Development of a module based service family design for mass customization of airline sector using the coalition game

•We applied strategic sharing of modules using coalition.•Modules that are being used in the platform prove to be most beneficial.•Service qualities also have a major influence on the choice of airline.•We examine the effect of introduction of a new service.

The Airline industry faces various issues and difficulties related to its management, which have a peculiar and a complex solution. The objective of this paper is to introduce new and simplified methodologies for improving the airline sector by introducing cost efficient and relatively high payout services. In this paper, we have applied strategic sharing of modules in service family design using coalition game and Cournot game theories to model the related situations. Service family design is a cost-effective way for achieving mass customization by developing highly differentiated products from a common platform while laying emphasis on individual products. A coalitional game is applied which is used to model the potential module sharing and thus determines which modules that are being used in the platform proves to be the most beneficial ones. The empirical evidence suggests that convenience, safety and service quality also have a major influence on the choice of airline passengers. In a Cournot model, new services are predicted to be introduced by an airline and the effect of that service on its profits and thus response from other competitor airlines are carefully examined and result of this, decides the layout of the service in the functionality of the airline. This research can be efficiently used to assist the working of airline companies and help them to select services and have a better understanding of the role of quality of different services in the airline sector as a whole, thus giving them an edge over its competitors.