On-time performance,passenger expectations and satisfaction in the Chinese airline industry

Service quality has become an important area for competition among Chinese carriers. This paper focuses on studying the relationship between customer satisfaction measured by customer complaints and their expectation of the on-time performance of Chinese carriers. By using a monthly balanced panel data set covering nine large and medium carriers, the empirical results show that an increase in actual on-time performance reduces customer complaints. However, an increase in expected on-time performance significantly raises customer complaints. In addition, although customer complaints are negatively related to the deviations between actual and expected on-time performance, our Wald tests do not support the model of the deviations between actual and expected on-time performance. Listed carriers receive significantly lower customer complaints compared with non-listed carriers. Furthermore, poor weather also affects customer complaints as an increase in rainfall or a decrease in temperature raises customer complaints.     

Customer value of purchasable supplementary services: The case of a European full network carrier's economy class

There is a general trend in the airline industry to try to find ways to generate ancillary revenue by offering additional or unbundled services. Low-cost carriers in particular are known to offer unbundled services, but only a few network carriers have started to unbundle their services and seek ancillary revenues. Meanwhile, others do not attempt this, due to a possible negative impact on customer perception and their brand image.The goal of this study is to determine the viability and customer value of purchasable supplementary services for economy class passengers of European full-service network carriers. The focus of the study lies in determining specific characteristics of the customer value concept in the context of purchasable supplementary services. By conducting a choice model the implicit preferences in regard to purchasable supplementary service of economy class passengers were analysed. A survey was conducted at Zurich Airport in Switzerland and the results and analysis were built on the data of 249 respondents. The results show that economy class passengers do perceive value in purchasable supplementary services and display a general intention to purchase such services provided they give the passenger added value and utility.     

Perceiving Airbnb as sharing economy: the issue of trust in using Airbnb

Airbnb is a growing business and has received much research attention. However, no research has specifically examined complaints against Airbnb. Understanding complaints serves not as a way to help improve services but provides an insight into guests’ perception of the Airbnb. I examined 664 reviews on sitejabber.com to study the common complaints and whether they are related to the perception that Airbnb is sharing economy. Using a grounded theory approach, I performed a content analysis of complaints. Besides customer service and technology challenges, one major complaint against Airbnb is their faded trust through their experiences.     

Towards a taxonomy-based preferred-customer model for suppliers in air cargo express service markets

Drawing on social exchange and push–pull–mooring theories, this paper develops a taxonomy-based preferred-customer model for B2B air express markets. Our model extends the conventional bilateral customer-supplier relationship perspective of customer portfolio management to include competition effects for more comprehensive (trilateral) strategic decision making. Based on this unified framework, our a survey of 180 customers of air cargo express carriers identifies three distinctive groups of preferred customers. In addition to the effect of competitors on air express carriers’ prioritization of customers, which is further complicated by a satisfaction paradox and spurious loyalty, we further establish classification indicators for differentiating preferred from non-preferred customers. Notably, although commonly used in practice, we find sales volumes to be ineffective for that purpose.     

Long-run causality between customer satisfaction and financial performance: the case of Marriott

Prior research that examines the relationship between customer satisfaction and financial performance (FP) in the hotel sector assumes that changes in customer satisfaction lead to changes in the FP of hotels. This research note aims to bridge the gap by looking into the possibility that FP of hotels may lead to increase in customer satisfaction with the annual data of Marriott from 1995 to 2016. To study the existence of long-run interactions between customer satisfaction and FP with firm size that is proxied by number of employees as the control variable under small sample size condition, the presence of cointegration among these variables with different appropriate dependent variable is investigated with the bounds testing approach. The obtained results suggest that there is a positive long-run causality from FP to customer satisfaction, and customer satisfaction has no effect on FP in the long-run. This study also finds that firm size has no impact on customer satisfaction. Explanation on each of these findings is provided in the conclusion. The selected sample and availability of data limit the generalisability of the findings of this study. Different hotel brands, measurements and analysis techniques will further the understanding in this field.     

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.     

Are low-cost carrier passengers less likely to complain about service quality?

Complaints made by airline passengers to the U.S. Department of Transportation (DOT) are often used in academic research and in the media as a proxy for the quality of commercial air service in the United States. In this paper, we test whether passengers of network carriers are more likely to make a complaint to the DOT about service quality failures than passengers of low-cost carriers. Through a fixed-effects regression, we find that passengers of low-cost carriers like Southwest Airlines are less likely to complain about service quality than passengers of network carriers like United Airlines, given the same levels of service quality and controlling for yearly fixed effects. This behavior could be explained by price-based expectations of service quality, lack of information about how to complain to the DOT, or qualitative differences in front-line customer service between airlines.     

