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Issues and Complications of Delivering Quality Customer Service

Activity

Call centre staff.

Call centre worker. © Photolibrary Group

Go to Wikipedia's page on Customer Service(http://en.wikipedia.org/wiki/Customer_service). Have a read through the opening section. According to the article, how did British Airways improve its image and service?

Below the opening section there are two lists of bullet points about how to deliver effective customer service and the benefits of doing so. Do you agree with this list? Which factors are to do with the organisation's systems and procedures? Which factors depend on the organisation's staff?

Successful travel and tourism organisations make sure that they recruit the right people. How would you test a candidate's ability to handle customer service effectively?

The benefits of delivering consistently effective customer service for organisations are clear: customer loyalty, competitive advantage, lower costs and a motivated workforce, to name just four. But a firm that aspires to delivering high levels of customer satisfaction should also be aware of the possible complications that might occur. Let's look at a case in point:

Air passenger rights in the EU

The increase in air passenger traffic in Britain (see Biz/ed's 'Growth in passenger numbers' table) and throughout the EU has led the European Commission to investigate whether the rights of passengers are being protected adequately.

EU rules came into force in early 2005, covering the levels of compensation that should be paid to air passengers when their flights are cancelled or severely delayed. The following section is a summary of the compensation rules:

Over-booked flights:

British Airways plane

Image: BA Plane. Copyright: emsago, stock.xchng

When passengers are 'bumped off' flights that have been over-booked, they are entitled to:

  • Euro 250-600 compensation, depending on the flight length
  • A refund of their ticket
  • A free flight home, if relevant

If a flight is cancelled for any other reason than safety, you are entitled to:

  • A refund of your ticket
  • A free flight home, if relevant
  • Meals and accommodation, if required
  • Communication facilities

If a flight is delayed, depending on the length of flight, you are entitled to:

  • Meals and refreshments
  • Hotel accommodation where necessary
  • Communication facilities

When the delay is longer than 5 hours, you are entitled to:

  • A refund of your ticket
  • A free flight back to your original departure airport, if relevant

What could possible be wrong with the new system of compensation? Well, the regulations have provoked a storm of protest in the airline industry, with customers looking on bemused. Here's a summary of the organisations involved in the case:

Authorities

  • EU
  • Civil Aviation Authority
  • International Air Transport Association (IATA)

Industry Bodies

  • European Regions Airline Association (ERA)
  • European Low Fares Airline Association (ELFAA)

Consumer Groups

  • Air Transport Users Council (AUC)

IATA and ELFAA claim that the rules could cost Euro 600 million a year, are unfair to their members and fail to protect passengers. They felt so strongly about this that they challenged the regulations in court. Specifically they say that the rules:

  • Contradict international regulations on passenger compensation
  • Penalise members for external events such as poor weather and industrial action
  • Discriminate against them in favour of other means of transport
  • Work against low-cost carriers for whom the level of compensation is disproportionate to the cost of a ticket

Naturally, the European Commission doesn't agree; neither does the consumer rights organisation, Which?. Anyway, the court challenge to the rules failed and the industry must now try to influence the EU to alter its position on compensation.

But surprisingly, the body responsible for representing UK air passengers' rights sees things differently. This 'consumer champion' has seen complaints about airlines increase four-fold since the new rules were introduced, but seems reluctant or unable to investigate cases. Some passengers have been left with the impression that the AUC favours the airlines when interpreting the regulations.

For the airlines, especially the budget operators, the compensation rules pose a major threat. How can they continue to offer low price tickets, when the new rules force them to make payments to passengers delayed by factors outside the company's control?

Please read EasyJet's reaction to the system of compensation for air passengers.(http://www.easyjet.com/EN/News/20050216_01.html)

Tasks:

  • Outline the arguments for and against the compensation rules.
  • Why does this case present a problem for the customer service activities of low-cost operators such as EasyJet?
  • What do you think of the company's response to the new rules?
  • How might customers react to an increase in ticket prices to cover possible compensation payments?

Sources of further information: