Services are different from products. The difference lies in tangible products versus intangible services. Because of the intangible aspects of services, they are impossible to store. Services are therefore co-created with the customer because production and consumption happen simultaneously. It is in this co-creation process where value can be created. The new service-dominant-logic (SDL) focuses on the exchange of intangible resources and the co-creation of value with the customer. A typical example of a service is that of an airline. Through the years the core business has never changed; getting people from one place to another. However, the characteristics of the process around that core business have changed. Because of the elusiveness of the service process of an airline, the aim of this paper was to examine how KLM, Royal Dutch Airlines, creates value in its service process.

The research was conducted by performing a single case study. The first step was to create a theoretical framework based on scientific articles. The data acquired was primary as well as secondary. Primary data was made available by KLM. Next to this, primary data was acquired by conducting interviews with KLM employees. Secondary data was acquired by looking for relevant information available on the Internet about KLM and its activities.

Research has shown that KLM offers resources, competences, skills, technologies and knowledge. KLM uses both tangible and intangible aspects in its service delivery. KLM offers a solid service-scape where it executes its organisation colours in every tangible aspect ranging from on-board tableware to uniforms and airplanes. By offering passengers traditional Dutch dishes with Dutch wines or other delights, KLM tries to stick out. KLM believes that its employees are essential. By training its employees according to its self-devised Seven Service Standards, KLM achieves highly motivated employees which will do their utmost best to deliver the service the customer expect to receive. With continual improvements, tangible and intangible, KLM aims to further develop its service.

Overall, KLM does a good job in value creation and value co-creation. KLM effectively uses the tangible and intangibles they have to offer. Its mindset towards customer centricity and a SDL approach related to the importance of its front line employees is essential. However, challenges remain due to changes in demand in on-board comfort, on-board offerings and technological developments and competition.