Understand the nature of airline businesses

Recognize airline customers’ hierarchy of needs

Understand customers’ expectations

Identify tangible and intangible customer services

Identify an airline’s internal and external customers

Airline and its nature of business

During the development of the aviation industry in the early 20th century, an airline was a transportation company that offered transportation service to the customers by air. Air transport was not common at that time as people were afraid of flying due to the many accidents that had occurred. The general public still preferred to take trains and ships for long-distance travel. The main goal of an airline in the early years was to carry customers from one place to another place safely. With the low market demand, the majority of airlines at that time were either established by the government or partially funded by the government. According to the report of Airbus Commercial Aviation Accident 1958–2015, the number of accidents decreased steadily over time.1 As the industry became mature with improved technology, air travel has also become the safest mode of travel. Today, air travel is one of the most important transportation systems in the world.

Figure 1-1: Airbus—A Statistical Analysis of Commercial Aviation Accidents 1958–2015 (Source: Airbus).

An airline is similar to an ordinary business in the service industry; the majority of the profits are from customers. After the deregulation of the airline industry in the 1970s, governments minimized their control of state-owned airlines and allowed private companies to establish their own new airlines. As such, airlines are free to enter the industry and intense competitions are created.

Customers’ demand and expectations of airlines have vastly changed today. In the early stages, safe operation was the main expectation of the customers. As many airlines have improved their safety records, customers began to expect more from an airline company. Today, other than basic safety needs, customers are also demanding for comfort and top-notch services.

The Maslow’s hierarchy of needs has defined that an individual’s needs are segregated into multiple levels. We are motivated to achieve certain needs and that some take precedence over others. Our most basic need is the first thing that motivates our behavior and once that is fulfilled, it is our natural instinct to seek to move up the hierarchy and satisfy the other higher needs. Based on the same principle, an airline’s hierarchy can be used to demonstrate customers’ expectation of an airline.

Figure 1-2a: Airline’s hierarchy of needs.

Airline customers’ hierarchy of needs

Airline offering safe transportation services is the minimum expectation of customers. This is also identified as the basic needs of customers in air transportation.

When the safety needs are met, customers’ demands are then expanded to facilities at the airport and on-board the aircraft. Customers evaluate the airline by the types of hassle-free facilities available at the airport as well as the in-flight entertainment system, seat sizes and selection of meals served.

This is then followed by personal service or customer service. The way that customers are being served has a direct influence on customers’ satisfaction level toward an airline. This includes the satisfaction with the interaction between customers and service agents, and service agents’ problem resolution abilities.

Once the personal service need is fulfilled and customers are satisfied with the airlines’ service, their intention for return repurchase is motivated and customer loyalty is established.

The very top of the hierarchy extends to long-term desires. Customers establish a long-term relationship with airlines when they are unlikely to change suppliers. In this instance, they feel important as they have become a VIP for the airline. This also reflects the customer’s status within the airline company. The privilege status creates a stronger motivation for customers to return to the same company for their future travels.

Fulfilling customers’ personal needs are not sufficient today as airlines are looking toward generating and retaining loyal customers. Loyal customers help airlines to secure and create a stable income for the company. The larger base of loyal customers generated by an airline, the better revenue it is likely to achieve. Many airlines today are putting a lot of efforts on satisfying customers’ personal need and to motivate them to move up to the ‘loyalty’ and ‘status’ portion of the hierarchy.

Applying the model

To achieve customers’ satisfaction, it is essential to understand their expectations. An airline company is offering services to thousands of customers every day and customer has different expectations when in face with different situations, and their needs are not always the same.

Safety

Customers fleeing from an earthquake disaster or situations pertaining to armed conflicts expect an airline to offer a safe transportation to take them away from the affected areas. These customers have low expectations as their main travel purpose is to get to safety. Safety needs are the principal concerns and other needs are not as important to these customers.

Facilities

Customers travelling with their families on vacations will evaluate the type of services offered by the airline before making a decision. This is to ensure a comfortable ride. More often than not, these customers expect food to be served on their flights, some form of entertainment to be provided during the flight to keep passengers entertained, and someone to assist them during their entire journey.

Personal service

Customers who have been traveling with the same airline several times expect service agents at the airport to remember them by name and know their seating preferences. In this case, the standard of service offered by the service agent needs to be the same, if not better as compared to their previous travel experiences.

Loyalty

This applies to customers who fly so often that they decide to fly with the same airline whenever they need to travel. They make their decision largely based on their satisfaction with an airline and the services that the service agents offer. Even though there are other airlines operating similar service with a lower ticket price, customers are still willing to pay more using services from the same airline as they are very satisfied with what they are getting. They also offer recommendations to their friends for the excellent service offered by the airlines.

