Case Study I: Star Airways Case Study 1. What is likely to be the decision process in case of choosing an airline?

Ans: Whether we are taking a plane for a business trip, visiting family on the other side of the globe or backpack traveling around the world, choosing our favorite airline will depend on what it offers us by way of price, service, route, and flexibility. Here are some decision making process while choosing an airline: Steps: Compare and select online: No need to rely on the travel agent anymore to make choices but we need to do the legwork and research that a travel agent once did. Understand the extent of airline companies available. Since the new millennium, the number of airline companies has doubled. The introduction of budget airlines was an enormous historical change and while it's great for travelers, it makes choosing harder. Budget airlines stick to the absolute basics. They cut unnecessary luxuries, from food to baggage allowances. As a result, many more people have access to flying. However, this lack of service is something we need to think about carefully in advance because it'll impact our enjoyment and even our well-being depending on our reason for traveling and the length of travel. For example, if we are unwell and traveling to a hospital or for the "last great trip of life", budget travel isn't likely to take as good care of as more expensive travel. Make choice to travel with an airline based on three main reasons. These reasons are: price, comfort, and safety. The following sections detail what to look for as part of overall choice of airline Price 1. Choose an airline based on price: If you're heavily price conscious because you're on a strict budget, then budget airlines are probably your main, if not only, choice. 2. Understand the limitations of a budget airline: Budget airlines use smaller aircraft. This means that they have less capacity to take passengers and their luggage. As a result, you will often be charged for wanting baggage beyond carry-on luggage, and you'll be penalized very heavily for excess baggage. In addition: Smaller aircraft only have 2 aero engines, whereas larger planes normally have 4. This means that budget airlines can only fly for a maximum of 6 hours, confining them to very limited routes. For example,

one of the big budget airlines Air Asia, based in Malaysia, flies to over 40 destinations including Malaysia, Thailand, Indonesia, Macau, China, Philippines, Cambodia, Vietnam and Myanmar. Jet Star and Tiger Airways have gradually expanded their capacity to assist passengers to fly over Australia as well. But they cannot fly beyond these destinations. 3. Expect increased price to bring increased convenience: If you're the type of person who likes flying at the last minute, or needs to fly longer distances, you'll need to pay more. In turn, however, you'll get the convenience of larger aircraft that can accommodate last minute requests, more room for you and your luggage, and longer distances. Comfort 1. Select according to service and comfort levels if these are important to you. Here, the crowd starts to thin because some airlines are recognized as providing greater comfort and service than other airlines. For example, without favouring any one airline over another, airlines renowned for top service include Singapore, Qantas and Arab Emirates, famous for their excellent quality of service. 2. Look for such "extras" as: Proper meals plus dessert, all sorts of drinks including coffee, tea, and alcohols are unlimited. In economy seats extra necessities are provided such as socks, slippers, tooth brush, blanket and eye cover for good night sleep. It has become a standard to have a monitor for each seat, which can be customized for each passenger to their favorite movies, all the popular TV series, games or music. 3. Compare the comforts with budget airlines. They don't provide anywhere near as much and with good reason you're saving money! Expect the following: Smaller seating - This can be hard if you're more than average height or weight, No extra services, such as food or drink. Or you have to pay for such services with your own money (if this is provided), No blankets or pillows unless you're sick. There are always exceptions. Take note of these and make the most of them while they last!

4. Consider the online facilities of the airline. If you're a hurried business traveler, it can be convenient to have fast, easy, quick electronic processing that you do yourself, from your computer terminal to the airport check-in itself. All airlines have websites where consumer can purchase ticket online 247. Upgraded system supports selecting your own seat as well. All budget airline websites have already migrated this function to support to more customers worldwide but it also means you do most of the "legwork". -----------------------------------2. Would this plan suggested by the vice president help in convincing the customers to use Star Airways? Give your reasons Ans: The plan suggested by the Vice President will definitely help in convincing the customers to choose Star Airways as their preferred airline. As the plan suggested by VP would stress on two major factors Quality and Customer Service. In a highly competitive environment the provision of high quality services passengers is the core competitive advantage for an airline's profitability and sustained growth (Chen, 2008). In the past decade, as the air transportation market has become even more challenging, many airlines have turned to focus on airline service quality to increase serv ice satisfaction. Service quality conditions influences a firms competitive advantage by retaining customer patronage, and with this comes market share. Delivering high-quality service to passengers is essential for airline survival, so airlines need to understand what passengers expect from their services. Customer satisfaction is fundamental to the practice of consumer sovereignty. In recent research, customer satisfaction (or dissatisfaction) has become an important issue for marketing practitioners because of the rapid business environment. Customer satisfaction can be defined as a judgment made on the basis of a specific service encounter. Satisfaction and loyalty are not surrogates for each other (Bloemer and Kasper, 1995; Oliver, 1999). It is possible for customers to be

loyal without being highly satisfied (e.g., when they are few other choices) and to be highly satisfied and yet not loyal (e.g., when many alternatives are available). The importance of the relationships between airline service quality, satisfaction, and behavioral intentions have been examined by Ostrowski et al. (1993), Sultan and Simpson (2000) and Cronin (2000). Although the direction of airline service quality and satisfaction has been studied empirically, the relationships between airline service quality, satisfaction, service value and behavioral intentions, is still a matter of debate because the direction may vary depending on context. Zeithaml et al. (1996) explore the relationship between service quality and customer retenti on and suggest that customers behavioral responses play a mediating role in that link. In other words, behavior intentions are conceptualized as consequences of service quality and will affect customers actual behavior, and in turn, firms financial outcomes. To improve our understanding of air passengers decision-making process, a model that considers airline service quality, service value, satisfaction and behavioral intentions is established. Based on the literatures review (Christo, 2007; Flavian, Guinaliu and Gurrea, 2006; Steven et al., 2006; Shankar, Smith and Rangaswamy, 2003; Srinivasan, Anderson and Ponnavolu, 2002; Mara and Barbara, 2002; John et al., 2001; John et al., 1999), the hypothesis and measurement model are formulated for the exogenous variable and the endogenous variables as shown in Figure 1 to explain the relationships among perceived sacrifice, service value, behavioral intention, satisfaction and airline service quality. Based on the above theory Quality and Customer Services plays a major role in guiding customer choose their preferred airlines. As the plan of VP is also to focus on these two, the plan he worked out for Star Airways will definitely be a success.