Qantas Customer Service - Case Study Example

? Qantas Case Study: Service Introduction Service has always been a hot debate when it comes to service oriented organization such as QANTAS airlines. A number of pundits and supporters of personalized service would argue that nothing can ever beat an actual employee interacting with a customer. It leaves a lasting impression and it guarantees that the customer will be back for more service that is if the interaction was handled pretty well. Working with numbers and actual QANTAS traffic as of July 2011 the company in total has carried 4,069,000 passengers. Assuming that each meaningful interaction will last five minutes to make the customer feel “important” and running over the entire month (Qantas Airlines). QANTAS would require 7,111 customer representatives which will cost approximately $213 million a year. Airline ticketing before the advent of computers and the internet was the most complex process in the entire airline industry. At the onset airline reservations are called in by the customers for available flights of a particular route. The information from the call would then be given to a central ticketing and monitoring center that creates “cards” for every call. These reservations are then matched with the available seats of the flight and the central booking for the flight will then be updated at the central booking office. The information about the seat availability of each flight will in turn be transmitted to all the booking office to ensure that they do not overbook a flight. Realizing the expanding role of air travel and the upward trend of its patrons American Airlines in 1946 installed the first electromechanical reservoir system (Winston). And in 1953 American Airlines started the SABRE project and it was finally installed and used in 1964 (Wilkinson). For many years to come until the present SABRE remains the yardstick in ticketing service provisioning. Several alliances worldwide have significantly contributed to SABRE and its profitability given the complexity and expense of airline reservation. ONE World is such an alliance, this particular alliance does not limit itself to ticketing and reservation however. ONE World also leverages for its members bulk purchasing of parts and services practically positioning its members to capitalize on its strategic strength and presence worldwide. In the context of customer service provisioning ONE World would enable QANTAS airlines’ customer to book flights practically in every parts of the world. To illustrate: A QANTAS passenger who wants to go to Bethlehem, Pennsylvania would first have to book a flight from wherever parts of Australia he is using the local QANTAS hub to the international hub of QANTAS in Queensland, Australia going to Detroit Metro in the United States. From Detroit Metro the QANTAS passenger will have to board a plane to of a ONE World member airline to Lehigh Valley International Airport and then drive by car to Bethlehem, Pennsylvania. Instead of calling several airlines to determine what flights are available going to Bethlehem, Pennsylvania the QANTAS passenger would just need to place a single call and all the bookings will be arranged using the ticketing and airline reservation system of ONE World. The whole process, without the assistance of ONE World’s system would have taken the entire day for the passenger. However, given that every reservation office of QANTAS is connected to ONE World the whole process could only take a couple of minutes. Since practically it would seem that QANTAS is the ONE making all the arrangements and the interfacing in the customer’s behalf, it would seem as far as the passenger is concerned it is QANTAS who have made his life easier. Case Study The challenges that QANTAS face in the next couple of years in order to remain competitive is to drive its operating cost further without compromising the quality of its service. As per the case study material presented, QANTAS’ edge has always been its ability to manage change effectively and efficiently. However, cost can only be driven far enough before quality starts getting compromised. The strategy of QANTAS to address this issue was to outsource most if not all of its allied services that are not considered its core competency. Another value proposition of this writer to ensure quality is to make the outsourced services open to other players. Since competition will be created for the outsourced service the outcome should be lower cost and higher quality of service (Jenner). Increasing its market share is another onus that needs to be addressed by the corporate leadership of QANTAS to remain faithful to its mandate to its stakeholders. By making more information available to the flying market online will definitely lower down the cost without necessarily increasing visibility through the multi-media which cost a lot of money. Making the ticketing and reservation process as easy and as painless as possible will invariably increase customer satisfaction. Customer Satisfaction is the ability of companies to provide services that not only will satisfy the need of its customer but also provide a pleasant experience to the customer while the service is being rendered. Providing a ticketing system that not only will capture the need of the customer but also provide the service even the customer is not aware at the onset he needs is a good way to capture a particular market segment. Visibility is a marketing factor that can be considered to effectively address market share, however being identified if not belongingness to a particular brand can also create visibility to the people already identified with QANTAS. Creating a brand that customers can identify with as part of the customer’s family can ensure being the first choice or first in mind when it comes to choosing an airline carrier. QANTAS program of identifying and giving extra privileges to members can increase market share. To further increase visibility the following proposition was provided that would include creating alliances. As far as its alliances are concerned QANTAS formula for success are not only strong but have been proven to be the best formula so far in the industry judging from its position amongst the entire spectrum of airline service. But it would seem that there is a need to create more alliances to expand further its market share. Its alliance with ONE World can be considered as a very strategic alliance that enables it to corner all incoming international passengers that is headed to parts of Australia that is being serviced by its local hub. Striking a similar alliance with other international airlines would enable it to get a stronger hold on all incoming passenger into Australia. Market exposure in other parts of the globe would be one strategic output of this alliance. In terms of customer service the alliance will provide a front that is supported by several large organisations driven by their congruent desire to provide a good flying experience to their passengers (Swelbar). Corporate Governance and Social Responsibility are two main points that need to be addressed by QANTAS in order for its solution to be holistic. Addressing the two areas would not only make it a good corporate citizen but the experience will also provide visibility mileage. Conclusion Competition, rising fuel cost and a volatile market are the primary drivers that will force organisation such as QANTAS to rethink its position and strategy with regards to its profitability. The primary concentrations of any service oriented organisation are customer satisfaction, strategic pricing and visibility to capture a significant segment of the market. Related to this are timeliness of service or efficiency, cost of operation and branding. As presented it would seem that QANTAS have covered all the basics to strengthen its organizational resiliency to change. This will enable QANTAS to survive what it takes to make the necessary adjustments in its vertical organizational changes to meet the challenges ahead. Increasing market share has several components, one of which is customer experience, another is the cost of the actual ticket and the other is visibility. Actual customer experience can be taken cared-off by employing the strategy of competing service providers for outsources services. By rating the performance of the service providers and making customer experience and satisfaction a part of the condition for renewal. Service provider will be a critical delivery point of customer satisfaction through actual experience (QANTAS). The primary competition area at the moment is the cost of ticket, with several companies competing, the cost of ticket is being driven down in order to capture market share. It should be noted that the cost of ticket can be effectively lowered if the cost of operation also goes down. Organizational changes may be necessary to ensure that operation cost is lowered. Several strategies have been presented above in order to make this change of which QANTAS is very well prepared. Bibliography Jenner, Gillian. Flight Global. 24 April 2009. http://www.flightglobal.com/articles/2009/04/24/325543/airlines-deepen-ties-with-outsourcing-partners.html. 20 September 2011. Qantas Airlines. "Qantas Airlines Fact File." September 2010. Qantas Airlines. Internet. 19 September 2011. QANTAS. QANTAS Spirit of Australia. n.d. http://www.qantas.com.au/fflyer/dyn/partners/airline. 20 September 2011. Swelbar, William. Forbes: The benefits of Airline Alliance. 6 September 2009. http://www.forbes.com/2009/06/08/united-airlines-alliances-opinions-contributors-captain-wallach.html. 20 September 2011. Wilkinson, Jason. IBM - SABRE the first online reservation system. 03 March 2011. http://www.ibm.com/ibm100/us/en/icons/sabre/. 19 September 2011. Winston, Clifford. The Evolution of the American Airline Industry. New York: Brookings Institution Press, 1995. Books. Read More