CUSTOMER RELATIONSHIP MANAGEMENT

Airline Industry

Meaning of CRM in Airlines Industry CRM is the process of managing detailed

information about individual customers and carefully managing all customer “touch points” to customer loyalty

Managing the “touch points”

Touch Points

Does this add any value?

ROI from different CRM Activities

Financial Assessment of different CRM initiatives

Paradigm Shift in CRM

We know why you fly, we're American Airlines

• American Airlines was developed from a conglomeration of 82 small airlines through acquisitions and reorganizations.

• It is the world's largest airline in passenger miles transported and passenger fleet size.

• American Airlines serves four continents.• As of February 2009, the American Airlines

fleet consists of 616 aircraft.• American Airlines had an average fleet age

of 15.4 years in February 2009.

CRM: The AA way

The Low Fare Airline

• Southwest is the largest airline in the world by number of passengers carried per year (as of 2007).

• Southwest Airlines was originally incorporated to serve three cities in Texas as Air Southwest on March 15, 1967, by Rollin King and Herb Kelleher.

• Successful business on an unusual model: flying multiple short, quick trips into the secondary (more efficient and less costly) airports of major cities.

• The fleet include only one aircraft type, the Boeing 737.

CRM in Southwest Airlines

The joy of Flying

Jet Airways is India’s leading private airlines. It boasts of a market share of about 29%. Jet operates with a relatively young fleet of

Boeing 737 jets and ATR72 turboprops. Started international operations in March

2004 between Chennai – Colombo. It carries about 7 million passengers a year.

CRM in Jet Airways

Special Offers

Offering free tickets

Concessional fares for students

Corporate deal offers

Jetlite surprises

Other CRM Activities

Rapid Rewards program for all passengers that make all their reservations online.

Incentives include lower rates, express boarding passes, and in-flight bonuses like free snacks & drinks.

Business Rapid Rewards for Business travelers.

Special services to senior citizens.

What tactics should airlines use to acquire,

develop and retain customers with greater precision and improved

results?

In order to manage the customer more effectively across all lines of service, airlines must change their approach to CRM in a number of ways…

Customer Segmentation CRM Initiatives Organization design & Management

What are the problem areas?

CRM investments are largely driven by the competition rather than the needs of the airline’s most valuable customers.

Few airlines truly exploit CRM analytics to segment their customers based on value rather than miles flown.

Destruction of Competitive advantage…

In a bid to imitate first-movers and provide customers with similar services, airlines have effectively eliminated any competitive differentiation provided by CRM initiatives.

Execution of an airline’s CRM strategy is often inefficient as well, with no clear vision or direction; competing departments often set separate goals.

Threat from ‘Within’…

Employees may not have the tools to provide consistent levels of service across all customer touch points.

Employees may not have the service mentality necessary for a CRM program to be truly beneficial to both the customer and the airline.

The Road Ahead…

Customer-focused airline operations

Moving Forward

• Develop a vision

• Focus on customer value

• Empower the employee

• Set targets and success metrics

• Address customer needs throughout the lifecycle