to promote the business airlines or airways. The Public Relations Officer, Receptionists, Travel Agents, Travel Guides, Media people are some of the sensitive points of publicizing the business. The most important point in this is the co-operation of media. The marketing professionals should have an idea of magazines, newspapers preferred by the prospects or users and they develop rapport with the correspondents concerned. The Airlines need to recruit efficient personnel for that very purpose that should have professional excellence no doubt but in addition they are also required to have the potentials of attracting the users, prospects.
For e.g.: Indian Airlines helped the cancer patients and took them for a small outing as part of their public relation campaign. Similarly, Sahara linked up with Close- up by taking Hrithik Roshan. Here for Close-up it is a promotional strategy while for Sahara a publicity that an airline is linking up with FMCG by using an entity.
Kingfisher is right now running a print campaign in major business publications. The new series of campaigns are focused on the functional attributes of the airlines.
Deviating from the usual flashy ads, Kingfisher is now appealing to the Left- brain of the consumers. The ads are targeting the three segments of user’s i.e Children, Ladies and Males but the ads are talking to Men who are the key decision makers.
The ad for the young travelers talks about special kids’ meal, wide seats and games. The ad ends with an appeal to the father that “Your little prince deserves to feel like a King ". The ad for the lady travelers talks about the seats that bend all the way back, the footrest that will pop up, life valets when your lady lands at the airport at midnight and helping hands that lift her bag. The ad ends with the message “Queen of your heart deserves to fly like one ". The third in the series aims at the decision maker himself. The ad aimed at male traveler as usual talks about the 'flying models ", the smile that tastes better than the ice-cream, spectacle cleaner and the air-boutique. The ad ends with the message ' Every man's seat feels like his throne'.
With regard to the quality of campaign, it may miss some eyeballs because of not being an eye catchy ad. But the message surely is smart. The basic premise in this ad campaign is that Men are the decision makers with regard to this service. May be a campaign aimed at lady executives may also come in the future.
On the promotional front, Kingfisher has signed up the latest diva of Bollywood, Ms Deepika Padukone as the brand ambassador.
Sales Promotion
A component of promotion adopted for a particular period to touch the target and withdraw the measures when the time is over is known as sales promotion. The tool based on incentives is found instrumental in sensitizing the users. The travel agents contribute a lot to the promotion of air transport business and therefore we need to think in their favor on a priority basis. The tour operators also contribute to the process and therefore need to think in their favor. The front- line-staff in the offices of the airways and the receptionists working there also play the same role. This makes it significant that they are given some incentives which are in the form of a holiday trip to a particular place, concessional services to their children or spouse or so. Also offering them with innovative gifts, which have not been offered by their competitors, can be given. The nature and type of incentives would depend on the contributions of providers. If they make immense contributions, the incentives would be in good quality and volume. There are incentives given called the promotional incentives on the basis of the frequency of using the services.
For e.g: Through Jet Airways, return ticket passengers on metro flights (both economy and business) can avail a discount at all Taj and ITC hotels in South India. Also Sahara has a fanatical assortment of gifts being handed out (its’ Take Offer). Braun Mixer grinders, CTVs, cameras, handy cams, mobile phones and even free holiday packages are up for grabs as a part of their sales promotion campaign.
Also, there’s something called marketing bonanzas. Some airlines give free tickets to customer so as to make them aware of their services. These tickets or any other gift voucher are given so as to attract a lot of people. This is a very interesting way of catching the headlines of customers. Example Go Air was sending SMSs to any number that they have won a free ticket from Mumbai to Goa or Delhi. Kingfisher has also sent messages to people for free ticket.
Jet lite announced its ‘Summer Special Bonanza’ promotion for online bookings through its website. Even Air Deccan used this approach of giving gift voucher worth Rs.250 and a saving of Rs.99 per ticket if booked thorugh Air Deccan’s site. The offer was valid for bookings made between 22-May-08 and 10-Jun-08 and for travel in the same period. There was also a 2 nights, 3 day holiday package to be won in the offer period.
Jet Airways, India's premier international airline, has announced a special promotional package for students flying to its destinations in the United States, Canada, United Kingdom, Europe or Asia. Jet Airways' special promotional package is valid for outbound travel on or before October 31, 2008. Existing, as well as new, students will receive a whole host of benefits including excess baggage allowance and special fares. Students availing of this offer will be allowed to carry an extra piece of baggage, with each piece not exceeding 23 kilos, on flights to the US, Canada, UK & Europe; and an additional 10 kilos on flights to Asia (Shanghai, Hong Kong, Singapore, Kuala Lumpur and Bangkok), on Jet Airways' online destinations.
With Jet Airways special promotional package, students will also receive exclusively designed Student Kits', in association with its partners. These may be collected after the purchase of a ticket at any of Jet Airways' city sales offices around India. Each kit contains a Matrix mobile connection with free talk-time worth Rs.4000 in the US, UK, Singapore and Australia, ICICI Bank Travel Cards for hassle free transactions across the world, a free Tata Indicom Wi-Fi Roam Card enabling internet connectivity from over 50,000 hotspots in the US ,UK, Austria, Czech Republic, Germany, Netherlands, Switzerland, France and Japan; Bajaj Allianz Travel Insurance with special privileges and low premiums and VIP vouchers worth Rs.500/- on purchase of VIP travel accessories.
Jet Airways also offers students an ergonomically-designed seat with hammock style head rest and foot support, the airline also provides its Economy passengers a personal reading light, on demand In-Flight Entertainment and access to over 200 hours of Hollywood and Bollywood movies, regional films, and television and short programmes. Thus Jet Airway plans to tap mass-students travelling abroad during this period.
Personal Selling
The air transport organizations find personal selling which is the mix of promotion mix helpful in increasing the business. An art to influence, stimulate, sensitize the impulse buying is known as personal selling. The air transport-marketing professionals are supposed to know about the behavioral profile of persons who act as personal promoters. The travel agents, tour operators, transport operators, travel guides, front-line staff on the booking counters, receptionists contribute substantially to the process of promotion. If they stop selling, the offices of airways would find it difficult to sell. This makes it clear that even the quality services fail in attracting the users, if the channels are not co-operated. This makes it essential that the airlines offer incentives to them so that they keep on moving the process of stimulation.
To better understand the concept of personal selling, the airline in question needs to follow the diagram given above. It explains all the things that the people involved in the process of selling should know and do. Starting with the first point, customer’s value for time, money and energy should be considered. Their comfort and suitability should be addressed to. They should be provided service in such a way that they get more than they expect to. It can be said that the customer’s should be pampered.
For instance, giving chocolates on arrival and departure or welcome drinks or discounts during off-season to name a few. The delivery of tickets should be made on time this enhances the effect of personal selling.
The entire aim of personal selling is to provide customer’s easy access and hassle-free journey and that is what should be done by the airlines and that is where the circle of personal selling ends. To fulfill the above mentioned criteria the airline industry must select persons, agencies having a positive image.
