Passenger perceptions of service quality: Korean and Australian case studies

This paper investigates air passengers’ perceptions of 11 factors that may influence their buying behaviour namely, in-flight service, reservation-related service, airport service, reliability, employee service, flight availability, perceived price, passenger satisfaction, perceived value, airline image, and overall service quality. Analysis of variance and an independent sample t-test are applied to data collected from Korean and Australian international air passengers. The results reveal that passenger perceptions are significantly different across airlines, seat classes, and usage frequencies.     

A voice in the skies: Listening to airline passenger preferences

This study aims to identify the impact levels and priorities in the service expectations that passengers have when identifying a preferred airline. The results are based on probabilities and impacts, and can help airlines to accurately understand the preference criteria of their passengers. The priorities of the passengers may differ according to the airline chosen; therefore, the probabilities shown in this study can inform senior airline managers about the passenger perspective. This study uses the Stochastic Multicriteria Acceptability Analysis-2 (SMAA-2) method. SMAA-2 identifies the priorities and impact levels of passengers’ expectations on airline selection, and the ranking of alternative firms according to the probability. According to the obtained results, Airline 3 (AF₃) is the most preferred airline with the highest confidence rate. This airline operates based on a low-cost model that allows passengers to choose additional services for additional charges. The passenger expectations that have the highest impact on the preference when selecting an airline are 1) ticket prices, 2) punctuality, and 3) booking convenience. Free in-flight food and beverages, the variety and quality of the food and beverages, and voyager miles programs for loyal customers are found to have no impact on the ranking of airlines. The expectations identified by the passengers in this study are related to the outcome quality dimension, with services dominated by flexible features. The findings of this study define the passenger as a rational decision maker who is price sensitive.     

Drivers of airline loyalty: Evidence from the business travelers in China

This paper examines the key factors that determine business traveler loyalty toward full-service airlines in China. Based on literature review and panel interview, ten airline attributes under three categories were derived: (a) operational factors: safety, punctuality, and aircraft; (b) competitive factors: frequency of flights, schedule, frequent flyer program, ticket price, and reputation; and (c) attractive factors: in flight food & drinks and in flight staff service. We surveyed 2000 Chinese business travelers on domestic flights, obtaining 462 usable questionnaires. Hierarchical regression analysis reveals that reputation, in-flight service, frequent flyer program, and aircraft have the greatest influence in driving airline loyalty.     

Investigating the effects of service recovery quality elements on passengers' behavioral intention

This study intends to analyze how the elements of restoring the quality of airline service influences the airline image, recovery satisfaction, and behavioral intentions of airline passengers. For this testing, a survey was conducted on passengers with an experience of dissatisfaction of airline services. A total of 240 responses were analyzed by using structural equation modeling. The results revealed that among the recovery quality elements, promptness had a positive influence the image of the airline. Additionally, a recovered image of the airline had a positive influence on the recovery satisfaction and behavioral intention. The findings of this study may improve our understanding of consumer responses to the airline company's efforts to recover service failure.     

A cross cultural investigation of airlines service quality through integration of Servqual and the Kano model

This paper examines the service quality attributes of airlines with regard to their effect on customer satisfaction in a cross-cultural context. The applicability of a modified Servqual instrument as a means of measuring customers' perceptions and expectations is explored using respondents from USA and Turkey. The study is unique as it integrates the Servqual scale and the Kano model in a complementary way. The findings reveal that the Servqual gap scores are negative in both USA and Turkey, in all areas of service quality, indicating that customers' perceptions fall far short of their expectations. For the Kano model, it is demonstrated that the general structure of the scale is the same for both countries. However, the two countries differ in certain service quality attributes as far as prioritization. This has implications for the formulation of airline marketing strategies. While some degree of standardization is necessary for certain service elements, especially if the airline is catering for the international market, there are certain service attributes that should be designed to meet local needs and expectations.     

Examining airline service quality from a process perspective

Airline service is composed of a set of processes. Passengers may have distinct expectations at different stages of the service chain. In this study, air travel was divided into ground and in-flight service stages. We first examined the gap between passengers’ service expectations and actual service received and the gaps associated with passenger service expectations and the perceptions of these expectations by frontline managers and employees of a Taiwanese airline. Next, importance–performance analysis was used to construct service attribute evaluation maps to identify areas for improvement. Results revealed that these gaps did exist and passengers were more concerned about the responsiveness and assurance dimensions from airline frontline staff. The tangibles dimension was considered more important when evaluating in-flight service quality than when evaluating ground service quality.     

