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.     

Antecedents of airline passenger loyalty: Low-cost versus traditional airlines

This study identifies the antecedents of airline user loyalty. A survey is administered to users of three airlines operating Barcelona–London flights. The results show that the principal antecedent of conative loyalty is affective loyalty. The main antecedents of affective loyalty are satisfaction and trust, the latter being revealed as a key variable for guaranteeing the success of relationships between the airline and its users, and also for understanding long term purchasing behavior.     

Predicting airline passengers’ loyalty using artificial neural network theory

The study explores a model for predicting airline loyalty using the antecedents indicated in previous studies. Data was collected using a questionnaire distributed to 614 domestic air passengers using the snowball sampling method. The measurement tool had 16 scale items constructed on the recommendations of previous studies. Passenger satisfaction, airline service quality, passenger perceived value, and airline image are identified as determinants for airline loyalty. The predictive analytical approach of Artificial Neural Network theory and covariance-based Structural Equation Modelling for determining causality is employed in the study. The artificial neural network model predicts airline loyalty with 89% accuracy. Sensitivity analysis suggests passenger satisfaction as the most significant predictor of airline loyalty. The causal study supports that passenger satisfaction mediates the relationship between airline service quality and airline loyalty.     

Perceptions of premium service and superiority: Why do customers pay more for high-value-added domestic airline services in Japan?

This paper clarifies the factors influencing customers' perceptions of premium service and superiority for high-value-added domestic airline services in Japan, and explains how these perceptions impact customer loyalty.To gather data for the analysis of consumers' perceptions, a questionnaire survey of 515 respondents who use high-value-added domestic airline services was conducted. These respondents' data were analyzed using structural equation modeling.The most valuable finding is the distinction between the perceptions of premium service and superiority, both of which strongly influence customer loyalty. This finding has two important implications. First, staff correspondence has a strong influence on customer loyalty – not directly, but through customers' perceptions of premium service and superiority. Second, perceptions of premium service and superiority influence customer loyalty separately. This finding may assist in the development of innovative high-value-added services.     

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.     

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.     

Service quality and customer satisfaction of a UAE-based airline: An empirical investigation

This paper investigates the linkages among service quality, service provider image, customer expectations, perceived value, customer satisfaction and brand loyalty in a Dubai-based airline. Initially, the determinants of service quality were identified utilizing the SERVQUAL framework with some modification. Service quality was then used as an antecedent to measure customer satisfaction, a condition which can bring about brand loyalty. In a research initiative using a quantitative approach, data from 253 questionnaires was analyzed. Using structure equation modeling, the data analysis suggests that service quality, perceived value, and brand image have a positive significant impact on customer satisfaction, which can in turn lead to brand loyalty. Theoretical and managerial implications are discussed.     

A study on passengers' airport choice behavior using hybrid choice model: A case study of Seoul metropolitan area,South Korea

Improving explanatory power is significantly important to understand variables that affect attitudes and perceptions in the decision process. This paper estimates not only tangible attributes but also intangible perceptions and attitudes using a hybrid-choice model to study air passengers' flight choice behavior. The empirical study was conducted for the choice behavior of air passengers at Seoul Metropolitan Area, South Korea. The analysis uses a two-level Nested Logit model in order to examine which factors have more effect on passengers’ choice of airport and airline simultaneously by using airport and airline choice attributes. The study also estimated the parameters in the equations relating the latent variable by using Structural Equation Model (SEM). The results indicate that the models with latent variables have improved Goodness-of-Fit when compared to classical discrete choice models and effectively capture psychological factors that affect choice behavior of passengers.     

Airline choice and tourism growth in the Azores

This study examines the effect of airline choice on tourism growth in the Azores. The results reveal that tourism numbers increased sharply as more alternative choices emerged to visitors after the entrance of low-cost carriers due to airline liberalization. Moreover, different airline types attract different kinds of visitors, contributing to tourism diversification. In particular, low-cost airline tourists are younger than those who travel in full-service airlines or charter flights. They are also more likely to buy a last-minute ticket and to come from Iberian and French markets. Charter flights, however, are important choices for those traveling to the Azores from more distant markets such as Sweden and Denmark.     

