A combined MCDM model based on DEMATEL and ANP for the selection of airline service quality improvement criteria: A study based on the Taiwanese airline industry

The aim of this study is to select airline service quality improvement criteria for the Taiwanese airline industry. Numerous factors such as low railway prices, the development of high-speed rail, increases in petroleum prices, increases in foreign airline competition, and the recent economic depression have led many airlines in Taiwan to encounter financial difficulties and even closure. Researchers have begun to identify critical service quality improvement criteria with the goal of increasing the competitive advantages of airlines. Most of the selected criteria, however, suffer from a major technical problem: all of the measurement dimensions are independent, leading to inadequate criteria for measuring service quality. Our calculations consider the interrelationships and effects among the evaluation dimensions and criteria to precisely rank and select criteria. The value of this study is that it provides airlines with a direction for measuring and improving their service quality with the goal of developing sustained competitive advantage over the long term.     

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.     

The effect of airline service quality on passengers’ behavioural intentions: a Korean case study

This paper seeks to improving our understanding of air passengers’ decision-making processes by testing a conceptual model that considers service expectation, service perception, service value, passenger satisfaction, airline image, and behavioural intentions simultaneously. For this testing, path analysis via maximum likelihood estimator is applied to data collected from Korean international air passengers. Service value, passenger satisfaction, and airline image are each found to have a direct effect on air passengers’ decision-making processes.     

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.     

Student’s vacation travel: A reference dependent model of airline fares preferences

This article reports the results of student vacation travel choice analysis using a reference dependent model of airline fare preferences. Findings suggests, as expected, that the preferences/utility decreases with increasing levels of cost. The evaluation of the airfare, however, becomes significantly more critical in the regime were low-fare airlines are more expensive than the regular airlines, meaning that price sensitivity for low-fare airlines is higher in this case. Part-worth utility functions for airfare as part of a more general portfolio model of vacation decisions of students suggest that indeed a reference dependent model captures such regimes in utility space.     

A modified VIKOR multiple-criteria decision method for improving domestic airlines service quality

This study applies a modified VIKOR method to improve service quality among domestic airlines in Taiwan. Our model allows decision-makers to understand the gaps between alternatives and aspired-levels in practice. A large sample is used to establish a complete service quality evaluation framework for reducing the gaps to achieve the aspired-level. We then applied the modified VIKOR method to establish the gaps in priorities between alternatives and aspired-levels. Finally, based on these gaps in priorities, we provide managerial implications to improve different carriers for satisfying the customers’ needs to achieve the aspired-level.     

Analysis of prospective airline mergers using a simulated annealing model

This paper examines the efficacy of a simulated annealing model of the US airline network in analyzing potential mergers between major airlines. The simulation performs satisfactorily in modeling the current hub-and-spoke system focusing on the effects on passenger routings, producer profits, and consumer welfare. In general, the simulated annealing model reasonably demonstrates the price and demand effects due to a merger of major carriers. While it cannot take into account all relevant information, such as labor union relationships and negotiating tactics, it can offers insight into the implications of airline mergers.     

A study of the airline boarding problem

The airline industry is currently under intense pressure to simultaneously increase efficiency, customer satisfaction, and profitability. The boarding process is one way to achieve this objective as it lends itself to adaptive changes. The purpose of this paper is to determine the most cost-effective way to board passengers and still maintain quality and customer satisfaction. We conclude that the best strategy is to use a non-traditional methodology of outside-in or some modification thereof. The findings suggest that airline managers should consider issues related to evenly distributing boarding activity throughout the aircraft, developing more effective policies for managing carry-on luggage, and using simultaneous loading through two doors.     

Some potential issues of service quality reporting for airlines

Prior studies have examined the value relevance of operating measures in the airline industry. These indicators, however, have been evaluated in isolation. This study adds to the extant literature by investigating the interactive effects of service quality (e.g., on-time arrivals, flight delays, mishandled baggage, and complaints) and aircraft productivity on the firm's future performance as measured by one-quarter-ahead Return on Assets or Return on Sales. Overall, results show that negative factors such as more complaints and more mishandled baggage interact with aircraft productivity to further reduce one-quarter ahead Return on Assets or Return on Sales, with the results of complaints being more pronounced. On the other hand, there is no support for the interaction between on-time arrivals and aircraft productivity.     

Gravity models for airline passenger volume estimation

This paper presents two gravity models for the estimation of air passenger volume between city-pairs. The models include variables describing the general economic activity and geographical characteristics of city-pairs instead of variables describing air service characteristics. Thus, both models can be applied to city-pairs where currently no air service is established, historical data is not available, or for which factors describing the current service level of air transportation are not accessible or accurately predictable. One model is limited to city-pairs with airports not subject to competition from airports in the vicinity, while the other model includes all city-pairs. Booking data of flights between Germany and 28 European countries is used for calibration. Both models show a good fit to the observed data and are statistically tested and validated.     

Corporate social responsibility programs choice and costs assessment in the airline industry—A hybrid model

Corporate social responsibility (CSR) has taken an increasingly important role in business. Here we develop a technique for operationalizing CSR programs for air transportation within the context of limited physical resources. A hybrid model for selection and costs assessment is proposed to address inter-relationships among CSR criteria using trial and evaluation laboratory methods, analytical network processes and zero–one goal programming. The activity-based costing approach is applied to estimate costs of the chosen programs and an example looking at China Airlines is presented.     

