DIRE DAWA UNIVERSITY

College of Business and Economics

Department of Marketing Management

Master program

Service and Relationship Management

Project paper Writing

BY
Helen Abera
DDU1400231

DIRE DAWA, ETHIOPIA

JULY, 2022

1
 1. Contents
1. Contents .................................................................................................................................. 2
1. Overall Strategic Assessment ................................................................................................. 3
1.1. Introduction to Ethiopia Airlines...................................................................................... 3
1.2. Effectiveness is Ethiopia Airline’s services marketing mix............................................. 3
1.2.1. Product ...................................................................................................................... 3
1.2.2. Price .......................................................................................................................... 5
1.2.3. Placement .................................................................................................................. 7
1.2.4. Promotion.................................................................................................................. 8
1.2.5. People...................................................................................................................... 10
1.2.6. Process .................................................................................................................... 12
1.2.7. Physical evidence .................................................................................................... 14
1.3. Alignment of Ethiopian Airlines marketing mix with vision and strategies .................. 15
1.4. Ethiopian Airlines strengths and weaknesses in terms of the 7 Ps................................. 16
1.4.1. Strengths ................................................................................................................. 16
1.4.2. Weaknesses ............................................................................................................. 16
2. Specific Service Implementation .......................................................................................... 17
2.1. Customers and services delivered by Ethiopian Airlines ............................................... 17
2.2. What changes/improvements are needed in service delivery process............................ 17
2.3. Risk reduction strategies ................................................................................................ 17
2.4. Strategic alternatives Ethiopian Airlines used when it faces mismatched b/n capacity
and demand ............................................................................................................................... 18
2.4.1. Recommendations ................................................................................................... 19
2.5. The gap between theories and practice regarding customer service process in Ethiopian
Airlines ...................................................................................................................................... 19
2.5.1. Recommendations ................................................................................................... 19
2.6. Customers complain center when they encounter service failures in Ethiopia Airlines 19
2.7. The gap between theories and practice regarding in Ethiopia Airline’s service recovery
strategy ...................................................................................................................................... 20
2.7.1. Recommendations ................................................................................................... 20

2
 1. Overall Strategic Assessment
1.1. Introduction to Ethiopia Airlines
Ethiopian Airlines (Ethiopian) is the flag carrier of Ethiopia. During the past seventy plus years,
Ethiopian has become one of the continent's leading carriers, unrivalled in Africa for efficiency
and operational success, turning profits for almost all the years of its existence. Operating at the
forefront of technology, the airline has also become one of Ethiopia's major industries and a
veritable institution in Africa. It commands a lion's share of the pan African network including the
daily and double daily east-west flight across the continent. Ethiopian currently serves 127
international and 22 domestic destinations operating the newest and youngest fleet.

1.2. Effectiveness is Ethiopia Airline’s services marketing mix

1.2.1. Product
Product is one of the most important components of the Ethiopian Airlines Bringing Africa
Together Marketing mix. The distinctive characteristics of the product by Ethiopian Airlines
Bringing Africa Together are:

1.2.1.1. Quality

• Ethiopian Airlines Bringing Africa Together maintains the high quality of products
• High product quality is maintained by adding value during different stages of the value
chain
• Ethiopian Airlines Bringing Africa Together procures raw materials from reliable and
trusted suppliers only
• These raw materials are processed under carefully maintained environments to
maintain high and consistent quality of the products
• High quality promise and delivery also provides Ethiopian Airlines Bringing Africa
Together with a distinctive competitive advantage

1.2.1.2. Ease of use

• The products manufactured and sold by Ethiopian Airlines Bringing Africa Together are
relatively easy to use
• All products come with a user manual, which is easy to understand and which provides
simple instructions for product use

3
• The consumers can also call the 24/7 helpline to understand details about product usage
• Also, retail representatives provide detailed instructions and explanations regarding the use
of the product at the time of the sale

1.2.1.3. Portfolio broadness

• Ethiopian Airlines Bringing Africa Together has a broad portfolio of products

• The broad portfolio helps Ethiopian Airlines Bringing Africa Together in reaching different
target groups in the market
• Also, the broad portfolio allows financial strength to Ethiopian Airlines Bringing Africa
Together
• The broader product portfolio also adds more value for Ethiopian Airlines Bringing Africa
Together

