TH2303

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EASTERN STATES AIR ENVIRONMENT CASE STUDY

Instructions (5 items x 15 points): Wait for your instructor to assign you a partner. Read the following case
and respond to the questions below.

Gloria Rooney assumed the presidency of Eastern States Air in the early 2000s after proving her ability as
Executive Vice President with two (2) other major airlines. Like most surviving airlines, Eastern States Air
weathered rough times during the mid-2000s. But as 2011 neared, Rooney was running an airline doing well.
Rooney wasn't satisfied with staying the course; she wanted to improve. And she thought she knew how.
Rooney saw that service in the airline industry had been in a state of steady decline for several years. More
and more passengers were flying than ever before, but their level of satisfaction had gone down. Crowded
airports, flight delays, overbooking, the occasional disastrous accident, and other factors had combined with
raising industry complaints to all-time-high levels when passenger flight miles were also at an all-time high.
In that atmosphere, Rooney finally had an opportunity to put into practice one of her most deeply held beliefs
about running an airline: "It's not what you do; it's how you do it." She repeatedly told her staff, "The 'what'
is the easy part. What we do is take passengers from here to there. The way we can distinguish ourselves
favorably from our competitors is in the 'how.'"
Eastern States Air became known as "the airline that put the Frills back into Flying." A small lounge was added
to all planes that could accommodate first-class passengers. For people not wanting to leave their seats, two
(2) complimentary drinks per passenger per flight delivered to the seat became the standard. An
internationally known chef was hired to supervise a food-service system that produced meals as close to the
gourmet level as was possible given the state of technology. Just before passengers exited each Eastern States
Air flight, they were surveyed to see how satisfied they had been with the basics of the flight and with the frills
that the airline had put back into flying. Early results of Rooney's campaign showed that passenger satisfaction
levels were off the chart at the top. In one astonishing month, the airline received no complaints about
anything. Rooney was overjoyed. "They said zero defects was an impossible standard in airline service. We
proved them wrong." The passengers who raved about Eastern States Air and flew the airline as often as
possible, sometimes simply for sheer pleasure, understood there was no free lunch. The Eastern States raised
their fares considerably to provide outstanding service, but some people happily paid higher prices.
Unfortunately, the number of passengers flying Eastern States Air took a disastrous drop. The ones who stayed
loved the airline. They became unpaid spokespeople for Eastern States Air, but there were not enough. Rooney
realized that the excellent survey results had somewhat deceived her. She had been surveying only those who
stayed, not those who left.
Surveying a broader cross-section of passengers, former passengers, and passengers of other airlines led
Rooney to change her strategy. "When you get right down to it," she said, "this is really a very simple business.
Steamships used to be a mode of transportation; now, they provide luxury cruises that end up where they
started. But in our business, people want to get from here to there as inexpensively as possible. In the current
market, cheap airfares are what people expect, and that's what we need to give them. But we won't forget
the loyal customers who have stayed with us. If we do this right, we can appeal to both groups."
To implement the new strategy, Eastern States Air cut back on the number of seats in first class but increased

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their size, along with first-class appointments and level of service, to retain the airline guests who had been
satisfied to have the frills put back into flying and were willing to pay for them. However, the economy became
the watchword throughout the rest of the plane. More seats were stuffed into each plane, the number of flight
attendants was reduced, and "meals" consisted of dry finger food, mainly pretzels. They not only added a fee
for luggage, they even charged for carry-ons. The Eastern States began to make a financial comeback, but the
number of complaints skyrocketed to record levels.
The following comments were typical:
"You are putting all your service into the front of the plane. What about those of us stuck in the back?"
"I've seen the animals in cattle cars treated better than this."
"I used to be able to get by a window or on the aisle; now, I always seem to get stuck in the middle seat. Why
is that?"
"I see that your industry is enjoying record profits. How about using some of that dough to give us a better
ride?"
"I'm a little over six feet tall, and I have to twist my legs to fit in that cramped space you give me."
"Seats too narrow, too close together. The flight attendant handed me pretzels just as we were landing."
"I've had better seats and better service on the cross-town bus."
"How can you charge me to stick my bag under my feet?"
Some of these disappointed and angry passengers took out their resentment on the flight crew. Morale among
the pilots and flight attendants began to drop. Rooney was baffled and disappointed. "You can't win in this
business. You give people what they want, and the complaints go through the roof." She was concerned about
the next board of directors meeting and what the board would say about her airline management.
Reference:
Ford, R., Sturman, M. & Heaton, C. (2019). Managing hospitality organizations: Achieving excellence in the guest experience. Sage
Publications

1. What are the components of the guest experience in this case? Identify and briefly explain.
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2. Based on the scenario, what do you think is the importance of understanding the guest's expectations?
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3. How would you perceive the quality, value, and cost of Eastern States Air products and services in the
following situations? Write your responses in the tables below.

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3.1 Addition of a small lounge to accommodate first-class passengers and two (2) complimentary drinks
per passenger per flight delivered to the seat, an internationally known chef supervises the food-
service system to give gourmet-level food, but the fares were raised to provide the service
consistently.
Quality Value Cost

3.2 The number of seats was lessened in the first class, but these were increased in size, and more seats
were added in the economy, making them too close together and cramped up; the number of flight
attendants was reduced, and the meals were reduced to dry finger food such as pretzels, and they charged
carry-on baggage and added a fee for luggage.
Quality Value Cost

4 Why is it significant for a tourism and hospitality organization to understand the quality, value, and cost
of products and services they offer to their guests?
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Rubric for scoring:

CRITERIA EXCELLENT GOOD FAIR POOR
10 8 5 3
The entire content is Most of the content was Few contents were insightful The content is not
insightful and organized, insightful and organized, and organized; few insightful and is
Content with complete supporting with complete supporting details were disorganized; no
details. supporting details. provided. supporting detail was
provided.

5 4 3 1
Organization of The entire idea is organized, Most parts of the idea Some parts of the idea are The idea was unclear and
ideas clear, and understandable. are organized, clear, and organized, clear, and disorganized.
understandable. understandable.
TOTAL

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