A freight transport optimization model for integrated network,service, and policy design

This paper presents a freight transport optimization model that simultaneously incorporates multimodal infrastructure, hub-based service network structures, and the various design objectives of multiple actors. The model has been calibrated and validated using real-life data from the case study of hinterland container transport of the Netherlands, where CO₂ pricing, terminal network configuration, and hub-service networks are chosen as the design measures. Policy packages combining multiple types of policies show better network performance as compared with the optimal performance resulting from a single policy type. This illustrates the value of incorporating multiple types of policies simultaneously in freight transport optimization.     

A novel interval-valued fuzzy MCDM method for improving airlines’ service quality in Chinese cross-strait airlines

This paper presents an effective approach based on combining VIKOR, GRA, and interval-valued fuzzy sets to evaluate service quality of Chinese cross-strait passenger airlines via customer surveys. The proposed approach can enable decision-makers to understand the gaps between alternatives and aspired levels. An empirical study is used to establish a complete service quality evaluation framework for reducing the gaps to achieve the aspired level. Based on the gaps in priorities, it can help an airline to identify its own strengths and weaknesses in specific areas of passenger service to further improve service quality.     

Improving bus service quality and information in Winchester

This paper reports the results of a package of measures, contained within a quality bus partnership (QBP), designed to improve bus service quality and information on three city centre routes in Winchester, including the Park and Ride (P&R) service. These measures were implemented by Hampshire County Council, Stagecoach Bus Company and Winchester City Council as part of the EU sponsored MIRACLES project, which ran from 2002 to 2006 and whose aims included reducing the environmental impacts of transport at the local level while increasing urban accessibility.These measures included the introduction of new buses, increasing the frequency of one of the main city centre bus routes, new bus infrastructure such as new shelters and poles, physical improvements to the bus/rail interchange and the printing of pocket travel maps. In addition, one of the P&R car parks was extended so that the capacity of the scheme was doubled. The objectives of this work package were to contribute to an 8% increase in bus patronage and the satisfaction rating of bus passengers on the QBP routes as well as integrating public transport services more effectively within Winchester.A review was carried out of bus travel and users’ needs, quality bus partnerships, bus-based P&R schemes and the importance of frequency of service to increasing patronage.In order to evaluate the effects of these measures, data were collected from the bus operator Stagecoach regarding patronage, reliability and the average age of the fleet. In addition, two bus questionnaire surveys were carried out to assess passenger's views to changes made to these three city centre bus services. An evaluation of the QBP routes was made to see how quickly investments made in purchasing the new buses and extending the P&R car park would be recovered. Conclusions and recommendations have been made with regard to the effectiveness of the changes made to the three bus city centre services as well as their cost effectiveness.     

A note on how to measure hubbing practices in airline networks

Benefits and costs associated to hubbing practices of airlines are still subject to much debate. In the previous literature, some standard spatial concentration indices have been proposed to measure it. However, we show that these indices are “ill-defined” because they do not take into account the salient characteristic of hubbing: connecting passengers. The purpose of this research is to present a new methodology which avoids the pitfalls of other methods. Our new methodology also analyzes the level of concentration of the connecting passengers studying two different dimensions: hub airports and routes. Finally, we apply our methodology to some US carriers.     

Characterisation of airline networks: A North American and European comparison

This paper contrasts the North American and European air transport markets using the extensive Official Airline Guide Databases. The pattern of network development in the two continental regions is examined using data for 1996–2008. The top ten carriers in both regions are analysed closely in terms of network structures and the basic geographical characteristics of these networks are highlighted. In addition, different measures of air transport activity such as seating capacity, and number of movements and of routes are compared. Visualisations of carrier networks are used to highlight the different network strategies operated by low cost and full service carriers. European carrier networks display many significant differences to North American carrier networks. European carriers generally organise their networks around one or two key nodes within the member state in which they are registered and generally do not operate interactive, continental-wide, multiple hub-and-spoke networks as do North American carriers. European and North American low-cost carriers operate much more interconnected networks than full services carriers. Southwest Airlines stands out as operating a particularly highly interconnected network.     

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.     

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.     

Inventory optimization for a customer airline in a Performance Based Contract

The supply of spare parts has a crucial role in the aviation sector, mainly due to the high costs of spare parts and to the strict availability requirements. In a stand-alone scenario, an airline owns the spare parts and manages the maintenance tasks by itself. A new trend consists of not owning the spare parts and delegate the maintenance tasks to an external company, taking advantage of a specific Performance Based Contract (PBC). The PBCs aim to reduce the ownership cost for the customer airline, while ensuring a target system performance. Spare parts become a variable cost for the customer airline and a business income for the maintenance supplier, which is commonly another airline.This paper proposes an innovative model, i.e. the PBC-METRIC, which supports the customer airline manager to minimize the spare parts supply cost, in compliance with the airline availability requirements and with respect to the PBC. In detail, the PBC-METRIC models a multi-echelon, multi-item, single-indenture, multi-transportation network, by an innovative two-steps algorithm, defining the PBC specifications as modelling variables and parameters. A case study on a European airline, with the role of customer in a PBC, illustrates the outcome of the model.