AIRLINE SERVICE SECTOR

SERVICE MARKETING ASSIGNMENT

Submitted to, Prof. Chakravarthy

Submitted by, E. Meghana Reddy (10M105)

INTRODUCTION TO AIRLINE INDUSTRY

We owe it to the Wright brothers for having invented airplanes. The Wright brothers could not have imagined how airplanes would change the way people live & do business. The airline industry has witnessed a sea change from two wheeler bi-planes to the Boeing 747's that are visible in our skies today. The passage of time has witnessed competition grow from leaps to bounds. Today airplanes are present in every country around the world with expectation of a few places. Even the industry has been growing year on year. Technology has also made a significant contribution to the airline industry over the years technological advances have been incorporated into the science of flying airplanes. The industry has also propelled the growth of ancillary services like travel agents, courier services, cargo handling, clearing & forwarding agents etc. An airline provides air transport services for traveling passengers and/or freight. Airlines lease or own their aircraft with which to supply these services and may form partnerships or alliances with other airlines for mutual benefit. Generally, airline companies are recognized with an air operating certificate or license issued by a governmental aviation body. Airlines vary from those with a single aircraft carrying mail or cargo, through full-service international airlines operating hundreds of aircraft. Airline services can be categorized as being intercontinental, intracontinental, domestic, regional, or international, and may be operated as scheduled services or charters.

HISTORY OF INDUSTRY
Neville Vincent, a former RAF pilot came to India from Britain in 1929, on a brainstorming tour to survey a number of possible routes. It was through providence that he met JRD Tata, the first Indian to secure an A-license within the shortest number of hours. Vincent worked out a scheme, secured JRD's approval and together they presented it to Mr. Peterson, the director of Tata Sons and also JRD's mentor. Sir Dorab Tata, the then chairman of Tata Sons, pleasantly surprised all by giving the scheme his okay. So they went ahead and drew plans for the operation for the first flight from Karachi to Mumbai with a single stopover at Ahmedabad. All that they asked was a guarantee from the government for a year for the sum of Rs.100,000. This, however, was turned down. The Tata-Vincent combine was naturally disappointed but not dismayed. A second scheme was prepared. This time the guarantee asked was Rs.50,000 for the first year, Rs.25,000 for the second year and no guarantee at all from the third year onwards. This scheme was rejected too. The team then tried a third time. This time they offered to donate an air service to the Government of India with no strings attached. The Government finally agreed and thus was born Tata Airlines that later became Air India. On 28th May 1953, consequent to the coming into force of the Air Corporations Act, 1953, the Government of India nationalized the airlines industry. In accordance with this Act, the two air corporations, viz. Indian Airlines Corporation and Air India International, were established and the assets of all the then existing airline companies (nine) were transferred to the two new Corporations. The operation of scheduled air transport services was under the monopoly of these two Corporations and the Act prohibited any person other than the Corporations or their associates to operate any scheduled air transport services from, to, or across India. However, after 40 years, in 1994, the wheel had turned a full circle as the Air Corporation Act, 1953 was repealed with effect from 1st March 1994. That ended the monopoly of the Corporations on scheduled air transport services. Air transport in India is now open to any carrier who fulfills the statutory requirements for operation of scheduled services.

INDIAN AIRLINE SECTOR

India occupies an eminent position in the civil aviation sector with a large fleet of aircrafts. In all, 56 airlines are operating scheduled air services to and through India and 22 foreign airlines are flying over Indian Territory. There are over 450 airports and 1091 registered aircraft in the country. In addition to the three public sector airlines Air India, Indian Airlines, Alliance Air - there are three private operators -Jet Airways, Sahara India Airlines & Air Deccan. There are also 41 non-scheduled air transport operators. Additionally 34 applicants have been granted NOC by the Ministry of Civil Aviation for setting up non-scheduled air transport operation. Estimates show that the domestic and international passenger traffic in India is projected to grow annually at 12.5% and 7% respectively over the next decade. By the year 2005, Indian airports are likely to handle 60mn international passengers and 300,000 tons of domestic and 1.2mn tons of international cargo.

