analysis the service gap of biman bangladdesh airlines

A Report on

Analysis the Service Gap of Biman Bangladesh Airlines

An Empirical Study

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UNITED INTERNATIONAL UNIVERSITY

Services Marketing (MKT-4102)

Report on

Analysis the Service Gap of Biman Bangladesh Airlines

An Empirical Study

Submitted To: Mirza Mohammad Didarul Alam

Assistant Professor

School of Business and Economics

Submitted By:

Name ID Class Serial

Md. Shahaid Jurain Alam 111 121 645 32

Proma Rahman 111 121 069 14

Suborna Deb Roy 111 121 587 29

Hasanul Haque 111 113 087 12

A.K.M. Fazla Rabbi Khan

Section:A

Date of submission: 31st December, 2015

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Letter of Transmittal

31st December, 2015

Mirza Mohammad Didarul Alam

Assistant Professor

School of Business & Economics

United International University

Subject: Letter of transmittal for term paper.

Sir,

With due honor, We wish to inform you that it was a matter of great pleasure as well as

learning to prepare report on “Analysis of Service Gap of Biman Bangladesh Airlines.”

under the course of Services Marketing. To prepare the paper, we collected and studied

materials in due time and analyzed these and eventually finalize the term paper.

Actually we have enjoyed more in preparing this term paper and develop new business. We

have worked hard to prepare this report. So we would highly oblige if the content of the

report have been acceptable to you.

Though we have put our best efforts yet it is very likely that the report may have some

mistakes and omissions that are unintentional. So, we hope that the report will worthy of

your consideration.

Yours obediently,

Md. Shahaid Jurain Alam

On behalf of the group

……………………...

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ACKNOWLEDGEMENT

At the very beginning we would like to express our deepest gratitude to Almighty Allah for

giving us the strength and the composure to finish the task within the schedule time. Our

sincere gratitude goes to our honorable teacherMirza Mohammad Didarul Alam, instructor

ofServices Marketing in United international University.

The opportunity that Mirza Mohammad Didarul Alamsir has given us was really help full to

get much informative. Therefore, we consider us as very lucky individuals as we were

provided with an opportunity to be a part of it. We are also grateful for having a chance to

explore so many knowledge for making this report. Without his support and encouragement

this assignment would not possible such an endeavor to enhance our practical knowledge

about the real situation.

We would like to show our warm-hearted gratitude to the Marketing department of Biman

Bangladesh Airlines Ltd; which has provided me with great deal of information, adequate

data and lastly co operated us for the accomplishment of this report successfully. Finally,

last but not the least, we would like to thank each and every Staffs of the different marketing

section of Biman specially Mr. Aftab Uddin Sharkar (Manager tariff), Mr. Ali Osman Nur

(Assistant Manager tariff),Md Shamsul Huda (Commercial Officer Tariff) Md. Rafiul Alam,

Md. Hafizul Islam,Mr Maruf (Assistant Manager HR) for their kind assistance regarding the

report Without whom it would not possible for us to complete this difficult task, We got all

necessary guideline, cooperation, advice from them to complete this complicated task.

We are very much thankful to Biman Bangladesh Airlines, its management, especially

employees of Marketing & Sales for their cordial support to prepare this difficult study with

important information and data.

Thanks all from core of our hearts.

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EXECUTIVE SUMMARY

Biman is the national flag carrier, which is fully owned and operated by the

Government of Bangladesh. The corporate body of Biman, namely ‘Bangladesh

Biman Corporation’, is doing business as Biman Bangladesh Airlines under the

Ministry of Civil Aviation and Tourism. Biman was established as of a corporation

on 27 October 1972 with a vision to protect Biman Bangladesh Airlines ltd. in the

aviation market as a world-class airline.

Biman has experienced man power that it is really a good strength though the

management of Biman cannot work independently because of government

intervention. At the same time considering the global standard of International

Airlines, Biman is lagging behind. The staffs are not provided with modern

technologies like Computer, internet facilities etc. The labor passengers have an

extreme attraction for the national flag carrier for its home like hospitality. The

returning residents also prefer national carrier for home essence. But the free entry of

mega carriers like Saudia, Gulf, Etihad etc. is creating threat for International market.

Even domestic private airlines are chasing with the similar pace of Biman.

Currently, Biman Bangladesh Airlines offers 16 Domestic and 102 International flights

through its 13 local and 28 worldwide branch offices. A two-class service (J and Y) is

operated on Biman's wide-body airliners and a single class service is available on the

smaller aircraft. Biman also operates a cargo service using the cargo holds of its passenger

aircraft to ship freight to international destinations. It has established Cargo Village at

Shahjalal International Airport where the cargo is packaged and labeled before being loaded

onto its aircraft. In addition to normal passenger the annual Islamic pilgrimage to Mecca for

the Hajj is undertaken by thousands of Bangladesh’s predominantly Muslim population. Air

fare pricing is a complicated job.

Bangladesh has an aviation market of about 3.5 million passengers in respect of passenger

travel and about 10 million tons in respect of cargo .The market is expanding rapidly but due

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to the different cause Biman has lost its reputation and carrying less portion of the market.

Biman Airlines is very much bureaucratic which makes delay in providing service to its

customers. Nepotism is one of the barriers for not getting right resources. It is a good to

mention that the management of Biman has realized the necessity of technological

improvement for smooth operation although it’s too late. The Board is not accountable to a

higher authority because the Minister of Aviation is the Chairman of the Board himself.

