The possibilities of mass customisation for the airline industry

The airline industry is an extremely competitive sector where fixed costs are causing most of the trouble. The price competition strategy is therefore a difficult and even dangerous manner to compete. Airlines can rather choose service quality as a competitive advantage (Chang & Yeh, 2002).

For the airline industry there are two customisation types most applicable, namely the cosmetic customisation and the collaborative customisation, (Gillmore & Pine, 1990) which also provide most opportunities. The information technology and flexibility in processes are already achieved in most airline industries which forms the basis for mass customisation. Many airlines manage an enormous customer data base already and the industry is primarily service oriented, which means it is open to customisation without drastically changing processes.

Cosmetic customisation is about the presentation of the product. The airline industry offers seats in an airplane and the only difference in presentation might be the choice between first or economy class, which does not fit most of the customer’s preferences exactly. Nevertheless, one can think of simple adaptions by means of showing the customer’s name on the inflight entertainment screen and immediately showing the customer’s favourite TV shows, music and movie genre. Besides that, also the items that are placed on the chair might add up to a possibility for cosmetic customisation, customers might prefer an extra pillow instead of headphones. These are simple changes that might increase customer satisfaction.

Together with collaborative customisation an airline could achieve excellent mass customisation. Collaborative customisation focusses more on tailored products. Within this focus most profitable and easy improvements can be made. First of all, airlines offer so many services before, during and after the flight, but for few passengers these services are actually available. Think of the lounge on the airport, this is only available for first class passengers usually. Making this available for all passengers is a way of upselling. During the booking phase airlines could offer economy class seats with access to the lounge (additional costs of course) or a first class meal. In this way, customers can choose themselves what type of ticket and additional services they prefer, and airlines profit highly of this by means of upselling their services.

In conclusion, although some changes to achieve mass customisation might ask for additional time and thus money (especially cosmetic customisation), this will result in a higher customer satisfaction and engagement. Customers feel that the airline knows who they are and what they want. Whereas collaborative customisation has the potential to increase the airlines revenue drastically as services might be used more often.

Sources:

Aggarwal, A., Chan, F. T., & Tiwari, M. K. (2013). Development of a module based service family design for mass customization of airline sector using the coalition game. Computers & Industrial Engineering66(4), 827-833.

Gilmore, J. H., & Pine, B. J. (1997). The four faces of mass customization. Harvard business review75, 91-101.

James J.H. Liou, A , Leon Yen, B., Gwo-Hshiung Tzeng, B. C., (2010) Using decision rules to achieve mass customization of airline services. European Journal of Operational Research, 205, 680-686.

Liou, J. J., Yen, L., & Tzeng, G. H. (2010). Using decision rules to achieve mass customization of airline services. European journal of operational research205(3), 680-686.

Unknown (2011) Is mass customization the airlines savior? IATA, Retrieved from: http://www.4hoteliers.com/news/story/8895

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