Service Marketing Triangle

The services marketing triangle shows the three interlinked groups that work together to develop, promote and deliver services. These key players are labeled on the vertex of the triangle shown below. COMPANY Internal marketing External marketing making promises Enabling promises

PROVIDERS CUSTOMERS

INTERACTIVE MARKETING Keeping Promises

Services marketing can be explained with the help of the Service Industry Triangle. There are three entities in the whole transaction process:

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 Individual and Institutional. Institutional customers are those corporate who need their employees and executives to fly very often. Hence they have block bookings (reserved bookings) with the airliners.

COMPANY
The company is the dreamer and the offeror. The company dreams up an idea of service offering which will satisfy the customers expectation. 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.

PROVIDERS
These are finally the persons (staff) who interact with the customer. They are the ones who carry out the final transaction. This interface of the customer with the company is through the customers interaction with the employees of the company. In order to keep its promises, the company enables its employees to through setting up facilities to deliver the promises that is by setting up ticket and enquiry counters. Hence the company aims at offering its providers with the required infrastructure and training to optimize the quality of the transaction. For eg: Yearly employee training programs and performance appraisals done by Sahara airlines. The strategic points where the provider and the customer interact are:

1. Enquiry of the services, flight timings, routes etc. 2. Purchasing tickets, either from the airlines or from the travel agencies 3.Checkin 4.Duringboarding 5.On board crew

In a triangle, all three sides are essential to complete the whole. For services all three marketing activities represented by the sides of the triangle are critical to success; without one of the sides in place, the triangle or the total marketing effort cannot be optimally supported.

People Mix
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. Many service organizations trust their people enough to empower their front-line personnel to resolve customer problems. The airhostess in any airline come in contact with the customers in the process of providing the service, while the cock-pit crew are employees who contribute to the service product but do not come in direct contact with the customers. The physical presence and the percentage of time the customer is present reflect the customer contact and extent of contact respectively. Services with high contact are more difficult to control and manage because of the degree of variability in the quality, demand and nature ofservice. The service contact personnel in the airline industry is an airhostess who is expected to possess a pleasing personality with polite service handling. While on the other hand the cock pit crew, being categorized as a low contact personnel, require to possess high analytical and technical attributes. In the airline industry, there is also the ancillary service personnel, the travel agent who helps to create the service exchange but is not a part of the service. While delivering services, airlines ensure that the service is delivered as promised and this is often totally within the control of the front-line staff. This ensures some amount of reliability. This in turn affects the degree of responsiveness sought from customers. The quality of service that the front-lone staff provides is highly depended on his/her ability to communicate their credibility. Airlines deliver caring and individualized attention to customers through their airhostesses. Empathy implies that these personnel will listen, adapt, and be flexible in delivering

what individual customers need. Also the appearance of an employee are important aspects as it forms the tangible dimensions of quality along with other factors like service quality, decor etc. To start off, airlines hire the right personnel with essential requirements. They recruit the right people and develop, and train them to deliver quality service. These employees are provided with effective and sufficient support systems and are motivated in a manner, they stick to the organization. They are more treated as customers, rather than employees.

Process Mix
The process of airline service lays emphasis on the involvement of channels, front line staff, travel agency offices, offices of the tour operators or so form where the services flow & reach to the ultimate users. The process begins at the time of reservation goes on to the confirmation of seats. For e.g.: Computer reservation system of Indian Airlines enables any reservation request from anywhere in the world to be auctioned in minutes. The reservation facility is accessible through all-major computerized reservation system of the world. By giving details of where to book and how to book airlines help in providing quality services to the customers. They also offer concession, by not charging any cancellation charges and also giving them the option to make a change in the reservation status if he requests so on the presentation of ticket, all these facilities go a long way in increasing passenger convenience. Then facilities at the airport, the baggage handling, flight information, etc. also helps in delivering quality service and making travel a pleasure. In the aircraft the meal service, in-flight entertainment, reading material, in-flight amenities, etc. help the customers, the travelers to have an enjoyable and convenient travel. All these procedures form a part of the total process designed to deliver quality service. Airlines are making every effort to constantly redefine service procedures to enhance service satisfaction levels

SERVICE ENCOUNTER
The interaction between the customer and service provider in the airline industry means that the employee often represents the company to the airline travelers (customers). Especially in the airline industry the service encounter plays a significant role because here the customer

comes in direct contact with the employees of the airline company and spends a lot of time in the service factory (the aircraft). Hence the issue of staff presentation is a major tangible factor in the airline industry. This in turn influences the satisfaction level of the customer. The airline companys organizational structure and culture dictates the extent to which responsibility for staff recruitment, training and motivation is shared between marketing operations and human resources. For service marketers in this industry, the core of service element is the interaction between those providing services and the customer is known as service encounter.