The good,the bad,and the ugly: 30 years of US airline deregulation

The US airline industry was deregulated in 1978 and has undergone significant changes in industry structure, profitability, employment, passenger volume, and patterns of service and fares, among other characteristics. This paper sets out to make three contributions to the literature as related to the story of airline deregulation. First, discussion of economic theory will provide the context for an updated overview of the positive, negative, and really negative results of US airline deregulation, summarized in the form of “the good”, “the bad”, and “the ugly”. Second, this paper provides a periodization of the 30-year history of US airline deregulation that is important in understanding the cycles of change as reflected in the industry’s financial performance and other relevant data. Third, this paper contributes to the renewed debate about the efficacy of deregulation and liberalization policies, particularly at a time when the global financial crisis has cast a harsh spotlight on the (un)desirability of these policies. Some of the good results during the 30 years of airline deregulation, from the industry and consumer perspective, include higher passenger volumes, more service to the most popular destinations, and lower fares on average. Bad results include financial and employment instability, diminution in the quality of airline service overall, and fewer flights and higher fares to smaller places. The recent 2000–2005 period has been particularly ugly, as the airline industry has lost over $30 billion, and several high-profile carriers, such as United, Delta, Northwest, and US Airways, were forced into bankruptcy.     

Calculating load factors for the transatlantic airline market using supply and demand data – A note on the identification of gaps in the available airline statistics

This paper takes a critical view of the verification of load factors for the direct transatlantic airline market by combining supply and demand-data. The supply-related data originate from the Official Airline Guide, a well-known data source that contains information on scheduled flights. The demand-related data originate from the Marketing Information Data Transfer database, a data set containing information on actual airline bookings. Combining both data sets enables us to calculate the seat occupancy of direct flights between North-West Europe and the US for 2001. Based on the results, we assess the utility of the joint use of these data sources for aviation economic research, and identify various gaps in the available airline statistics.     

Influence of perceived service fairness on relationship quality and switching intention: an empirical study of restaurant experiences

Restaurants and dining out are an important part of the tourism industry and are a major business in their own right. The purpose of this study was to examine the relationship between perceived service fairness, relationship quality, and switching intention in fine dining restaurants. Data were collected through a convenience sampling method from 164 customers from only fine dining restaurants in the northern region of West Malaysia (Kedah, Perak, Penang, and Perlis States). Unlike all previous studies which have focused exclusively on the role of justice in service failure and recovery, this study considers all-inclusive service delivery contexts. The results of this study showed that all the dimensions of perceived service fairness have a significant relationship with switching intention. In addition, perceived service fairness has a positive relationship with trust in all dimensions except for outcome fairness. Moreover, the results found that among the perceived service fairness dimensions, only procedural fairness and interactional fairness had a positive relationship with commitment and price fairness; outcome fairness was not related to commitment. Finally, the results confirmed the negative and significant relationship between relationship quality (trust and commitment) on switching intention. Managerial implications of these findings are briefly discussed.     

The impact of an aircraft's service environment on perceptions of in-flight food quality

Airlines are currently striving to improve the quality and quantity of in-flight food, because research has shown that catering is a key attribute for a customer's satisfaction with airline service quality. But the role of an airline's service environment in forming customer perceptions about food quality has not yet been properly investigated. Using electronic word-of-mouth data from N = 3996 airline passengers, this study deploys a linear regression model at multiple levels to relate perceived in-flight food quality with both the overall service environment and its formative components. The results clearly unveil the importance of an aircraft's service environment on perceived in-flight catering quality; perceptions of food quality are primarily influenced by the quality of cabin staff service, followed by entertainment and seat quality. Instead of continuing with the current practice of signing up top chefs to improve menus, airlines may instead consider putting their management focus on service improvements.     

The formation of the tourist's loyalty to the tourism distribution channel: how does it affect price discounts?

Given that distribution agents who wish to maximize long‐term business profits should not only attract new consumers but also keep them loyal, this study analyses the variables that determine the consumer's loyalty to distribution agents for tourism. Although retailers in the service industry employ price discounts on products to motivate short‐term sales, they often establish promotional policies without considering their effect on the long‐term business results. This paper presents an empirical study of the effect of price promotions on tourists who travelled with a package tour. The results indicate that price discounts do not erode consumer loyalty directly, and that the key to obtaining loyal consumers is to offer package tours that customers perceive as providing high‐quality service. Copyright © 2007 John Wiley & Sons, Ltd.     

Celebrity livery featured aircraft,the Moneki Neko (fortune cat) of airlines

Aircraft livery is a painting scheme on the aircraft that allows an airline not only to differentiate its aircraft from those of others, but also to promote the perceived values of the airline. Besides being visually attractive, celebrity-themed aircraft liveries also become increasingly popular today because they can influence consumers' perceptions of airlines. This study uses the data collected from Taiwan international airport, ranked the world's top 15 heaviest passenger traffic, to investigate the influences of celebrity worship on the original Theory of Planned Behavior's constructs, and purchase intention. The results reveal significant positive relationships between celebrity and attitude, perceived behavioral control, and purchase intention. Finally, contributions and implications are discussed.     