Status

These customers have gained a high status in the airline. They have flown so often that service agents at the airport and on the aircraft remember their travel details. All the service agents know their travel preferences and have them prepared in advance. These preferences include the following observations: Customer A always arrives at the airport for check-in 1 hour and 10 minutes before the flight; she has no check-in baggage; she always chooses seat 11A by the window and that she always has a Krug Champagne during her meal and a black coffee after that.

What are customers expecting?

Air travel is becoming more common today and customers have many choices of airlines to choose from. However, the aircraft manufacturing and cabin interior industries are dominated by a few players and airlines have no alternative but to offer standardized products in these areas. As such, they compete against each other by offering similar products in terms of cabin ambience, meal service, seat design, in-flight entertainment and communication technology. To generate competitive advantages, today’s airlines are focusing on customer services to influence customers’ choice of airline.

To win the hearts of the customers, airlines have used different strategies to keep their existing customers and attract new ones. The main objective is to ensure that the customers are happy so that they will return for repurchase and use their service again.

Figure 1-2b: Elements of airline safety.

Customers’ expectations

Satisfaction is generated after a customer enjoys their journey and feels the money paid is worth the value. The minimum customer expectation of an airline is supported by three basic elements: safety, timeliness and price.

Safety is the number one priority for all airlines. This demonstrates the trustworthy of the airline’s operations, including aircraft maintenance and security procedures. Customer will choose airlines, with the best safety records. These records can be easily accessed by customers via the Internet. Other details customers look out for include personnel trainings, aircraft investments, aircraft malfunction rate, airline accident rate and the airline fatality rate.

There are many modes of transportation for customers to choose from and the main reason for deciding to travel by air is usually time-related, i.e. customers expect to reach their destinations in the minimal time needed. Customers expect their flights to depart and arrive on time. As such, an airline’s on-time performance data is an important factor when customers decide on their choice of airline.

Cost is another important element that determines customers’ satisfaction. This is especially so for those who travel for leisure as this category of customers are price sensitive and customers seek other alternatives when an airline charges a higher price. Many airlines today have applied the yield management approach to target different customers by offering different pricing schemes to suit the needs of different travelers. Hence, customers who are taking the same flight and on the same service class may not be paying the same price for their tickets. These differences in prices are due to dissimilar ticket conditions. A customer paying a higher price gets more flexibility for their travel. These include enjoying the flexibility of date change, flight change and refund. On the other hand, customers who purchase discounted tickets are bounded by travel restrictions such as the lack of flexibility in terms of flight changes and refund.

Figure 1-3: Basic customers’ expectations.

Furthermore, today’s customers have higher expectations. Other than the basic requirements mentioned above, they have additional demands such as service, quality, action and appreciation.

Customers constantly compare the airline service with the amount of money they have paid for their tickets. Generally, customers who have paid more demand a higher service needs compare to those who pay less.

Customers also compare service providers and choose the company with a positive reputation in terms of service and product quality. The quality of an airline is determined by variety of activities and offers offered, which are used as a basis for customers to evaluate the airline company as a whole.

In addition, customers expect airlines to take prompt actions when a situation arises and that they are be able to contact airline staff easily to have their problems resolved.

Customers wanted their business to be appreciated. These appreciations often create and strengthen the relationship between the airline and the customers, leading to future businesses. This is vital in an industry where an airline’s quality and reputation can be easily spread by word of mouth.

Figure 1-4: Additional customers’ expectations.

Each customer creates their own expectations of an airline’s service. The minimum expectations that all customers have are concerns pertaining to safety and on-time departure and arrival. However, the level of expectations may not always be the same for all customers as this is a variable that is directly affected by how much they have paid for their flight ticket. Their satisfaction is directly influenced by whether the money they have spent is worth it.

Naomi Karten, a highly experienced speaker and seminar leader, has suggested the below formula to calculate customers’ level of satisfaction.2

If customers’ level of satisfaction is one, the airline is fulfilling customers’ expectation. When the customers’ satisfaction is more than one, it means that airlines’ performance is exceeding the customers’ expectation, and vice versa.

For example, on a flight from Asia to Europe, a customer who has paid several thousand US dollars on a ticket often has much higher expectations than another who has spent several hundred US dollars. As such, airlines offer different level of services such as first class, business class and economy class to fulfill their expectations. Airlines also arrange for special check-in counters for customers who have paid a higher fare and amenities such as lounge access and welcome drinks while boarding are offered to ensure these customers’ comforts are met. Once an airline’s performance exceeds customers’ expectations, satisfaction is created. However, if the same airline fails to deliver as expected, the feeling of dissatisfaction is generated.

