TSOM6066 Coursework: Airline Industry Analysis and Service Quality

This report examines the airline industry, focusing on Turkish and Norwegian Airlines, exploring strategies to enhance employee performance and job satisfaction. It delves into the service concepts, target markets, and corporate strategies of both airlines, followed by a comparative value chain analysis. The report also provides recommendations for measuring service quality and customer satisfaction, covering various methods such as SERVQUAL, surveys, and social media monitoring. The analysis includes discussions on inbound and outbound logistics, marketing, sales, and service aspects, offering a comprehensive overview of the airlines' operations and customer engagement approaches. The report aims to identify the issues the airline industry faces with customers and how the industry manages its quality in a competitive market.

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TRAVEL AND TOURISM
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Contents
Introduction................................................................................................................................4
About Turkish and Norwegian Airlines.....................................................................................4
Ways in job satisfaction and employee engagement can be increased in the airline industry...5
1. Provide a positive working environment:.......................................................................5
2. Recognition and Reward.................................................................................................5
3. Evaluate and measure job satisfaction............................................................................5
4. Involve and engage the workforce..................................................................................6
5. Developing the worker’s skills and potential..................................................................6
Target market and corporate strategy of Turkish airlines..........................................................6
Target market and corporate advantage of Norwegian Airlines................................................7
Value chain analysis of Turkish Airlines versus Norwegian Airlines.......................................8
1. Turkish Airlines.................................................................................................................8
 Inbound logistics:............................................................................................................8
 Operations:......................................................................................................................8
 Outbound logistics:.........................................................................................................9
 Marketing and sales:.......................................................................................................9
 Services:..........................................................................................................................9
 Firm infrastructure:.........................................................................................................9
 Human resource management:......................................................................................10
 Technology development:.............................................................................................10

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 Procurement activities:..................................................................................................10
Value chain of Norwegian Airlines:........................................................................................10
Inbound logistics:.................................................................................................................10
Outbound logistics:..............................................................................................................11
Sales and marketing:............................................................................................................11
Services:...............................................................................................................................11
Firm infrastructure:..............................................................................................................11
Human resource management:.............................................................................................11
Technology development:....................................................................................................12
Recommendations for suitable approaches to measure service quality and customer
satisfaction................................................................................................................................12
Ways to measure service quality:.........................................................................................12
1. SERVQUAL:.........................................................................................................12
2. Mystery Shopping:.................................................................................................12
3. Post Service rating:................................................................................................12
4. Follow-Up Survey:................................................................................................13
5. In-App Survey:......................................................................................................13
6. Customer Effort Score;..........................................................................................13
7. Social Media Monitoring:......................................................................................13
8. Documentation Analysis:.......................................................................................13
9. Objective Service Metrics:.....................................................................................14
Ways to measure the customer satisfaction:........................................................................15

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1. Survey customers:..................................................................................................15
2. Understand expectations:.......................................................................................15
3. Find out where you are falling:..............................................................................15
4. Pinpoint the specifics:............................................................................................15
5. Access the competition:.........................................................................................16
6. Try to measure the emotional aspect:....................................................................16
7. Loyalty management:............................................................................................16
8. A series of attribute satisfaction measurement:.....................................................16
9. Intentions to repurchase:........................................................................................16
10. Monitoring:............................................................................................................16
11. Feedback cards:......................................................................................................16
Conclusion:..............................................................................................................................17
REFERNCES...........................................................................................................................19

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Introduction
In this report two airlines are discussed Turkish and Norwegian airlines, the Turkish airlines
it world’s largest carrier and it is also a luxury airline however the Norwegian airline is a
low cot airline and it is also the third largest airline in Europe (Berry, and Jia, 2010) This
report is the brief discussion of the approaches that can be used in direction to develop the
performance of employees and the job satisfaction by the airlines, next thing which will be
discussed in this report is the target market and the corporate strategy of both the airlines after
this the value chain analysis and recommendation for the airlines will be done. This report is
to identity the issues the airline industry faces with the customers and also the ways in which
the airline industry manages its quality in the competitive market (Flint, Blocker,and Boutin ,
2011)
About Turkish and Norwegian Airlines
Turkish airline is a national flag airline of turkey. It has its services in 304 countries and
destination and it makes it the biggest carrier in the world. It serves a lot of destination non-
stop from a solo airport. It flies to 122 countries and serves 82 destinations. Its headquarters
is in Istanbul. This airline was started on 20th may 1993.
Norwegian Airlines, This is a low cost airline and is one of the largest airlines in Norway. It
is the third biggest airline in Europe. Norwegian Airlines launched its long haul operation in
May 2013. This airline was founded on 22nd January 1993 and it took over the regional airline
service with the help of busy bee foundation (Bergman, and Klefsjö, 2010)