Biman has suffered from being politicized in many aspects. Corruption in different sectors

of Biman is another significant barrier that is making it difficult for the organization to break

away from loss making ways. Again, delay in flight has been a common phenomenon for

Biman. To help Biman move out from its old-fashioned way of management, to

accommodate the future opportunities and to avert the current crisis and threats, it is

extremely essential for Biman to undertake some immediate initiatives such as policy revise

modernization, proper planning, experienced and professional manpower and take a

mechanism to stop corruption. We analyze the gap between expectation and perception

based on Reliability, Responsiveness, Assurance, Empathy, and Tangible. Than we conduct

t-test and p-test from that we know the gap between the customer’s expectation and

perception under each dimension mentioned above. At last, we have done regression and

correlation analysis to know the effect of each dimension over another and ultimately over

customer satisfaction.

In this report, some suggestions have been made. It is really tough to comment any issue

perfectly in this small work. But the strong and active support of our dissertation supervisor

Mirza Mohammad Didarul Alam, was our main inspiration to accomplish it. We express our

heartfelt gratitude to her.

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Table of Contents

Chapter # 1...............................................................................................................................................................2

1.1 Introduction............................................................................................................................................2

1.2 Background of study...............................................................................................................................2

1.3 Objective of study...................................................................................................................................2

1.3.1 Broad objective..............................................................................................................................2

1.3.2 Specific objective...........................................................................................................................2

1.4 Methodology of the study........................................................................................................................3

1.4.1 Sources of the Data........................................................................................................................3

1.5 Limitation of study..................................................................................................................................3

Chapter # 2...............................................................................................................................................................4

2.1 Literature Review...................................................................................................................................4

Chapter # 3 Brief Description about Gold Gym....................................................................................................11

3.1 Goal......................................................................................................................................................11

3.2 History of Gold Gym.............................................................................................................................11

3.4 Timing...................................................................................................................................................11

3.5 Equipment.............................................................................................................................................11

3.6 Trainer..................................................................................................................................................12

3.7 Services.................................................................................................................................................12

3.8 Membership process.............................................................................................................................12

Chapter # 4 Analysis & Findings...........................................................................................................................13

4.1 GAP Analysis........................................................................................................................................13

4.2 Correlation...........................................................................................................................................15

4.3 Regression analysis..............................................................................................................................16

Chapter # 5 Recommendation & Conclusion.........................................................................................................17

5.1 Recommendation..................................................................................................................................17

5.2 Conclusion...................................................................................................................................................17

Chapter # 6.............................................................................................................................................................18

6.1 Reference..............................................................................................................................................18

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6.2 Appendix...............................................................................................................................................18

Chapter # 1

1.1 Introduction

Biman Bangladesh Airlines Ltd. The national flag carrier of Bangladesh has started

itsjourney from scratch virtually with no aircraft, no ancillaries. It came into

operation immediately after the war of independence. Despite many odds on its

journey towards a long and challenging way to progress, Biman has been able to

establish its reputation as an airline of welcome smile and an ocean of hospitality.

Biman now carries the national flag of Bangladesh to South Asia, South-East Asia

and Far-East, Gulf and Middle-East region and European Countries. A steady

progress has been made with better services ensuring increased passengers. To make

Biman passengers feel “once Biman always Biman” the airline has recently brought

in some qualitative changes in its service concept. Biman has been aiming in

achieving the goal of being truly international commercially viable airline of the

region with its warmth and friendliness, care, safety record, traditional hospitality

and comfort of the services it offered. Biman is now flying even higher with great

pride around the globe with the bi-color, the nation’s flag. In this report we conduct

an empirical survey about the service expectation and perception of Biman

Bangladesh. It is very essential to know about customer, what their expectation is

and what they had perceived from a firm. Here, we find the gap and resolve the

problem to make customer more satisfied. We analyze the gap between expectation

and perception based on Reliability, Responsiveness, Assurance, Empathy, and

Tangible. Than we conduct t-test and p-test from that we know the gap between the

customer’s expectation and perception under each dimension mentioned above. At

last, we have done regression and correlation analysis to know the effect of each 8 | P a g e

dimension over another and ultimately over customer satisfaction. At the end of the

report, there are some recommendation given that may help to Biman Bangladesh to

satisfy their passengers more easily.

1.2 Background of study

We are the students of the School of Business and Economics, under the course of

Services Marketing, as our assigned task is to find out the gap between customer

expectation and perception of Biman Bangladesh Airlines. To complete this we took

survey based on selected questionnaire and to analysis the gap between perception and

expectation. Then we had made hypothetical test and find the gap. We had also done

regression analysis and correlation analysis. Based on this analysis we found where we

need to take corrective action where the gap is to achieve the ultimate goal that is

minimizing the gap between expectation and perception. We have identified the level of

satisfaction and dissatisfaction for the services what they get from the service

organization. The gap between customer expectation and perception has been identified

with the help of SERVQUAL Model, where there are five dimensions- Reliability,

Responsiveness, Assurance, Empathy and Tangibility.

1.3 Objective of study

Every study, there must be some objectives. In our report, there also some objective of the

study on “Analyzing the Service Gap of Biman Bangladesh Airlines”. That is, about the

issues of customer services, their expectation, their perception etc. that we have traced for

the report. Basically, there are two types of objectives of the study. One is the broad

objective and the other one is the specific objective.