Flight from Singapore to London

Expectation	Airline performance	Airline performance
Customer A—Premium fare
Flight departs on time at 0900	The flight departed at 0856	Flight departs at 0940
10 minutes wait to check in	6 minutes wait to check in	15 minutes wait to check in
Board ahead of another customers	Priority boarding offered	15 minutes wait for boarding
Disembark first	Disembark first	10 minutes wait to disembark
10 minutes wait to retrieve baggage	8 minutes wait for baggage	20 minutes wait for baggage
	Exceeds expectations = Satisfaction	Did not meet expectations = Dissatisfaction
Customer B—Low fare
Flight departs on time at 0900	The flight departed at 0856	Flight departs at 0940
30 minutes wait to check in	16 minutes wait to check in	45 minutes wait to check in
30 minutes wait to retrieve baggage	28 minutes wait for baggage	35 minutes wait for baggage
	Exceeds expectations = Satisfaction	Did not meet expectations = Dissatisfaction

Customers’ in-flight expectations are generally set by the industry. Today’s customers’ basic expectations of an airline are safety, comfortable chairs, delicious food, in-flight entertainment, and enthusiastic service agents. However, the industry’s expectations are changing rapidly. When one airline introduces a new product, other airlines follow quickly. This then becomes the new industry standard. To draw an example, when one airline offers in-flight Wi-Fi service and in-seat power ports, the airline booking soars. Other airlines soon start to follow and these eventually become the basic services provided in an aircraft. Customers’ expectations are also influenced by the type of services purchased. The cost of air tickets differs vastly among first-class cabin, business-class cabin, economy class cabin; and between full-service airlines and low-cost carriers.

Standardized cabin amenities

First class is the most luxurious class that seeks to provide customers the most space and comfort on an aircraft. This premium service comes with a price and the cost of first-class tickets is usually the most expensive. Due to the cost of the ticket, customers who travel by first class have very high expectations in terms of the airline’s products and services.

Business class is the second-tier class and majority of the customers are frequent travelers who go on business trips. These customers also set high expectations as they are familiar with the airline’s operations and know what to expect from airline service agents.

Economy class is the most inexpensive class and is attractive to a variety of customer types, including families, tour groups and on occasions, people who are travelling for business purposes. Traveling by economy class is not as expensive as other classes and the majority of customers have lower expectations. Occasionally, there are businesspersons and other frequent travelers who choose to travel by economy class and these customers often maintain their high expectations as opposed to other economy-class customers.

Full-service airlines are airline companies that offer a full packaged service to customers. After customers purchase their tickets, a majority of other services such as in-flight meals and allowance for check-in luggage are offered free of charge.

On the other hand, low-cost carriers offer limited service and only cover the basic product. If a customer needs additional products or services, they are required to pay an extra fee.

In short, a customer who has paid to travel on a full-service airline has higher expectations than another who decides to fly with a low-cost airline as the former is also seeking comfort and amenities on board the aircraft. Low-cost airline travelers are aware that the amount of money they paid only covers the transportation process and these customers required to buy other amenities for more comfort if they desire.

What is customer service?

Customer service is defined as a series of interactions between a product provider and its customer at different stages of a sales transaction. The American economist, Robert W. Lucas has defined customer service as the ability of knowledgeable, capable and enthusiastic employees to deliver products and services to internal and external customers.3 To ensure that transactions are performed smoothly and efficiently, employees who are involved in said transactions must be talented and keen to perform their duties.

Figure 1-5: Customer service cycle.

Customer service is becoming significantly important in creating customer satisfaction in many airlines today. In this context, customer service refers to the process of service delivery to customers before, during and after the purchase of an air ticket. Customers often use this experience to determine an airline’s quality of service and decide whether they will purchase tickets from the same company for their future trips.

Customer service is an integral part of the profit cycle, helping an airline to achieve its goals. When customers are satisfied with the service provided by an airline, this will guarantee a subsequent purchase. This in turn, increases the airline’s revenue and it can then use these profits to offer incentives to employees and further motivate them to keep up their good work, improve the airline’s image by carrying out marketing campaign and social responsibility programs, and improve their products. The continuous cycle not only retains long-term customers, it also helps to maintain the airline’s profitability and encourage growth.

In the airline industry, a customer’s level of satisfaction is based on a combination of tangible and intangible services.