A non-additive multiple criteria analysis method for evaluation of airline service quality

Subjective preferences with interactive property are often involved in the evaluation of airline service quality. It may not be possible, however, to correctly evaluate service quality using conventional additive measures. The fuzzy measure, which is a non-additive measure, is more suitable for this situation. Given the presence of arduousness in current fuzzy measure identification and in the calculation of the comprehensive performance values of alternatives in terms of the Choquet integral, this paper proposes the λ_k fuzzy measure and introduces Marichal entropy of the λ_k fuzzy measure to reach a solution. This paper also presents the aggregator Choquet integral with respect to the λ_k fuzzy measure. To verify the method's effectiveness, an application study of the comprehensive performance of 15 US airlines was conducted, using data collected over a 10-year period. Our results show that the proposed method is a suitable multi-criteria analysis method, which can be used to evaluate the performance of airline service quality when man–made interaction phenomena are not existent.     

The impact of airline service quality on passengers’ behavioral intentions using passenger satisfaction as a mediator

This research study measures the perception of airline service quality based on data collected from Pakistan International Airline (PIA) passengers using SERVQUAL. It investigates the impact of service quality dimensions on passenger's behavioral intentions in presence of mediator (passenger satisfaction). The data is collected through an adopted SERVQUAL instrument from the respondents in the domestic and International waiting lounges of PIA. The data is analysed using reliability statistics, correlation analysis and through hierarchal regression analysis. A systematic random sampling technique is used to analyze the study sample and PROCESS macros was used to run mediation analysis. The results reveals that passenger's satisfaction mediates the relationship between airline service quality and behavioral intentions. Practically, PIA should not only improve on Service Quality but should build up quality consciousness among on ground and inflight employees; pay attention to reliable factors and establish customer goodwill through enhanced services; regard reliability factors and enhance employee accomplishment. Implications of these results for management policy and practice are highlighted as guidelines. PIA managers can now better understand the importance of service quality and its long-term benefits in the form of customer loyalty.     

Exploring the green image of airlines: Passenger perceptions and airline choice

During the last few years there has been an increasing trend for companies to market their products or services as green or environmentally friendly as part of their corporate social responsibility. Few studies have analyzed the effects of this recent focus on the environment and its impact on airline passengers. Therefore, we examine passengers' general attitudes towards the green image of different airlines, perceived differences in eco-friendliness among these airlines, and effects on airline choice during booking. We also investigate how passengers' recent experiences with an airline affect perceived eco-friendliness of that airline. In addition we compare passenger ratings of airline eco-friendliness to those published by independent 3rd parties. Our findings show that the green image of airlines does influence airline choice during booking. We observed a passenger willingness to pay extra for a green image, however, not as much as their willingness to pay extra for amenities, such as additional legroom.     

FIPIA with information entropy: A new hybrid method to assess airline service quality

This study proposes “FIPIA with information entropy” as a new, hybrid method to assess airline service quality by identifying the most important priorities for airline passengers and producing recommendations to airline management for optimal resource allocation to improve service quality and customer satisfaction. The proposed method is an improvement over IPA, IPIA and FIPA methods, through the introduction of information entropy and fuzzy logic to the analysis of importance, performance and impact dimensions of airline service quality to improve interpretability and actionability of analysis results. This study also offers airline managers a list of what they should improve in resource allocation in order to increase service quality considering customer satisfaction and create value by managing the relational capital more effectively. The new hybrid method was field-tested by administering a 26-item questionnaire to passengers of a major airline operator, analyzing the responses using the Importance-Performance-Impact Analysis (IPIA) method, fuzzy logic and information entropy. The analysis revealed four main dimensions of airline service quality, namely reliability, assurance, tangibles, empathy and responsiveness with 17 constituent attributes. The case study revealed that (1) resource allocation was adequate only on four attributes; (2) seven service quality attributes were identified as needing further management focus on resource allocation; (3) six service quality attributes received more resources than necessary which should be shifted to other attributes; (4) dimensions of reliability and tangibles needed more focus than others. The proposed hybrid method of FIPIA with information entropy can be employed for any industry where service quality depends on multiple attributes.     

The strategic impact of airline group diversification: The cases of Emirates and Lufthansa

The airline industry is a diverse sector, requiring the support of a varied range of ancillary businesses such as maintenance, catering and travel agencies to carry out its activities. Many of these supporting businesses demonstrate the potential to drive wider profit margins despite generating lower revenues than the airlines themselves, making them attractive investment opportunities in a sector prone to volatile and often lacklustre trading. This study investigates two of the largest diversified airline groups, Germany's Lufthansa Group and Dubai's Emirates Group, each adopting a distinct approach towards diversification that may serve as a model for airline groups worldwide. The areas investigated were Cargo, Maintenance, Catering and Travel Services. The research found that whilst diversification may not always present the most attractive option financially, strategic factors can often outweigh such concerns. Business units studied were found to have variable prospects; particularly in the case of Catering, a sector on the rise – versus in-house Maintenance, which for airlines, is likely to see decline. The pursuit of third party revenue streams to offset weak internal trading and growth in competencies were found to be the key drivers of success. Interplay between segments was also apparent, showing that a well-organised diversification strategy can achieve robust cross-functional benefits and deliver significant value to the parent organisation.     