1.3.1 Broad objective

From this study we want to know about the service quality of the Biman Bangladesh

Airlines on the basis of five dimensions and effects of those dimensions on the customer

satisfaction.

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1.3.2 Specific objective

To measure the customer expectation about the service of Biman Bangladesh

Airlines.

To measure the customer perception about the service of Biman Bangladesh

Airlines.

To find out the gap between customer expectation and perception of Biman

Bangladesh Airlines.

To analyze the relationship between (co-relation analysis) the dimensions and

customer satisfaction.

To identify the relationship of regression analysis..

1.4 Methodology of the study

The task is to find out the gap. So, we want to know five dimensions of services quality of

Biman Bangladesh Airlines. WE conduct T-test, P-test and GAP analysis and analysis all

the data to get a result. Lastly, we conduct Co-relation and Regression analysis and find out

the relationships among the dimensions.

1.4.1 Sources of the Data

There are two sources of collecting information which are primary and secondary source.

For doing this report we depend on the both primary and secondary sources of data.

Primary

a) Target population: Passengers of Biman Bangladesh Airlines

b) Sample size: Fifty both male and female

c) Sample technique: Random sampling technique.

d) Data collection period: 24th November, 2015 to 18th December, 2015.

1.5 Limitation of study

The main limitations of this study are the constraints of resources, access and time. It is

limiting the study of the island with airports. The choices of sampling method depend

entirely on the resources available.

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Time Limitation: Very limited time was one of the most faced obstacles while

preparing this report. The duration of preparing the full report in nearly one

month, which is very insufficient to understand about the customer expectations

and their perceptions. Due to time shortage, details of many aspects of the

services of Biman Bangladesh Airlines have to ignore in this report.

Place Limitation: It is not possible to reach everyone as well as all people to

collect the information. We have collected the information from the customers in

Dilkusha,motijhil and Mohammadpur, krishi market.

Chapter # 2

2.1 Literature Review

1. International Journal of Management and Strategy

(IJMS) 2012, Vol. No.3, Issue 5, July-Dec.2012

Title: CUSTOMER SATISFACTION MEASUREMENT IN AIRLINE SERVICES: AN

EMPIRICAL STUDY OF NEED –GAP ANALYSIS

AUTHOR: Dr. Makarand Upadhyaya, Associate Professor (Marketing), College of Business

Management, Jazan University, Saudi Arabia.

In his study Dr. M Upadhaya has focused on customer complaint and its quick resolution. In

Airlines industry customer complains plays a vital role in customer satisfaction. He focused

on 2 types of complain, controlled complaint are those which is under control such as fare

related problems, flight delays, misbehaviour by staff, etc. and uncontrolled are those such

as weather problems, technical fault, etc. So for solving these problems trained staff is

required who can effectively minimize or handle these problems.

2) International Review of Business Research Papers

Volume 6. Number 6. December 2010 Pp.48 – 65

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Title: A Comparative Study between Indian Public and Private (Low Cost) Airlines With

Respect To Their Passenger Service

Author: Dipa Mitra.

In her study she has given importance on healthy relationship between customer and the

Airline service provider. The Airlines Industry today should aim not only at delivery of the

service tothe passengers, but they should also focus on satisfying the passengers with the

services. They need to know the customer preferences and should bring changes according

to that. Then the customer will be satisfied. Some of the private players are very much

concerned about their passengers as well as some of them are implementing low price

strategy to attract the passengers. So in this competitive age, the success of Airlines is very

much dependent on the passenger service provided at all levels, after and during the journey

to make their passengers satisfied.

3) ZENITH

International Journal of Multidisciplinary Research

Vol.2 Issue 2, February 2012, ISS N 2231 5780

Title:A STUDY ON SERVICE QUALITY AND PASSENGER SATISFACTION

ON INDIAN AIRLINES.

Author: R.ARCHANA and DR.M.V.SUBHA

They have studied the factors which influences on passenger satisfaction. They have

identified that Cuisines provided, seat comfort, safety these factors have an important role in

customer satisfaction. They have also found that customer satisfaction depends on personal

entertainment, which is an important factor in flying decisions of passenger. According to

their study online seat booking, call centre facilities and reservation/cancellation is highest

influencing factor in flying decisions of the passengers.

4) Title:Application of Customer Relationship Management in Airline Industry

Authors:Mohammad. J. Tarokh and Mahmoud Majidi.

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According to Mohammad. J. Tarokh and Mahmoud Majidi customer relationship

management has a vital role in satisfaction of Airlines services. The marketers should

understand the customer needs and wants to satisfy those needs. For that building a good

relation is very important with the customers. They have talked about Airline e-CRM which

provides an understanding of customer behaviour and enables airlines to measure results of

marketing changes. E-CRM supports fully digital information exchange between airlines

and customers, reduced cost of a customer contact. It also helps to dynamically adapt to

customer behaviors.

5) Title: “The Impact of Expectation & Perception on Customer Satisfaction in

Airline Industry (A Case Study of Mahan Air)”

Authors:Dariush Rafati and Peyman Shokrollahi.

In their studies they have talked about the gap between customer expectations and

perceptions about services. They have said that according to the educational level the

expectation of the customer differs. They have also said that gap between customer's

expectations and perceptions in airline service attributes help top managers to

understandwhich services are important to customers and which services are consistent to

customers’ perceptions.

6) INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN

BUSINESS

VOL 4, NO 6. OCTOBER 2012.

