Airline business model transformation begins with customer segmentation

Making an active effort to understand customers' needs and concerns will give airlines a better idea of the changes required in their business models to deliver and receive value.

The starting point for realigning business models so that they address passenger needs is to agree on which passengers to target; acquiring detailed knowledge of their travel behaviour; and designing appropriate processes and committing resources - whether it's building new systems and facilities or training staff - to provide the right services.

This sounds fairly basic and easy. Yet, passenger frustration continues to exist and, in fact, in many cases it is increasing. Why?