Etihad Airways Essay Example

after the flight, since service is an intangible product, it is hard for passengers to quantify the quality of their experience. Etihad Airways would need to find a way to make their service appear tangible, and show all the possible benefits of engaging their flight services.

Inconsistency

The quality of services is often inconsistent, due to the fact that services are delivered by people, and hence the quality varies with each individual’s capabilities and their day-to-day performance. For example, a usually very competent and polite air-stewardess could give a passenger less than satisfactory service because she was having flu. This is a contrast from tangible traditional products, which are mostly manufactured in modern production lines which ensures consistency of quality most of the time. Due to inconsistency in people who are the service providers, it would be difficult for Etihad Airways to ensure that all their service staff such as counter staff and air-steward and air-stewardess is always delivering service of the same standard, hence the challenge Etihad Airways face would be the need to come up with plans and trainings that would bring such service standards as close to consistency as possible.

Inseparability Thirdly, consumer cannot and do not separate the deliverer of the service from the service itself, which means that consumers directly relate the service provider to the service itself. For example,

the consumer has to interact with the deliverer of the service to get the service, such that Inventory The inventory problem of services is different from that of tangible traditional products. For tangible traditional products, problem exists because goods are perishable and costs include handling inventory. However, in the case of services, inventory carrying

costs refer to idle production capacity, which refers to the service provider being available when there is no demand. In the case of Etihad Airways, such costs can be high, depending on the load factor of each flight. If the load factor is low, inventory carrying costs would be high, because there are many seats that are utilized.

Furthermore, service staffs are usually paid on a salary basis. Hence, for the times where they are not providing services to customers due to lacking demand, the salary paid to them constitutes inventory carrying costs as well. Therefore, Etihad airways have to be able to predict and effectively generate demand for their flight routes, so as to reduce idle capacity. Etihad Airways also need to plan manpower effectively so as to reduce wastage of idle staff.

2. What steps and strategies can Etihad Airways adopt to meet the challenges and to become the best airline in the world?

3. How important is it for an airline to win awards? How can awards help in meeting the unique challenges of service marketing? It is of great importance for airlines to win awards. This is due to the fact that awards act as a platform, in which the airline can display to the public their competencies in the area of their service expertise. The awards act as a form of recognition that they are indeed the leaders in the field of flight provision. For example, Etihad Airways has won the title of the World’s Leading New Airline in the World Travel Awards for 3 consecutive years. Furthermore in 2009, Etihad Airways won the Best Business Class Award organised by Skytrax.

These awards are

both expert ranked and based on surveys done by flight passengers all over the world. Firstly, these awards give these awarded airways free publicity. As the results of such awards are announced, public is then informed and aware of such information. Since Air Travel is an intangible service, this helps the consumer make more informed decisions without actually experiencing the service before purchase. Consumers are likely to be affected by expertise and popular opinions. This would greatly increase the reputation of the airway in the eyes of the average consumer, thereby increasing the number of passengers who choose to fly using Etihad Airways.

With the aid of such awards, potential passengers might possibly make a definite decision to fly with Etihad Airways. Furthermore, they might be able to better quantify the quality of their experience with Etihad Airways, because such awards might have different categories that they take into consideration, as the surveys they have taken might help them to quantify their experiences.

When awards the airways get generates increased demand, there is less likely chance of idle production capacity. This allows the airways to cut down on inventory carrying costs, as there is more utilization of both the flight seats and manpower. Furthermore, it generates more profits when more seats are sold, as seats not utilized still incur the same cost as utilising it. Lastly, when awards are received throughout the years of operations, it signifies that the airways display significant consistency in the provision of their services, and hence this helps to project a better image, in terms of the threat of inconsistency as well.

4. Why is buying the correct type and number of aircraft

important to a passenger airline? Which challenge in service marketing is this task seeking to meet?

The type of passengers the airways provide services for will affect greatly the demand and type of demand for the flights. Demand will affect the number of aircraft bought, while type of demand would affect the type of aircraft bought. As aircrafts and maintenance of them are a heavy investment to an airline company, it is important to assess such information before making the decision on what type and number of aircrafts to buy. For example, if the demand for a certain flight route on a random day usually revolves around a bit more than 1 complete aircraft size, it would be impractical to purchase 2 aircraft to meet the exceeding demand, as it is highly likely that the remaining capacity of the second aircraft would not be utilised.

Furthermore, if most of your passengers are businessman who likes to fly business class or first class, it would be impractical to purchase an aircraft with the internal design that is used mainly for economy class seats. The challenge this task is seeking to meet would be that of Interactive Marketing (Productivity), with specificity to capacity management and service inventory management. Choosing the correct type and number of aircraft is trying to address the problems with capacity. Most services have a limited capacity due to inseparability of service from the service provider and perishable nature of the service. If there is no demand for the empty seats left before plane take-off, the service capacity would be lost.

Hence, it is important to manage the number and type of aircrafts such that the load

factor of the airway would be as high as possible. Secondly, this task seeks to correctly address the airway’s inventory. As mentioned earlier, aircrafts and the maintenance of them is very costly, and hence the wastage of monetary resources would be very high if decisions on purchasing is made wrongly. Hence, by aiming to buy the correct type and number of aircrafts, this task is trying to meet the challenge of service inventory management as well. 5. How important are internal communications and external communications in helping to meet the unique challenges of service marketing? What key tasks need to be taken to improve internal and external communications in Etihad Airways?