Industrial Presentation at Air Asia

GREEN SERVICE MANAGEMENT IN HIGH TECH SERVICE INDUSTRY: A CASE STUDY AT AIRASIA

AIRLINEBy

Muhammad Azfar Abdullah (PhD), Boon Cheong Chew (PhD) and Syaiful Rizal Abdul Hamid (PhD)

Service sectors contributed 68.4% of total GDP.

How?Lean Concept: Cost, Quality, Flexibility

Issues: a)Lean Service is critical since respect for people and employment engagement have to be considered.b)Climate change is effects on human and naturec)Require a strategy that incorporates environment sustainability d)Industrial activities towards environmental pollutione)Changing the attitude of customers, employees, suppliers, and stakeholders

Motivation research on Green Service Management

Targeted to improve 2% until reach year 2020(IATA, 2015)

Airlines should encourage pursuing green initiatives and strive to improve their environmental footprint

1) Majority of the carbon emissionscarbon emissions are from transportationare from transportation sectors which road transport contributed 76% whereas aviation is 12%. Therefore, EU was proposed greenhouse greenhouse gas (GHG) emissions trading schemegas (GHG) emissions trading scheme in December 2006 to reduce GHG emissions produced by airlines.

2) Airlines should encourage pursuing green initiatives pursuing green initiatives and strive to improve their environmental footprint.

3) To date, there is limited researchlimited research area about green services in airlines industry and in any operations.

4) Since airline industry is a cross-border business, the compliance to global green and sustainability standards on air transport must strictly comply.strictly comply.

1) To identify the rationales for AirAsia company to pursue green services from developed country to Malaysia.

2) To investigate the current green service practices in the AirAsia.

3) To identify the green services challenges in AirAsia.4) To examine the strategies of AirAsia to overcome the

green service challenges.5) To develop a green service protocol for an airline

industry.

Service Strategy: develop, designing and setting action plan to achieve strategy.Service Design: design and development of services processes to meet the requirements.Service Transition: ensure the new/modified service design is appropriate into the operation environment. Service Operation: ensure, support and deliver service value to the customers.Continuous Service Improvement: building and sustaining competitive advantage among service sectors.

Service Research FrameworkEmphasize on Service innovation must fit in into service management by offering new or improved services to create value for customers, employees, business owners, alliance partners and communities.

How the research study was conducted?

Soc

ial R

esea

rch

Mixed method

Qualitative

Quantitative

1) Interview2) Observation3) Document Analysis

Survey Questionnaire

Research strategy

MethodologicalChoice

MethodsData Collection

Techniques

AirAsia & Malaysia Airport Holdings Berhad

GreenService

Management

A total of 20 respondents from AirAsia A total of 10 respondents from MAHB

Qualitative Analysis Quantitative Analysis

Objective 1: To identify the rationales for AirAsia company to pursue green services from developed country to Malaysia.



Objective 2: To investigate the current green service practices in the AirAsia.

1) Paperless2)Reduce carbon emission on transportation3) Reduce food waste on-board4) Reusable food packaging

Reduce energy consumption

1) Extra charges on extra baggage weight.2) Recyclable self-baggage tag.3) Paperless on baggage tag print.

Reduce energy consumption

Allocate integrated recycle bin

1) Recycling activities by cabin crew.2) Separate the waste into (non)recyclable waste.3) Use certified paper in magazines and menus.




Self – administered questionnaires409 respondents

7 main green activities were examined:ticket booking, check-in, baggage check-in, on-board services, aircraft operations, airport facilities, and airline green image.

green practices show that it has positive effect on the green airline image

green practices from AA still need to educate and bring awareness to promote the green conscious among the passengers

Items Detail Green PracticesFrequency (Percentage)