Overall, customers are expected to spend less money and arrive at their destination on time and safely. Many airlines have achieved all the three basic elements effectively. When these elemental elements are met, customers then raise the bar and demand more from the airlines. To fulfill customers’ additional demands, many airlines are offering supplemental benefits. These additional benefits can be divided into two categories: tangible and intangible products.

Figure 1-6: Tangible and intangible customer service.

Tangible products are physical objects that can be perceived by touch and the five senses, i.e. something that customers can see, hear, smell and touch. This normally refers to the environment the customer is experiencing while using the airline’s service. Sometimes the actual product they receive when using the airline service is accounted as a tangible customer service. Examples include quality of in-flight meal, availability of leg space in the cabin and the quality of the screen provided for in-flight entertainment.

Intangible products are products that cannot be touched, and they are often referred to as services. Services provided by airline service agents are also known as customer service. These include how customers are being served and treated throughout their journey. Examples include the efficiency of ground service agents performing the check-in and the helpfulness of cabin crew who offer in-flight services. Another influencing element is delivery of products and services, such as attitude and the helpfulness of airline service agents, and their ability to resolve minor issues and conflicts.

Figure 1-7: Tangible and intangible products.

Tangible products can be easily matched by competing airlines. Standardized seat pitch and width, hi-tech in-flight entertainment system and delicious meals are becoming the norm within the industry. These lead to airlines competing against one another on the basis of intangible customer services.

How a product is being delivered is as important as the quality of the product. Customers judge the quality of a company mainly based on the service that they get. This is especially so in instances which customers is flying with an airline for the first time. They will often evaluate the quality provided based on the service offered by the sales agent. For example, a customer would like to visit Sydney and has never been there before. This is also the first time he is flying and has no knowledge about making reservations for his first flight. He contacted several airlines’ reservation departments to inquire about his trip. As the airlines are offering similar products at the same prices, he will eventually decide to fly with the airline which the reservation agent offers the best customer service as that is his best point of reference. The excellent service provided by the sales agent has resulted in his confidence in the airline, hence causing him to make the final decision to fly with a particular airline.

Tangible customer service

Product quality

The overall product that a customer purchases is evaluated based on its quality. A product’s quality consists of multiple elements that motivate customers to purchase a particular service from airlines. These elements include an airline’s reputation, safety record and the amenities offered both on the ground and on board an aircraft.

Service environment

This is also known as the service landscape or ambience. It refers to the physical locations where a customer experiences an airline’s products. These may include the check-in counter’s setup, airport lounge’s layout, boarding gate’s design and aircraft cabin interior’s design, just to name a few. The environment also plays a part in influencing customers’ overall perception of the airline and the chances of retaining return businesses. According to a psychological study of human behavior affected by the environment conducted by Albert Mehrabian in 1974, a customer may react in one of either two directions when making a decision: approach and avoidance.4

Approach reactions are generated when customers are satisfied—they are happy with the environment, e.g. state-of-the-art cabin facilities and appealing interior design of the aircraft, and are willing to stay longer or return for future occasions. On the other hand, avoidance reactions are created when customers do not enjoy the surroundings, e.g. crowded and dirty airline lounge. Below are other examples of approach-avoidance factors that customers consider:

The layout and design of the check-in area at the airport has a direct impact on customers’ level of satisfaction.The design of the common and individual queue areas have a direct impact on customers’ waiting time.

Airline lounge service is only available to high-yield customers.The design and the facilities in the lounge will affect customers’ level of comfort while waiting for boarding. Customers who spend their time in the lounge prefer a spacious and private environment for rest or to work.

The boarding process used by the airlines impacts customers’ level of satisfaction.The boarding procedures adopted by airlines include boarding by rows, by zone or by random. Using different strategies has both positive impact and negative impact on passengers’ waiting time at the boarding gate.

The color theme of the aircraft cabin and the background music is instrumental in creating a memorable travel experience for customers.A clean and modern-looking aircraft also helps in raising customers’ level of satisfaction.

Cabin Identify of Thai Airways International

In 2014, Thai Airways rebranded their aircraft and incorporated elements of the Thai culture in their new business class and economy class cabins. Thai teak wood, silk foil, rattan and Thai artwork were used in the cabins to reflect Thai culture and traditions so as to create a strong motif and brand identity.5

Figure 1-8: Airline’s service environment.

The service environment is also dependent on employees’ moods and the quality of the service they provide is often affected by the conditions of the working environment. Therefore, a clean, safe and well-designed environment can have an indirect impact on customers’ level of satisfaction and impression of an airline.