Title:IMPACT OF EMPLOYEE MOTIVATION ON CUSTOMER SATISFACTION:

STUDY OF AIRLINE INDUSTRY IN PAKISTAN.

Authors:Muhammad Bilal Ahmad, Ejaz Wasay and Saif Ullah Malik.

Employee motivation is an important factor, which may be directly or indirectly related to

customer satisfaction. If the employees are well motivated then they perform better job. And

if the employees work efficiently and provide services to the customer then the customer get

satisfied.They have said employee motivation is affected by both personal characteristics as

well as workplace environment.If the employees behave nicely with the customer then the

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customer feel good and they think the company is showing respect and providing value. And

the employee behaviour will be good when they will be motivated and there is a healthy pay

system and work environment.

7) Australian Journal of Basic and Applied Sciences, 5(11): 718-723, 2011

ISSN 1991-8178

Title:Customer Satisfaction Delivery In Airline Industry In Malaysia: A Case of Low Cost

Carrier.

Authors:Jayaraman Munusamy, Shankar Chelliah, Sivamurugan Pandian.

They have found that the factors such as the pre-flight services which they are proving,

customer relationship management and cabin environment and in-flight services that

customers are getting influence customer satisfaction. If these are very good then customer

gets satisfied. The customers will be satisfied if the cabin facilities, baggage systems are

well maintained. Customer satisfaction also depends on how they are maintaining

relationship with the customers. How the staffs are behaving with customer, entertainment

facilities, timing plays a key role in customer satisfaction in Airlines Industry.

8) Open Access Scientific Reports. Degirmenci et al., 1:5

http://dx.doi.org/10.4172/scientificreports.294

Title:Customer Satisfaction Measurement in Airline Services Using Servqual.

Authors: Elif Degirmenci, Huseyin Basligil, Ahmet Bolat and Yavuz Ozdemir.

In their study they have focused on service quality, CRM, Loyalty, Airline Service Quality

etc., which play an important factor for customer satisfaction. To satisfy the customer the 14 | P a g e

http://dx.doi.org/10.4172/scientificreports.294

Airlines Company should maintain good relationship with them. It will be possible when

they will provide the best quality service to the customer. The service provider should take

care of in-flight services, it has to be improved. Then the loyalty of customers will be

increased. Customer loyalty depends on the educational level of the customer.

9) CFS AVIATION INDUSTRY CUSTOMER SATISFACTION SURVEY – 2010

In this report the study was conducted in Nigeria. It is found that they prefer advance ticket

booking services and they have bad experience. So to satisfy the customer the Airlines

Company should take care of this issue. Customers also think about safety and security in

flight. So the marketers need to improve the security system. The service providers need to

make a smooth process of ticket reservation and ticket cancellation. Customer satisfaction

mainly depends on these above issues.

10) Title: Improving Customer Satisfaction in an Airlines Industry.

By: BREAKTHROUGH MANAGEMENT GROUP INTERNATIONAL

According to the report the report Cabin appearance Staff should be trained well. They

should also give importance to build effective communication in all locations.

11) Title: Measuring Customer Expectations of Service Quality: case Airline Industry

By:Ekaterina Tolpa

Date: 06.06.2012

According to the report it is found that the importance is given on the quality of the services

in order to satisfy the customer. When the expectations of the customer get fulfilled then

they become satisfied. Service quality includes customer safety, flight frequency, reliability

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etc. They should also focus on customer segmentation. When the flight frequencies get

increased and safety measure is available then the customers get satisfied.

12) Customer Satisfaction Heterogeneity and Shareholder Value

Rajdeep Grewal

Alka V. Citrin

Murali Chandrashekaran

Revision Requested, Under Second Review: Journal of Marketing Research

October 2008

In this researcher paper researcher has describe the importance of investment. They have

done a research which says that shareholder value and the growth of company depends upon

the investment done by the company i.e. in which sector or in which department they has

invested its money. In this research they have adopted the view that customer satisfaction is

a key marketplace asset, they have tested two conjectures: (a) objective service quality and

advertising impact not only the level of customer satisfaction, but also the heterogeneity in

this asset get impacted, and (b) Satisfaction heterogeneity will decrease the utility of the

satisfaction asset in driving shareholder value, and also influence the contemporaneous

volatility in shareholder value. They have done this research using secondary data from

diverse sources describing the dynamics within the U.S. Airlines Industry over a 9year

period from 1997- 2005. They come to conclusion that increasing levels of satisfaction

heterogeneity serve to reduce the volatility in shareholder value.

13) International Air Transport Association (IATA)

Montreal — Geneva

Vision 2050

Singapore, 12 February 2011

Giovanni Bisignani - Director General & CEO – IATA

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The whole research is done on the future problems, need, requirement, changes that will be

face by aviation industry. The problem describe in this research is that the number of

passengers increasing day by day and the cost of travelling has decrease, if this the scenario

now what will be in 2050. So the modification that aviation industry should do for their

benefits are mention and research has been done on these things. Solution trace out by the

research is that all the company in this industry should be united and there should be no

competition, all should go hand in hand. Even they should pursue government to join with

them. There should be change in the leadership. They said that last decade has shown that by

working together with a common purpose, change is possible and also flexibility and

openness to change will mark the way forward.

