Airline Industry

CUSTOMER
RELATIONSHIP
MANAGEMENT
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

Reservations

Baggage Check in &

tracking Check out

Touch
Food &
Points Frequent-flier
Beverages program

Business
Flight
Class
attendants
Services
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