Impact of an Airline Merger on Customer Satisfaction

ABSTRACT

Given the radical changes in the airline industry where many airlines struggle to sustain their financial viability, consolidation appears to be one viable option for airlines. While airlines guarantee that consolidation will bring better customer service, the traveling public fears the effects of mergers that result from less competition. Using the AA/TWA merger, this article presents the results of an empirical study that provides both the airline public and airlines with insight into the real impact of an airline merger on airline service and customer satisfaction.     

Recommend or not? The influence of emotions on passengers’ intention of airline recommendation during COVID-19

Due to the COVID-19 pandemic, the airline industry has undoubtedly suffered serious losses. Investigation of passenger's intention to recommend an airline is urgently needed for airline companies to formulate specific retention strategies and revitalize the industry. Therefore, this study mainly sought to identify the latent factors that determine airline passenger's recommendation intention during the COVID-19 period, and investigate how the emotions expressed in passenger reviews affect their intention to recommend an airline. From the period between January 2020 and October 2021, 6798 online reviews were collected and analyzed. The results indicate that four out of eight emotional dimensions, including joy, trust, anger, and disgust, significantly influence passengers' intention to recommend. This study not only extended the applications of the expectancy-disconfirmation theory and Plutchik's emotional theory but also provided instructive suggestions for airline businesses that need to formulate marketing strategies, especially during the COVID-19 period.     

The impact of terrorism on European tourism

This paper estimates the influence of terrorist attacks on European tourism through the short-term post hoc response of the airline industry and passengers. We use a seasonally-adjusted ARMA-GARCH methodology on unique datasets that examine changes in tourism as measured by ASKs, seats filled and changes in both fares and revenues. Traffic flows are found to fall despite significant fare reductions; however, this response varies substantially based on the flight origin and ticket-type purchased. We found that business travel slows substantially due to duty of care legislation for corporate transport. While we found evidence indicating substantial airline fare reductions, in the majority of investigated cases this response was unable to mitigate substantial reductions in passenger demand and flows across varying ticket types.     

The Effect of Cross-Industry Cooperation on Performance in the Airline Industry

Summary

Airline services are one part of the inter-connected network of travel services. Brandenburger and Nalebuff (1995, 1996) suggested that firms may add value to their offerings by cooperating with other members of a firm's value net (competitors, substitutors, customers, and suppliers). In a 14-year longitudinal study, this paper explores the evolution of cooperative relationships between members of the U.S. domestic airline industry and other firms outside the U.S. domestic airline industry, with the goal of identifying performance effects associated with such cooperative alliances. Results of the pooled, cross-sectional time series regression indicate that cooperative alliances outside the U.S. airline industry contribute positively to performance when environments are rapidly changing and variable.     

Nexus between CSR and DSIW: A PLS-SEM Approach

Various studies have acknowledged the significance of “Corporate Social Responsibility” (CSR) for enhancing organizational performance. However, less is known about it’s micro-level impact on employees’ working behavior, including employees’ “Desire to have a Significant Impact through Work” (DSIW) in the airline industry. Therefore, this study offers a new insight by testing a proposed parallel-sequential multiple mediator conceptual model, for assessing the nexus between CSR and employees’ DSIW in the airline industry. Proposed conceptual model is adapted from John et al.’s (2019, 2017) DSIW related models, for investigating the potential sequential and parallel multiple mediation of employee engagement, organizational pride and organizational identification, in the nexus between CSR and employees’ DSIW. Further, PLS-SEM approach was employed for analyzing the data, collected from 640 respondents, working in a well-reputed airline in Malaysia. Findings confirmed a partial mediation of employee engagement, organizational pride and organizational identification, for determining the nexus between CSR and employees’ DSIW, in the airline industry. Furthermore, findings of our post-hoc analysis have also revealed that, employees working on the non-managerial positions, are more influenced by organizational policies, towards CSR related initiatives in the airline industry. However, more similar studies should be conducted to further validate these outcomes, in the other sectors (e.g. food and beverages, lodging and recreation etc.) of the hospitality industry.     

Will you fly with this airline in the future? An empirical study of airline avoidance after accidents

ABSTRACT

While safety is the paramount concern of the airline industry, accidents do happen. The subsequent media attention relating to an airline accident might lead potential passengers to avoid certain airline operators. This study examines factors potentially determining tendencies to avoid such airlines. A self-administered random survey was conducted with 230 respondents in a metropolitan area. Structural equation modelling was employed and the results highlight the significant role of consumer trust and service recovery. Consumer trust plays a mediating role in the relationships between the factors (i.e. previous flight experience, company image, stability attribution, controllability attribution) and the decision to avoid an airline.     