The impacts of congestion on commercial vehicle tour characteristics and costs

Analytical modeling and insights, numerical experiments, and real-world tour data are used to understand the impact of congestion on urban tour characteristics, carriers’ costs, and distance/time traveled. This paper categorizes tours into three classes based on their tour efficiency and variable costs structure. Travel time/distance between customers and depot is found to be a crucial factor that exacerbates the negative impacts of congestion. Travel time variability is a significant factor only when travel time between depot and customers is considerable in relation to the maximum tour duration. For each customer, it is possible to define a dimensionless coefficient that provides an indication of the relative impact of congestion on routing constraints. Congestion also affects carriers’ cost structure, as congestion worsens the relative weight of wages and overtime escalates and the relative weight of distance related costs decrease.     

Opaque Web practices among low-cost carriers

The low-cost airlines' adoption of Web technologies to facilitate direct sales has accelerated their market penetration. However, some low-cost carriers are increasingly using Websites to create distance between themselves and their consumers in specific areas of their operations, while simultaneously developing excellence in sales transaction completion via self-service. The ‘opaque’ practices many low-cost carriers employ appear to be intentional design features and are contrary to the ethos of designing a ‘good system’ to facilitate the full spectrum of customer service. As a result, the low-cost sector has come under increased scrutiny for engaging in unfair practices and violating consumer protection law.     

The impact of air policy on incoming tourist traffic: the contrasting cases of the Caribbean Community and the Middle-East

It is generally agreed that government ownership and participation in national carriers and regulated air service agreements can lead to inefficiencies and abuses of market power. This can result in poor carrier performance and service levels, impeding further growth in tourism markets. This paper contrasts this theory with recent case evidence from the Caribbean and the Middle-East. The former represents the mature exotic type beach holiday while the latter is a fast developing religious, cultural and multi-product form of tourism. In both cases multi-step relationships exist between the development of air transport policy and the number of incoming visitors. The strength and significance of these interrelationships are tested using two separate best-fit Structural Equation Models (SEMs) based on a panel data set of a selection of endogenous and exogenous variables for the period 2000-2007. It is found that, despite both regions’ continued government participation in national carriers, only in the Caribbean has this appeared to have resulted in the expected dampening effect on tourism output, whereas a reverse effect was found for the sample of Middle-Eastern states. Focussing on their formidable hub-and-spoke networks, state owned and vertically integrated Middle-Eastern carriers are still encouraged to offer competitive fare and service levels to capture 6th freedom traffic with the growing number of long-stay visitors being one of the main beneficiaries of this.     

Using analytic network process to measure the determinants of low cost carriers purchase intentions: A comparison of potential and current customers

The goal of this study is to use the analytic network process (ANP) approach to develop an evaluation model which prioritized the relative weights of determinants of low cost carriers (LCCs) purchase intentions between potential and current customers. A field study with 96 potential customers and 84 current customers of LCCs was performed. The results found some similarities and differences between potential and current customers with regard to the determinants of LCCs purchase intentions. With respect to the final weights of these determinants, both customer groups considered “reliability and image” to be the important factor that affects their intentions to purchase LCCs. Additionally, “price and convenience” received a higher weighting by potential customers, while current customers emphasized the importance of “employee services”. The evaluation model and the results obtained using it provide a valuable reference for LCC managers who are seeking to facilitate effective customer relationship management.     

Innovation: The winning formula to regain profitability in aviation?

Most airlines have overcome the immediate effects of the recent global aviation crisis partly because of economic upturn and partly because of massive restructuring. Legacy network carriers had to take on the challenge of low-cost carriers, and regain competitiveness in short- and mid-haul business through considerable cost cutting and more flexible pricing models and are now profitable. On the other hand, many airlines do not make a reasonable profit, and the majority of carriers do not earn their capital cost. Airlines claim that they are still squeezed between their neighbors in the aviation value chain that leverage local monopolies (such as airports) or oligopolies (such as aircraft equipment manufacturers). Many legacy carriers, however, have not properly prepared for an era of deregulated and changing markets. They have not yet taken appropriate steps to escape from there positions between the few successful premium carriers and low-cost carriers. This middle position has little differentiation potential, an unsatisfactory growth perspective, and poor profitability prospects. Further, despite ongoing liberalization, the regulatory framework still does not enforce far-reaching consolidation, leaving the industry in a fragmented status with massive overcapacities. Consequently, the industry needs to further leverage external deregulation as well as internal restructuring to establish more efficient and competitive business models. Aside from basic cost cutting, innovation may become the decisive driver of progress, comprising advanced business models, customer segmentation, and technologies (Franke, M., 2006. Innovation: the winning formula to regain profitability in aviation? Speech at the Hamburg Aviation Conference, Hamburg).     