14) Linkages between customer service, customer satisfaction and performance in the airline

industry: Investigation of non-linearity and moderating effects

Adams B. Steven*

Yan Dong

Martin Dresner

Robert H. Smith School of Business, University of Maryland, College Park, MD 20742

This research paper investigates the linkages between customer service and customer

satisfaction, and firm performance in the U.S. airline industry. They had examined the

moderating effects of market concentration and firm dominance on the service-satisfaction-

performance relationship. This research says that customer satisfaction and airlines

profitability are dependent and they are affected by the market. Research says that

considering customer satisfaction and customers services airlines industries can increase

their profit.

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Chapter # 3

Brief Description about Biman Bangladesh Airlines

3.1 Company Summary

Vision:

To protect Biman Bangladesh Airlines ltd. in the aviation market as a world-class airlinesMission:

To provide safe, Reliable, Efficient and Economical air transport services and to satisfy

customer’s exceptions while earning sustainable profit and continuing to be a caring

employer.

Goal:

To provide and develop Safe, Efficient, Adequate, Economical and properly coordinated

air transport services, internal as well as international.

Name and logo:

Biman Bangladesh Airlines

White stork flying across the red sun.

Head Office of Biman:

“Balaka Bhaban”, Biman Head Office, Kurmitola

Dhaka-1219, Bangladesh

Slogan:

Your Home in the Sky

Website:

www.biman-airlines.com

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http://www.biman-airlines.com/

3.2 History of Biman Bangladesh Airlines

Biman Bangladesh Airlines was established on 4 January 1972 as Bangladesh's national airline

under the Bangladesh Biman Ordinance .The initiative to launch the flag carrier was taken by 2,500

former employees, including ten Boeing 707commanders and seven other pilots of Pakistan

International Airline s , who submitted a proposal to the government on 31 December 1971

following the independence of Bangladesh. The airline was initially called Air Bangladesh

International but was soon changed to its current name.

On 4 February 1972, Biman started its domestic service on the Dhaka–Chittagong, Dhaka– Jessore

and Dhaka–Sylhet routes with a World War II vintage Douglas Dakota and Douglas DC-3, both

gifts from the Bangladesh Air Force. On 10 February 1972, Biman experienced its first accident

when the Douglas DC-3 crashed near Dhaka during a flight test, killing all five crew members. On

4 March 1972, Biman started its international operations with a once-a-week flight to London using

a Boeing 707 chartered from British Caledonian. Eventually in the first year of operation, Biman

operated 1,079 flights carrying just over 380,000 passengers.

The airline was wholly owned by the Bangladesh government through the Bangladesh Biman

Corporation since its inception. In 1977, Biman was converted into a public sector corporation

which afforded Biman limited autonomy, led by a government-appointed board of directors. The

authorized share capital was increased to BDT 2 billion in 1987, and Biman was transformed into a

public limited company, the largest in Bangladesh, in 2007.

3.3 Product/Service Offering

An airlines mainly sells service. It carries passenger or cargo or both from one point to another

point. Biman Bangladesh offers 16 Domestic and 102 International flights through its 13 local and

28 world wide branch offices. From the last 2 decades Biman carried its passengers by using the

following four types of aircrafts:

McDonnel Douglas Dc-10-30 Airbus Indstries A310-300 series Fokker f-28 British Aerospace ATP

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Biman Bangladesh Airlines basically provides two categories of services: -Domestic Flights-International Flights

Domestic flights:Currently Biman has the following domestic flights:

Sylhet Chittagong Cox’s bazaar

International flights:Bangladesh Biman provides 51 departure and 51 arrival fights per week.It has the following

International flights from Dhaka to:

Abu Dhabi Bahrain Hongkong Singapore MumbaiDelhi Bangkok Dubai New York FrankfurtJeddah Calcutta Karachi Doha KuwaitLondon Katmandu Kualalumpur Paris TokyoRiyadh Rome Brussels Muscat Yangoon

3.4 Management

The airline has been wholly owned by the Bangladesh government through the Bangladesh Biman

Corporation since its inception. In 1977,Biman was converted into a public sector corporation

which afforded Biman limited autonomy, governed by a board of directors appointed by the

government .The authorized share capital was increased to Tk 2 billion in 1987,and Biman was

transformed into a public limited company ,the largest in Bangladesh, in 2007.

3.5 Operational network organ gramBiman has a Multi level organization structure. The board of directors is the highest

authority .Where CEO is the top management. It has about 5 layer management supervision.

Authority is delegated from highest to downward level. The chart in the next page the current organ

gram of Biman.

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Board of Directors:

CEO

Director Director Director Director Director Director Directormkt & sales Customer admin. finance e store & project& flight

service eng. planning Oper.

Gm GM Gm cargo GmDist. sales sales Marketing

CountryDy. GM. District Manager Dy. G.MSales Manager export Marketingpromotion

Dy G.M

sales Manager Managerimport reservation

Manager ManagerPax

ManagerCounter & cargosales Market

Research

ManagerAgencyinterline

ManagerTariff& IATAaff.

ManagerCommunication

Figure 1: Biman Organization Structure

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3.6 PerformanceBangladesh has an aviation market of about 3.5 million passengers in respect of passenger

travel and about 10 million tons in respect of cargo .The market is expanding rapidly .Biman

being the national carrier used to carry loin portion of this market but due to the different

cause Biman has lost its reputation and carrying less portion of the market. The different

charts in the following pages will show the performance of Biman.