1.2.1.4. Benefits of product consumption

• Ethiopian Airlines Bringing Africa Together offers functional benefits to consumers of the
product use
• These functional benefits are promised and delivered – however, they are also delivered by
other similar products
• The distinguishing aspect of Ethiopian Airlines Bringing Africa Together is its delivery of
emotional benefits to the consumer
• Products manufactured and sold by Ethiopian Airlines Bringing Africa Together promise
consumers an ego boost, confidence, and security
• Ethiopian Airlines Bringing Africa Together also promises fulfilment of psychological
needs on product consumption
• These psychological needs include, for example, the need for empathy, the need for
belonging, and the need of feeling loved.

1.2.1.5. Different SKUs

• The products by Ethiopian Airlines Bringing Africa Together are available in different
sizes

4
 • Ethiopian Airlines Bringing Africa Together has made use of different SKUs to increase
market penetration
• Different SKUs can be brought and used as per the consumption needs of the consumers,
and the target markets
• Through the production of different SKUs, Ethiopian Airlines Bringing Africa Together
has also increased the trial rate
• Different SKUs have also helped Ethiopian Airlines Bringing Africa Together improve its
product accessibility

1.2.2. Price
Ethiopian Airlines Bringing Africa Together marketing mix focuses on a hybrid strategy for
pricing to obtain maximum value for its products. The marketing mix Ethiopian Airlines Bringing
Africa Together uses a combination of a number of techniques for pricing its products, which are
detailed below:
1.2.2.1. Premium pricing

• By using premium pricing for some of its product ranges, Ethiopian Airlines Bringing
Africa Together encourages favorable brand and product perceptions in target consumer
groups
• Premium pricing for products also encourages a favorable quality perception of Ethiopian
Airlines Bringing Africa Together products amongst consumers
• With premium prices, Ethiopian Airlines Bringing Africa Together has successfully also
made some of its product ranges exclusive by restricting sales and production. This, in turn,
leads to a perception g luxury in consumption products
• Premium prices add a touch of privilege and high value in Ethiopian Airlines Bringing
Africa Together products
• Using elements of premium prices in other product ranges has also allowed Ethiopian
Airlines Bringing Africa Together to maintain significantly high profits and a consistent
business growth

5
1.2.2.2. Psychological pricing

• Since Ethiopian Airlines Bringing Africa Together has a number of different product
ranges and product groups, the use of psychological pricing has been beneficial
• With the use of psychological pricing, Ethiopian Airlines Bringing Africa Together also
successfully adds more value to its products from the point of view of customers
• Ethiopian Airlines Bringing Africa Together also gains higher sales with psychological
pricing
• Consumer purchase a higher number of Ethiopian Airlines Bringing Africa Together
products because of its use of psychological pricing
• Ethiopian Airlines Bringing Africa Together is able to increase its target audience and
broaden its target purchaser groups

1.2.2.3. Geographical pricing

• Ethiopian Airlines Bringing Africa Together is able to penetrate different regional markets
optimally with the use of geographical pricing
• For offshore locations, geographical pricing also allows Ethiopian Airlines Bringing Africa
Together to cover shipping and customs expenses
• Geographical pricing also allows Ethiopian Airlines Bringing Africa Together to maintain
consistent revenue growth by altering pricing in different markets based on local currency
value

1.2.2.4. Bundle pricing

• For some product ranges, Ethiopian Airlines Bringing Africa Together is also known to
use bundle pricing strategy popularly
• Ethiopian Airlines Bringing Africa Together also uses bundle pricing during sales
• Bundle pricing increases the trial rate for consumers
• Ethiopian Airlines Bringing Africa Together experiences higher return on the cost of
gaining a new customer
• With bundle pricing, Ethiopian Airlines Bringing Africa Together is also able to control
costs and prices by lowering marketing and distribution expenses

6
 • The use of bundle pricing also adds value to the umbrella brand name of Ethiopian Airlines
Bringing Africa Together.

1.2.3. Placement
Ethiopian Airlines Bringing Africa Together places high importance on the placement of its
products because it directly relates to accessibility for consumers.

