Introduction: Saudi Airlines
The airline industry in the Gulf region is famous for its continuous struggle to offer quality services to its customers. Besides, the high competition among the airlines in the industry has led to various strategies including cost-cutting, managing the unpredictable demands, and ensuring that the company adheres to the tight quality requirements. Airlines have to implement these strategies amid maintaining quality services delivery that would satisfy their customers. Generally, customer satisfaction has been at very low levels in the region. According to various studies that have been done, the airline industry has the lowest scores in terms of customer satisfaction compared to other industries in the region (Fiorino, 2006).
Against this struggling background, airlines find it mandatory to change their focal point towards excellent services delivery (Gronroos, 2001). The most critical issue is for the airlines to understand their customers’ sensitivity towards the services they offer as well as their expectations. In addition, the airlines must understand what kind of services the customers consider quality and important. The airline services are made up of a multifaceted combination of intangibles. The reason is that airlines sell performances and experiences. Therefore, the quality of services is important in attracting and retaining loyal customers (Gliatis & Minis, 2007).
Saudi Airlines background
Saudi Airlines was incorporated as a short-haul and low-cost airline serving mainly the gulf region. Over the years, the airline has been transformed into a major International Corporation with additional services on board. However, the firm has maintained its low-cost strategy, therefore, is considered the only LLC airline in the region. Since its incorporation, the airline has been different from others in the region. The firm started serving not only domestic and regional routes but also competed for the international routes. The airline competition for international routes began upon the realization that the regional and domestic markets are limited. In this endeavor, the airline started to secure landing rights, flights, and access to airports as well as attract customers (Weber, 2005). The price and the professional brand strategy contributed to this success.
However, like many state corporations, Saudi airlines were subject to state manipulations and as a result, started to lose the strategies that is used in the beginning. In fact, the monopolistic form of competition did not auger well with the airline. The firm could not compete with other airlines in the region, particularly the privately owned ones. Since the airline was being funded by the state, making a profit was not the major goal, therefore, services deteriorated considerably. As a result of laxity by the airline staff to offer quality services, the customers’ number dropped by 68% according to DataGuru.org (2012). The customers that the company lost most consisted of foreign nationals. The loss of clientele led to the airline making huge losses and incurring enormous debts.
Currently, the firm has undergone a huge transformation and the brand name that comes into mind within the gulf region is Saudi Airlines. The reason is that the airline has currently stood alone as an excellent services provider. The best services delivery has been attributed to its long-serving and iconic flight crew (Fiorino, 2006). Within the region, Saudi Airlines has been consistent in its profitability. In addition, the airline has been the market leader and the industry challenges in the region. The reason is that the airline has been managing its brand within the confines of its brand strategy. Proper management and implementation of the airline brand strategy have resulted in healthy brand equity (Gronroos, 2001). Generally, the reputation of the airline within the region is because of the implementation of its brand strategy.
From the beginning, Saudi Airlines’ brand has not been instrumental towards its success. Nevertheless, in recent years, the airline has to implement a brand strategy that has enhanced services delivery according to the customer’s needs. The brand strategy has been adopted by most the established firms as well as other aspiring airlines in the regions. The reason why Saudi Airlines’ brand strategy is unique is that the management takes leadership in the implementation of the brand strategy (Boetsch, Bieger & Wittmer, 2011).
Problem description with quality of service and reduction of customer satisfaction
Saudi Airlines has for a long time relaxed on delivering quality services to its customers. As a result, the airline customers have dropped considerably leading to huge losses and debts. In the recent past, according to DataGuru.org (2012) research, Saudi Airlines have realized that 68% of customers have stopped using the flights. Management has long believed that this drop could be because of the changing needs, prices, and economic issues. Nevertheless, studies done by DataGuru.org indicate that the drop was due to the customers’ services related issues. Poor in-flight management and deprived communication between the customers and the flight managers as well as frequent delays have cost the airline (Gilbert & Wong, 2003)
Upon realization that lack of quality services to the esteemed customers has led to the dissatisfaction hence the drop in the clients’ number. Immediately, the airline started to embark on the restructuring process. The reorganization began by rebranding strategy creating an airline brand that is attractive and is capable of delivering services to the customers (Boetsch et al. 2011). The streamlining process was also aimed at ensuring that the services are distributed according to the needs of the customers and offering an experience to the clientele according to their expectations.