Sources wise Contribution:

Source wise Contribution

Source Year 2007 2008 (BDT in Lac)‐Passenger 185241.00Cargo 30257.00Ex Baggage‐ 3918.00Total 219416.00

Figure 3: Revenue earning region wise

From the above figure, there is brief picture of the performance of Biman Bangladesh

Airlines. Currently, Biman is not performing well as per expectation. The present Prime

Minister of Bangladesh, Sheikh Hasina, has taken some initiatives to re-design Biman. But it

is a matter of regret that Biman management has not taken remarkable action to improve the

condition even after the urge of Prime Minister. A recent article by Abdullah Mohibuddin,

former DC10 flight engineer, has clearly mentioned the recent scenario of Biman. Let us take

you in to the article:

“In her speech the Prime Minister called for stern action against corruption and

irregularitiesin Biman. She asked Biman officials to start Dhaka-New York flight and also

introduce e-ticketing as this would help stop the irregularities involving ticket booking.

Biman management promised her that New York flights would be resumed in March, 2010.

But we are yet to see any sign of it. If anyone visits Biman's website, he/she will find

nothing about online ticketing, but a bunch of useless information. Biman management will

always have an answer: “we are trying our best”. Ultimately, this is a sort of dileman.

Websites are updated on a real time basis now and some airlines even offer boarding cards

through their website so passengers can go straight to the Airport immigration counter. It is

obvious that the automation of the ticketing process will save Biman on time, human

resources expenses and efficient tracking system to prevent misuse of papers with more

effectiveness.

The Prime Minister has told the present Biman management what is needed for Biman to

improve. She outlined all important areas in brief. They are as follows: i) passenger handling

on ground and in air, ii) introduction of Internet ticket booking, iii) on-time service. That is

the availability of the aircraft, IV) old aircraft either converted to carry cargo or used for Hajj

& chartered operations for recovery of loss V) curb corruption in the organization.

3.8 Services

Hajj-flight:In addition to normal passenger the annual Islamic pilgrimage to Mecca for

theHajj is undertaken by thousands of Bangladesh’s predominantly Muslim population.

Biman carries a loin portion of these pilgrims. In 2002, the government os pened up the

service to private operator Air Bangladseh. The initial private flights were plagued with

delays, with both outgoing and return flights postponed for as long as nine days, which

caused the Bangladesh government to return the Hajj flights monopoly to Biman. In June

2007, the caretaker government approved a three year Hajj policy to alleviate the problems

encountered during the previous two years. Hajj flights of Biman used to continued from

Bangladseh’s two other international airports, Shah Amanat International Airport and Osmani

International Airport.

Biman Cargo:Biman also operates a cargo service using the cargo holds of its

passengeraircraft to ship freight to international destinations. It has established a Cargo

Village at Hazrat Shahjalal International Airport where the cargo is packaged and labeled

before being loaded onto its aircraft. While the air cargo industry in Bangladesh grew by

16.5%(fiscal 2008-09).Biman’s acrgo operations remained stagnant when private operators

such as Bismillah Airlines ,Best Aviation and Air Bangladesh witnessed a 108%growth from

the previous year. The private operators increased their share of the cargo market by 10.6%

and were responsible for handling 24% of the total 99,000 tons of cargo at the expense of

both Biman and foreign airlines which saw a reduction in their shares by 4.6% and 6%

respectively. Foreign airlines handled 47% of the total cargo with Bismillah Air taking on the

remaining 29%.

Biman Maintenance:

The Biman maintenance and Engineering Department is well organized and staffed with

qualified licensed personnel.

The Airlines is capable of heavy aircraft maintenance.Complete aircraft paint facilities are

aloso available and functioning. Biman has own Engineering Hanger Complex. Interior

maintenance including full cabin, galley and lavatory replacement is also available. The

maintenance facility has an upholstery repair shop including the ability to rebuild cabin seats.

Biman also has avionic and instrument repair capability. Biman maintenance saves the cost of

Biman as well as earn a huge money by providing the maintenance and repairing service to

the other foreign and local airlines and utilizes this sector to earn a lot of money.

BATC:Bangladesh airlines training centre BATC used to train a large number of newly recruited as

well as the existing employees of Biman for the skill development of their manpower. BATC

trains not only the staffs of Biman but also the higher officials of some other local and

foreign airlines and earns money from this program.

Foreign Flight Handling Service:

Foreign flight handling services is provided to the foreign airlines operating to Bangladesh

which can be considered as a non-core business of Biman.It is one of the major sources of

income of Biman Bangladesh airlines. Foreign flight handling service includes the services of

unloading the foreign airlines passengers from the aircraft, receiving luggage’s from the

aircraft and handed those over to the respective passengers, unloading the cargo from aircraft

and handed those over to the concerned cargo section etc. Ramp support and different type of

technical supports are also provides by Biman Bangladesh Airlines as and when required to

the foreign airlines.

Price:Air fare pricing is a complicated job .Being the member of IATA airlines has to follow the

IATA pricing rules. IATA Tariff Coordinating Conference is the regulatory body of the Air

Tariff worldwide both Passenger fare and cargo rate .It introduces all tariff related rules

regulations for the commercial air transport through resolutions passed time to time. The

IATA tariff Committee publishes Normal and special fares through Air Tariff Publications.

As the Airline market is very competitive and perishable the carriers can not depend on the

IATA published fares. They widely uses private fares which are very low than the fares of

IATA.