1.2.3.1. Company-operated stored

• The company maintains stores operated by the management of Ethiopian Airlines Bringing
Africa Together in all markets
• Company-operated stores give Ethiopian Airlines Bringing Africa Together higher control
over operations as well as store layout and design
• Ethiopian Airlines Bringing Africa Together also interacts directly with the consumers and
gathers important details regarding consumer behavior and consumer feedback through
company-operated stores
• The company operated stores also give leverage to Ethiopian Airlines Bringing Africa
Together in terms of decisions regarding the stocking of different product items

1.2.3.2. Licensed stores

• Ethiopian Airlines Bringing Africa Together licensed stores also allow consumers to enjoy
the various product offerings by the company
• Licensed stores also decrease the risk of financial and physical investment for Ethiopian
Airlines Bringing Africa Together in unstable markets
• Licensed stores have also given Ethiopian Airlines Bringing Africa Together high business
growth, and a boost for rapid market expansion and penetration
• Through licensed stores, Ethiopian Airlines Bringing Africa Together has also learned
about local consumers and cultures
• Licensed stores and shops encourage sales of products by Ethiopian Airlines Bringing
Africa Together by aligning it with local cultural values
• Licensed stores also help Ethiopian Airlines Bringing Africa Together in localizing its
product offerings to enhance brand equity and band image

7
 1.2.3.3. E-commerce

1. Ethiopian Airlines Bringing Africa Together has developed a successfully operational

website for online order placement and order tracking
2. Ethiopian Airlines Bringing Africa Together also encourages sales through social media
portals, where the company takes orders through direct messages, as well as through a
mini-shop model
3. The company also stocks products with online retailers such as Amazon and eBay, as
well as smaller local online retailers as well
4. Online retailing, and using the internet to make sales has boosted the sales for Ethiopian
Airlines Bringing Africa Together and has also increased the accessibility of its products
for consumers.

1.2.3.4. Supermarkets and hypermarkets

• Ethiopian Airlines Bringing Africa Together also places its products in supermarkets and
hypermarkets across the country
• A large number of Ethiopian Airlines Bringing Africa Together target groups shop from
supermarkets and hypermarkets
• Placement in supermarkets and hypermarkets also improve cost efficiency for Ethiopian
Airlines Bringing Africa Together

1.2.3.5. Partner agents

• In offshore locations, Ethiopian Airlines Bringing Africa Together also makes use of
partner agents for its products’ placement
• These partner agents are assessed and evaluated on strategic compatibility and reliance
• Ethiopian Airlines Bringing Africa Together contracts with partner agents in other
countries and markets for its product placement to ensure quality control and terms of
negotiation

1.2.4. Promotion
The marketing strategy for Ethiopian Airlines Bringing Africa Together also places high
importance on the promotional tactics and strategies used. The promotional strategies allow the

8
Ethiopian Airlines Bringing Africa Together to interact with the consumers and influence them
directly. Ethiopian Airlines Bringing Africa Together uses a 360-degree approach in its
promotional activities, and makes use of the following means of promotion:

1.2.4.1. Digital marketing

• Ethiopian Airlines Bringing Africa Together has corporate profiles on all social media
websites and portals
• Ethiopian Airlines Bringing Africa Together uses its social media presence to directly,
engage with consumers
• This direct engagement and interaction allow Ethiopian Airlines Bringing Africa Together
to understand the customers, their needs and demands
• Ethiopian Airlines Bringing Africa Together uses this feedback and incorporates it in its
broader marketing and organizational strategy
• Ethiopian Airlines Bringing Africa Together also maintains a corporate website – which
highlights company information, product information as well as information regarding any
ongoing campaigns and sales

1.2.4.2. Reward Programs

• Ethiopian Airlines Bringing Africa Together has a loyalty card program for its customers
• The loyalty card allows customers to redeem points in exchange for products or other
exciting gifts, as directed by the company
• Each purchase is entered into the loyalty card by Ethiopian Airlines Bringing Africa
Together and is valued for points against the products’ monetary value
• The loyalty card can be purchased or is given complementary by Ethiopian Airlines
Bringing Africa Together on high valued purchases
• Frequent usage and purchase of products by Ethiopian Airlines Bringing Africa Together
also has rewards against the loyalty card