MeanStrongly Disagree

Disagree Neutral AgreeStrongly

Agree

Ticket Booking

1. Booking ticket online will reduce paper usage 1 (0.2%) 1 (0.2%) 61 (14.9%) 162 (39.6%) 184 (45.0%) 4.28

2. Offering pre-book meals to avoid food waste onboard 0 (0.0%) 3 (0.7%) 110 (26.9%) 160 (39.1%) 136 (33.3%) 4.05

3. Offer low fares to ensure every trip is full passengers 0 (0.0%) 1 (0.2%) 90 (22.0%) 166 (40.6%) 152 (37.2%) 4.15

Check-in

1. Mobile check-in will reduce paper usage for both customers and management

5 (1.2%) 8 (2.0%) 17 (4.2%) 120 (29.3%) 259 (63.3%) 4.51

2. Mobile check-in technology can reduce energy consumption at conventional counter

6 (1.5%) 6 (1.5%) 30 (7.3%) 136 (33.3%) 231 (56.5%) 4.42

Baggage Check-in

1. Heavier baggage will increase aircraft weight and consume more fuel

3 (0.7%) 3 (0.7%) 24 (5.9%) 178 (43.5%) 201 (49.1%) 4.39

2. Baggage tag can be reuse for another flight 0 (0.0%) 0 (0.0%) 18 (4.4%) 151 (36.9%) 240 (58.7%) 4.54

3. Pre-book baggage via online help to reduce energy consumption and save cost

0 (0.0%) 6 (1.5%) 28 (6.8%) 185 (45.2%) 190 (46.5%) 4.37

On-board Service

1. In-flight magazine, safety leaflet and menus will be recycle back every month

3 (0.7%) 6 (1.5%) 58 (14.2%) 184 (45.0%) 158 (38.6%) 4.19

2. On-board wastage is segregate by cabin crew into recyclable waste and non-recyclable waste

5 (1.2%) 15 (3.7%) 68 (16.6%) 146 (35.7%) 175 (42.8%) 4.15

3. AirAsia reducing waste onboard by not offering free food 54 (13.2%)53

(13.0%)90 (22.0%) 111 (27.1%) 101 (24.7%) 3.37

4. AirAsia servicing food by using recyclable plates and cups 5 (1.2%) 11 (2.7%) 41 (10.0%) 190 (46.5%) 162 (39.6%) 4.20

Aircraft Operation

1. AirAsia directly fly to the destinations without transit to save fuel and reduce CO2 emissions

14 (3.4%) 15 (3.7%) 82 (20.0%) 184 (40.1%) 134 (32.8%) 3.95

2. During landing to parking base require one engine to reduce amount of fuel consumption

13 (3.2%) 14 (3.4%) 160 (39.1%) 133 (32.5%) 89 (22.8%) 3.66

3. The engine frequently wash to keep engine clean and maintain fuel efficiency

1 (0.2%) 3 (0.7%) 113 (27.6%) 143 (35.0%) 149 (36.4%) 4.07

4. AirAsia using newer aircraft and new engine option for fuel efficiency and reduce CO2 emissions

5 (1.2%) 9 (2.2%) 126 (30.8%) 149 (36.4%) 120 (29.3%) 3.90

5. AirAsia have initiative to use biofuel to reduce CO2 emissions 5 (1.2%) 7 (1.7%) 143 (35.0%) 144 (35.2%) 110 (26.9%) 3.85

Airport Facilities

1. Recycle bin is provided at waiting area to segregate the waste 7 (1.7%) 33 (8.1%) 69 (16.9%) 156 (38.1%) 144 (35.2%) 3.97

2. Glazing window give natural light and save energy 5 (1.2%) 10 (2.4%) 63 (15.4%) 195 (47.7%) 136 (33.3%) 4.09

3. Skylights in the terminal serves as an alternative light source and reduce the use of electricity during the day

1 (0.2%) 14 (3.4 %) 46 (11.2%) 193 (47.2%) 155 (37.9%) 4.19

4. LED lights contain no toxic material and energy efficient 2 (0.5%) 8 (2.0%) 68 (16.6%) 185 (45.2%) 146 (35.7%) 4.14

5. Food waste from the kitchen will be recycle to become fertilizer 4 (1.0%) 16 (3.9%) 89 (21.8%) 150 (36.7%) 150 (36.7%) 4.04