The travel agencies having a well established business can help substantially and therefore it is the prime responsibility that while selecting the travel agents one must assign due weight age to the image of the agencies. The tour and transport operators help considerably and one needs to think about the incentives to be offered to the promoters. In personal selling, the front-line staff or personnel at the booking or reservation counter of airlines office playing an incremental role in promoting the business. Here, it is essential that one is aware of the credentials of persons supposed to discharge the business responsibility and try his best to brush up their faculties as and when opportunities come.
Word-of-mouth Promotion
This happens to be an important constituent of promotion mix in which the promoters act as a hidden sales force. The air transport organization depends on this type of promotion if they feel that the quality of services offered by them is of world class. In the Indian perspective, the Indian Airlines, Air India, Sahara India, Jet Airways and others may use this component of promotion if they realize that providers have not been distorting the quality of services promised. If you are traveling by kingfisher and you really like the experience then you will definitely recommend your friends, relatives, etc to travel by the same airlines. Word of mouth is the best promotional strategy as it does not incur any cost for the company and also a positive image is built in the market by their loyal customers.
Indigo airline being a low-cost airline does not allocate much fund to advertising hence, it entirely relies on word-of-mouth promotional tool to spread a word about their services and thus communication is established and brand is recognized by the people who are potential flyers rather than the entire country which is an expensive affair.
PEOPLE
The commercial airlines service industry extremely competitive, safety sensitive and high technology. People, employees and customers must be the arena of an organization’s core competence.
In the service industry, service personnel come in direct contact with their customers in the course of production and consumption of the services.
Because people provide most services, the selection, training, and motivation of employees can make a huge difference in attaining customer satisfaction. Ideally, employees should exhibit competence, caring attitude, responsiveness, initiative, problem solving ability, and goodwill.
The airlines hire the right personnel with the essential requirements. They recruit the right people develop, and train them to deliver quality service. These employees are motivated in a manner that they stick to the organization; they are treated more as customers, rather than employees
For Example: Delta Airways recruits an employee and moulds him to cater to their demands. These employees are sent to US and Frankfurt on a 21 days training programme. The successful completion of this motivated the employee to stay on with the airline. They are provided with many incentive programmes and also with a one- month bonus incentive on completion of the sales target.
The Airline sector is divided into two categories, Internal and External customers.
Customers refer to the persons who have certain needs, wants and desires. The company makes promises to its customers. In the Airline industry, the customers refer to those persons who feel the need of travelling from one destination to another. The customers are further classified as Internal and External customers.
Internal Customers:
While delivering services the airline ensures that the services are delivered as promised and this rendering of service satisfaction is often totally in control of the frontline staff. The quality of service that the frontline staff provides is highly dependant on his/her ability to communicate their credibility.
Being a Hospitality line the employees are given extensive training to provide caring and individualized attention to customers. There are many people involved with the successful working of the airline industry.
The various types of airline personnel include:
FLIGHT CREWS: These are the trained people who play a very important role from the time when you check in your baggage till you board the aircraft. They ensure the smooth functioning of everything and guide you through the entire process. They form 85 percent of the airlines labour force.
The Flight crew includes:
Pilots
Flight Attendants
Reservation Clerks
Airport check-in and gate personnel
Security guards and In-flight security personnel
The service contact personnel in the airline industry are the Flight Attendants who are expected to have a pleasing personality and must also be polite while service handling.
While on the other hand the cock pit crew/ Pilots are considered as low contact personnel hence they are required to posses highly technical and analytical skills.
The Reservation clerks play a very important role as they check the tickets, allot the seat numbers and also place the destination tags on the baggage; hence they should be highly attentive while doing their work.
The Airport check-in staff must be extremely helpful as that is where the evaluation of the hospitality of the airline can be gauged from at first
GROUND STAFF: These are the main people who work behind the scenes and play a very important role to ensure smooth functioning of the entire procedure right from handling the formalities on the airport to helping the passengers board the aircraft. All these functions are handled impeccably by the ground staff.
The Ground Staff includes:
Avionics technicians/ engineers
Flight dispatchers who track all the airline’s flights
Baggage handlers
Gate Agents
PDC (Prolog development center)
The PDC (Prolog development center) has implemented a Staff Scheduling System; this system was adopted for the ground staff as creating good staff schedules is often a complicated process. It is difficult to clearly appreciate the many possible combinations of duty periods, duty hours, time-off-in-lieu requirements, holidays etc. that will ensure each person works the correct number of hours.
First and foremost it is important that internal and external rules are correctly implemented while maintaining adequate manning levels and ensuring a fair distribution of the various shift types. Scheduling restrictions (financial or other) may exist and must be taken into account.
Why Use a Staff Scheduling System?
Creating a good staff schedule is often a complicated process. Especially when the airline industry “never sleeps”. Manning is 24x7x360. The business involves many employees with different agreements and they must be confident that they get paid correctly.
First and foremost it is important that internal and external rules are applied, there has to be adequate manning and lastly the personnel must be available when the traffic requires it.
On an Organizational level PDC- Staff Plan, provides their clients many Advantages in the terms of:
Cost savings in terms of less salary bonus, over time and time-off-in-lieu
Significant reductions of administration
Efficient cost management through a flexible staff scheduling (no over manning and no under manning)
The Advantages that PDC-Staff plan provides the employees are in the terms of:
Fast and safe scheduling of duties and shifts
Better overview of manning, time expenditure, time-off-in-lieu, etc.
Relief of administrative work
Thus, efficient staff scheduling saves great resources and thus time to focus the efforts on other areas. In addition, time will be saved in the scheduling process itself
What are airlines looking for?
In making a decision about the employment of cabin crew, all airlines consider three prime elements:
Eligibility
An airline may have eligibility tests depending upon its own specific requirements. These are facts that can be determined either by physical or by documentary Evidence. Some of the Eligibility checks likely to be included are:
Does the candidate meet the required age profile?
Does the candidate meet the required height/weight profile?
Has the candidate attained required educational (or other) qualifications?
Is there documentary evidence to support the qualifications the candidate claims to have?
Has the candidate acquired adequate experience in a customer service or public contact role?
Can the candidate speak a second language? To what level of proficiency can the second language be spoken?
Suitability
This is clearly more difficult to assess than eligibility. Airline managers will be looking for people who can best fulfill the role of a Cabin Crew .The minimum requirement is for:
17. Technical knowledge
18. Maturity
19. Adaptability
20. Judgment
21. Tact
22. Diplomacy
23. Grooming
24. Attitude
Airlines will also be looking for people whose performance will not be adversely affected by the disadvantages of the job and will readily accept direction/training.
Specific requirements
Eligibility and Suitability are relatively basic requirements, which must be met in all cases.
Every Airline sets its own specific requirements; some airlines pay much emphasis on the appearance and personality of the person while others may look at the experience and knowledge. Some airlines may prefer have trained and experienced personnel while others may want fresh recruits.
Put simply, airlines are looking for the right people for their current circumstances. Do not be too disheartened if you do not get in at the first attempt. You can always try again - or apply to another airline! It is also true that candidates fail to be recruited by an airline at one attempt, and then succeed at a later date. This is usually because the candidate has acquired better interview technique, or extra skills, experience or confidence. It can also be because the airline itself has revised its person specification.