1.2.4.3. Community Influencers

• Ethiopian Airlines Bringing Africa Together makes use of community influencers as its
on-ground promotional efforts

9
 • Ethiopian Airlines Bringing Africa Together identifies strong and confident individuals to
be brand ambassadors in their communities
• Ethiopian Airlines Bringing Africa Together provides these brand ambassadors and
community influencers with its product range and invites them to use it themselves to see
benefits

1.2.4.4. Conventional marketing

• The company places advertisements in consumer-related magazines. This largely includes

home decor, and home management magazines
• Magazine ads are not very frequent, but appear twice every quarter of the fiscal year
• In high-density locations, Ethiopian Airlines Bringing Africa Together also makes use of
out of house hoardings
• Hoardings increase visibility for Ethiopian Airlines Bringing Africa Together and also
work towards building stronger brand recall
• Ethiopian Airlines Bringing Africa Together also produces TV advertisements
• All TV advertisements have an emotional appeal to them
• TV advertisements by Ethiopian Airlines Bringing Africa Together have progressed to
include a slice of life elements and characteristics
• TV advertisements by Ethiopian Airlines Bringing Africa Together also highlight the
functional benefits of the product

1.2.5. People
The marketing mix of Ethiopian Airlines Bringing Africa Together also places an essential focus
on people development and people building. This is because Ethiopian Airlines Bringing Africa
Together realizes the importance of employees in building strong customer relationships.
Ethiopian Airlines Bringing Africa Together develops its employee and people by focusing on the
following aspects:

1.2.5.1. Training

• Ethiopian Airlines Bringing Africa Together makes sure that all employees undergo regular
training sessions for skill development and enhancement

10
• Trainings at Ethiopian Airlines Bringing Africa Together are not the only field related, but
also focus on essential management and organizational skills
• Training sessions and activities at Ethiopian Airlines Bringing Africa Together also
identify with the employee's own needs of progression, development and growth
• All training sessions and activities designed and carried out by Ethiopian Airlines Bringing
Africa Together take into consideration business goals and objectives, as well as
employee's personal goals and aspirations
• Ethiopian Airlines Bringing Africa Together, therefore, tries to develop the employee as
an organizational member, as well as an individual
• All training is engaging, and hands-on so that employees do not only learn but also
experience

1.2.5.2. Organizational ownership

• Ethiopian Airlines Bringing Africa Together works on strengthening the organizational

commitment in its employees
• Ethiopian Airlines Bringing Africa Together builds employee loyalty so that people can
reflect their optimal best at work
• Ethiopian Airlines Bringing Africa Together also understands that satisfied employees will
lead to happy and satisfied customers
• Ethiopian Airlines Bringing Africa Together regularly shares different reward programs
for employees, including stock sharing, so that their organizational commitment and
ownership is enhanced
• Ethiopian Airlines Bringing Africa Together also includes employees in decision making
at different managerial levels, and regularly takes their feedback for different projects and
products – which also work towards building organizational ownership

1.2.5.3. Motivation building

• Ethiopian Airlines Bringing Africa Together employees are the face of the organization
• Ethiopian Airlines Bringing Africa Together are motivated through the exciting and
creative organizational culture

11
 • Employees are also motivated through different reward programs and bonuses that
Ethiopian Airlines Bringing Africa Together distributes
• Another source of motivation is appreciation programs where management appreciates and
acknowledges the work and performance of different employees

1.2.5.4. Succession planning

• Ethiopian Airlines Bringing Africa Together remains one of the leading players in the
industry also because of its focus on succession planning
• Ethiopian Airlines Bringing Africa Together conducts succession planning for all
managerial levels
• Succession planning is done through internal promotions as well as external recruitments
to meet the needs and demands of the vacant job position at Ethiopian Airlines Bringing
Africa Together
• Strategic succession planning has allowed Ethiopian Airlines Bringing Africa Together to
be prepared for different challenges, and also be resourceful enough to deflect them

1.2.6. Process

Ethiopian Airlines Bringing Africa Together has organized and systematic processes in place to
make sure that the business experiences consistent growth.