Most of the studies that have been conducted confirm a direct relationship between improved services delivery and customer satisfaction. From the studies, the airline management should take a holistic and strategic approach to the customers’ services delivery as well as airline branding to win the clientele contentment and experience (Babbar & Koufteros, 2008). The overall airline revenue will also improve leading to its long-term growth and sustainability.
Research objectives and aims
The major aim of this study is to investigate and discuss the concepts of quality services delivery and brand strategy within the airline industry. The discussion will focus on the services being applied in the case of Saudi Airlines. The paper will further discuss the customers’ expectations and experience with the airline services and will complete by discussing the brand strategies that the firm should adopt to remain competitive within the industry (Boetsch, Bieger & Wittmer, 2011).
As indicated, the theoretical objective of the paper is to examine the major quality issues affecting airline service, particularly at Saudi Airlines, and to find different approaches to ensure that the firm provides quality services delivery to its customers. The second objective is to explore how satisfied are the respondents to the services provided by the airline and determine what competitive strategies has Saudi Airlines defined in order to advance its brand while competing within the industry in the region. Finally, the study will examine the impact of Sky-team partnership with the airline, particularly in the area of customer satisfaction (Boetsch, Bieger & Wittmer, 2011). The study will further clarify the suggested solutions to be applied in the airline approaches to compete efficiently and successfully with the new LCC in the country.
In summary, the theoretical objectives of this study are:
- Examine what are the major quality issues affecting service at Saudi Airlines
- Investigate how satisfied are the respondents with the services provided by the airline
- Determine what competitive strategies have Saudi Airlines defined in order to advance its brand while competing within the industry in the country.
- Examine the impact of Sky-team partnership with the airline, particularly on customer satisfaction
- Clarify the suggested solutions to be applied in the airline approaches to compete efficiently and successfully with new LCC in the country.
Research question
Upon conclusion of this study, the obtained outcomes should respond to the following questions based on the literature gaps asserted by Boetsch, Bieger, and Wittmer (2011):
- What are the major qualities issues affecting service at Saudi Airlines?
- How satisfied are the respondents with the services provided by the airline
- What competitive strategies has Saudi Airlines defined in order to compete with the three operating firms in KSA?
- What is Saudi Airlines’ strategic plan for the next five to ten years to extend their loyal customers while achieving marvelous quality of service?
Scope of investigation
The scope of this study will be limited to the secondary data majorly the scholarly articles and research that have been done recently. In this study, much of the information will be obtained through the literature review of the scholarly articles as well as the materials pertaining to the airlines’ industry as well as relevant information from the industry (Chang & Yeh, 2002). Moreover, the study will be limited to a single firm, Saudi Airlines, with reference to the industry in the Gulf region.
For further empirical studies that may be done, the study will be limited to the selected customer group and the Saudi Airline staff. In the empirical study, the survey will be the most suitable method of data collection since it is the best method of reaching the respondents within the target group (Chang & Yeh, 2002). The data collection should be given the least time possible. The survey will be conducted online since this is the only way to get the respondents that are spread in many parts of the world. The data analysis and interpretations will also be performed through Webropol analysis tools.
Problem limitation and anticipation
The research scope is limited to a particular demographic group of customers and only flights within Saudi Airlines. The nationalities of the respondents are varied as the airline customers consist of many populations majorly those within the gulf region. However, the nationalities will not be significant in this study. All the nationalities are grouped under the airline clients (Martin, Roman & Espino, 2011).