CREW PROFILE AND COMPLIMENT
The senior most person on any flight is the Commander. His is the last word where the flight & its crew or the passengers are concerned. The Cabin crew Senior or the In Flight Supervisor is the senior most Cabin Crew, but takes orders from the Commander.
The Crew complement on board is the total number of crew including both the Cockpit & the Cabin Crew. This number is preset where the Cockpit/ Flight deck crew is concerned for a particular type of aircraft. The number of Cabin Crew an airline has on an aircraft depends on a number of factors:-
3. Type of aircraft - for any aircraft there is a minimum Cabin crew complement required depending on:
The number of emergency exits on the aircraft
The number of passengers on board the aircraft.
8. The type of food & beverage service to be provided to the passengers.
9. Right duty time length of the flight. On some long haul flights when the flying time exceeds the flight duty time (the max number of hours a crew can be on duty), then there are two sets of crew on board. This is found ONLY on International sectors on extremely long sectors.
10. Today a few airlines have started new services like baby-sitting, on-board masseurs, tailors etc, which require extra crewmembers on board. More often than not, airlines start new service procedures that do not require additional crew or other staff, but to capture a good market share, Airlines often launch such services that are NOT sustained over a period of time.
The Hierarchy where the Cabin Crew is concerned may vary a little from airline to airline depending on their individual policies. For example in some airlines the air hostesses retire much before
Advantages of the Job
As with the role itself, the perceived advantages of being a cabin crewmember are often quite different from the actual benefits. Below is a list of what cabin crew & others see as being the real advantages:
Travel
This is what attracts many people to the job in the first place. Cabin crew goes to places they always dreamed of, and find interest in destinations they would not necessarily have chosen to go to.
Camaraderie-Solidarity & Friendship with other Crew members
The camaraderie, team spirit, and sense of belonging together that the majority of crew has when they are flying is unique. Despite being a very diverse group of people, your colleagues are likely to be sociable and out-going, and will help to make the job a lot of fun.
Variety and Interest - Absence of monotony
This is certainly not a 9 - 5 jobs, and no two working days are likely to be the same. The sheer dynamics of different crew, passenger profiles, destinations and roster structures ensure that there will always be variety.
Appreciation
This is one career where the appreciation is almost instant after a 'good job done'. Despite all the things that can go wrong on a flight, many passengers do show their gratitude of the crews' efforts, either when someone has done their best for them individually, or especially when the whole team has pulled together well. The better airline management teams also acknowledge consistently good performance, or outstanding individual service.
Personal Development
Airlines usually have high standards of initial and follow up training, and some provide self-learning facilities or schemes thus helping the crew to develop their personalities and all develop themselves in other aspects.
Other benefits
Most Airlines provide a number of other 'perks' along with the usual handsome salary they give a crewmember. Most major airlines to provide ground transportation and a good standard of accommodation for crews who are staying overnight at destinations away from their 'home base'. Free medical attention for cabin crew I their family members (in some cases) are also provided. Free staff travel tickets are another BIG bonus given. Airlines have schemes whereby all their staff are able to travel free on the 'employer' airline or at extremely advantageous prices on other airlines. Airline staff also benefit from a range of discounts, from hotel chains, shopping malls, duty free shops, insurance companies and financial service institutions.
Uniform
Airlines usually provide items of uniform clothing to all their public contact staff free of charge.
Disadvantages of the job
Air cabin crew is a wonderful job, and can provide an interesting and rewarding career, but as with any job there are drawbacks as well.
Travel Limitations and Risks
This is almost the reverse of Travel' as an advantage of the job. As a crew member you do not choose where you go to, or how long you stay there. Crew also face the usual risks present for any other traveler, such as theft of personal belongings, mugging, poor hygiene standards in other stations/cities, bites/stings from insects and animals, and risk of contacting infectious disease.
Customer Service Negatives
Good customer service is a prime role pf cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Good customer service is a prime role of cabin crew, but nobody would describe as anything other than a disadvantage of the job.
Dependence upon the support of other departments, including planning, maintenance, and catering, cleaning and logistical units is very high. Any breakdown in the chain (for example dirty toilets or insufficient catering) lead to a feeling of being “let down and having to take the burnt of passenger complaints.
External Customers:
These are the main customers for the airline industry as they generate revenue to the same. Hence Customer Satisfaction plays a very important role. The customers should always be kept at pedestal by looking into their needs and acting on them immediately and also providing them with exclusive services. This would earn goodwill for the airline and ensure the smooth running of the business.
The customers are categorized on the basis of their need and preferences:
Customer Segmentation
Most airlines use a very traditional segmentation strategy, dividing passengers into first class, business travelers and economy travelers. But, nowadays most of the airlines offer only two classes – the business class and the economy class.
The customers subsequently also be divided as per the scope of the market .This ia a process of subdividing a market into distinct subsets of customers that behave in the same way or have similar needs. Each subset may conceivably be chosen as a market target to be reached with a distinct marketing strategy.
This includes preparing a method of identifying a group of consumers, within a broader market, that has similar characteristics and needs. Segments can be identified by examining geographical, demographic, psychographic, and behavioral differences.
Segmentation of the aviation industry can be done under the following factors:
Geographic segmentation
Geographic segmentation calls for dividing the market into different geographical units such as nations, states, regions etc. the company can operate in one or few areas or operate in all but pay little attention to local variations.
Most of the domestic airlines, their market segment consists of the customers who’s destination are major commercial cities like Mumbai, Delhi, Kolkatta etc. apart from these the airlines also concentrate of tourists destinations like Goa, Agra etc. The reason behind this is that such sectors have major traffic and are profitable sectors. However Indian Airlines, being the National Carrier of the country, fly’s even to the unprofitable sectors and concentrates on the segment of people flying to such destinations.
Demographic segmentation
In demographic segmentation, the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion and social class. There are several reasons for the popularity of demographic variables to distinguish customer groups. One reason is that consumer needs, wants, usage rates and brand preferences are often associated with demographic variables.
Airlines like Kingfisher targets the affluent class and the executives from multi national companies, business community etc. However in the case of Air Deccan and other low cost airlines, their segment is the population from the lower middle class and the middle class. Thus it can be said that Kingfisher targets the classes whereas the no frill airlines target the masses.
Psychographic segmentation
Psychographics is the science of using psychology and demographics to better understand consumers. In this segmentation customers are divided into different groups on the basis of psychological, personality, lifestyles or values. People within the same demographic groups can exhibit very different psychographic profiles.
The airline tries to work on the psychology of the people. Kingfisher concentrates on the segment of people who do not mind paying a higher price, but would like to have the best of comforts. Whereas the low cost airlines targets those customers, who believe in value for money services and account for every rupee that they spend.
Behavioral segmentation
In behavioral segmentation the customers are divided into groups on the basis of their knowledge of, attitude towards, use of or response to a product or a service. It refers to grouping consumers in terms of their relationship with the product, for instance their usage rate, the purpose of use, their willingness and readiness to buy, etc.