1.2.6.1. Operations

• All operations at Ethiopian Airlines Bringing Africa Together are clearly defined and
communicated to the employees
• Ethiopian Airlines Bringing Africa Together makes sure that employees are well trained,
and knowledgeable of all processes relates to operations
• All stages of operational processes focus on maintaining a high-quality level and standard
of the products
• Systematic process re in place for all operation – from procurement to the final sale of the
products
• All operational processes are maintained, checked, and uploaded through the internal portal
of the organization for supervisory purposes

12
• The use of online portals for operational processes also builds a strong backup for
managerial purposes at Ethiopian Airlines Bringing Africa Together

1.2.6.2. People Management

• Ethiopian Airlines Bringing Africa Together has also defined clear processes for people
management through streamlining its human resource management department
• Ethiopian Airlines Bringing Africa Together has defined guidelines regarding recruitment,
training, compensation management, and performance appraisal of employees
• All people related processes are not only communicated to the management and
supervisors, but also to employees to create a sense of transparency, and an environment
of trust
• Progressive people management systems and processes have allowed Ethiopian Airlines
Bringing Africa Together to keep its workforce motivated and happy – which reflects in
satisfied customers

1.2.6.3. Quality maintenance

• Ethiopian Airlines Bringing Africa Together also has defined policies and processes for
managing and maintaining quality
• All products undergo triple quality checks to ensure that customers receive the best product
• In addition to quality checks at the production and distribution level, the management has
also placed separate quality maintenance and quality check department
• The quality maintenance department has experts who make sure that not only the final
product but also the processes involved in producing the product were infused with quality

1.2.6.4. Store management

• Ethiopian Airlines Bringing Africa Together manages store management through stringent
and closely monitored policies and processes
• These processes relate to not only the floor and space design but also to the performance
of the employees at the store

13
 • The processes for store management also regularly monitor footfall and work on strategies
to increase footfall through different tactics, and changes in the store design and store
management
• The company also has a systematic process for customers who interact with the products
and feel them before making the purchase
• The final sale at the store is also clearly defined – for the employees and the customers
both
• Processes and policies are important for Ethiopian Airlines Bringing Africa Together for
maintaining quality of the products, and for ensuring that the company does not experience
any unnecessary expenses and costs

1.2.7. Physical evidence

The physical evidence is also important in the marketing strategy for Ethiopian Airlines Bringing
Africa Together as it works towards influencing the consumers in favor of the brand and its
offerings. The physical evidence for Ethiopian Airlines Bringing Africa Together include:

1.2.7.1. Store atmosphere

• The store design and management for Ethiopian Airlines Bringing Africa Together is
exciting and creative
• The store atmosphere makes the customers feel relaxed and comfortable –so that they can
interact with, and enjoy product offerings by Ethiopian Airlines Bringing Africa Together
at ease
• The store design is also important for Ethiopian Airlines Bringing Africa Together because
it controls the level and nature of experience and interaction that the customers have with
the product and the brand
• With company-operated stores, it is easier for Ethiopian Airlines Bringing Africa Together
to control and manage the store atmosphere to be able to positively influence customers
and to be able to appeal to them emotionally

14
 1.2.7.2. Packaging

• Ethiopian Airlines Bringing Africa Together has unique packaging, which is different from
other players in the industry
• Ethiopian Airlines Bringing Africa Together also has a vibrant touché to its packaging,
which is regularly changed in terms of colors and patterns
• The logo for the company is simple, and recognizable by the consumers easily
• The brand logo has also become a symbol of confidence, ambition, and aspiration for
consumers who use products by Ethiopian Airlines Bringing Africa Together
• The packaging of the products is sophisticatedly done and matches the brand image
developed and maintained by Ethiopian Airlines Bringing Africa Together

1.2.7.3. Website design

• The website design is simple and easy to use

• Ethiopian Airlines Bringing Africa Together has a customer friendly user interface which
allows easy navigation and understanding of its various product offerings
• The corporate website of Ethiopian Airlines Bringing Africa Together also has the brand
logo, and is packaged similarly to the products offered by the company
• The design patterns, and color change on the website with changes to the product packaging
to match various campaign needs and sale offerings

1.3. Alignment of Ethiopian Airlines marketing mix with vision and

strategies
Ethiopian has a vison to become the most competitive and leading aviation group in Africa by
providing safe, market driven and customer focused passenger and cargo transport, aviation
training, flight catering, MRO and ground services by 2025. As it has been discussed above the
organization following the right path to become the leading airliner in Africa in 2025. The airline
is undertaking every possible marketing mechanisms out there which makes it competent in the
global level. The discussions made above incorporated the alignment of each marketing mix
elements with the vision and strategies of eth organization.