In addition, the airline low-cost flights with mid-range full network carriers are the flights taken into consideration. The luxury and long-haul flights are not taken into account in order to curtail the service’s attributes and leverage the service’s delivery expectations and experiences (Chen & Chang, 2005). In most cases, there are different service expectations and experiences in long-haul flights, which might be complex, particularly where the air travel is differentiated according to classes.
Further, the services quality dimensions that will be examined are limited to generic levels such as flight frequency and reliability. Moreover, the study will analyze such attributes as the frequency and speed of check-ins, entertainment, onboard catering, and the customers’ attitudes. Though the airline services are categorized as ground and in-flight services, the study does not differentiate such services, particularly while discussing the quality services delivery (Chang & Yeh, 2002).
Literature review
Quality services within the airline industry
According to Mason (2002), exceptional airline customer service is created when the firm is capable of meeting the expectations of its clients. In other words, it is the situation where the services being offered by the airline exceed the expected customer satisfaction. In addition, the services must also match the clients’ perceived notion that their wants and prospects are being met by the airline. Delivering excellent services is difficult in an atmosphere where others are held accountable. Most of the passengers as well as other stakeholders believe that the flight crews are accountable for the level of services being provided by the airline (Chen & Chang, 2005).
Liou and Tzeng (2007) argue that airlines management should approach the customer services delivery holistically including branding to improve customer satisfaction. In addition, through a holistic approach, the airline experience in the services delivery improves significantly, which in turn increases the net revenue for the firm. In fact, quite a number of researches indicate a direct relationship between improved airline revenue and customer satisfaction. Improving customers’ satisfaction with the delivered services is critical for the long-term growth and sustainability of most firms. The improved customer experience is significant for the success of the airline. In concurrent with these findings, Iatrou and Alamdari (2005) assert that majority of airlines are delivering or planning to deliver excellent experiences to their customers.
Most of the studies that have been conducted confirm a direct relationship between the improved services delivery and customer satisfaction (Kandampully, 2002). However, recent studies DataGuru.org indicate that 68% of the firms’ customers have stopped using their flights. Management has long believed that this drop could be because of the changing needs, prices, and economic issues. Nevertheless, studies indicate that the drop was due to customers services related issues (Boetsch et al. 2011). From the studies, the airline management should take a holistic and strategic approach to the customers’ services delivery as well as branding to improve the customers’ satisfaction and experience. The overall airline revenue will also improve leading to its long-term growth and sustainability.
The misdirected objections are to be expected in an atmosphere where it is habitually indistinguishable who is in charge of the delivery of services. In such a situation, the airline administrators can either be self-protective or endeavor to make clear to clientele as well as other stakeholders the rationale why first-rate customer services delivery is not easy to attain (Gursoy et al., 2005). On the other hand, airline management can integrate customer-centricity at all levels of flight management.
Beginning from the top, the airline management needs to set up a customer-driven vision for the firm and balance out the correlation between the excellent deliveries of the customers’ services and branding. In this sense, customers’ services are described as the experience the airline provides (Teichert et al., 2008). The airline brand is what the airline management, clients, and other stakeholders think to abound the airline, services, and products being offered. The airline brand encompasses all the perceived experiences (Gursoy et al., 2005). The corporation has a brand that is what the stakeholders and the customers think and experience about the airline.
The airline brands are either ad hoc or strategic. The ad hoc brand is the customers’ opinion or perception of the typical experiences encounters they have had with the airline or what they have been told and read about the firm (Teichert et al., 2008). Ad hoc branding constitutes the firm’s reputation based on the customers’ personal experience with the airline over the years. Conversely, strategic branding is what the management, the flight operators as well as other stakeholders promise to provide to the customers. Strategic branding is what the airline management has put in place to ensure that better services are delivered to the customers (Iatrou & Alamdari, 2005). Saudi Airlines administration is aware of the ideals that a good brand strategy can achieve for the firm.