Segmentation of customers on the basis of airlines
Business Class
They are crucial for airlines' profitability. With less spare time and more cash in their pockets, they agree to pay a premium price for a premium service. The premium prices they pay provide wider and more comfortable seats, better choice of meals and seats, luxurious lounges.
If the airline is also providing the first class including the business class and the economy class then it will provide additional services to the first class travelers in addition to the other services. These services may include fully reclining seats, workstation and TV surrounded by private dividers
Economy Class
They represent a totally different market. The most important consideration for most of them is the price. The lower the airfare, the more people will fly the respective airline. By and large, with the exception of wealthy travelers, this segment will not pay extra for premium services and will agree to change several planes during their trip if this option costs less than a direct flight.
PROCESS/SERVICE MAPPING
A process map is a tool to visually illustrate how the work flows. It is also a communication tool, a business planning tool and a tool to help manage the organization.
Key elements include:
Inputs
Outputs
Activity steps
Decision points
Functions
The lines and symbols on a process map help us to record concise sentences for every step in the process that tells the reader:
What is happening?
Where it is happening?
When it is happening?
Who is doing it?
How inputs and outputs are handled and distributed?
They can be defined at many different levels and with various boundaries. Furthermore:
Processes must have a beginning and an end.
Processes are co-ordinated activities that involve people, procedures, technology and infrastructure.
Processes constitute a significant portion of organizational costs.
An organization is only as effective as its processes.
The purpose of process mapping is for better understanding. It involves the gathering and organizing of facts about the work and displaying them so that they can be questioned and improved by knowledgeable people.
Process maps help one to understand the important characteristics of a process, allowing them to generate useful analytical data in order to derive findings, draw conclusions and formulate recommendations. Furthermore, process maps allow one to systematically ask many important probing questions that lead to developing a view on business process improvement.
The basic process followed is given below. This process can be termed as process mapping in an Airline Industry.
Customers Point of View
Check which gate to enter from
Getting the ticket checked at the door
Screening of the Baggage.
Getting the boarding pass as well as boarding the luggage.
Security check and finally boarding the plane.
Employees Point of View
The initial process of checking the ticket, baggage screening, providing the boarding pass and the security check imply for the employees also but the 2 most important process that the employees have to conduct is:
Proper numbering on the baggage of the customers so that the luggage does not get interchanged and boarded into the right aircraft.
Proper allotment of the seats.
1. Check which gate to enter from. 2. Getting the ticket checked at the door
3. Screening of the Baggage 4. Getting the boarding pass as well as
boarding the luggage.
5. Security checks 6. Waiting to board the air craft.
Another important aspect that the employees have to look for is Security Process. Security relates to the security of the aircraft as well as the passengers. Security check is of utmost importance.
The Central Industrial Security Force, a paramilitary organization is in charge of airport security under the regulatory frame work and instructions of the Bureau of Civil Aviation Security (Ministry of Civil Aviation Security). CISF formed an Airport Security Group this security force is dedicated to protect Indian airports. Each and every airport has now been given an APSU (Airport Security Unit), a highly trained unit to counter unlawful interference with civil aviation; apart from the CISF every airline has a highly trained aviation security force which is a separate department.
Some of the security procedures are listed below
At major airports, the checked baggage is passed through X-ray machines and a 'security checked' sticker affixed before entering the check-in area.
Passengers are checked through personal frisking, and/or door frame metal detectors and hand held metal detectors.
The cabin baggage is either checked through X-ray machines or physically examined.
Security personnel put a security stamp on boarding passes and cabin baggage labels.
Immigration is done at this point that is just after the boarding pass is received.
In case of a 'Red-Alert', a secondary security check is also carried out near the stepladder before embarkation.
Checked baggage has to be personally identified by the passengers before it is loaded on the aircraft. Wherever the boarding is through aerobridges, passenger and baggage reconciliation is done through an internal matching system instead of physical baggage identification.
Ten percent of the checked baggage/cabin baggage is usually physically checked at random.
Passengers in transit have to remain on board during the ground halt of the aircraft.
Once the passenger reaches his destination from the airport that is when the process gets over.
BLUE PRINTING
Blue printing is a process that deals with the entire working system in an Airline Industry. It is a complete process.
Blueprinting involves identifying all the key activities, procedures and specifies the linkages between them. The working of the airport is a complex process and all the process whether visible or invisible have to be carried out effectively as well as efficiently because even if one process goes wrong the entire chain of the working system gets disturbed.
Moreover, current trends in the airport industry impose more and more efficiency and security: Hyper-regulation for safety and security; Market de-regulation in terms of liberalization, strong competitiveness, services customization, etc.; Traffic segmentation and globalization to better answer to airline needs; Reduction of profitability for handlers and airlines; Increase of airline traffic; and so on. In such a scenario, only operators and authorities who will evolve gaining a competitive position can win the market challenges asking for more efficiency, high quality service levels and security. In order to support all actors in the airport industry to reach best efficiency and quality targets, Software Design has spent huge efforts in finding solutions and services capable of bringing them the power of technology innovation in a transparent way and working with a business approach. With this a lot of changes can be made in the existing service process thus developing a blueprint
BENCHMARKING
Benchmarking is the process of comparing the cost, time or quality of what one organization does against what another organization does. The result is often a business case for making changes in order to make improvements.
Benchmarking opens organizations to new methods, ideas and tools to improve their effectiveness. It helps crack through resistance to change by demonstrating other methods of solving problems than the one currently employed, and demonstrating that they work, because they are being used by others.
Airline Association for Benchmarking & Measurement is a focused group of airline professionals that looks to identify the best practices surrounding airline industry issues for the improvement of overall operations of the members.
Mission
To identify "Best in Class" business processes, which, when implemented, will lead member companies to exceptional performance.
Objectives
To conduct benchmarking studies of important business processes.
To create a cooperative environment where full understanding of the performance and enablers of "best in class" business processes can be obtained and shared at reasonable cost.
To use the efficiency of the association to obtain process performance data and related best practices from group of companies.
To support the use of benchmarking to facilitate process improvement and the achievement of total quality.
Membership
The scope of Airline Association for Benchmarking & Measurement™ membership includes airline professionals interested in benchmarking as part of or in support of their core business.
Company membership will be considered with respect to compliance with Airline Association for Benchmarking & Measurement™ mission, goals and operating guidelines, as well as, qualification of the organization within the scope of membership.
Participation in specific efforts will be optional and open only to members with costs shared by the participants
Benefits of Membership Studies
Airline Association for Benchmarking & Measurement will identify and present to members opportunities to participate in Benchmarking studies on various topics of importance to "security" issues.
There are two types of Benchmarking studies provided
Consortium studies are offered to the membership as a whole with costs divided.
Single company sponsored studies addressing the interest of one member company can be offered to other selected members for no fee.
The association will also support process improvement benchmarking efforts
Research - Access public and private databases.
Identify study participants - Top airline companies interested in benchmarking current issues.
Collect data - Manage response collection with the participants as a third party.
Lead site visits - Structure with best participants.
