Customer segmentation in airline

When we talk about customer segmentation in airlines, the airline

industry usually segments the customers on the behaviour. The
underlying segmentation is generally based on the purpose of
trip rather than the customer’s age or affluence.
Therefore, on the basis of behaviour we have segmented the airlines
in 4 categories, which are:-
Business Travellers
Budget conscious travellers
Loyal travellers
Urgent Travellers

Let us look at the characteristics of the customers belonging to

each of the categories one by one and also look at the traits that
differentiate the categories from one another

Business Travellers:-

1. Business travellers are generally those customers who book

their tickets generally close to the departure date.
2. They care for convenience more than the cost or anything for
that matter.
3. They also generally demands flexibility in tickets of which
airlines can take advantage by increase the prices substantially
nearer to the departure date. Also analysing the customer
behaviour using digital marketing and increase the prices on a
per click.
4. These customers do not care a single bit about any refund
related policies but they just want the tickets at the short
notice.
 5. That too they require the best seats in the plane. When it
comes to convenience they do not settle for anything less and
for them the customer experience is the number one priority.
6. These are the customers who are smaller in ratio as compared
to customers belonging to other categories. They are small in
number but they are the most profitable customers for an
airlines business. From these customers airlines tend to make
of profit of around 75 percent.
7. These are the customers for whom time is very critical and they
are the ones who ends on buying meals and accessories in an
airline on a regular basis.
8. Therefore, it necessary for airline to maintain the same top
notch first class quality in service to business class customers
even if customer are small in number.

Budget conscious travellers:-

1. These are the customers who generally tend to book their

tickets well in advance. And in case of urgent bookings they
generally prefer other cheaper modes of transport rather than
air.
2. For these customers the cost of the tickets is the only major
priority. They even tend to adjust on quality but not on cost.
3. For them the number of tickets is generally predefined well in
advance and they don’t demand any flexibility in tickets as they
know that the cost of tickets would increase more.
4. These customers want a clearly stated policy for returns that
they would receive on cancelling the ticket. They need a
predefined schedule and price when it comes to ticket booking
5. The major priority is always cost. They can even adjust in quality
but not in cost.
6. These customers are most in number as compared to customers
in other categories. Though they are most in number they ony
generate little profit.
7. For these customers time is never a problem and therefore they
book their tickets well in advance.
8. These are the most common group of customers and therefore
it is necessary for an airline to keep a track of the purchasing
habits of these customers which would futher help them to
improve