Services being offered by the airline
One of the activities that provide a competitive advantage to the airline is services innovation (Teichert et al., 2008). Services innovations are supported by new technologies. Therefore, the competitive advantage brought by innovative quality services cannot be ignored. According to Tiernan et al. (2008), services innovations enable airlines to access new markets, particularly where the technological know-how is fast growing. The increased developments of technology provide more opportunities for the airline to develop new services. The interconnectivity between the quality innovative services and the development of new technologies are critical in the airline brand strategy and services delivery. Tiernan et al., (2008) assert that innovative services occur when there is increased knowledge development.
All services delivered by the airline are being supported by technological innovations. One of the innovations in services delivery is the strategic alliance. Other services innovations include the use of electronic ticketing and self-services check-ins. In the recent past, the airline has launched a project that will enable the implementation of innovative services delivery that includes electronic ticketing, common-use self-service check-in kiosks, bar-coded boarding passes, and RFID-enabled luggage handling. The innovations have transformed the airline services making the process of handling customers more effective, efficient, less costly, and quickly (Kandampully, 2002).
Conversely, customers can also be involved in quality services delivery. Consistent with Tiernan et al. (2008) study findings, three ways exist in which clientele can be drawn in the eminence services deliverance. These include listening to the needs of the customers, understanding their requirements, and finally having a dialogue with the customers. The process is called user-based innovations to the services delivery (Tiernan et al., 2008). The airline has applied user-based innovation to improve the delivery of its services. Through user-based innovation, customer satisfaction and on-flight experiences are enhanced.
Services offerings through strategic alliances
The current trend in the industry is that airlines are entering into strategic alliances to ensure that services delivery and customer benefits are enhanced (Weber, 2005). There are two types of strategic alliances. These are the tactical alliance and the strategic alliance. The type of alliance Saudi Airlines has entered with the Sky-team is the strategic alliance. In tactical alliance, the airlines are bound to benefit from reduced risks, lesser resources commitment, and marketing benefits. Conversely, strategic alliances are comprehensive and have a longer lifespan. In addition, the strategic alliance covers many benefits and increased levels of resources commitments. In a strategic alliance such as that between Saudi Airlines and the Sky-team, the airline is likely to benefit from joint marketing, a shared customer base, and network-wide cooperation (Tsaur et al., 2002).
What is significant in the strategic alliance is antitrust protection. In addition, conventions allotment, multiparty fare determination, marketing, common flyer benefits, luggage management, the collective use of hangers as well as different kind of services form part of the agreements between the airlines (Tsaur et al., 2002). All these terms are geared towards ensuring that the customers get the best services.
The main driver for the airline to join Sky-team as part of the strategic alliance is to expand its network beyond the current regional market (Weber & Sparks, 2005). Since entering into new-fangled souks is hampered by a restraining set of laws, undeviating power, and rights, the deliberate treaty is the simple legal strategy for aircraft corporations to develop internationally. By being a member of the strategic alliance, the airline believes that its passengers will increase considerably. The increase is because of the combined common flyer plans amid various factors.
However, the airline must improve the delivery of its services in order to avert negative perceptions of other firms within the agreement. In the circumstances that the airline services delivery is poor, the customers of other companies might develop a negative perception. In that sense, the firm would not fully benefit from the alliance. Studies done by Rendeiro and Cejas (2006) assert that the level of services delivery among the airlines within the strategic alliance must be the same. From the perspective of the customers, the alliances offer an opportunity for increased services together with expanded route networks.
In addition, the clients are aware of the increased access to networks and their capability of collecting frequent flier points (Rendeiro & Cejas, 2006). Nevertheless, the level of responsiveness to the alliance may vary among the customers. Further, the passengers are more concerned with the services being delivered particularly about their convenience. Other factors that remain to be a major concern to the passengers are safety measures and aircraft quality (Mason, 2005). Therefore, in as much as the airline can be a member of an alliance, services quality remains to be a major concern to the customers. Services quality is the major attraction to the customers and therefore influences their decision-making.