According to Mary Bitner (1992), the service environment consists of multiple factors that affect customers’ satisfaction. These include ambience, use of spatial space, functional congruence, signs and attires.6

Ambience

The ambience refers to the physical environment conditions. This includes all elements related to temperature, humidity, air quality, smells, sounds and light that influence customers’ perceptions. While the ambience at the airport’s check-in lobby is controlled by the airport authority, the airport lounge environment and the cabin environment can be adjusted based on individual airlines’ preferences and needs. The cabin’s temperature, pressure and humidity and lighting are also adjusted according to the time of the day to make the customers feel more comfortable.

Space

All customers prefer to have more privacy and space. The layout design of the check-in lobby, furnishing arrangement in the airline lounge and aircraft cabin setup also affect customers’ level of satisfaction. A waiting area that is spacious and well-designed conveys a sense of openness and vice versa for one that is cramped and littered. An aircraft with too many seats may be unattractive to the customers as even though the airlines may be earning additional profit from the sale of these seats, the amount of space offered to the customers is compromised.

Functional congruence

Functional congruence refers to how well something with a functional purpose fits into the environment in which it serves that purpose. In the instance of an airline, this includes the functioning of the equipment used, the locations where check-in service is provided, availably of check-in kiosks at the airport and the distance from the airline lounge to the boarding gate. These come together to form the entire service experience.

Signs

Clear display signs are extremely important in an airport. While these are already put in place by airports, some airlines do provide their own signs to further assist and direct passengers to the correct boarding gate. In the aircraft, signs are installed to inform passengers when to fasten their seat belts and when they are permitted to use their electronics during the flight.

Attire

As ambassadors and representatives of the airline, it is essential for employees to be well-dressed and well-groomed. Some airlines also implement dress codes for passengers who are accessing the airline lounge as well as boarding of an aircraft. For example, Qantas has enforced the smart casual dress code for customers who wish to access the lounge.7 American Airlines forbids customers who are dressed inappropriately or barefooted from boarding the aircraft.8

Airlines set strict dress code policy for staff who travel on their aircraft. Staff who travel on the company’s travel benefits are considered the representatives of the airline and they are required to dress appropriately. In March 2017, an airline was slammed in social media for refusing two female staff passengers wearing leggings to board the aircraft. They were asked to change their outfit before they were allowed on-board.

Service delivery system

An airline must deploy adequate service personnel to reduce waiting time. For example, the average check-in time for Airline A is 3 minutes. If it allocates 10 check-in counters to check in 500 customers, the total time required is 150 minutes. On the other hand, if it decides to open up 5 more check-in counters, the total required time is reduced to 100 minutes. However, the downside to this is increased airline operating cost. Similarity the number of cabin crew deployed on an aircraft affects customers’ level of satisfaction. Another factor that determines services is the quality of the actual service delivered.

Intangible customer service

Intangible customer service mostly refers to the ability of service agents.

Service skills

Service skills refer to the ways employees interact with customers. These include communication skills, ability to maximise resources and think out of the box, and problem-solving skills. Today’s customers expect service agents to understand their needs and resolve issues in a timely manner.

Product knowledge

In order to provide excellent service, airline employees must have adequate product knowledge related to their duties and the surrounding environment so as to cater to the needs of passengers. These include basic knowledge such as operation of in-flight entertainment system and duty-free limit allowance of alcoholic drinks allowed to be taken into a country.

Service attitudes

Helpfulness and friendliness are the basic requirements of a service provider. A positive mindset also helps to create a cheerful environment which indirectly helps to enhance customers’ level of satisfaction. Service attitudes can sometime turn an unpleasant situation into an opportunity for creating loyal customers.

Who are the customers?

Customers are individuals or organizations who have engaged an airline’s services. An airline customer can be from any group, gender, nationality or culture. In addition, airline customers can be divided into three types: internal customer, intermediate customer and external customer. It is important to establish relationships with both internal and external customers as the former handles all the various aspects that come together to create a smooth flight experience, and the latter provides the revenue that keeps an airline operating.

Internal customers

Internal customers comprise the following groups of people that airline employees work with in order to operate smoothly: vendors, suppliers, and manufacturers. In the instance of frontline service agents, they need the support of their internal customers—various supporting service agents to provide effective customer services to customers. These supporting service agents include catering service agents, maintenance personnel, baggage handlers and ramp agents. The airline also relies heavily on these suppliers who provide services for cleaning and catering to maintain the cleanliness of the aircraft and timeliness delivery of in-flight meals.

Intermediate customers

Passengers sometimes transfer between airlines, especially for long-distance travels and airlines need to work together to ensure a hassle-free experience. Hence, airlines need to consider the needs of their intermediate customers—other airlines. Teamwork is important in the airline industry as service agents need to coordinate with their co-workers to provide services to passengers.