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Ways in job satisfaction and employee engagement can be increased
in the airline industry.
1. Emphasise a Focus on the Positives
According to various studies it has been seen that the best way to increase the job
satisfaction is to provide a good and a optimistic work atmosphere as this is one of the
most significant factor of this process. In command to inspire the employees in the
working environment the airline industry needs to go beyond the needs of the worker
(Yuksel, Yuksel, and Bilim, 2010)
1. Recognition and Reward
According to various studies it has been seen that The In order to motivate the
employees the airline industries needs to keeps a recognition and reward program for
the employees who work hard. It is not important to give reward to employees in the
form of money, it can be any form. These kinds of things and programs make the
employees feel that they are being valued by the firm and it brings confidence in them
also these things helps in motivating them in order to work hard (Antràs, and Chor,
2013)
2. Stress the Importance of Regular Reviews
According to various studies it has been seen that The It is important to continuously
improve and evaluate the system. The process of evaluation is a non- stop process
and it has specific steps. One of the main aims of evaluation is to determine and

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measure the workforce(Yu, 2012) This process helps in identifying the major problem
in the industry and also helps in improving and designing of a new plan. The airline
industry can conduct a survey for job satisfaction each year (Fornell, Rust, and
Dekimpe, 2010)
3. Involve and engage the workforce
According to various studies it has been seen that The Employees can display up for
work but it is important to see if they are productive and engaged in the airline
industry. Airline industry should keep programs where the employees can share and
donate their thoughts and suggestions; this will help them to have possession and
conceit in their work (Gereffi, and Fernandez-Stark, 2011)
4. Developing the worker’s skills and potential
According to various studies it has been seen that The Education and training helps in
motivating the employees and it can also help in making the employees innovative
and as well as productive (Cowper-Smith, and de Grosbois, 2011) There are various
reasons of training and development of the employees as well skilled employees are
more capable and they are also bright to control jobs in a improved way. If an
employees in well skilled then they do not need much supervision which helps the
management to be free (Ryu, and Gon , 2012)
Service concept
Intangibility: this means that the services cannot be seen, smelled, felt, or tasted and a
person cannot try a service before or after buying it for example: an airline passenger just
have a ticket to buy and there is nothing that they can touch

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Perishability: this means that a service cannot be stored for later used. When there is a high
demand of a service then perishability is not a problem but in case the demand falls then the
company or firm can have problems (Mikulić, and Prebežac, 2011)
Variability: this is one of the most important characteristic of services which simply states
that the quality of service can vary from place to place.
Lack of ownership: this is one of the most important characteristic of service. It simply
means that a person cannot own a service like an office or a product.
Inseparability: this means that the services are produced and consumed at the same time and
that is the reason it cannot be separated from its providers.
Target market and corporate strategy of Turkish airlines
Turkish airlines focus on three different types of potential customers, two of these target
market focus on the luxury side of Turkish airlines. Turkish is number one Airline Company
in turkey and the services provided by the airline are towards the high end customers. Apart
from the service provided on the flight they also have an option of business class. The
primary target market of this airline is the corporate business sir travel. Turkish airlines are
high end Travel Company, the celebrities and other traveller chose to fly luxuriously to their
destination with the Turkish airlines. The second target market of the airlines is the citizens of
turkey. This airlines one of the huge advantages of the airline industry (Habib, Kattan, and
Islam, 2011)
Turkish airlines provide high quality facility to the clienteles; brand awareness and safety
concerns are also associated with the corporate strategy as it helps the Turkish airlines to
attract more customers and also the price leadership of the firm (Borenstein, and Rose, 2014)
Turkish airlines also have the biggest domestic and international transit of passengers and this

