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My chosen sector for summarising existing service concept is the travel sector, also the travel sectors related industries as the aviation industry, and the transportation industry.
Service operations are all around us, and we usually interact with a range of them on a daily basis (Robinson, Fallon, Cameron, Crotts,2016). The travel industry caters to recreational, leisure and business travellers (economywatch,2010). According to the World Tourism Organization, the travel industry generated revenues of US$856 billion in 2007. This figure is only for the US, and this is 10 years old data, everyone could start thinking what size of business is the travel sector know? The Oxford Economics global industry model projects travel and tourism direct industry GDP to grow 3.9 percent per annum (compound annual growth) over the next decade(skift,2015). Everyone can see the travel sector is a huge sector, also couldn?t stop growing in the past decades, numbers are in the travel sector was over $2.4 trillion in 2014, which is almost triple of the revenue from 2007!
The aviation industry is one of the biggest industry, with more than 5000 air carrier?s company in the world. Our local low cost airline carrier is the Ryanair, which has been set up by the Ryan family in 1985, with a yearly passenger number of 5000. Now 30 years later Ryanair accommodating over 100 million passengers annually, and constantly growing further. Ryanair is Europe?s favourite airline, carrying 117m annually on more than 1,800 daily flights from 84 bases, connecting over 200 destinations in 33 countries on a fleet of over 350 Boeing 737 aircraft, with a further 315 Boeing 737?s on order, which will enable Ryanair to lower fares and grow traffic to 180m annually by 2024 (Ryanair,2016). We can see this is an exceptionally planned and executed business model from the management of Ryanair.
But, this ?pot of gold? business model has the service concept which can stunning customers, or even Ryanair employees?
Ryanair?s most loved, or hated CEO, Michael O?Leary has been developed a service concept which is greatly serving shareholders in Ryanair, also supplying cheaper ticket prices for travellers on their network as their competitors. Is there any problem with this service concept? Someone saying yes, someone saying no, but most of us using, or already used their services as Ryanair can offer huge savings on their flights ticket. Management in Ryanair mastered their skills for how cut the costs for operating their airline, and giving the less as legally must give to their customers. Some of the interesting facts of their cost cutting campaign so far, most of them urban legends:
– charging passengers for on board toilets
– standing rooms for passengers to fit more passengers to their aircraft
– using less staff on their aircrafts, such as flying without co-pilot
Ryanair has the service model which is serving their customer on an acceptable way most of the times, however they have a place for much more service improvement which are improving the existing service concept:
– they must adapt more responsive customer service to cover unexpected situations both during the flight, and before the flight on the ground
– figure out more customer friendly service for dealing with passenger baggage?s, and with the passengers themselves
– establish a better and safer working environment for their own staff, because this is health and safety issue on their flights almost everyday
– create a win-win situations on extra charges, which are more attractive for passengers, and not making huge revenue loss for Ryanair
– more punctual flights, and more professionalism dealing with delayed flights
Robinson, P., Fallon, P., Cameron, H., Crotts, J., (2016) Operations Management in the Travel Industry, 2nd Edition
Rafat Ali, Skift ? (2015), 5 Charts That Show Why the Travel Industry Is the World?s Fastest Growing Sector
Comment on the essay (aviation industry service and Ryanair):
It provides some significant background on the travel industry in general with figures from 2007 that the value to the US economy was $856b with a comment as to what the current value might be, a quick google shows that this figure is now ?956b dollars in 2015 in the US (Source Statista) or the contribution globally is ?2.17tr so perhaps some up to date figures might have framed this better.
As the travel industry is so vast the essay rightly narrows this down to aviation and then again within aviation to focus on Ryanair. The background to Ryanair is outlined and the growth of the airline is obvious both from the figures provided and the knowledge we may have on Ryanair.
On reviewing the submission, I think it describes Ryanair?s business model rather than its service concept, the business model in which Ryanair offers a no frills, a pack them tight and turn it around quickly model to ensure revenues are optimised, this works to the advantage of shareholder obviously but also the customers as this money is reinvested in better services. Ryanair finished last in a Which magazine customer satisfaction survey in 2013 but a year later after a new customer focus initiative it announced that Pre-tax profits soared 152% and revenue increase by almost 11% (CSSIRELAND 2015). Ryanair changed their service model in 2013 with some well publicised initiatives and apart from the positive bottom line impact their own stats from the feedback on their own app suggests they have an 89% customer satisfaction rating as of AUG 2016,
I think the areas it outlines for Ryanair to focus on good focus points but perhaps some information on why these are areas of focus would be beneficial. Balancing further changes when the company has a 89% satisfaction rating will require a little work.