Travel agencies and freight forwarders are also an airline’s intermediate customers as these companies help the airline to sell its product to external customers. As such, it is vital to develop a good relationship with the providers of these services. This is even more so in today’s context where customers’ choice of airlines are directly influenced by travel agents and freight forwarders’ recommendations. Offering excellent services and being attentive to these intermediate customers helps build good working relationships and increase sales.

External customers

These refer to the millions of customers who travel by air every day. While these customers expect to be well taken care of during their journey, there are some customers who require more help than others. It is important for airline service agents to identify these different types of customers, their characteristics and needs.

External customers may be divided into the following main categories:

Business travelers

Leisure travelers

Cargo customers

Business travelers

These are customers who travel for work. These customers often travel many times in a year and are very familiar with the air travel process.

Characteristics:

Dressed in formal attire

Expect a hassle-free experience

Leisure travelers

These customers usually travel for leisure and in groups. They do not travel often and may sometimes require additional assistance.

Characteristics:

Dressed casually

Expect a fun and exciting experience

Figure 1-9: Airline customers.

Cargo customers

Cargo customers engage an airline for freight delivery services and usually contact the airline directly. They are just as important as business and leisure customers as they make up a significant percentage of an airline’s sales.

Customer service in the airline industry

During the air travel process, airline employees from various departments have direct and indirect interactions with customers. The air travel process begins with customers making their ticket reservations. This is followed by check-ins at the airport, boarding of aircrafts, the en-route experience, arrival at their destinations and finally, baggage retrieval. There are airline employees at every step of the way who provide services and assistance to customers in distinct ways.

For example, reservation service agents must have superb listening skills as they need to pay attention to customers’ requests. Both airport service agents and cabin crews require a different skill set as they deal with customers face-to-face. On the other hand, lost and found agents need to demonstrate strong problem resolution skills as the majority of customers who they are in contact with have issues with their baggage.

Passengers

Customer care (reservation and ticketing)

The customer care department, also known as ‘reservation unit’ is where customers contact an airline to purchase flight tickets. Traditionally, flight reservations are made by phone and reservation service agents assist customers to reserve their seats. Today, the majority of air tickets are sold through the Internet. However, when customers need to make changes to their travel plans, the quickest way is to contact the airline reservation centre directly. Hence, the reservation department also serves as a hotline which customers can contact the airline directly when they have any queries.

Customer care includes the following functions:

Make reservations

Ticketing arrangements

Frequent flier points redemption

Inquiry hotline

At the airport

Many airlines have reservation service agents stationed at the airport to assist customers with reservation and ticketing inquiries. They also take care of ad-hoc requests such as rebooking of flights.

Airport reservation and ticketing includes the following functions:

Make reservations

Ticketing arrangements

Frequent flier points redemption

Check-in counter

On the day of departure, customers go to the check-in counters of the respective airlines to check in for their flights. Airline ground service agents then check their travel documents before issuing them a boarding pass. Customers can also choose to deposit their travel baggage at the check-in counter.

Check-in service includes the following functions:

Registering customers for the flights

Travel document checks

Issuance of boarding pass

Baggage check-in

Boarding gate

After going through the airport security and immigration (on international flight only), customers will then proceed to the boarding gate and wait to embark on the aircraft. During the boarding process, airline ground agents will need to verify customers’ travel documents. They may sometimes collect a portion of their boarding pass for cross-checking of passenger headcounts.

Boarding service includes the following functions:

Assist customers on embarking the aircraft

Travel document checks

In-flight

While en-route a flight, cabin crews are stationed to ensure the safety and comfort of customers. The cabin crew demonstrates the usage of emergency equipment and offer amenities to customers during the flight.

In-flight service includes the following functions:

Ensure safety of passengers

Offer in-flight amenities and ensure customers are comfortable during the flight

Arrival

Upon arrival, customers will disembark the aircraft and airline ground agents are available to offer assistance to both arrival and transiting customers.

Arrival service includes the following functions:

Assist customers upon disembarkation

Offer directions to all customers

Baggage retrieval

After clearing immigration, customers can then retrieve their baggage from the baggage hall. Lost and found agents are stationed in the baggage hall to offer assistance to those whose baggage either did not arrive or were damaged during the flight.

Baggage service includes the following functions:

Track delayed or lost baggage

Make arrangements for return baggage

Make arrangements for baggage repair

After-sales

Customers may sometimes contact airlines to feedback on their positive and/or negative experiences during their journey. For some airlines, agents stationed at the reservation departments are in charge of taking in these comments and resolve complaints.

Figure 1-10: Travel process for travelers.