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adds to the competitive advantage for the firm. Apart from this the firm also has a very low
cost model of operations which helps in keeping good quality of service constant and it also
helps the company to attract good leadership positions. Turkish airlines also cut its cost and
started attracting the customers by a premium loyalty card. (Muturi, Sagwe, and Namukasa,
2013)
Target market and corporate advantage of Norwegian Airlines
The main target market of these airlines in for the people who need affordable travelling.
Although now this passenger profile is changing and it is adding new destinations along
with increasing the brand awareness(David , 2013) The cost curious travellers are becoming
the target market. Although the customer is not provided with frills and they are given a
choice of buying it. The in-flight services are also available at a very affordable price.
Norwegian has always been a pioneering airline which has a very strong identity and it has
achieved everything from its business performances and the significant innovators. This
airline started with a low cost strategy and it also focused on the long haul in the recent years.
This airline also uses new technologies which helps it to run its operation in a smooth
manner. This airline also used the customer experience management technology which helps
them to know about the relevant traveller insights, this airline also attract the customers by
giving them an option of personalization. The low cost strategy is something which attracts
the customers to this airline; it is also focusing on a fuel efficient starting point in order to
achieve the cost efficiency on the long haul flights (Bogicevic, Yang, Bilgihan, and Bujisic,
2013)

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Value chain analysis of Turkish Airlines versus Norwegian Airlines
1. Turkish Airlines
Turkish airlines value chain is a portion of a very big scheme of value and the
industry comprises various companies’ suppliers and distribution channels. The value
chain deeds of Turkish airlines are as follows:
 Inbound logistics: in these the activities are related to storing, receiving
and dismantling the product contributions. This also includes thingslike
handling of the material, warehouse and also the architecture which helps in
receiving and the store customer info related to the digital media company. In
the present time the airlines has contract out most of its inbound logistics and
activities as well (Rolland, and Freeman, 2010)
 Operations: Activities which aid the organization in order to transmute raw
material into the finished goods. the Turkish airlines uses the customer data in

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order to serve the ads which are based on the behaviour of the clients,
moulding plastic in order to create the products and etc.
 Outbound logistics: the Turkish carriers use these actions to dispense the
complete goods to the partners of the channel and the final buyers. The
outbound activities also includes warehousing, scheduling, wholesalers
distribution, network and retailers order fulfilment, and processing (Ciliberto,
and Williams, 2010)
 Marketing and sales: these doings are taken by the airlines in order to
make means by which a buyer can buy the products of the firm easily. This
includes activities such as, marketing, advertising pricing, force management
promotion, sales, and channel selection etc.
 Services: this action is something that the Turkish airlines should start with,
it needs to deliver maintainnece and sales services for the successful use of the
product. The activities includes: connection services, product onward and
backend arrangement of the software, training, post maintenance of sales, and
part supply (Tsai, Chou, and Leu, 2011).
 Firm infrastructure: Under this the events that are included are related to
finance, accounting money and office, overall organization, legal facilities,
excellence management and preparation. The Firm infrastructure doings of
Turkish Airlines helps in chains the whole value chain however the possibility
can vary from the assumed that Turkish Airlines is a very expanded business
even inside the its own industry (Kritikos, Pernici, , Plebani, Cappiello,
Comuzzi, Benrernou, Brandic, Kertész, Parkin, and Carro, 2013)
 Human resource management: In a atmosphere where the organization
is trying to develop a association for learning, human resource is a thing that

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can lead to the success of an organization. The airline should use human
resource more for its competitive advantage (Rast, and Tourani, 2012)
 Technology development: the technology cares almost all the activities
in the contemporary day organization. In the industry of technology. The
growth has become one of the main reasons for the competitive advantage.
The development of technology in the Turkish airlines includes the doings
such as constituent project, field-testing, technology selection, procedure
engineering, and feature design.
 Procurement doings: the procurement activities at the Turkish airlines are
undertaken in order to purchase the inputs that are used by the Turkish
airlines. They do not include the inputs purchased and the companies bought
inputs are as follows:, supplies, raw materials laboratory equipment, office
machinery, equipment, and buildings.
The value chain of Turkish airlines helped it to develop operationally efficient and a low
price company. By the de-integration of its upkeep, cookery, ground treatment and the call
middle subsidiaries into separate companies. The stand-alone companies become more well-
organized and lucrative (Ramayah, Samat, and Lo, 2011)
Critical analysis of value chain analysis
The value chain is a processes of internal activities which a company perform in order“to
design, produce, market, de-liver and support its product”. Porter further states that “a firm’s
value chain and the method by which it performs separate activities are a replication of its
antiquity, its plan, its method to applying its strategy, and the fundamental economics of the
activities themselves”.