The frequent flyer program is less significant when it comes to the customers’ decision-making. According to Martin, Roman, and Espino (2011), the main purpose of the flyer program is to keep up the client’s trustworthiness and to offer concrete income flow to the airline. The flyer program only benefits airlines with additional quality services delivery (Westwood et al., 2000). In other words, the flyer programs alone cannot sustain customer loyalty. Clients can easily switch to other airlines depending on the quality services being provided. Customer loyalty must be supported by increased levels of patron trustworthiness.
Building the brand
Global corporations have consistently relied on the branding theory to market their products and gain dominant market share. According to the branding theory, any artistic expression used to propose product or service value is what is called a brand. The theory claims that branding campaigns must start from the proposition of value. However, this relies on the assurance, stability, and consistency used in expressing the inventive branding device to reach all the points of contact. Besides, branding assists in devising a promotional mix given that it functions amid marketing mix elements and commercial planning.
According to branding theory, product brands can hardly occur devoid of ideas, insights, and information. Usually, product brands rise above the corporation, services, as well as products being sold. Currently, product brands extensively rely on pragmatic, viral, and societal expression, but hardly depend on mass communication.
Based on the branding theory, Saudi Airlines should decide on a brand strategy that would differentiate its products and services from other firms in the region. In other words, the airline should adopt the services differentiation strategy to attain excellent services delivery. This strategy should be driven by modern technological know-how, innovations, as well as quality in order to deliver services to its customers (Gursoy et al., 2005). Those responsible for the implementation of the brand strategy should understand the characteristics of the brand. The result is that the airline will remain the most competitive in the region.
For instance, the airline services and products should be innovative and unique to the customer. In addition, the firm should use unique products that differentiate the airline from both domestic and international competitors. In essence, technological know-how should be the major determinant in product innovation and brand strategy. The corporation should maintain its technological innovations throughout (Gursoy et al., 2005). To illustrate this, the firm ought to ensure that it upholds its premature flotilla of airliners within its most important space carters. The company should adopt the strategy of regular replacement of the older aircraft with new and better models. In other words, the airline should be the first to purchase new models of aircraft particularly to distinguish its brand from competing airlines (Rendeiro & Cejas, 2006). The technological brand strategy will enhance the company’s cost efficiency as well as its marketing strategies. In fact, being the first to use new models will attract media attention and publicity, which will result in innovative practices as well as distinguishable brand promises.
The airline should realize that innovations are ever-changing. They have a short lifespan, as they are easily being copied and implemented by other firms offering competition. Once other companies within the industry have adopted the innovation, it now becomes a common practice. Therefore, the airline should continue to invest in its research and development programs. In essence, technological innovations should be incorporated within the business strategy in order to further differentiate the airlines’ services from those of other competitors (Tsaur et al., 2002).
Excellent services delivery
Excellent services delivery is not a necessity but a must for the airline. In fact, the personalization of airline services has become a common trend that ensures distinguishable services delivery. The airline cabin crew should personalize the airline’s brand. Through personalization, the stewards will ensure that services are delivered according to the customers’ needs (Babbar & Koufteros, 2008). The cabin crew should be trained on this process and ensure that quality services are delivered to the clients. Besides, the airline should design a unique and desirable uniform for all its cabin crew. The uniforms are supposed to be the decipherable autographs of the Saudi Airline brand. In other words, the unique uniforms should become the most designated and visible element of the whole trademark practice.
The airline should ensure that its staff is trained meticulously and broadly on the auspices of the industry services delivery to ensure that its services are consistently delivered to the customers. The personalization strategy by the cabin crew should be a powerful tool to ensure a full brand experience by the clients. The personalization should remain a brand image with fabulous status within the airline services delivery practices. The stewards should embrace the Asian values together with their hospitality that can easily be described as compassionate, affectionate, tender, well designed, and peaceful (Gliatis & Minis, 2007). All these values will ensure that the airline brand strategies are achieved and the customers get their best experience.