KINGFISHER AIRLINES

Company Profile:
King fisher airlines are one of the leading private players in the Indian aviation industry. Incorporated in 1995 as Deccan Aviation, the company is engaged in the business of providing passenger services and helicopter charter services. The name was changed to Kingfisher Airlines in the year 2008. The airline is part of UB Group owned by Dr Vijay Mallya. Kingfisher Airlines owns 76 aircraft comprising A330, A 321 (single and double cabin), A 320 (single and double cabin), A 319, ATR 72-500 and ATR 42-500. In India, the airline has a network in 72 cities operating more than 400 flights a day and commands a market share of 25%. Internationally, it operates flights to Dubai, Colombo and London. This airline offers three unique classes of services Kingfisher First (Business class), Kingfisher Class (Premium economy) and Kingfisher Red (Low fare).

The company owns two subsidiaries namely Northway Aviation and Vitae India Spirits. Northway Aviation is engaged in the business of financing pre-delivery payments and aircraft acquisition. Kingfisher Airlines is only five star airlines in the Indian skies and is known for providing world class in fight services to its passengers. The company has emerged as the first Indian airline that provides a range of services in the mobie segment such as flight updates, ticket l buying through SMS and many more

People:
Kingfisher employees include Hospitality industry, Interpersonal skills, aptitude, & service knowledge people.

Physical evidence:
Forms; Exclusive lounge space,Hi! Blitz, Gourmet cuisine, world class cabin crew, 5trendy video- Fun TV, 10 music stations -Kingfisher Radio .

Process:
Taken up are; Booking the ticket-online Tele - booking Kingfisher outlet

JET AIRWAYS

Company Profile:
Jet Airways (India) was in corporate in 1992, as an airline company. In India it has over 357 fights daily to 42 destinations. It operates flights 20international destinations. The companys

subsidiaries include Jet Lite (India), Jet Airways LLC, Trans Continental EServices, Jet Enterprises, Jet Airways of India Inc., India Jet airways Pty and Jet Airways Europe Services N.V. Services. It provides services such as airport l ounges, bus services, coach services,

complimentary chauffeur drive services, It has created Jet kids, programme for kids between 2 years to 12 years that offers gift and offers while there are travelling in airplanes. It also offers services like Jet mobile, Jet Escapes, Cargo, etc. Jet Airways provides services such car rentals, hotels, conversion services, retails services, Tele communications etc. To provide these services it has partnered with various companies such as Air France, American Airlines, Citi, HDFC B ank, ICICIBank, HSBC, Hyatt, Hilton Hotels, The Leela, Marriott, Oberoi Hotels & Resorts, The Park, Ferns n Petals, matrix, are amongst others

People:
People mainly employed are; Crew members, ground staff, customers, suppliers.

Physical evidence:
Services, Elaborate Flight Offices -Org. & Ticket Booking Agents Virtual Services, Aircrafts, Logo

Process:
Carried out include Booking the ticket - online booking or tele-booking, Ground services

Kingfisher Air lines VS Jet Airways

Kingfisher is one of the latest Airlines in INDIA. Jet Airways is the experienced airline in INDIA.

Overall growth in year 2006-07 is 37%.

Overall growth in year 2006-07 is 16%.

Kingfisher acquired 46% share in Air Deccan.

Jet airways acquired Air Sahara in 2006.

Domestic airlines poised to go international flights.

Jet Airways already has domestic as well as International flights.

In a short span of 2 years its market share has become 28% including Air Deccan.

Jet Airways has its market share 31% including Air Sahara.

Personal in-flight entertainment in every seat

Average entertainment services.

BREAKING DOWN THE PROCESS

We are going to look now in detail at all the actions that are necessary to complete the process from the very beginning to the very end. Here, to simplify a bit we imagine a customer buying a ticket online.