PHYSICAL EVIDENCE
Physical Evidence refers to the environment in which the service is delivered and where the service industry and customer interact. It is the ability and environment in which the service is delivered. Both tangible goods that help to communicate and perform the service, and the intangible experience of existing customers and the ability of the business to relay that customer satisfaction to potential customers.
The aircraft by itself, the seating configuration meant to be comfortable and spacious, the in-flight food, the staff dressing, baggage handling facility, colour of the aircraft, in-flight entertainment, and ambience in the aircraft provide physical evidence to the airline service.
Nowadays, websites are another major part of the physical evidence of airlines. A recently completed survey indicates that passengers rely on major airline websites, but would like the airlines to improve those sites to better meet their specific needs and expectations.83 percent of the passengers indicated they use airline websites to book flights. The survey also identified that nearly half (48 percent) of respondents indicated they also book flights by calling the airline directly, which may be a further indication that airline websites are not sufficiently meeting the needs of small business travelers. Results show that 56 percent of respondents use travel websites to make flight arrangements, while 47 percent use a travel agent, compared to 83 percent using airlines' websites.
Hence, the websites should be updated regularly, should be less time consuming, fast processing and easily operative.
COLOUR AND STAFF DRESSING
Increasing importance is given to the cabin crew and the ground staff uniform. Designers are given contracts to design the uniform and the colors are such which symbolizes the airlines motto. Colour is a visual identifier and thus attractive color scheme catches the eye of the passenger. The staff dressing also helps to differentiate one airline from other. Just by looking at the staff, the passenger assumes the standard of the airlines. And these two are the first thing that a passenger visualizes in an airline. However, another important reason for the use of color is the expansion of a corporate culture. For example, Paramount Airways does this very well. Their use of blue color emphasizes confidence, a character trait that is important to the airline industry, especially in these times. Blue also demonstrates vastness, opportunity, a sense of modernism and openness and honesty.
KINGFISHER AIRLINES
The first thing that strikes about fly Kingfisher is the bold use of the color Red. From the tail of the aircraft with the logo of the kingfisher bird and the word Kingfisher painted boldly across the body of the aircraft in Red to the interior decor and even the Crew uniform –it‘s Red, Red, Red all the way.
The in-flight crew called 'Flying Models' are clad in short Red skirts and a trendy rolled up sleeve jacket in Red with a white shirt unlike the traditional blazers and waist coats of other airlines. There are no male pursers on board either because KF in-flight is all women.
AIR INDIA
Eminent Indian fashion designer Ritu Beri was roped in by national carrier Air India to design the new uniform for its cabin crew and ground staff. Air India went for a complete makeover to reflect its aspiration to be a “powerful” global entity.
The design of the new uniforms draw inspiration from the Sun Temple of Konark in Orissa, yet maintains a modern outlook. The colour palette of the uniform is red, orange, black and white, with red standing for strength and orange for cultural roots.
The uniform for the female employees, both ground staff and cabin crew, included sarees, tunics, scarves, jackets, coats, aprons and shoes, while there would be specially designed ties for the male staff.
JET AIRWAYS
To position itself as a global airline, Jet Airways introduced fresh airline uniform for the cabin crew designed by Italian designer Roberto Capucci. Their uniform reflects distinctive international look capturing spirit of new India and a meeting point between East and West
IN FLIGHT MEALS
Airline passengers always have a certain standard of living and are very hygienic about the food. However, in-flight meals have often been the butt of many jokes over the years for their perceived lack of nutritional value. In airlines, the passenger prefers variety in the meal offered, noticing the nutritional value. They also see as to which caterers is serving the food; the way the food is served and handled. This is one critical aspect where even the service recovery can’t help to retain the passenger because even the slightest of the mistake by the chef or by the cabin crew, or compromising on the quality of food might prove very dangerous for the passenger’s health. This, in turn, will spread a bad reputation of the company.
Hence, more and more airlines are in fact striving to make their meals more attractive by packing as much goodness as possible into them.
KINGFISHER AIRLINES
In-flight Meals or Snacks are served as part of the fare on every flight and small amenity kits distributed as well. Depending on the flight time, Kingfisher serves Breakfast, Lunch, High Tea or Dinner on all flights. An individual menu card is there on all Kingfisher flights. Kingfisher has a wide variety of multi-cuisine menu to suit the varying tastes of the local sectors. Indian, Chinese, Continental and World Cuisine is available on various sectors. Vegetarian or non-vegetarian food can be chosen on the flight. Kingfisher First Class passengers can choose from a special menu and depending on their choice, a three course gourmet meal is served on the flight.
It also provides an exclusive three course menu complete with a Kingfisher sparkling welcome drink, signature dessert and freshly brewed coffee on board.
JET AIRWAYS
Jet airways have different menu options onboard for Premiere and Economy class passengers.
The following specialty meal options are available on Jet Airways:
Strict Vegetarian (STVG)
Jain Meal (JNML)
Diabetic Meal (DBML)
Low Cholestrol (LFML)
Low Sodium (LSML)
Low Calorie (LCML)
Low Protein (LPML)
Non Lactose Meal (NLML)
No Salt (NSML)
This shows the passenger that Jet Airways do care about their health , thus creating a goodwill among the passengers.
Kosher meals
Jet Airways also offers kosher meals (KSML) on the Mumbai-London-Mumbai and Mumbai-Singapore-Mumbai sectors. Kosher Meal preference has to be notified 48 hours in advance. The Kosher Meal on Jet Airways flights consists of Western Non-Vegetarian Meal of Fish, Potatoes and Vegetables. Kosher meals are served onboard in a sealed pack. The cabin crew opens the pack in front of the passenger and shows the Kosher certificate inside the box.
This assures the passenger that there is no malfunctioning or adulteration in the meal provided , thus creating an impression in the mind that meals offered in Jet Airways are of the best quality.
AIR INDIA
Air India offers a wide variety in its in-flight meal menus, with a multi-cuisine approach to cater to the predilections of the range of passengers. The variety of food ranges from vegetarian meal, Moslem meal, Kosher meal, Low Sodium meals to something simple as a fruit platter. The meals are hygienically packed from reputed hotel chains like the Taj Group and Ambassador. Besides the regular normal vegetarian and non-vegetarian meal, Indian Airlines also provides special meals such as Jain meal, Diet meal, child meal etc.
IN FLIGHT ENTERTAINMENT
To make long flights more enjoyable, several major commercial airlines offer in-flight entertainment and information systems to their passengers. This is increasingly gaining popularity in the airlines sector because the passengers here, unlike other modes of travel do not have any other source of entertainment. In airlines, the interaction among passengers is also minimum. So, this is one of the tangible tools of attracting or pulling the passengers towards an airline. Nowadays, there are lots of innovations done in the in flight entertainment system and each airlines is daily coming up with some or the other new technology or up gradation for the passengers to have entertainment in the flight.