The brand strategies
The airline should include its communication policy as part of the brand strategy. The corporation should develop a slogan that communicates its core values and mission that satisfies the customers’ needs. The slogan as well as the aspirations of the airline to commit itself towards the provision of quality services should be conveyed exclusively and consistently in both the old and the digital media with an aim to attract a larger customer base (Babbar & Koufteros, 2008). In fact, all airline messages should be communicated through iconic firm artistry, dressing, and in all different premises and locales.
All new services being launched should be communicated in an exciting and fabulous disposition to emphasize the objectives of the airline brand. The firm should also focus on one experiential brand strategy, particularly in in-flight hospitality. The entire brand benefits cannot be communicated at the same time (Chen & Chang, 2005). The airline should use every opportunity to communicate the brand benefit each at its own convenient time. The company should remain focused and consistent in the communication of its brand in order to achieve the aims of its strategies. The entire airline’s brand strategy, as well as its positioning, should ensure the delivery of excellent customer services.
In as much the firm has used various brand strategies; the airline has not been committed and consistent with its implementation. As a result, the brand strategies have not filtered through all facets of the services delivery. For the airline to achieve high service quality, it must retain and sustain its brand advantage through unwavering from the original strategy (Babbar & Koufteros, 2008). Conversely, high-quality attainment can be problematic, particularly in an industry where demands are fluctuating according to the way services are delivered. The airline management must remain dedicated to the achievements of the services delivery through the brand strategy (Tsaur et al., 2002). The administration must understand that the brand strategy has the ability to pull through even during the difficult times the airline is facing. Moreover, all the stakeholders must focus on the long-term benefits of the brand strategy in order to avoid quick-fix intransigent resolutions, which water down the good objectives of the brand.
Developing cost advantage through brand strategy
For every brand strategy, there must be costs and benefits that are involved. In other words, for the strategy to attain its full benefits, there must be considered investments, proper execution, and comprehensive performance plans. In addition, the airline must come up with a pecuniary and predetermined cost framework, which will permit continuous investments to sustain the trade name while offering a cost advantage. The well-built pecuniary capabilities will enable the firm to support the development of infrastructures, research and development, and new technology. All these activities will be attained at condensed overheads (Babbar & Koufteros, 2008). The long-term leases can be reduced so that the airline can afford newer and more effective and efficient airplanes that minimize the cost of repairs and avoid delays.
Further, the airline can improve its brand strategy by maintaining a new infrastructure. In other words, the fleet should be current. The aircraft should be of the younger generation that is cost-effective in terms of reduced fuel consumption. To reduce the costs of fuel, the airline should hedge its fuel contracts in advance to stay away from recurring and unpredictability in the fuel prices (Gliatis & Minis, 2007). Moreover, the good financial base will allow the airline to settle short-term debts that are incurred. A good financial base adds to the competitive advantage for the airline.
Developing a brand that delivers results
Saudi Airlines should develop a brand that enables it to remain to be the best performing company in the industry within the region and globally. In as much as some of the established brands are struggling to perform, the airline should come up with a strategy that enables it to perform consistently within the industry. Moreover, the airline should follow an effortless management procedure that would enable it to achieve an exceptional domino effect. The brand strategy should ensure that the airline maximizes its revenue and command price premiums (Chen & Chang, 2005).
The accomplishment of augmented revenues and leadership in price-quality is through staying away from temporary and persistent cost performances as well as trade name paybacks. The airline will be capable of offering quality services at reduced costs. The other methods through which the corporation can achieve maximum benefits are through cost control and in ensuring that the brands of aircraft are of the current generation. Generational aircraft are cost-efficient in terms of fuel consumption. Moreover, the airline, through hedging the fuel contracts, can minimize costs by avoiding the adverse effects of fluctuating oil prices (Babbar & Koufteros, 2008). Finally, the airline management should ensure that the brand strategies are managed with a long-term outlook and remain consistent with the brand strategy.
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