15
 1.4. Ethiopian Airlines strengths and weaknesses in terms of the 7 Ps
1.4.1. Strengths
A) Significantly increased the number of air travelers carried, and tripled the carried
cargo with increased traffic to Europe, North America and Asia.
This is achieved due to organizations product Portfolio broadness, different SKUs, E-commerce
(Placement) as the company stocks products with online retailers such as Amazon and eBay, as
well as smaller local online retailers as well, digital marketing which includes social media
websites and portals, and corporate websites which allow the company to follow-up overall
business trends and engage with customers all over the world.

B) Its main hub Addis Ababa is very well located for the traffic between Intra Africa-
India/South Asia and Latin America-India/South Asia.
• As it can be seen from the statement above the location/placement is another marketing
mix element which is being addressed by the organization as a strength.

C) Operates the Youngest Fleet in Africa with an average age of 9.5

This where physical evidence comes to the game, as such product attribute attracts consumers
towards the airline. This another way offers functional benefits to consumers of the product use,
distinctive competitive advantage, and serve as a promise to consumer as an ego boost, confidence,
and security

D) Association with Star Alliance helps to strengthen position in the domestic and
international market
This is achieved due to their portfolio broadness moreover, this can be attained by uilizng every
singly marketing mix elements listed above.
1.4.2. Weaknesses
A) Low revenue from home market
• This shows that the company has weaknesses somehow in adopting Geographical pricing
to maintain consistent revenue growth by altering pricing in domestic markets based on
local currency value. Most of all, this may be due to lack of involvement of community
influencers in promoting its product range and invites them to use it themselves to see
benefits. Conventional advertising also seems to lack in this regard.

16
 • Slow complaint response; such acts may hurt the brand image of the company.

2. Specific Service Implementation

2.1. Customers and services delivered by Ethiopian Airlines
The Ethiopian airline developed different products and services that the company deliver to the
consumer. Accordingly, the company offers the following services and product;

• Ethiopian Airports
• Ethiopian Skylight Hotel
• In-flight Catering
• Ground Services
• Maintenance, Repair and Overhaul
• Aviation Academy
• Cargo

From this one can easily identify that everyone in the country or abroad in need of this products
and services is customer to the company. This includes mainly passengers, trainers, importers,
exporters, travelers, and etc. are customers of Ethiopian Airlines.

2.2. What changes/improvements are needed in service delivery process

• Ethiopian airlines need to pay more attention to the service quality dimensions of airline
tangibles, and image as these dimensions significantly impact customer satisfaction. This
may mean that service deliveries by the airline need to focus on this applicable service
quality dimensions
• The company needs to work on the security issues as the current cyber security situations
are endangering the whole aviation industry.

2.3. Risk reduction strategies

Ethiopian airline is one of aviation’s unsung success stories of the last decade. Its move to expand
both risked profits and was largely unforeseen by the industry and its competitors. While the
aviation business remains structurally volatile and prone to downturn, and while many others have
failed, Ethiopian airline shows that a combination of defensive, affirmative and innovative
strategies can ease the costs and challenges of expansion and mitigate the underlying risks of a

17
growth strategy. Its example suggests that risk mitigation is central to Ethiopia airline’s expansion
plans. Understanding the mix of approaches Ethiopian Airline pursued could well be instructive
to those who seek to emulate its success, even in industry contexts where the circumstances appear
to vary considerably.

