Airline Industry
Transcript: The Airline Industry Presentation Brittiny Washam Patrick Frates Jessica Farris Ashley Cunningham Todd Sauer Kelsey Millman Impact of Customer Service on the Retention of Passengers in Low Cost Airlines Define customer service and how it varies amongst different cultures Identify Southwest and Ryanair marketing strategies, two airlines at opposite ends of the customer service spectrum, but that both provide highly popular low-cost carrier service. Will attempt to show what keeps passengers returning to both airlines, given the vast gap in service provided. Conclude which airline’s strategy will prove more effective in the longterm What is the Issue? Hospitality: the friendly and generous reception and entertainment of guests, visitors, or strangers. As hospitality students, we are educated on a broad variety of hospitality industries with an emphasis on learning proper guest service techniques. As competition in the airline industry increases, and customer service falls victim to cost-cutting measures, we must examine the state of service within the industry to know how to properly apply the skills we are honing for future leadership positions. What is Customer Service? "Customer Service is a function of how well an organization is able to constantly and consistently exceed the needs of the customer.” “The customer’s assessment of overall service quality is determined by the degree and direction of the gap between their expectations and perceptions of actual performance levels.” (Parasuraman, Zeithaml, & Berry,1985, 1988 ). RyanAir Headquarters in Dublin, Ireland Targets European customers Ages 15-64 looking for cheap air fare. Began in 1985, Modeled after Southwest Business Plan Marketing Plan To Maintain a high market share and become the undisputed market leader within the European low cost airline segment; to attack even the big network carriers like Lufthansa and British Airways and become the largest airline in Europe in terms of transported passengers; and furthermore to sustain and optimize its top cost production What' up with that! Customers pay for water, drinks, and snacks Chairs do not recline Employees pay for their uniform Was sued for charging a customer $34 for the use of a wheelchair, and has now implemented a $.63 “wheelchair levy” No frequent flyer program Outsources making it difficult to create company culture Interested in rapid growth Southwest To see the direction behind the Southwest management strategy we look to the mission statement... The Mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. Southwest and RyanAir Low-Cost Carriers Travel point-to-point Utilize secondary airports Use one aircraft type No business Class Importance of Price Vs. Customer Service Price Most customers think of price before everything else. As the number of airlines decreases and the price of jet fuel increases, airfares will increase. Capacity cuts & rising demand Some markets cost more to fly to than other markets (landing fees, gate fees) Customer Service As airlines look to cut back, customer service is the first area where the airlines look to cut first. Fewer employees in the customer service depts. at airlines means fewer real people there to help with customers. The airlines job is not to please customers, it’s to get them from point A to point B. The airlines will do anything they can to save $. Even if that means giving the worst customer service. SouthWest Airlines “We try to be the absolute best in terms of customer service delivery.” Southwest President & COO Colleen Barrett. She believes if Southwest can take care of their employees, then those satisfied employees will deliver the same sense of friendliness to Southwest customers. Southwest believes it is in the customer service business, they just happen to fly airplanes. Ryanair Analysis http://airconsumer.ost.dot.gov/reports/atcr11.htm Implications RyanAir Customer service • In 2010 RyanAir was voted #1 in customer service in Europe. • Rated 87% of over 34,000 Ryanair flights arrived on time • Less than 1 complaint per 1,000 passengers was received • Less than 1 mislaid bag claim per 5,000 passengers were received Retention 5 step plan 1. Become immersed in a client's business and industry 2. Frequent contact points, beyond engagement 3. Maintain personal relationships 4. Quality control systems that are visible to clients 5. Regular client surveys KingFisher Customer service • Kingfisher has won many awards as a reflection of its customer service • Best bonus promotion • Best customer service • Best member communications best award redemption • Best elite level best website • Program of the year • 'India’s Favourite Airline' in HT MARS Consumer Satisfaction Survey , 2009 Retention • Kingfisher finally came out with a loyalty program where frequent flyer can earn extra miles with each travel • With this loyalty
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