Service Innovation along the Chain of Service Process in Airline Business

This chapter aims to explore the airline service processes which relate to the issue of outsourcing for service innovation. With this, airline managements are able to identify the part of the service process that necessitates outsourcing. The decision to outsource some service processes to the supplier is intended to allow airlines to focus on their core business. This chapter looks at the service encounter approach to analyse the possibility of the innovation during service processes. The results indicate that there are four major groups who have experienced service encounters in which innovations originate and evolve. These four groups interact in the service process which identifies the fact that the service process can be outsourced and innovated (e.g. web-integrated system, mobile phone application for check-in, maintenance, repair and overhaul (MRO), multi-sorting baggage handling system). Airline management has been suggested to make improvement of the services offered by considering safety, cost aspects, and enhance customer service experiences. This effort is expected to come up with an airline business strategy that will create sustainable competitive advantage.