6. Rainwater harvesting is collected to be used for flushing toilets and watering the landscape

3 (0.7%) 12 (2.9%) 90 (22.0%) 152 (37.2%) 152 (37.2%) 4.07

7. Electric vehicles in airport able to reduce CO2 emissions 3 (0.7%) 8 (2.0%) 74 (18.1%) 165 (40.3%) 159 (38.9%) 4.15

8. Unused equipment will be turned off automatically to save energy 2 (0.5%) 5 (1.2%) 59 (14.4%) 167 (40.8%) 176 (43.0%) 4.25

9. Environmental policy exposed in the airport aims to raise green awareness 3 (0.7%) 6 (1.5%) 61 (14.9%) 166 (40.6%) 173 (42.3%) 4.22

Airline Image

1. I have always had a good impression of AirAsia airline 10 (2.4%) 24 (5.9%) 110 (26.9%) 184 (45.0%) 81 (19.8%) 3.74

2. I believe that AirAsia has a better green image than its competitors 9 (2.2%) 36 (8.8%) 145 (35.5%) 154 (37.7%) 65 (15.9%) 3.56

3. In my opinion, AirAsia has a good green image in the minds of passengers 10 (2.4%) 40 (9.8%) 156 (38.1%) 147 (35.9%) 56 (13.7%) 3.49

4. AirAsia has positive attitude towards the environment 3 (0.7%) 23 (5.6%) 135 (33.0%) 174 (42.5%) 74 (18.1%) 3.72

5. Green policies often appear to increase environmental awareness 7 (1.7%) 23 (5.6%) 102 (24.9%) 181 (44.3%) 96 (23.5%) 3.82

Objective 3: To identify the green services challenges in AirAsia.

Challenges Findings Discussions

1) Cultural challenge The local culture is not familiar with the green concept. (less green awareness)

Both companies have to educate people on green awareness to create green behaviour

2) Management challenge

Selection of green material & green supplier is the barriers to pursue green service. Other than that, cost is the biggest challenges.

The assessment and evaluation from the management towards the green service was significantly meet the industrial practitioner perspective.

3) Infrastructure challenge

AA was struggling to improve and enhance the green infrastructure whereas MAHB already equipped with green infrastructure to maintain and sustain the environmental sustainability.

The durability of the infrastructure cause to pursue green infrastructure. In addition, the high cost of green infrastructure is the biggest challenge too.

4) Technological challenge

Developing skills and knowledge of the employees in order to handle the new technology

The lack of knowledge on green technology is the barrier for both companies

5) Policy challengeThe green practices should be grounded on the green policies in order to standardize to all management levels.

The industrial practitioners have the same view with the academic scholar to adopt green policies a standard towards the environmental sustainability.

Objective 3: To examine the strategies of AirAsia to overcome the green service challenges.

Strategy Findings Discussions

1) Developing staff holistically

Most of the interviewees are believed that through green training and green awareness would enhance in employees’ values and beliefs upon the climate change issues.

Through green training and green awareness will improve green behaviour, knowledge and experiences on handling the green technology.

2) Ingrained eco-profitability consciousness

Most of the interviewees understood that to pursue green technology required high investment cost.

the green service require high cost structure and at the same time it is depend on intelligent solution and creative innovation to reduce cost and environmental pollution.

3) Facilitate decisions and transformative initiatives

Majority of the respondents are agreed that the management should make decisions on transformation initiatives to provide green service in the marketplace

There are four green initiatives which are shared value, green policies, green supplier and green team are the antecedents to promote green service culture within the firm and forming green behaviour among the employees.

1) Service innovation and environmental sustainability should be embedded in service management because of climate change issue and in order to enhance customer experience

2) Service execution is the process that focus on marketing and customer-oriented programs to affect the sale. It is involve customer involvement to improve the quality of the entire service delivery and enhance customer experience

3) Lean service practices is a catalyst to green service in order to improve economy perspective and company profitability through the efficient use of resources and the reduction of redundant and unnecessary materials.

4) Green service emphasize on environmental benefit that why generally in any kind of service management could be further enhance and innovated with the appropriate and relevant advance technology.

5) Green service management refer to the entire of service process from green input (green supplier) until green output (recycling centre) that guided by green policies, developing green attitude and organizing green behaviour supported by green technology and green infrastructures in forming green corporate image of the firm.