The effect of de-hubbing on airfares

This paper studies the price effect of de-hubbing, which occurs when an airline ceases hub operations at an airport. We develop a simple theoretical model to study the impact of de-hubbing on prices and quantities of direct flights at the hub airport. Using an event study of seven cases of de-hubbing between 1993 and 2009, we analyze how average airfares change following de-hubbing. Consistent with the theoretical implications, the empirical results suggest that airfares decrease when there is a low-cost carrier presence at the de-hubbed airport, whereas airfares increase when the de-hubbed airport is not serviced by a low-cost carrier.     

Modeling Airline Crisis Management Capability: Brand attitude,brand credibility and intention

Crisis management consists of a number of capabilities which evaluate crisis signals and implements actions to minimize damage. Both identifying these capabilities and understanding their influence on perceptions of brand attitude, credibility and intention to purchase offers significant theoretical and managerial insights. This paper, therefore, proposes a cause-effects model of perceived airline crisis management capabilities and their influence on brand credibility, brand attitude and purchase intention in the aftermath of large-scale Taiwanese airline strikes. Using data collected via an online survey, the study makes three contributions to airline crisis management. It, firstly, identifies a set of crisis management capabilities for strike-hit airlines, secondly, it offers a causal chain of perceived airline crisis management capabilities, brand attitude, brand credibility and purchase intention. Furthermore, it the full mediating effects of brand credibility and brand attitude in the causal chain. This study, thus, makes conceptual and methodological contributions to crisis management and purchase intention research and provides practical insights into effective airline crisis management and brand management for the airline industry.     

Airline passengers’ continuance intention towards online check-in services: The role of personal innovativeness and subjective knowledge

This study integrates the individual psychology constructs (personal innovativeness and subjective knowledge) with the Technology Acceptance Model to develop and test a model of airline passengers’ continuance intention towards online flight check-in services. Predictions were tested with data from a sample of airline passengers in China who have experienced the online check-in service. The findings of this study demonstrate that airline passengers’ innovativeness and subjective knowledge have a direct effect on continuance intention, and an indirect effect through partial mediation of perceived ease of use and perceived usefulness. Theoretical and managerial implications are discussed.     

Price and marginal cost effects of on-time performance: Evidence from the US airline industry

We examine the impact of flight delay on market power in the U.S. airline industry. Consistent with the literature, our estimation results confirm that flight delays are associated with negative consumer welfare effects. Most importantly, we find that poor on-time performance negatively impacts product markup—proxy for market power. Furthermore, we are able to decompose these markup effects into price and marginal cost effects and evidence suggests that the source of these negative markup effects is primarily driven by negative price responses.     

A preliminary examination of the relationship between consumer attitude towards space travel and the development of innovative space tourism technology

With increasing global competition in service sectors, innovative technologies have radically changed the tourism industry, and to be successful innovative products/services must have clear, significant points of difference that are related to needs in the market place. Furthermore, changes in consumer perceptions that emanate from an innovation are central to its effective product and service design. Although for most of us space travel is still a faraway dream, it is in fact a future probability that will increasingly attract travellers who seek new vacation experiences, and as a result, sustain academic interest. Thus, in initiating space tourism for the purposes of recreation, leisure and knowledge enhancement, a preliminary estimation of potential global demand characteristics that are specific to consumer innovators for space travel needs to be undertaken prior to promotion of research and development. In this context, this paper investigates both consumer attitudes towards space travel by analysing the components of motivated consumer innovativeness and the interest that potential consumers have in developing space tourism technology innovations within Taiwan. Consumer innovativeness is complex and comprised four innovativeness types, namely, social, functional, hedonic and cognitive. As product/service innovation development has been relatively unexplored in the mature industry of tourism, many business managers would welcome an understanding of which vacation travellers are most likely to be the earliest buyers of such an exciting new product. With data collected from a sample of 354 Taiwanese, this research uses mediated regression to examine the influence of the four types of consumer innovativeness on consumer's attitudes and acceptance of a space tourism technology innovation, and the mediating role perceived novelty plays in the relationship. The findings indicate that only hedonic and social innovativeness are associated with improved consumer attitude and that novelty partially mediates the relationship for those two types of consumer innovativeness. The implications for theory and practice are discussed. Limitations and directions for future research are also addressed.