It is very important to fix the appropriate fare in line with market demand. A carriers may fail

to achieve goal due to correct pricing even it fulfill all sorts of standard service

requirement for the customers. So the airline pricing department must be manned with the

experienced pricing specialists’ .The name of Biman pricing department is Tariff and IATA

affairs. It basically deals with price fixing. It has the right to raise or reduce the fare of

passengers as well as cargo carriage based on different kind of situation, demand etc. Not

only fare for passenger or cargo but also the rate for carrying stretcher , wheel chair and

excess baggage are being fixed by the tariff and pricing section of Biman.

Factors behind fluctuating price:

• RBD Maintenance:

RBD or Reservation Booking Designator is nothing but nesting or allotted of seats in

different fare levels in the same compartment in order to maximize revenue. This is also

referred as fare mix. There are 26 RBD’s can be used in a flight, like

J,D,C,A,P,R,Y,S,M,Q,T,N,L,H,O,K,U,G etc. RBD maintenance is a kind of business policy

which is taken by Biman for maximizing their profit.

• Seasonal factors (High time/Low time):

Demand of air space not remains same throughout the whole year. Sometimes demand

becomes very high and sometimes demand becomes very low based on different seasons. For

an example: Since most of the target passengers of Biman are ethnic passengers or labor

class. So during different type of occasion like Eid season the flow of passengers becomes

very high and demands for air space increases. Sequentially the price of Air ticket increases

in this situation. So, different seasons play vital role for the fluctuation of the price of Air

tickets.

• Competitors fare fixation:

Although IATA (International Air Travels Association) has published a fixed fare for all the

airlines, each and every airlines fixes its own fare through making some manipulation into

it’s published fare to survive within the excessive competition among the Airlines. Mainly

Biman Bangladesh Airlines used to fix it’s fare by comparing the fare fixation of other local

and International airlines to become forwarded within the excessive completion of current

Aviation market. So the fluctuation of the Fare of Biman Bangladesh Airlines sometimes

depends on the competitors fare fixation rather not basically depend on the cost coverage.

• STC decision:

STC (Special Tariff Committee) of Biman plays a vital role for establishing pricing

policyand fixing special fares, cargo rates and related charges throughout the network. It has

the special right to take the decision of reducing or raising the fare of air ticket during the

crisis period or in different season based on the situations

• Promotional fare:

Biman used to offer different type of discount on its fare which is considered as promotional

fare during launching flights in a new route for the market penetration. For example: When

they launch their flight in the rout Dhaka-Bahrain, they offered 20% commission for selling

Biman ticket to is GSA (General Sales Agent).So that the Agency could also share that

discount with the ultimate passengers of Biman for traveling that new route and get them

benefited.

Special Tariff Committee:

Biman has constituted a Special Tariff Committee (STC) for the purpose of establishing

pricing policy and fixing special fares, cargo rates and related charges throughout the

network.

• The Director Marketing & Sales is the chairman of STC where the Manager tariff acts

as the member secretary. The STC is constituted with some other members from

different departments.

The formation and functions of the committee are as under:

a. Director Marketing & Sales Chairman

b. General Manager Marketing/Sales Member

c. Controller off Accounts Member

d. D.G.M Internal Audit Member

e. D.G.M Sales Member

f. Manager Tariff & IATA Affairs Member Secretary

E-ticketing:Electronic ticketing is a method to document the sale and track usage of passengers

transportation without requiring the issuance of paper value documents .The electronic tickets

is used in exactly the same way as a paper .However instead of processing a paper document,

all the data relating to the passenger’s itineraryfare, class,payment and TFCs ,etc is stored in

an ET record in the database of the validating carrier. Tariff, pricing & E-ticketing section of

Biman deals with the E-ticketing . Biman Bangladesh Airlines is going to initiate the E-

Ticketing system through the IBE (Internet Booking Engine) system from the 1st November

through which passengers will be able to create the online ticket Booking by sitting at home

but for making the purchase they have to go to the sales outlet or the sale counters of Biman.

Finally for the direct selling of E-ticket Biman is going to develop the online ticket selling

program with the help of internet through the credit or debit card system from the 1st January

of 2011.The Electronic Ticketing will hopefully enables faster

Promotion:Biman is far away from modern promotional activities. It has been coming up with all

traditional promotional activities. It has very poor budget on publicity and advertising. It has

only some publicity campaign through sports sponsorship. But these are not sufficient. It has

some yearly incentive plan for the agents. But the actual benefits of this incentive does not

reach to the original customer. So Biman should restructure its promotional activities in the

line with modern concept as under:

Chapter # 4 Analysis & Findings

4.1 GAP Analysis

Gap analyses of each dimension are given below:

4.1 GAP Analysis

Gap analyses of each dimension are given below:

Reliability

SL Status Mean T- value P- value Decision

Expectation Perception

1 Rel1 3.3265 3.0000 1.548 0.125 Significant

2 Rel2 3.3469 3.0200 1.527 0.130 Significant

3 Rel3 3.2449 2.8200 2.057 .042 Insignificant

4 Rel4 3.3265 2.7800 2.472 0.015 Insignificant

5 Rel5 3.0816 2.7400 1.546 0.125 Significant

In reliability dimension we see that, in first, second and fifth statements have deviation

between expectation and perception. The significance level are 0.125, 0.130 and 0.125.

Responsiveness



1 Res1 3.4286 2.9000 2.359 0.020 Insignificant




In responsiveness dimensions, there are no deviation between expectation and perception.

