Pegasus Airlines: Delighting a new type of travelling customer

Synopsis

(from: Kotler book Manual)

Pegasus was created in 1989 as a charter airline partnered with Aer Lingus. Now owned by Sabanci

Holding; who changed the airline to a low-cost airline, Pegasus currently has a fleet of 83 Boeing and

Airbus planes and ranks in the top 30 among European airlines. Its on-time departure rate is around

85 percent, which is above the European average of 81 percent, demonstrating the importance the

company attaches to customer service. The company regularly receives awards and recognition for,

among other things, its management strategy; initiatives in website development; and its marketing

strategy, which employs a new approach to advertising that includes viral marketing, flash campaigns

and mobile campaigns. This strategy has succeeded in making Pegasus the most searched airline in

Turkey.

Pegasus is continually developing to meet customer expectations. Customers who book early (60

days) enjoy further savings, they have developed the Pegasus Plus card (a credit/loyalty card) which

offers a range of benefits and developed a specific customer satisfaction guarantee policy that

provides customers with (i) in the case of a delay greater than three hours, a refund of the ticket and

(ii) in the case of a delay greater than five hours, a refund and a free ticket. Unlike many airlines, a

one class interior configuration is operated, but passengers can pay a small extra premium to choose

their seats. This is complemented by the Pegasus Flying Caf, which offers a range of refreshments

and catering options for a small additional charge. Pegasus offers further customer service options,

including a 10 percent discount to passengers on international flights who order their in-flight meals

48 hours in advance.

Pegasus's strong word-of-mouth has also been important in the airline's success and is reflected in

the words of customers on a special website titled 'Pegasus listens to you'. Sections of the website

encourage customers to generate ideas for service improvement, to debate generic questions and

topics relating to the airline's management and services, and to encourage customers to report

problems they have encountered.

It is a personal culture that gives Pegasus's customer service an edge. Pegasus's employees work as

a team with their goal being a common understanding of the airline's long-term objective to provide

a democratic environment in which everyone shares their ideas freely. Training, as well as continuous

development is provided to ensure regular career progression and high levels of motivation through

a solid performance system and regular personal feedback.

Since 2005, Pegasus has shown that a low-cost airline can deliver low fares, excellent service and

steady profits. It has demonstrated that even in the airline business, entry barriers can be lowered and

a powerful brand can be created.

Discussion questions

1. The very first marketing story in the text is about Pegasus. Let's take a quick look at the home

page on the company's website and social media platforms to see what we can glean about the

company and how it operates. Just looking at the different digital platforms, what stands out about

Pegasus?

2. How has what we are seeing contributed to the success of Pegasus? Has Pegasus been successful?

Why? (As pointed out in the Pegasus story, thanks in a large part to its obsession with customer

satisfaction and customer experience, the company has grown profitably. Thus, by creating value

for customers, Pegasus has captured value from customers in return.)

3. Why did the authors choose Pegasus as the very first company to highlight in Chapter 1?

How does this opening story relate to the major points made in the rest of the chapter? (This question

should lead naturally into major Chapter 1 concepts: What is marketing and what is the marketing

process? What is customer-driven marketing and why are customer value, satisfaction and

relationships so important?)