Airline Industry is
the one of the latest and most dynamic industry India has. We all are very much
aware of the turmoil in this industry with a limited set of highly competitive players
with decent market share and with good span of coverage trying to push up
revenues despite sinking profits (in fact zero profits, with an exception of
one or two). As this goes, I would like
to state my observations on the dynamism of this industry which has left a few
players bankrupt (Kingfisher, Air-Deccan, Sahara) and forcing the rest to look
for new means of funding their future expansions like getting into a joint
venture with a well-established foreign player (such as Air Asia with Tata, Jet
Airways with Qatar).
Though I do not have
any grey hair yet due to my intensive study of this industry, but from my
limited interactions due to frequent air travel since the past 2 years, and my
management education has helped me develop a perspective on this industry which
I feel strongly and could help the industry if explored along my line of
thought.
To make the basics
clear, as we all know Air Travel is one of 3 modes of travel, and it is also
the most expensive and faster means of travel which was affordable by only a
certain segment of the population. During the advent of privatization of
airline industry, back in 2000s, only the upper middle class and the rich class
could travel. Since the air travel was mostly for the affordable’, all the
glamour (within the flight cabin and in the airport) had to be maintained in a
way that is ravishing. By inside the flight cabin elitism I mean is the the
quality of cabin crew, the food services, and other stuff which goes along with
it. This was the scenario in the early 2000s.
Now, in the second
decade of the millennium as we all have witnessed and experienced that the quality
of life has improved. Many unaffordable things are drawn into household
expenditure. The various reasons which have contributed are well known, such as
rise in business growth which further propelled rise in employment, rise in
average salaries, rise in education levels, etc. And importantly air travel too
became affordable over the decade. The rise of low-cost airlines has
contributed much to this as a result more population is now under the ambit of
air travel.
Times have changed
for airline industry now. The industry as a whole witnessed change in terms of
rise of low-cost carriers, competition, cost escalations, etc. but individual
airline businesses have not changed. With changing times, as a management
graduate, I expect that business should change too; customizing itself to the
environment. In contrast, the industry is still using the old pillars to run
the new environment. Take a close look at the industry changes which have
happened.
1.
Inclusion of middle class as customers.
2.
The fading away of the elite club brand of air-travelling.
3.
Cost escalations
4.
Low cost Carriers emergence
5.
Air travelling has become a necessity more than a luxury.
The nature of the
Airline industry is a service industry and service industry thrives on margins.
Most service industries such as retail, hotel, etc. try to bank on new
customers as well as loyal customers (meaning who own a loyalty card sort of).
The business decisions are always bent towards having more and more loyal
customers and increasing the first time customers. Considering that the above mentioned changes
and the nature of industry, I would like to portray few of my observations
which could help add to the lean cost systems and also provide some thoughts on
how to increase the customer engagement for the airline industry as a whole.
1.
“Quality of cabin crew” The current cabin crew is of far more superior quality than required.
As mentioned earlier, the elitism which existed in air travelling a decade ago
has faded because of the increasing affordability amongst many. Hiring of good
quality cabin crew complimented the customers then, but now… this hardly makes
a difference apart from adding cost burden (paying more salaries for the
superior quality). The airline companies should question themselves, ‘Why do I
need so 3-4 equally very well qualified persons to offer food and maintain the
place?’ Having a close look at job of a cabin crew job reveals that it starts
with offering food and ends with cleaning the mess. This is a practice which
originated along with the privatization of the airline business but did not adapt
to changing times. Paying good salaries to 3-4 people for running errands is
neither affordable nor sustainable. In management terms, its’ best to have one
horse rather than 10. Having one Horse (talented and well-versed person heading
the cabin crew) and the rest 2-3 fairly (not superior) qualified persons who
can communicate in Hindi and get the job done of making the customer feel
comfortable yet paying only half the salary of the existing cabin crew would be
an apt staffing strategy. In the latter case, one would be able to run the show
with reduced employee cost per flight. Not only this will help manage costs,
but also provide better ways to manage talent.
2.
“Cab/Taxi Service” A moment after a customer books the air ticket he/she then starts
to search for booking a cab. In my view a minimum of 25% of revenues for a taxi
business (just an estimate) comes from the to and fro from airport to customers
location. When travelling by a taxi has become a must to reach the airport, in
my view it becomes essential for the airline businesses to tap this share of
profits. Airlines should start to see from a holistic customer delight
perspective. If today, customer X books Y airline for travelling, then the Y airline
should be able to provide me with the Y taxi at market rates which thereby
would make customer X feel more secure about the services as by the end of the
day it gives a satisfaction that the taxi is being arranged by a trusted party.
3.
“Pool Travellers” Like we have a pool-cab, how does a pool traveller sound? Many a
times, while getting off the flight, customers (especially young crowd) generally
look around with a smiling face hoping that somebody would grasp their face
gesture which resonates ‘I want to travel home from the airport, is there
anyone whose house falls in the same direction? We can split the bill’. Many
travellers would want to find a person who is travelling in the same direction
so that they can travel comfortably in the cab yet save on their travel
expenditure. If airlines can cross the current line of customer engagement and
look beyond what customer needs, then they would find an answer to this
problem. If only the airlines could collect information during the issuance of
boarding pass from the customer w.r.t to his post flight travel details, and
categorize their seating in such a manner that all similar direction people to
be seated together and also introduce them to each other as ‘same direction to
home’. They might as well end up sharing a cab and start to know each other, rather
than just staring at each other’s faces all the while of their journey. This
way the airline business can start getting more into the shoes of the customer
and delighting him, rather than just serving the customers superficially.
4.
“Safety Demonstrations” As all flights have mandatory safety demonstrations, which are
done purely for compliance sakes. Just to reiterate to the airline folks, except
the new customers, nobody else gives a damn to the instructions as they do not
change in years. A thought into how to engage travellers while giving safety
demonstrations could add to the flight positive mood. If the flight chief cabin crew member could
identify some highly seasoned traveller, and encourage him to perform the
safety demonstration and take his pic from his mobile, then you are not only
adding cheer to the cabin, but also engaging your traveller. Imagine, next time
you get a seasoned traveller, request him in a jovial mood stating
‘Sir/Madam, You have
been identified as the star safety demonstrator because of your frequent air travel;
we request you to kindly demonstrate the instructions in line with our speech’.
You may cheer the
person while the demonstration is being done. This way, it may better engage
employees than just doing mere compliance.
These are some of the
ideas I would like the airline businesses to adopt by getting into customer
shoes. Other service industries such as mentioned earlier like retail & hotel
have adopted the philosophy of ‘getting into customers shoes’ & ‘customer
delight’ long ago, but the airlines have been slow to catch up. Pondering over
the above mentioned suggestions would benefit the overall industry as a whole.
The bottom line is
the no different from what Mr KM Birla
had said in his speech ‘Butter Chicken at Birla’ that ‘There are opportunities
out there for ambitious and well-run Indian companies—as long as they remember
that the world will change them as much as they hope to change the world.’
*The article is my personal view.
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