The structure of customer satisfaction with cruise-line services: an empirical investigation based on online word of mouth

Given the importance of the cruise segment in the tourism industry and the limited number of prior studies in the area, this study empirically explores the structure of customer satisfaction with cruise-line services by evaluating the attributes of cruises that are significant to passengers. Using 44,993 voluntarily provided customer reviews published on a cruise guide website, a stepwise regression analysis is conducted to examine the effects of the attribute performance of cruises on customer satisfaction and dissatisfaction. The findings empirically confirm the validity of the two-factor theory of customer satisfaction in the cruise tourism context. The asymmetric relationship of some attributes makes it possible to identify dissatisfiers, satisfiers, and hybrid factors for the cruise industry overall and cruises on ships of different tonnage. The results can help managers in the cruise industry understand what aspects of cruises should be given more attention to improve their competitive edge. This study is one of the first to look separately at the determinants of customer satisfaction and dissatisfaction in the emerging cruise industry and proves that the two-factor theory is applicable in a new environment.     

The split delivery vehicle routing problem with minimum delivery amounts

In the vehicle routing problem, a fleet of vehicles must service the demands of customers in a least-cost way. By allowing multiple vehicles to service the same customer (i.e., splitting deliveries), substantial savings in travel costs are possible. However, split deliveries are often an inconvenience to the customer who would prefer to have demand serviced in a single visit. We consider the vehicle routing problem in which split deliveries are allowed only if a minimum fraction of a customer’s demand is serviced by a vehicle. We develop a heuristic method for solving this problem and report computational results on a wide range of problem sets.     

Appraisal of literature on customer experience in tourism sector: review and framework

A substantial body of literature has been built up in experience marketing. In spite of that there is no cohesive framework that has systematically examined antecedents, formation and implications of customer experience, or has classified different aspects of customer experiences. The purpose of this article is to derive an integrative review of published articles on consumer experience and its related topics. The study synthesizes the research on customer experience through two different but interrelated streams: (1) experience as a product attribute or a complete product and (2) consumer experience created due to customer interaction with the physical environment or people. This article develops a framework that corroborates literature related to (1) definitional aspects of customer experience, (2) formation of customer experience, (3) asserting consumer psychology in engaging in the creation of experience and its consumption and (4) the effects of customer experience. We first review available prior research and present the salient features of these articles and their findings. The research gaps are then identified and a set of propositions provided, followed by directions for future research. This article also identifies some methodological issues that are relevant in the context of individual level effect on customer experience.     

Competing on value: Perspectives on business class aviation

This paper presents an airline consumer choice model to analyze value propositions – the benefits delivered to passengers in relation to the fares paid. The model is developed using a study of clientele flying business class, studying three premium start-up airlines Eos, MaxJet and Silverjet that provided business-class-only flights on London–New York routes. Premium airlines were compared to selected rival full-service carriers for sustainability of their business class value propositions, using preference profiles of five target customer groups that comprise the business class passenger population. We find that the three premium start-up airlines were superior in offering some appealing features at reasonable fares that were highly valued by some passengers, although they were unable to replicate some other attractive aspects in the value propositions of the incumbents. This suggests a coexistence of premium entrants and incumbent carriers would have been possible, had the environment they operated in not changed drastically for the worse, before the premium entrants had achieved the financial robustness necessary for survival.     

铁路客运客户价值分析模型的构建

建立完备的客运客户价值分析体系,确定铁路效益贡献价值不同类别的客户,对合理配置运力资源有重要作用。由于铁路运输的客户价值很难量化,需考虑多种因素,因此构建铁路客运客户价值分析模型,主要从客户角度出发,结合客户评价的主观性,以客户效用函数来量化客户价值。     

Relational benefits,switching barriers and loyalty: A study of airline customers in Taiwan

A model of looking at switching barriers and customer loyalty stemming from customer relational benefits is developed. In-depth interviews with airline customers revealed that, in addition to confidence, social, and special treatment benefits originally identified in the Western cultural context, ‘respect benefits’ surfaced as an additional relational benefit type in Taiwan. The hypotheses were tested using data collected from airline relational customers. Results showed that social benefits and confidence benefits had significant and positive influences on switching barriers and certain relational benefits had a larger effect on switching barriers and customer loyalty than others.     

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.     

Factors influencing the intentions of passengers regarding full service and low cost carriers: A note

This study investigates discrepancy in factors affecting passengers' intensions regarding using full service and low cost carriers. A conceptual model, that originally focused on the former, is adopted and slightly revised according to the service properties of low cost carriers. To validate the revised model, a questionnaire survey on passengers of Spring Airlines, the first low cost airline in China, was conducted. The results indicate differences in attitudes towards full service and low cost carriers. Service perception is a latent variable with the most significant influence on intentions about using full service carriers, but exhibits less effect on intentions regarding low cost operators. Conversely, service value exerts the greatest effect on intentions for possible low cost passengers.