KINGFISHER AIRLINES
Kingfisher Airlines flights have individual LCD TV screens for each passenger. They have a choice of 5 video channels of the trendy FUN TV, or listen to Kingfisher Radio which offers a choice of 10 international radio channels. There is a separate video channel for kids too to keep them busy on the flight. All passengers are given complimentary headphones to enjoy the in-flight entertainment. For Kingfisher First Class passengers there is an extra wide 8.4 inch LCD swivel screen fitted on every seat. Kingfisher First Class passengers can also enjoy noise canceling headphones for a quiet and relaxed flight experience. Kingfisher First Class passengers can also play video games on the LCD screen and even play multiplayer games with their co-passengers.
Kingfisher Airlines has tied up with Dish TV to provide live in flight entertainment to its passengers. This shows the weightage given in flight entertainment in the airlines sector.
JET AIRWAYS
Jet Screen, Jet Airways' In-flight entertainment system is available on both business and economy class on several Jet Airways flights. Jet Airways has also installed state-of-the-art Panasonic 3000i Audio Video on Demand (AVOD) on every seat in some of its flights. In addition to video channels, up to 8 audio entertainment channels playing latest Bollywood songs, International Pop songs, Ghazals, Indian and Western Classical, etc. are also available on Jet Screen.
SEATING
In airlines, passengers mostly stay glued to their seats. So, it’s very important to have a comfortable seating in the flight. Specially , in long distance journey the passenger has to spend a lot of time on the seats, thus the passenger should have full satisfaction with the seats provided, as in, there should be enough leg space, there shouldn’t be any back problem, comfortable head space and more importantly , the seats should be clean. The seating arrangement has to be spacious as different individuals have different physique. Thus, the seats should be such wherein every passenger irrespective of his/ her size or shape should feel relaxed and comfortable on the seats and should feel refreshed after reaching the destination.
Seating is not much of a problem in airlines like Kingfisher or Jet however low cost airlines needs a lot of improvement because they usually have this problem of not having enough leg space.
KINGFISHER AIRLINES
The seats are the plush Sleeperette seats with a 48 inch pitch, 125 degree recline, adjustable headrests and fully extendable footrests. The expansive legroom, the fully lie flat bed in Kingfisher First and the widest seat pitch in the skies, allows the passenger to stretch those tired muscles to the fullest. There are also laptop chargers and mobile phone chargers in each seat.
JET AIRWAYS
Jet Airways is the first airline in the world to install new ergonomically designed seats that offer more space, reduce pressure on the passenger’s body and has adjustable "Hammock" head rest and a unique foot net which gives added support, especially on long journeys.
NEWSPAPERS AND MAGAZINES
Newspapers and in flight magazines are provided to the passengers so that even in the skies they can get information and update their knowledge.
KINGFISHER AIRLINES PARAMOUNT AIRWAYS
INDIAN AIRLINES
GENERAL RATINGS TO THE AIRLINES SECTOR
Web Site : Ease of Use
Age of Aircraft in Fleet
Web Site : Product information
Cabin Safety Standards
Web Site : Online Check-In
Cockpit Communications
Handling Delays/Cancellations
Airline Onboard Magazine
Staff Grooming & Presentation
Assisting Families & Children
PRODUCTIVITY AND QUALITY
QUALITY DIMENSIONS
RELIABILITY
It is the ability of the service provider to meet the promises made by them accurately. The customer must develop a feeling that they can depend on that particular service provider for their problem.
It is most important for an airline to depart and arrive on time since passengers want to depart and arrive on time. ‘On time’ is defined, in accordance with normal industry standards, as departure within 15 minutes of scheduled departure time. If the flight is on time, it colours everything else. Today, top airlines hold their positions because passengers recognize their consistent reliability. Reliability is not just nice to have. They impact the passenger and his satisfaction, and that impacts the bottom line of the airline.
Passengers place great importance on reliability and that's why leading airlines fly Boeing jets because they are the most reliable in the skies.
Information needs to be recorded about the scheduled and actual departure time, and, if there was a problem that caused a delayed departure, whether the problem resulted in a delay or a cancellation, whether there were passengers on board and a detailed description of problem should be given. This leads to the payoff i.e. the ability to track, analyze and improve the reliability of the aircraft.
Airlines should also be reliable in case of baggage handling. The passenger should get his luggage on time without being damaged. In case, the luggage is mishandled then the airlines should have such a system in place wherein the passenger can rely on the airlines for the safe arrival of his / her luggage. The reliability issues that this interface creates have prompted airlines, over the years, to look for ways to introduce more automation into this environment.
ASSURANCE
Assurance refers to freedom from danger, risk or doubt. It includes credibility, competence, security and courtesy. The service provider and the employees must be capable of winning the trust and confidence of the customers.
The ground staff and the cabin crew play a major role here. They are the one who can assure the passengers about any doubts they have regarding the flight and the services provided. In airlines, passengers are mostly brand loyal. Hence, once the passenger is assured and trusts a particular airline then he always prefers that airline. Thus, assurance plays a very important role in customer retention.
In high cost airlines , the passenger always thinks that whether he will get a good value for his money whereas in low cost airlines he / she always think whether the quality of the service will be good or not. Hence, the passenger is always at a risk. Here, the airlines have to put in extra efforts to remove the doubts from the mind of the passengers about their airlines. And in this competitive world, where new airlines are coming up so rapidly, the efforts made by the airlines could be seen to assure the passengers that their service is the best. Airlines go out of the way to win the trust of their customers.
E.g. The Kingfisher First experience takes off even before the passenger do at the Airport where he / she is greeted by a Personal Valet to assist at every step of the way, from baggage handling to boarding. This is done to assure the customer at the very first step that he hasn’t put his money at the wrong place; giving a VIP treatment, thus clearing any kind of doubt or the risk factor from his mind.
TANGIBLES
Tangibles are those physical features which can be seen by the customer. These are the physical proofs which help the customer to judge the quality of service. The customers evaluate the quality of these services on the basis of the tangibles provided by the service providers.
In case of airlines tangibles include:
Flight
In – flight meals
In – flight entertainment
Seats
Staff uniform and skills
Baggage handling technology
Website
In airlines, tangibles help to differentiate an airline with its competitors. This is the most important criteria in customer evaluation. The customers perceive what they see. Thus tangibles help create an impression in the customers mind the way an airline wants.
EMPATHY
Empathy basically is when the employees of the organization make the customer feel at home, at ease, making him feel wanted.
In airlines, a personal touch should be given to the services because that delights the customers the most. They should be made felt as if they are very important to them. However, for an airline to succeed it must have genuine empathy with both its employees and its customers.
The cabin crew has to be very polite, understanding and courteous. They should take genuine delight in attending the customers, in helping them and establishing warm friendly relationships. The crew should know the importance of doing things for customers from the bottom of their heart. They should believe in going beyond the routine to add emotional value to their work. As a result they would be able to delight customers. But for all this, the crew and the ground staff should be motivated; a culture should be created where the crew also supports the company’s mission and values.
The senior executives, middle managers and supervisors should demonstrate a similar 'genuine heart-felt' empathy for their various teams of employees , thus helping the organization develop a warm culture based on empathy which leads to showering of that empathy on the customers.
For e.g. if any small child is flying in the flight for the first time without any elder person along with him, the crew should see to it that the child doesn’t get scared so they should visit him regularly, give him chocolates, chat with him, thus taking his proper care and not letting him feel that he is alone.