Cargo

Customer care

While the process of cargo movement is similar to that of passengers, there is very limited interaction between the airline service agent and the cargo companies. Most of the communication and coordinating works are carried out over the telephone.

Reservations

Freight forwarders usually contact airlines for reservation. The sales team will then calculate the delivery cost and make the necessary arrangements.

Cargo reservation includes the following functions:

Cargo space reservation

Inquiry hotline

At the airport

Departure

Cargo is accepted at the airport’s cargo terminal. After the documents are checked, the cargo will be stored in the terminal. They will then be loaded onto the respective aircrafts.

Cargo departure service includes the following functions:

Cargo acceptance

Inquiry

Arrival

Upon arrival at the destination, the cargo will be offloaded from the aircraft and stored in the cargo terminal. Freight forwarders will then need to submit their documents for verification before the freight is released.

Cargo arrival service includes the following functions:

Cargo release

Inquiry

After-sales

Freight forwarders may sometimes contact an airline to inquire about the status of their goods. These enquiries are taken care of by the after-sales department.

Figure 1-11: Travel process for cargo.

The importance of customer service in the airline business

According to statistics released by travel fare aggregator website, Flight Scanner,9 a total of 228 flights carry passengers from Bangkok to Hong Kong every week and 12 airlines offer direct service between the two cities. The majority of these airlines offer similar facilities on their flight and are competing against each other on the basis on the cost of flight tickets and the quality of the services provided.

This shows that service is a critical factor that allows customers to distinguish the differences between airlines operating on the same route. If customers are satisfied with the service provided by a particular airline and its service agents, they are very likely to share their experiences with their friends and on social media. This creates a positive ripple effect on an airline’s brand and reputation. Great customer service also plays a part in influencing customers’ repurchase intentions and can be the deciding factor for customers who do not have a preference for any particular airline when planning their flights. Offering exceptional customer services allows airlines to:

Turn complaints into opportunities

Generate a positive impression

Establish long-term relationship with customers

Attract competitors’ customers

On the other hand, if a customer is served badly, there will be negative repercussions.

Ambassadors vs. complainers

An airline can turn customers into brand ambassador. Happy customers will recommend the airline to their relatives and friends, they will also write positive comments in forums and travel sites, and repurchase the airline’s services.

On the other hand, unhappy customers can easily destroy an airline’s reputation when they spread negative messages. In fact, the majority of customers do not make a formal complaint with an airline and instead, they will share their bad experiences with their friends, post them in forum, social media platform and blogs.

Both positive and negative posts can be spread rapidly online; customers can share their message online anytime at the check-in counter, boarding gate and even during a flight. People seem to be more interested in sharing negative posts as compared to positive ones and re-posting these messages allows the formation of public opinion on an airline. Those who have experience of a similar problem will then further elaborate the problem. In addition, when a customer posts a comment, reaction from the public is almost immediate. It is difficult for the customer to amend their post even though the airline service agent could resolve the problem later. Therefore, it is important for airline service agents to attend to customers’ needs immediately.

Research has shown that positive posts spread faster than ones. An airline that provides excellent service can easily turn online feedback into a large marketing campaign as every sad post generates an extra 1.29 negative posts as compared to a normal post. On the other hand, every happy post has an even stronger impact: if a user posts an upbeat statement, an extra 1.75 positive posts are generated.10

An incident at Chicago O’Hare airport took place on 10 April 2017 erupted in twitter, when a passenger was dragged out from an aircraft due to an overbooked flight.

Another customer on a flight filmed and posted the incident on social media and within 2 days the video was shared over 100 thousand times. The news has also spread to other media including the traditional media all over the world.

Satisfied customers vs. loyal customers

Satisfaction is a measurement used to evaluate whether an airline’s performance exceeds the customers’ expectations. Satisfied customers are created when customers are happy with the products and services provided by the airline.

Figure 1-12: Satisfied customers vs. loyal customers.

Loyal customers, on the other hand, are those who exhibit a devoted attitude towards airlines. Such behavior results in these customers making repeat purchases, rather than choosing the competing airlines. Loyalty is created when customers are continually satisfied with an airline’s quality of service and products.

All airlines endeavor to meet their customers’ basic expectations and to persuade satisfied customers to become loyal customers by offering additional services to increase and retain customer loyalty.

Figure 1-13: Shift from unsatisfied to loyal customer.