Assurance



1 Ass1 3.4490 2.9800 2.200 0.030 Insignificant




In assurance dimensions, there are no deviation between expectation and perception.

Empathy



1 Emp1 3.3061 2.7400 2.378 0.019 Insignificant



4 Emp4 4.0408 2.8400 1.380 0.171 significant


In empathy dimension we see that, in fourth statement has deviation between expectation

and perception. The significance level is 0.171

Tangibles



1 Tan1 3.0816 2.5000 2.424 0.017 Insignificant

2 Tan2 2.9796 2.7200 1.147 0.254 significant

3 Tan3 3.1633 2.7200 2.185 0.031 Insignificant

4 Tan4 3.2857 2.8600 1.953 0.054 significant

In reliability dimension we see that, in second and fourth statements have deviation

between expectation and perception. The significance level are 0.254 and 0.054.

GAP Analysis

Dimension Expectation Perception GAP

Reliability 3.2516 2.92 0.3316

Responsiveness

Assurance

Empathy 4.0408 2.8400 1.2008

Tangible 3.13265 2.7900 0.34265

We have calculated the Gap by finding the differences between the Service Perception and Service Expectation. The following table is given with the result of all dimensions and the Gap.In the GAP analysis, we see that the highest gap is 1.2008 in empathy dimensions. So, Biman Bangladesh has to do a lot of works and improvements in this area. In tangible dimension, the gap is 0.34265 means the difference isn’t high but Biman Bangladesh need to take some extra care in this area. The same suggestion is applicable for reliability also. This is a happy news for the management of Biman Bangladesh Airlines is that there has no variation between expectation and perception in responsiveness and assurance.

4.2 CorrelationResponsiveness, Assurance and Tangible has no relationship with Reliability. Assurance and

Tangible has no relationship with Responsiveness. Empathy and Assurance has no co-

relation. Similarly, Tangible and Empathy has no correlation. On the other hand,

Responsiveness and Empathy has the strong relationship as 0.008 but it is very little compare

to the generalized form.

Reliability

Responsiveness

Assurance

Empathy

Tangible

Reliability 1.000

Responsivenes

s

0.000 1.000

Assurance 0.000 0.000 1.000

Empathy 0.003 0.008 0.000 1.000

Tangible 0.000 0.000 0.002 0.000 1.000

4.3 Regression analysis

…………. Significant

Insignificant

..……………………………………………………

Here, we see that, only tangibility has no relation with the customer satisfaction. Its value is

only 0.004. On the other hand, all four dimensions such as reliability, responsiveness,

empathy and assurance have significant level of relation with customer satisfaction. So, these

parts are take the main limelight and dominant customer as they set the consumer mind

satisfactory in perceived and satisfy levels. Their values are chronologically 0.428, 0.094,

0.793, 0.885 and 0.817 for Reliability, Responsiveness, Assurance and Empathy.

Chapter # 5 Recommendation & Conclusion

5.1 Recommendation

In our findings, we recommend to do necessary steps to Biman Bangladesh Airlines.

Reliability

Responsive

ness

Tangibility

Assurance

Empathy

Satisfaction

The highest gap is in Empathy dimension. It means the passengers of Biman Bangladesh Airlines expect more but they perceived very little. It is very alarming for the management. The management must take some necessary steps to solve the problem.

From regression analysis, we found that only tangibility has not relation or not significant to satisfy the customers. It also indicate to give more concentration in this area.

There other areas with variances but Biman Bangladesh must be look here that no one can turn into the big portion of the pie

5.2 Conclusion

We analyze the gap between expectation and perception based on Reliability, Responsiveness, Assurance, Empathy, and Tangible. Than we conduct t-test and p-test from that we know the gap between the customer’s expectation and perception under each dimension mentioned above. At last, we have done regression and correlation analysis to know the effect of each dimension over another and ultimately over customer satisfaction. After completing necessary calculation, we find out some critical result. The gap analysis shows us empathy is one of the most important sector that Bangladesh Air Lines must be concentrate if they grab the maximum share in the local market. We also give some recommendation that may help to find out the gap and help to solve it within the possible quickest times

Chapter # 6

6.1 Reference

Books

1. Boyd Harper W., Westfall Jr. Ralph and Stasch Stanley F. Marketing research. USA:

Richard D. Irwin, Inc. Seventh edition.2002.

Periodicals and Journals

Handbook, Booklets, Leaflets

1. Diganto, “Biman Bangladesh Airlines In-flight Magazine,” 43.

Websites

www.bimanair.com

www.airlinequality.com/index.htm

http://www.trochim.human.cornell.edu/kb/index.htm

http://www.thefinancialexpress-bd.com/2010/03/30/96310.html

http://www.ti-bangladesh.org/research/EX_Summary_Biman_Eng.pdf

www.marketingmasters.co.uk/geoff/marketing research handout.doc

www.google.com

www.wikipedia.com

www.ask.com

https://www.biman-airlines.com/

6.2 Appendix

The Question paper attached with the report.

https://www.biman-airlines.com/

http://www.ask.com/

http://www.wikipedia.com/

http://www.google.com/

http://www.marketingmasters.co.uk/geoff/marketing%20research%20handout.doc

http://www.ti-bangladesh.org/research/EX_Summary_Biman_Eng.pdf

http://www.thefinancialexpress-bd.com/2010/03/30/96310.html

http://www.trochim.human.cornell.edu/kb/index.htm

http://www.airlinequality.com/index.htm

http://www.bimanair.com/