RESPONSIVENESS
Responsiveness is willingness to help the customers and provide prompt service. The degree of responsiveness shows the level of commitment that the people of the company have towards their work. It is very necessary for the company to concentrate on prompt and the right kind of responsiveness to the needs of the customer.
In airlines, the customers are very impatient. They expect their needs to be catered promptly. Hence, any delay in responding to their needs or problems might create a very bad impression in the customers mind. The staff should see to it that each and every complaint of every individual is handled effectively and quickly.
This aspect comes into picture when there is a flight cancellation due to bad weather and the passengers can board the next flight only the next day. At this moment of crisis, a quick response by the airlines regarding their luggage, their accommodation and all the other needs can create a very good reputation.
Also, sometimes there is a case wherein the crew is helpless and it cannot fulfill the customer’s requirement, even that time the crew has to respond to the customer either by explaining him their helplessness or by providing him/her with some alternative.
Thus, nowadays where the zone of tolerance among the customers in airlines is minimum, responsiveness is one dimension which has to be really taken care of.
FISH BONE ANALYSIS
Procedures
During acquiring the boarding passes there may be delay in getting the passes which may dissatisfy the customer.
Baggage handling is not done accurately i.e. the bags are misplaced or not loaded on the flight, which may cause delay in flights.
Due to tightened security at airport the security person may take longer time to check the person.
Information
Radar at the airport is not working properly thus the correct information is not provided to the customer.
Websites – the websites may not be updated regularly which may provide wrong information to the customers.
The customers are guided wrongly by the person at inquiry counter which may add woes to the customers.
Front staff personnel
System crash when customers come to get the information or boarding passes.
Cabin crew taking ample of time for guiding people and providing the necessary requirements to customers.
Not enhancing to customer responsiveness and services.
Not all queries are sorted of the customer at enquiry counter.
Not getting warm welcome or reply from the air hostess.
Back staff personnel
Cleaning staff taking ample of time to clean the plane setting up the things right in the plane.
The materials are not loaded on plane on time.
Material supplies
The supply of food and other essential requirements does not arrive at scheduled time.
Customer
Customers coming late to board the plane may cause delay in flight.
In case, the person on flight gets ill (getting heart attack) in that case the flight. needs to be landed again which may again cause delay.
VIP customer coming late to board the flight.
Facilities / Equipments
The seat may not be proper or the seat belt may not be working properly.
The music system (headphone) not working properly.
The food and drinks are not supplied to customer on time.
Other Causes
Their may be delay in flight if a hoax call is received and intense security check-up is done which may cause some trouble to customers.
If the weather is bad there may be delay in flights.
If there is any technical flaw in the plane it may result in delay of flight.
Due to strikes by workers and organization may cause problems to customers.
SERVICE RECOVERY
While studying the Marketing Mix for the Airline Industry, we have understood the customer’s expectations, the service process, the service quality, the productivity in service delivery and building customer relations. But in all service contexts, service failure is inevitable. Service failure is inevitable for the best of the airline companies, even those with world-class service systems. Thus, in order to retain customers and also understand those, airline companies must understand what a customer expects and what can be offered to the customer when service failure occurs and thus implement strategies for an effective service recovery.
Impact of Service Failure on the Customer
Service failures occur for all kinds of reasons, some of which can be listed as service not available when promised, late delivery, incorrect outcome, poor execution or rude behavior of the workforce etc.
For an airline company, a service failure can be of the following sorts – flight delay; mismanagement of the formalities like checking-in; indifferent behavior of the flight crew; baggage problems and so on. Service failures for airline companies are due to factors which are controllable as well un-controllable by the company.
Service failure for services other than airlines have a paradox kind of an impact on the customer as well as the organization – you dissatisfy a customer once and then delight him in the service recovery process and win his loyalty which is not assured with a failure-less service delivery. But for the Airline Industry, service failure does not create positive opportunities for the organization. Incase of a service delivery in the airlines service providing, the customer is highly dissatisfied and the recovery strategy cannot be as effective to delight him. For instance, if a flight gets delayed, the customer gets late and the time he loses due to the delay cannot be brought back; or if the carrier misplaces luggage of a particular customer then no strategy is enough to delight the customer (no strategy to compensate on the lost belongings). Service failure in the airlines sector creates a negative impact for the airline company. Thus, a perfect service delivery is aimed at by a carrier.
Following a service failure, a number of negative emotions may occur in the customer’s mind such as anger, discontent, disappointment, self-pity, and anxiety. These emotions are the factors to be kept in mind while implementing specific service recovery strategy to win back the customer. Different customers respond differently to service failures. Incase of the airline industry, the customers are rather considerate by not displaying anger and discontent but by just mere complaining and seeking reprisal. Basically, the response is very passive. Such a kind of response depicts that the customer expects least consequences that will benefit the customers. Such a response is not beneficial to the airline company because the organization does get an effective feedback and cannot improve on the basis of the customer’s expectations and thus cannot retain customers effectively.
COMPLAINT HANDLING
In case the passenger has a problem with the in flight crew, they can give a written application to the In-flight Supervisor who later hands over the complaint to the COMPLAINT HANDLING CELL. The complaint handling cell is under the control of the Deputy Director In charge of supervision. Also the complaints regarding the ground staff, security and other such departments can also be given in writing to the Deputy Director In charge directly. Once the complaint is received it is forwarded to the higher authorities who decide what action needs to be taken. Usually a warning goes to the personnel who have defaulted. In rare and extreme cases the personnel may be suspended from flying for a period of 2 – 3 weeks. Once an action is taken, the company sends an apology letter to the customer along with the response to the complaint.
In case the complaint is regarding mishandling or damage to the baggage, there is compensation provided to the customers. The amount of compensation depends on the policy of the company and the degree of damage.
There are nine steps involved in handling complaints effectively. They are mentioned below:
19. The frontline employee handling complaints should stay calm under any circumstances.
20. Let the customer get the story off their chest- do not interrupt, this will only cause irritation. In this case listening skills comes into picture.
21. Avoid admitting any liability at this stage. The officer just need to show concern like, “I’m sorry for the inconvenience, let me see what I can do”. Give attention to the customer, make him feel important.
22. Get facts by using question and try to find out the real and whole story behind it.
23. After listening and collecting data, just identify appropriate action considering company’s policy and customer’s expectation.
24. Take action if you have authority or involve manager or concerned person.
25. If corrective action cannot be taken immediately, tell the customer. It’s better to give bad news rather giving false news.
26. Record the action to be taken and inform anyone else in the organization involved.
27. Look into the matter, provide a proper follow-up.
These nine approaches if followed effectively, complaints can be handled properly and possibly a customer can be retained.
SERVICE RECOVERY STRATEGIES
“Companies have made Service Delivery Idiot-proof. But Idiots cannot solve problems.”