Text mining approach to explore dimensions of airline customer satisfaction using online customer reviews

The airline industry operates in a highly competitive market, in which achieving and maintaining a high level of passenger satisfaction is seen as a key competitive advantage. This study presents a novel framework for measuring customer satisfaction in the airline industry. Using text mining methods we explore Online Customer Reviews (OCRs) to provide guidelines for airlines companies to improve in competitiveness. We analyze a database of more than 55,000 OCRs, covering over 400 airlines and passengers from 170 countries. Using a Latent Dirichlet Allocation model we identified 27 dimensions of satisfaction described by 882 adjectives. Dimensions and adjectives were used to predict airline recommendation by customers, resulting in an accuracy of 79.95%. The most relevant dimensions for airlines' recommendation prediction were calculated. OCRs were stratified according to several variables. Of those, type of passenger impacted the least on the number of dimensions of customer satisfaction, while type of cabin flown impacted the most. Observing results in different publication years we showed airline customer trends through time. Our method showed sensitiveness to identify variations in dimensions distribution according to different passenger characteristics and preferences. Practical implications are that airline service providers aiming at maximizing customer satisfaction should focus their efforts on (i) customer service to first class passengers, (ii) comfort to premium economy passengers, and (iii) checking luggage and waiting time to economy class travelers. Regression analysis revealed cabin staff, onboard service and value for money as top three dimensions of satisfaction to predict the recommendation of airlines. Designing services that excel in those dimensions is likely to improve the company's performance with customers.     

A comparative performance analysis of airline strategic alliances using data envelopment analysis

As “open skies” agreements became more common among different countries and thus began to open up international routes to further competition, the global airline industry has undergone accelerated structural changes for the last two decades. These changes include the consolidation and expansion of airline strategic alliances throughout different regions of the world. Though airline strategic alliances are generally perceived to be a major driver for enhancing the operating efficiency and the subsequent competitiveness of participating member airlines, the concrete evidence supporting such a perception is still lacking in the literature. This paper is one of few attempts to evaluate the comparative efficiency of the strategic alliances among global airlines and then assess the managerial impact of airline alliances on the airline's comparative performances.     

Airline in-flight entertainment: the passengers’ perspective

Following relaxation of economic regulation in many aviation markets, the competition amongst airlines has intensified in recent years. This has resulted in improvements in airline products, especially in the in-flight services. One of the areas on which airlines have focused their attention is the provision of personal in-flight entertainment (IFE). In 1998, airlines spent $1.8 billion on IFE. However, the industry is faced with a number of questions in relation to such levels of investment: Are the investments justified? Does IFE influence passengers’ choice of airline? Does IFE have a revenue-generating potential? What does the future hold as far as the IFE services are concerned? This paper addresses these questions based on a passengers survey and literature review. The results indicate that while IFE is not amongst the primary factors affecting passengers’ choice, it contributes greatly to passengers’ satisfaction with airline services. While provision of IFE can currently act as a differentiating factor, in the future it will become part of passengers’ expectations. It has also become apparent that, while IFE has the potential to generate some revenue, it would not be enough to cover the total costs associated with the installation and running of IFE systems. The impact of IFE would be felt, indirectly, through increase in passenger loyalty which should have a positive impact on airline revenues.     

An investigation of service quality,customer satisfaction and loyalty in China's airline market

Customer loyalty is a source of competitive advantage and an important intangible asset to any organisations, but empirical evidence from China's airline market regarding the determinants of passenger satisfaction and loyalty is lacking. This paper investigates the service quality of four major airlines in China's domestic market and explores the links between their service quality and customer satisfaction, as well as the conditions under which airlines can retain existing passengers. In line with previous studies, service quality variables are significant factors influencing customer satisfaction levels. However, satisfactory service was not found to result in higher customer loyalty among business travellers. In comparison to Hainan Airlines, passengers who travelled with Air China, China Southern and China Eastern were more likely to switch to an alternate carrier, indicating lower levels of brand loyalty. In addition, the frequent flyer programs (FFPs) have been largely a failure for the four major airlines in terms of increasing customer loyalty, as revealed in this study. It is necessary to draw distinctions between business and leisure travellers when studying the determinants of customer satisfaction and customer loyalty. Ticket pricing had a positive and significant effect on passengers' overall satisfaction and in turn strengthened customer loyalty among leisure travellers, but achieved no impact on the satisfaction and loyalty of business passengers. Some demographic variables such as gender, income and education are statistically significant for one group of passengers but not for another in the probit models estimated. It is suggested that different marketing strategies may be used to target different market segments to improve customer loyalty.     