Process Flow Technology / Item Description Airline

1.Ticket BookingOnline booking Purchase ticket flight via online AirAsia

Pre-order Meals Book meal through online AirAsia

2.Check-in

Mobile Boarding Pass Generate barcode from the mobile app AirAsia

Google glassUpdate passengers on their latest flight information, weather and local events at their destination and translate any foreign language information.

Virgin Atlantic

Roaming AgentMobile agents (airline staff scan the passengers ticket barcode)

Air France, EasyJet, America Airline

Smartwatch Boarding PassCheck-in through smartwatch (iPhone watch & Samsung Gear 2)

Air Berlin & Iberia

3.Baggage Check-in

Self Baggage check-in Automatic Baggage Drop AirAsia

Self Baggage Tag Slip in the printed barcode into baggage tag AirAsia

Electronic Baggage TagAutomatically generate new barcode based on booking details

British Airways

4.Security Check Body & item scanning Detect prohibited items into the aircarft Malaysia Airport

5.Immigration E-immigration Automated passport inspection Malaysia Airport

6.Waiting AreaIntegrated Recycle Bin Segregate the waste Malaysia Airport

Water Bottle Refill Station Refill water into passengers bottle San Francisco Airport

Process Flow Technology / Item Description Airline

7.On-board service

Onboard Smartphoneprovide latest passenger information, purchase of food and beverages in-flight

Delta Airline

On-board picnic service Reusable food box brought by passengers Purchase at Heathrow Airport

E-book & E-magazine electronic version of in-flight magazines Lufthansa & Singapore Airline

Green Makeover environmental-friendly leather and recyclable carpet Southwest Airline

On-board recycling Segregate waste on-boardLufthansa, Emirates, British

Airways & AirAsia

Lightweight trolley New design of trolley with 35% more lightweight Lufthansa

8.Immigration E-immigration Automated passport inspection Malaysia Airport

9.Baggage claim eTag & eTrackElectronic baggage label tracked by a Smartphone will be updated within 5 seconds

Air France

10.Custom Baggage Inspection Scanned the baggage before allowed to destinations Malaysia Airport

11.Leaving Terminal

RecycleRecycling newspaper, polystyrene meal boxes, plastics and cans at recycling machine

Frankfurt Airport

Green Gate Green project marketing on display panels Frankfurt Airport

Institutional Factors

the allocation of resources, green technology, organizational structure, market evaluation and personnel development are the fundamental criteria in the institutional factor to analyze for green service performance.

Process Factors

Emphasize on quality assessments, frequent training and technology diffusion were the factors to create a unique interaction between employees and customers. Thus, the highly skill workers are created to make the service process goes smoothly and improve customer perceptions.

Result Factors

investing in green material and green technology might turn into the long-term business sustainability. Furthermore, designing new service concept and new service offerings bring high potential in the marketplace to stay competitive and sustainable.

Current green practices from gate to gate (airline travel process, internal operations, aircraft operations & ground operations) - Qualitative

green practices show that it has positive effect on the green airline image. - Quantitative

5 green service challenges are identified (Cultural, Management, Infrastructure, Technology & Policy)

3 green service strategies (Developing staff holistically, Ingrained eco-profitability consciousness, facilitate decisions and transformative initiatives)

Proposed new green service protocol for airline to become green airline

Muhammad Azfar Bin Abdullah

Email: [email protected]

Linkedin:

https://www.linkedin.com/in/azfarabdullah

Primary research interest:

(a)Service Technology Management

(b)Green & Sustainability practices

(c)Quality Management

Boon Cheong Chew

Email: [email protected]

Linkedin:

https://www.linedin.com/in/bcchew

Primary research interest:

(a)Renewable energy development & deployment

(b)Clean technologies innovation & implementation

(c)Green & sustainability practices

(d)Human technology innovation & introduction

mailto:[email protected]

https://www.linkedin.com/in/azfarabdullah

mailto:[email protected]

https://www.linkedin.com/in/azfarabdullah/

Education

Industrial Presentation at Air Asia