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Value chain of Norwegian Airlines
Inbound logistics: the inbound logistics have various dissimilar groups in the industry of
airlines like for instance: scheduling of the journeys, keeping judgment on contestants and the
plan they are accepting.
Outbound logistics: Norwegian Airlines used most of its operations by using the online
process of ticketing and they allow the customers as well to book the tickets online and also
printing there boarding card from their homes. This airline usages the general electric engine
for the safety of the customers and for the main predilection of the company.
Sales and marketing: Norwegian Airlines have a string brand name and this thing has an
significant effect in the sales of the organization that is the reason this airlines advertises by
the sponsoring.
Services: Now a day’s retaining a customer is a difficult task so to overcome this
Norwegian Airlines deliver divers eking of services to its client like if flight is late by extra
than three times then u$ 61 e-gift voucher is given, nearside can likewise pre-book their
checked luggage for a inferior rate, and clienteles can also connected book hotels, hostels,
rent a car and medical facilities.
Firm infrastructure: The infrastructure has a very strong firm substructure and they
evolve since a very classic integrated facility provider and they emphasis near the goals and
they also deliver the inexpensive fare also this airline tries to explore new markets and also
takes decisions (Tsai, Hsu, and Chou, 2011)
Human resource management: Norwegian Airlines hire talented and well skilled
workforces. And they allocate multi accomplished people in order to incredulous the value in

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terms of human resource and also to uphold the assignment of the company with a low price
of the airline and they also recompense the staffs in rapports of the performances.
Technology development: Norwegian Airlines usages various unlike kinds of
technologies in order to minimalist the price and to make the operations efficient and easy,
they also use the yield management scheme which take the operating costs and expected
proceeds into account, and this technology also cuts down the middle men and also helps in
implementing the enterprise reserve planning system, which helps in redeemable time and at
the end of the month and it also hurries up the data
Norwegian Airlines low cost approach had been successful in the industry, however This
report has identified the reason behind Norwegian Airlines value chain analysis helped in
identifying how Norwegian Airlines operates and adds value, by being distinctive in its low
cost model.
Recommendations for suitable approaches to measure service quality
and customer satisfaction
Ways to measure service quality:
1. SERVQUAL: this is one of the calmest customs to portion the quality of service. By
doing a survey both airline industries can ask the clienteles to the rate the service
delivered by them in relation to their expectations. This method has five fundamentals
which are assurance, tangibles, reliability, empathy and lastly
responsiveness(Calabrese, 2012)
2. Mystery Shopping: These techniques in mostly charity by the retail supplies, hotels
and the restaurants but this technique be recycled by any other industry as well such
as hiring an “Undercover customer” in instruction to exam the value.

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Ways to measure the customer satisfaction:
1. Survey customers: this is one of the best ways for getting the feedback of
the customers; most of the persons are eventful and have known period to give
response. (Ryu, Lee, and Gon, 2012)
2. Understand expectations: the airline industry should comprehend the
needs and requirements of the customer in order to satisfy their expectations
and providing them with a good service.
Balance score card of Turkish airlines

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Strategy Performance
measure
Targets Initiatives
Financial
 Margin of
profit
 Growth of
revenue
 Cash flow and
costs
 20% of
increase in
the market
share
 20% increase
in the revenue
of seat each
year
 Additional
routes
 More frequent
flights
 Cost
reduction for
further
Customer
 Market share
 On time
arrivals
 Passengers
 Customer
satisfaction
 Missed bags
0.5%
 Growth In
passengers by
10% every
year
 95% on time
arrival
 Quality
management
 Customer
loyalty
program
Internal
 On ground
time
 On ground
departure
 95% on
departures
 30min on
ground time
 Cycle time
optimization
program
Learning  Number of
additional
courses
attended
 70% of
employees
take least one
course per
year
 Offering
various
training
programs
The balance score card shows the following things
 Under finances, the aim of the company is to increase in the market share by 20% and
also to increase in the revenue of seat each year by 20%. They can do this by
introducing Additional routes, more frequent flights and Cost reduction for further.
The performance can be measured by profit Margin, Growth of revenue and by
analysing the Cash flow and costs
 Under customer, the aim of the company is to manage the Missed bags by 0.5% Focus
on Growth In passengers by 10% every year and 95% improvement in time of arrival