Statistics

Below are some facts and figures on customer satisfaction and loyalty, based on a study conducted by various US companies:

It is 6 to 7 times costlier to attract a new customer than it is to retain an existing customer.11

54% of consumers shared bad experiences with more than 5 people, and 33% shared good experiences with more than 5 people.12

89% of consumers have stopped doing business with a company after experiencing poor customer service.13

Consumers are 2 times more likely to share their bad customer service experiences than they are talking about positive experiences.14

A 5% increase customer in retention increases profits by up to 95%.15

For every customer who bothers to complain, 26 other customers remain silent.16

More than 70% of buying experiences are based on how customers feel they are being treated.17

Summary

Majority of today’s airlines offer similar facilities on their flight. As such, they are competing with one another based on travel fare and the services offered. Excellent customer service is essential in securing customer repurchase intentions. Airlines use different strategies to turn satisfied customers to loyal customers so as to retain profitability.

Applying the knowledge

True or false?

Are the following statements true or false? Put a tick in the right column.

Statement	True	False
1. Customers are satisfied when their expectations are met.
2. Service environment refers to the service landscape in which customers are in direct contact with airlines’ products.
3. Ambience refers to the social environment that influences customers’ perception of an airline.
4. Limited leg space between seats in an aircraft does not impact a customer’s level of satisfaction.
5. Deploying adequate service agents help to increase customers’ level of satisfaction.
6. Loyal customers make repeat purchases with an airline.
7. Today’s airlines are competing against one another based on customer service.
8. When customers are happy with an environment, they have a tendency to stay put longer in the same location.
9. Intangible customer service mainly focuses on service agents’ abilities and skills in providing services.
10. All customers are willing to pay more money for better services.

Short-answer questions

1 How is customer satisfaction created in the airline industry? Explain your answer in full sentences.
2 What are the three elements make up the basics of minimum customer expectations?
3 How does a first-time flyer judge the quality of an airline? Explain your answer in full sentences.
4 What is customer service and why is it important to the airline industry? Explain your answer in full sentences.
5 Identify and explain the differences between an internal and external customer.
6 Write a list of the different characteristics of business and leisure customers.

Endnotes

1. Airbus. 2016. Commercial aviation accident 1958–2015. Airbus.

2. Karten, N. 1994. Managing Expectations: Working with People Who Want More, Better, Faster, Sooner, NOW!. Dorset house.

3. Lucas, R. 2011. Customer Service Skills for Success (Connect, Learn, Succeed). McGraw Hill.

4. Albert Mehrabian, James A. Russell An approach to environmental psychology Cambridge, Massachusetts: MIT Press, 1974.

5. Ghee, R. 2015 Mar 15. Creating a unique cabin environment—airlines investing in distinctive design and customer service. Future travel experience: http://www.futuretravelexperience.com/2015/03/creating-unique-cabin-environment-airlines-investing-distinctive-design-customer-service/

6. Bitner, M. 1992, Apr. Servicescapes: The Impact of Physical Surroundings on Customers and Employees. Journal of Marketing. Vol. 56, No. 2 pp. 57–71.

7. Flynn, D. 2015, Feb 12. Qantas to enforce dress code at Qantas Club airport lounges. Australian Business Traveller: http://www.ausbt.com.au/qantas-tightens-dress-code-at-qantas-club-airport-lounges

8. American Airlines. 2015. Conditions of Carriage. American Airlines: http://www.aa.com/i18n/customerService/customerCommitment/conditionsOfCarriage.jsp#acceptanceofpassengers

9. Skyscanner. Bangkok to Hong Kong. http://www.skyscanner.co.th/routes/bkkt/hkg/bangkok-to-hong-kong-international.html?langid=EN

10. Hall, Edward T. October (1963). A System for the Notation of Proxemic Behavior. American Anthropologist.

11. White House Office of Consumer Affairs Washington, DC.

12. Zendesk. 2013. The impact of customer service on customer lifetime value. Zendesk: https://www.zendesk.com/resources/customer-service-and-lifetime-customer-value

13. Oracel. 2011. 2011 Customer Experience Impact Report. Oracel Cooperation: http://www.oracle.com/us/products/applications/cust-exp-impact-report-epss-1560493.pdf

14. American Express. 2012. 2012 Global Customer Service Barometer. American Express: http://about.americanexpress.com/news/docs/2012x/axp_2012gcsb_us.pdf

15. Reichheld, F and Schefter, P. 2000. The Economics of E-Loyalty. Harvard business School: http://hbswk.hbs.edu/archive/1590.html

16. White House Office of Consumer Affairs Washington, DC.

17. Beaujean, M. Davidson, J and Medge, S. 2006. The ‘moment of truth’ in customer service. Mckinsey: http://www.mckinsey.com/insights/organization/the_moment_of_truth_in_customer_service

A Practical Guide to Airline Customer Service

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