Regional Airlines Case Study

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Case 2: Regional Airlines

Case 2: Regional Airlines
Case Introduction
A+ for effort, Customer Service Pays for Itself
In an extremely regulated and thus relatively uniform industry such as the commercial airline industry, the successful airline is the organization which sets itself apart from the competition. Within an industry that requires customer planning to interface with flight schedules and security measures, a major operational aspect which can aid an airline in gaining an edge on the competition is customer service. The effective consumption of air travel (finding flights, buying tickets, getting through the airport, boarding a plane, and finally reaching the final destination) is not the same simple consumer –supplier relationship that the consumer experiences in a trip through the Wal-Mart checkout counter; the nature of air travel makes the interaction between the airline and the customer very complex. Almost every facet of the complex relationship between the airline and customer can generate a large amount of stress for the consumer; consumers find poor customer service in the face of tight travel deadlines and paid for travel plans that did not necessarily go as intended extremely frustrating. Analysis

Investigating Salient Case Issues
To capitalize on offering a high level of effective customer service, an investment must be made. The airline must ensure their customer service department not only understands that customer service is highly valued in the organizational environment but also must ensure that the customer service department has the tools and resources to offer effective customer service (Graham, 2012). Like any business investment, the organization must make smart decisions when providing customer service resources; for instance a call center of fifty employees which only answers two calls an hour is a humongous waste of resources that would be better allocated towards another goal. The problem of understand that an investment towards more effective customer service is needed, but at what cost to make that investment, is the problem which faces Regional Airlines in the case study on page 539 of the 2012 Anderson, et al, text: An Introduction to Management Science

Regional Airlines is expanding its customer service operation by setting up a new phone system for the purpose of providing ticketing services and customer assistance over the phone. The airline is going ahead with the new phone system; however, two major decision points exist, how many agents to allocate to the line (one or two) and what complexity of system in which to invest (a system that provides a holding function versus one that does not).The expected call load for the new operation is one call every 3.75 minutes, available metrics indicate that on each call a ticket agent spends 3 minutes with a customer; effectively this results that for every customer attended to, there will be 45 seconds of downtime (Anderson, et al, 2012). Unfortunately for Regional Air, those figures are only averages, there will be an indeterminate amount of calls which meet or exceed the 3.75 minute span in between calls. The decision between systems which provides a hold function versus the one that does not will determine will determine if that customer is placed on hold or if the call is just dropped.

Placing an unanswered call on hold provides a buffer for the agent to end the call and then service the holding customer; however, for a customer that stays on hold for an inordinate amount of time will begin to feel less and less like a well-served customer. The expected call load versus the time it takes for an agent to deal with each call is the basis of allocating only one agent to man the call system. The second option of allocating two or more agents is in effect, insurance that each call will be answered in a timely fashion and callers will not have to wait for extended periods of time. The decision of how many agents to allocate to...
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