Global airline alliances: Convenience or complaints?

Vantage point: Insights from cutting-edge research

Airline alliances — which help travellers fly seamlessly with different airlines during a single journey — often cause customer dissatisfaction due to variation in service received by a traveller during a single journey, says research by Siddharth Shekhar Singh of the Indian School of Business, Trichy Krishnan, Dean, School of Management, Bennett University, and Dipak C Jain, honorary president of Woosong University.

The researchers came up with four reasons that cause variations in service quality of different airlines in an alliance. First, being part of an alliance stretched airlines’ service capabilities. When new members joined, member airlines were forced to cater to higher traffic flows with limited infrastructure. Second, airlines differed in policies related to extra-baggage allowance, miles accrual, missed flights or lost baggage. Third, every airline varies in the provision of “additional” services to its customers. Finally, in times of emergencies related to missed flights and lost baggage, lacking access to information that is available with the home airline, a partner may simply not be in a position to help customers.

Krishnan, Singh and Jain find that differences in services provided by member airlines are a system-wide issue across the entire alliance, and not one that can be handled by individual airlines. This problem can be successfully solved only if the governing board of the alliance takes the lead to fix the optimal service level rather than let the member airlines decide it.

Indians have highest exposure to online fraud in APAC

India stands amongst the top four countries in the Asia Pacific region with highest digital adoption, digital banking account sign-up and utilisation, while the country’s consumers also show high satisfaction to companies’ efforts in handing fraud, according to Fraud Insights Report 2017 released by information services company Experian. India also remains the only country in the top four with high fraud incidents, indicating a possible gap between perception — the lack of awareness and understanding of consumer about methods in which frauds occur online — and truth, that is the actual occurrences of fraud itself.

The report in its second edition analyses fraud trends across 10 countries in Asia Pacific and delivers insights from both the corporates as well as consumers. It emphasises on the prevalence of identity theft and other fraud trends in India in relation to sectors such as financial services (including insurance), retail and telecommunications. Of the three surveyed sectors, Indian retail merchants experience high fraud rates of as much as 5 per cent of total gross merchandise value. The various methods devised by fraudsters leading to such losses are: 19 per cent return frauds, 11.6 per cent clean fraud and 11.1 per cent card not present fraud cases.

“These insights provide the truth vs. perception of a companies' ability to manage trust and the impact on their business. With this knowledge, companies can better understand, engage and empower customers themselves wherever possible as their behaviours are often a source of personal data breach that can be used by fraudsters,” said Vaishali Kasture, country head, Experian India.