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all of this can be done by good Quality management and by providing the Customers
with loyalty programs, the performance of this can be measured by market share, On
time arrivals, number of passengers and feedback from the in order to know the rate
of Customer satisfaction.
 Under internal changes, the aim of the company is improve by 95% on departures and
to keep a 30min time on the ground time. All this can be done through Cycle time
optimization program.
 Under Learning, the main aim of the company is to see around 70% of employees
taking at least one course every year, this can be done by offering various training
programs to the employees and it can be measured by the number of Number of
additional courses attended by the employees
Balance score card of Norwegian airlines
Strategy Performance
measure
Targets Initiatives
Financial  Market value
 Set revenue
 Plane lease
cost
 30% CAGR
 20% CAGR
 5% CAGR
 Opening new
international
routes
Customer  FAA on-time
arrival
 Customer
ranking
 NO. 1
 NO.1
 Quality
management
 Loyalty
program for
the
customers
Internal  Time on
ground
 On-time
departure
 30 Minutes
 90 percent
 Cycle time,
optimisation
program
Learning  Ground crew
shareholders
 Ground crew
shareholder
trained
 Year 1: 70%
 Year 2: 90%
 Year 3:
100%
 Employee
stock option
plan
 Ground crew
training

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The balance score card shows the following things
 Under finances, the aim of the company is to increase Compound annual growth rate
by 30, 20 and 5 percent in 3 consecutive years, it can be done by opening the new
international routes and it can be measured by analysing the Market value, Set
revenue and by the least cost of the Plane.
 Under customer, the aim of the company is be number one and to provide the
customers with the best quality all of this can be done by Quality management and by
good and new Loyalty program for the customers. It can be measured by on-time
arrival of the customer and the Customer ranking.
 Under internal changes, the aim of the company is improve by 90% on departures and
to keep a 30min time on the ground time. All this can be done through Cycle time
optimization program.
 Under Learning, the main aim of the company is to see around increase the
employee learning by 70, 90 and 100 percent , all this can be done by Employee
stock option plan and through the Ground crew training and the performance can be
measured by feedback from the Ground crew shareholders and the number of
Ground crew shareholder trained
TQM of Turkish airlines:
In order to rehearsal TQM, the key focus was on the Turkish Airways alteration from an
engineering based company in one dictated by the market. There are four key influences that
donated to the achievement of the company, namely:
1. Continuous reduction of costs

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2. Focus on providing excellent customer service at a premium price
3. Cover growing market through alliances and partnerships
4. Maximize return on individual flights by investing in computerized reservations.
Along the "trail" to contrivance TQM, there were documented the following key steps:
1. Leading a training to identify the present position within the practical workshop and
reportage results;
2. Procurement support and a full promise to TQM idea from all levels of organization;
3. Educating staff rendering to the values of TQM and enable essential changes in
organization style;
4. Changes in strategies, events and work performs that would fit and would enable new
organizational culture essential;
5. Opening the excellence development process
6. Rereading development complete and nurturing a continued promise from all heights of
the organization.
TQM of Norwegian airlines:
1. Norwegian airlines made a quality management system for inflight services as a part of
their comprehensive exercise in order to implement ISO in selective areas of operations.
2. They also have various techniques in order to improve the services of their employees as
well, by the help of training programs.
3. Norwegian airlines in order to improve the quality use the external business of catering
in order to provide good quality of food and services to the customers on the plane.

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4. This airline has also passed the international transport association safety audit. Apart
from this it maintains all the quality standards at the best price, hence giving the
customers satisfaction.
Conclusion:
In this report two airlines are discussed Turkish and Norwegian airlines, the Turkish airlines
it world’s largest carrier and it is also a luxury airline however the Norwegian airline is a
low cot airline and it is also the third largest airline in Europe. Through this report following
finding have come to notice firstly in instruction to develop the presentation of the employees
and to inspire job satisfaction both the firms should take the following steps such as
providing a optimistic working atmosphere, keeping a reward and recognition program,
Evaluate and measure job satisfaction, Include and absorb the workforce and lastly Develop
the worker’s skills and potential. Next this report discussed the value chain of both the
airlines from side to side the value chain examination it was seen that the value chain of
Turkish airlines helped it to become operationally well-organized and a low price company.
report also discussed about the target market and corporate strategy of both the airlines.
Lastly in the report the recommendation for both the industries is discussed which helps in
measuring quality and customer satisfaction.

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