Quality risk assessment model for airline services concerning Taiwanese airlines

Whereas most studies have focused on elevating the service quality of airlines, few have explored quality risks from the viewpoint of customer dissatisfaction caused by poor service. For this study, we designed a quality risk assessment model that measures quality risk for airline services by integrating the Kano model, degrees of importance and satisfaction, and the failure mode and effects analysis. Data were collected for Taiwanese airlines through a questionnaire. The application of the proposed quality risk assessment model revealed several high-risk services, such as employee service attitudes, the ability of employees to manage customer complaints, the comfort of airplane seats, in-flight snack services, and flight punctuality. Finally, this study presents a discussion on the managerial implications and recommends directions for future research.     

The U.S. Airways Group: A post-merger analysis

America West Airlines acquired the bankrupt US Airways on September 27, 2005 to form the US Airways Group, improving its competitive position in the US airline industry. This paper analyzes the post-merger performance of the US Airways Group using airline operating metrics and financial ratios for the period 2005 to 2013. While the airline has still a long way to go to improve its leverage and liquidity ratios, its capital structure and ability to pay its obligations have improved since 2005. Moreover, although the airline is still inefficient in utilizing its assets, the efficiency improvements achieved since the merger have resulted in profits and positive returns to investors. Its share prices have also largely outperformed the S&P 500 and the XAL since the merger, an indication that investors are pleased with how the merger is developing over time. In view of the US Airways Group's improving financial and operating performance, the merger is, essentially, a success.     

An analysis of traveler need for and willingness to purchase airline dynamic packaging: A Korean case study

This study analyzes (1) the need among air travelers for commission-based ancillary products and services from airline websites via dynamic packaging and (2) the willingness to purchase them. For this purpose, a survey is conducted with 2030 airline customers in Korea. This study aims to provide insights into Korean traveler preference to enable airlines serving Korean customers to formulate and implement successful business strategies that incorporate dynamic packaging into airline websites to expand ancillary revenues. The results confirm that Korean travelers demonstrate the need for and willingness to purchase commission-based ancillaries when purchasing tickets from airlines. On average, commission-based ancillary products are positively received by respondents. Airport transfers (e.g. rail and shuttle services), foreign currency exchange offers, and travel insurance are the most popular. Female travelers, travelers in their 20s, and frequent travelers (10 + times a year) report a significantly higher need for and willingness to purchase a set of commission-based ancillaries with flights from airline websites. Willingness to purchase third-party products from airlines is higher than in previous studies, and the preference rankings also differ. This study supports the viability of commission-based ancillary offerings from airline websites targeting Korean travelers. It shows the potential for airlines to successfully upsell and cross-sell via dynamic packaging strategies, one of the first steps toward becoming competitive travel retailers.     

Service quality and non-salary mechanism for airline companies in Taiwan

Based on the affective events theory (AET), this study demonstrates how family-supportive organization perceptions (FSOP) and psychological detachment predict strain symptoms (the need for recovery and emotional exhaustion) and how the strain symptoms influence service quality. With data collected by convenience sampling from 206 airline employees, our results show that FSOP negatively influence strain symptoms, while psychological detachment mediates the relation between FSOP and the need for recovery. Although the need for recovery has no significant relation with service quality, emotional exhaustion does have a significantly negative association with service quality. Our contributions are more comprehensive for the literature on human resources, organizational behavior, and airline transportation. Moreover, based on the theory, our research fills the gap between FSOP and service quality by adding the strain symptoms as important mediation variables. The results can also be put to practical use on employment policies, such as retaining excellent employees in an organization and increasing an organization's competition advantages. The results may also apply to human resource management (HRM) and present that improvement in service quality is the most important competitive ability for the airline industry.     

Airline emissions charges and airline networks

Emissions charges are an effective tool to control aviation carbon dioxide emissions. This paper investigates how airline emissions charges affect a monopoly airline's network choice. By considering simultaneously fully-connected, hub-spoke and mixed networks, we find that the impact of emissions charges on airline network configuration depends crucially on some relevant parameters, for example, the marginal benefit of the reduction of schedule delays and the disutility of additional travel time of connecting flights. Welfare analysis shows a discontinuity in the network configuration from the social planner's perspective and an inefficiency related to the airline's choice on mixed network.