We just realized that service recovery in the airline industry loses a little scope because of the passive nature of the customers and because of the negative impact of service failures. But, in the competitive market, Airline companies are trying their best to delight their even though service has failed in the first encounter. Some of the strategies which airline providers are implementing for service recovery are as followed
Total Quality management or “Zero Defects”
Airline companies are trying their best to make it right for the customer in the first encounter itself, give the customers what they expect and avoid the errors as much you can. For instance, avoid flight delays which occur due factors which are under the control of the management such as speedy check-in process, discipline staff to be punctual and soon. Doing it right at the first encounter saves the company the costs of redoing the service and compensating for the errors.
Effective Complaint Handling
Complaints need to be encouraged so that the Airline Company is aware of the loopholes and what the customer is expecting from the service. Complaints should be taken seriously and should be acted upon immediately. Since, the customer is of the passive nature with respect o complaints, one must ensure that it is easy for a customer to put forth his complaint and he should be assured of a treatment. Technology and its innovation should be put to use to form an effective system for complaint handling and their reprisal.
Fair Treatment to the Customers
On failure, a customer expects to be treated fairly in term of the outcome they receive after the failure. The customer should receive something more than what he has actually expected and which was met in the first encounter. Fair treatment will help in customer retention. For instance, incase of loss of baggage, a service provider might provide the traveler vouchers for shopping at international locales for free of charge.
Market Research
Not all dissatisfied customers will come up to the reception desk and post a complaint. The airline company has to make efforts in finding on itself the failures in service. Market research forms a very important tool in knowing this. For example, one can ask for feedback from a customer who is just going to board a flight. He can be asked about his experience with the ground staff, the ambience of the lounge, and other facilities.
PROFITABLE ART OF SERVICE RECOVERY
Service failures are inevitable but they don’t hit a service provider as much as the costs of service recovery and the costs of redoing the service with intent of delighting him are very relatively high. Basically, the service provider has to bear of the cost of repeating the service process that too with an added value.
With respect to the airline industry, service recovery can be made productive and profitable by the following methods.
Resolving the problem at the source itself
Suppose a failure of service takes place at the ticketing counter, the finance department head does not needs to be involved but in fact, the ticketing executive himself should address to the problem. The staff which is in direct contact with the customer and is forming a part of the critical encounter should be trained and empowered to tackle failures at the source itself.
Do not dismiss the occasional problem
It is tempting to dismiss an occasional problem but companies should avoid doing the same. Customer retention is an important task for an airline company in this period of intense competition. Occasional problems cannot just be dismissed because; it is these occasional problems which dissatisfy the customer every now and then.
Flexible Management
The management needs to be flexible and dynamic enough to take decisions with regards to service recovery. The customer’s perception and expectations should be kept in mind whilst taking a strategic decision. Treatment should be fair enough to delight the customer. Basically, the company has to give in to the expectations of the customer but at the other end also negotiate to get a fair and a profitable deal.
Measure the Costs
At every step of the service recovery process, the costs involved need to be monitored closely so that no wastage or blockage of funds happens in the process.
Train employees
Employees need to be trained perfectly in order to give the best service delivery at the first encounter itself. Also the staff needs to be trained with respect to decision making, crises management and so on.
Empower the Front Line Workforce
The front line work force is the workforce that is in direct contact with the customer and form as an important critical service encounter. The front line can be empowered with authority to take a decision incase of service failures. Companies can train their front line staff for such situations.
Service Recovery is a different management philosophy a company embraces customer delight as a primary goal of business. It is a fundamental to quality service providing and therefore it should be considered as one of the important part of a airline company’s strategy.
“To Err is to Human, to Recover, Divine”
LOW COST AIRLINE / LOW COST CARRIER
A low-cost carrier or low-cost airline (also known as a no-frills or discount carrier or airline) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. The term originated within the airline industry referring to airlines with a lower operating cost structure than their competitors.
India's first low-cost airline, Air Deccan started service on August 25, 2003. The success of Air Deccan has spurred the entry of more than a dozen low-cost airlines in India. Air Deccan now faces stiff competition from other low-cost Indian carriers such as Jetlite, SpiceJet, GoAir and Paramount Airways.
Few of the features of the low cost airlines:-
A single passenger class
A single type of aero plane (commonly the Airbus A320 or Boeing 737), reducing training and servicing costs
A minimum set of optional equipment on the aero plane, often excluding conveniences such as ACARS, further reducing costs of acquisition and maintenance
A simple fare scheme, such as charging one-way tickets half that of round-trips (typically fares increase as the plane fills up, which rewards early reservations)
Unreserved seating (encouraging passengers to board early and quickly)
Flying to cheaper, less congested secondary airports and flying early in the morning or late in the evening to avoid air traffic delays and take advantage of lower landing fees.
Aggressive fuel hedging programs.
The price policy of the low cost carriers is usually very dynamic, with discounts and tickets in promotion. Even if the advertised price may be very low, sometimes it does not include charges & taxes.
But in the past one year major changes have taken place because of the hike in the fuel prices. Like everyone is aware that the fuel prices have risen way too much. So due to this all these low cost airlines are facing a major setback.
These increases in fuel prices has caused trouble for each and every airline and they are trying to recover the losses in various forms and also trying to come up with promotional schemes and various other incentives in order to retain their customers.
They losses occurred by these airlines in the fiscal year 2006-2007 and 2007- 2008 have been tremendous. Now their ultimate aim is to recover these losses.
Earlier due to the introduction of the low cost airlines and their cheap rates which were almost similar to those of the train fares the customers blindly traveled by air as their travel time could be less but after the rise in prices the customers think twice before buying the air tickets.
Hit by galloping fuel prices, airlines the world over have started resorting to various cost cutting measures including flying aircraft at a given height on a low speed to reduce fuel burn.
India's crowded airline sector is flying into huge losses on the back of a surge in global fuel prices that have forced it to hike fares, slowing explosive passenger growth.
National carrier Air India and other carriers have started following these measures and other fuel conservation initiatives which are a standard practice undertaken by all global airlines, especially those flying on long-haul international routes.
Reduction in aircraft speed at an optimal height, called a reduced Cruise Mach policy, has been adopted by Air India for its Boeing 747-400 and Boeing 777 aircraft fleet used in long-haul operations.
The national carrier is also planning similar measures for its Airbus A-310 and Boeing 737 planes, which are meant for medium and short-haul flights and are the merged carrier's backbone for domestic operations.
Besides, undertaking the Cruise Mach policy, Air India has also started cutting on the aircraft's weight by removing certain non-essential items on board.
AIRLINES VALUE ADDED CHAIN
CONCLUSION
“I was engaged in what I believe to be the most thrilling industry in the world—aviation. My heart still leaps when I see a tiny two-seater plane soaring gracefully through the sky. Our great airlines awe me. Yet I know they were not produced in a day or a decade.”
— William A. "Pat" Patterson, CEO United Airlines.
Studying the Airline Industry gives us the same feeling as the CEO of United Airlines does. The project report talks about the Airline Industry and its most important function – MARKETING.
The project report has covered every other aspect of the Airline Service Marketing which on paper seems to be simple to implement but in practice is as tough a job as the invention of the airplane itself.
The project study has given us a great depth of intellectual learning about the sector. We hope, the project report has the same enduring for its readers as it did to us.