Here is risk mitigation (risk management) forms in its expansion strategy followed by Ethiopian
Airline;

• Applying proven defensive strategies from other airlines (e.g. fuel hedging, trailing new
destinations conservatively, with set performance cut-offs);
• Applying proven affirmative strategies (e.g. participating in airline alliances, targeting
an increase in cargo in underserved markets);
• Applying innovative affirmative strategies, such as:
a. Through joint ventures, pioneering an original, secondary hub approach in
minor markets (e.g. Lomé in the West African nation of Togo) which helped
strengthen entry into a much larger sub-regional market (West Africa) to overcome
the potential political risks and protectionist tendencies;
b. Creating new aviation markets (initially, East Asia to Africa; later, an alternative
Asia to South America route, via Africa) to diversify the business and insulate the
company from localized market downturns

2.4. Strategic alternatives Ethiopian Airlines used when it faces mismatched

b/n capacity and demand
• Analyzing and modeling the trade-offs and implications of over- and under-
scheduling at the world’s busiest airports.
• Developing creative mechanisms for allocating capacity to the airlines that
value it most and will best use it to transport passengers.
• Integrated modeling of airline planning activities including demand forecasting,
pricing, and flight schedule optimization.
• Understanding the economic value of airport capacity and modeling airline
responses to capacity adjustments.

18
 2.4.1. Recommendations
• Identify the sources and extents of uncertainty surrounding the planning process, and locate
which uncertainties might be alleviated through increased flexibility in the design process.
• Move towards a stochastic approach that considers those uncertainties, particularly the
varying nature of traffic demand.
• Characterize the capacity of the different elements of the airport (including the related
economic factors) and identify the development objectives of the infrastructure system.
• Include the cost of delay, the cost of congestion, and the economic value of additional
airport capacity as part of the decision framework.
• Evaluate the effects of economies of density, scale, and scope in infrastructure extension.
• Consider the problem of risk and loss aversion of airport managers as well as the issue of
how expectations are framed as to the potential investment return.
• Appraise the effects of a marginal change in capacity, particularly at congested airports. •
Develop decision-making tools that improve policy and managerial choices, and involve
all relevant stakeholders

2.5. The gap between theories and practice regarding customer service
process in Ethiopian Airlines
Among the customer service judgment variables expressed through reliability, assurance,
tangibility, empathy and responsiveness, the responsiveness for customer’s complaints and ways
of communication is viewed by customers to be improved in a standardized way according to
previous reports made on the organization.

2.5.1. Recommendations
• The management should pay due attention to the interpersonal skills and responsiveness of
the employees and the trainings offered to them so as to bring their skills and
responsiveness to an excellent level.

2.6. Customers complain center when they encounter service failures in

Ethiopia Airlines
Ethiopian responds quickly to customers’ complaints. If customers have a complaint regarding our
service or our product, they want to hear from them. Information about where to direct written
complaint is on the website www.ethiopianairlines.com. They will acknowledge written

19
complaints at least within 30 days of receipt and will send a substantive response at least with in
60 days of receiving written complaint. As it can be seen 30 days are too long.

2.7. The gap between theories and practice regarding in Ethiopia Airline’s
service recovery strategy
The Airline does not use very fast way of information dissemination has to be developed and used
whenever the delay occurs. On the whole, the claimed practice of the Airlines regarding service
delivery failure is not supported by concrete evidence. There exists a gap between what the Station
Management Offices of the Ethiopian Airlines claim and what is the reality on the ground. It can
be deduced that the Ethiopian Airlines has well-organized manual on how to handle the customers’
service recovery complaints appealed. This Manual which was prepared based on the standards of
the International Air Transportation Association (IATA). In addition, the Company collects
customers’ feedbacks in order to measure its level of effectiveness in handling the issues under
consideration on a continuous basis. However, there was no concrete evidence on the ground
which could serve as justifications for the practice claimed.

2.7.1. Recommendations
• The Company should deal with customers’ dissatisfaction through well-organized and
designed feedback system to countercheck whether customer’s satisfaction is assured or
not. When the Airlines starts implementing proper feedback system such as toll-free
telephone lines, suggestion box and online feedback systems, it can minimize the areas of
deficiencies in the service recovery practice.
• The Ethiopian Airlines should enhance the best practice of customer service recovery to
the position that approaches its external image and shouldn’t lose the already built
goodwill.
• The management should identify unsatisfied customers on a continuous basis and should
give a distinguished service recovery to keep them stay. This action helps the Airlines to
attract other customers which, in turn, make the Company competitive enough in the
industry.

20