Crisis Management—

SUMMARY

This paper reviews the crisis preparedness of the Greek passenger shipping industry after two widely publicized crises events (Superfast III and Express Samina). As far as Greece is concerned, the travel and tourism industry is one of the most significant contributors to the country's GDP at a rate of more than 10% and the country's passenger shipping industry contributes fundamentally to this figure. Overall findings suggest that both the State as well as the passenger shipping companies encompass crisis management tools and mechanisms to protect the industry, and the whole Greek tourism sector. This paper also identifies the 'ripple effect,' the wider implications a crisis can have on the business environment. Therefore the Faulkner (2001a,b) model for tourism disaster management framework is adapted to accommodate permanent changes enforced on the whole industry as an outcome of a crisis situation.     

Crisis Management in Tourism

SUMMARY

Anticipating and preparing to deal with the threat of crises precipitated by disaster from natural and people-made catastrophes is an important challenge facing tourism. As an industry tourism is particularly susceptible to such negative events putting the sector under almost constant threat of a crisis. Before the catastrophes of 9/11 and the Asian Tsunami of 2004 crisis management in tourism was essentially a reactive response, as opposed to a state of proactive anticipation. A review of the emerging literature on crisis management in tourism is given to identify the foci of the current academic discourse. More systematic input by human resource management was identified as a way to assist tourism businesses in preparing for and dealing with crises. By discussing crisis management within a services management context, a contribution is made to the debate on the need for proactive crisis management within the tourism industry. A central plank to this position is that the preparation stage of crisis management in tourism is the actual beginning of any strategic response to recovery. Well conceived and executed human development is promoted as an initiative and key component of crisis preparation and management. Developing the potential of human capital at the industry and enterprise level to deal with crisis management is a way of reducing the vulnerability of tourism enterprises to crises. Measures are suggested that may be taken to prepare tourism businesses for crisis situations.     

Computer reservation systems and airline competition

Computer reservation systems have become the primary means of disseminating air travel information to the airline-sales distribution system. These systems have had a major impact on competition within the airline industry. Recent CAB rules designed to remove competitive inequitites in these systems have themselves become a centre of controversy, attracting considerable attention in the air-travel industry. The outcome of this controversy will shape the distribution of airline services for the foreseeable future.     

What influences company attachment and job performance in the COVID-19 era?: Airline versus hotel employees

Airline and hotel employees are experiencing multiple forms of precariousness amid the COVID-19 pandemic, which have increased workers' distrust of their respective airline/hotel businesses and affected job performance and retention. This research builds and tests two sturdy theoretical frameworks to explain airline and hotel employees' job performance and behavior during the COVID-19 pandemic. The frameworks, developed using a quantitative method, adequately account for employees' company attachment and job performance by using their perceived job insecurity, life satisfaction, and job satisfaction as the key antecedents; while employees' perceived job insecurity influences the formation of attachment to the company and job performance. The mediating nature of life and job satisfaction is also examined alongside the moderating role of two different industry types (airline versus hotel). The results show that the process of generating job performance differs between airline and hotel employee groups. The research implications and value are discussed.     

European air transport in the 1990s

This article considers possible future developments in the European airline industry. In 1987 the EEC Council of Transport Ministers agreed on a more liberal regulatory regime aimed at promoting more airline competition. With 1992 the target for the elimination of all barriers to an internal EEC market, the marketing power of large airline size will emerge as the major factor shaping the industry. If EEC airlines are able to use the ‘Right of Establishment’ provisions of the Treaty of Rome to expand their operations into other EEC countries, this could usefully replace competitive market forces lost through national mergers.     

Consumer Perceptions and Behavior

Abstract

The primary objective of this article is to highlight the importance of consumer perceptions in strategic airline alliance settings. Previous research on strategic alliances, both in the service and manufacturing sector, has mainly focused on issues relating to the organization. Consumer perceptions have generally been ignored-in view of the pivotal role of the consumer in service settings a surprising neglect. The paper focuses on the airline industry, an industry with a high service element, to illustrate how positive results eventuating for partners in a strategic alliance may cover slow shifts in consumer attitudes, and behavior. If not carefully monitored, these shifts may adversely affect performance measures of individual alliance partners in the long-term.     

Towards transnational airlines

In spite of nationalistic pressures, regulation and a disinclination to disrupt the status quo, it is unlikely that development of the airline industry will now be diverted from the eventual evolution of transnational giants. Stephen Wheat-croft, Director of Aviation and Tourism International, London, UK, discusses changing attitudes, policies and technologies which are likely to contribute to the inevitable domination of the airline industry by a few large multinationals.     

The Impact of Brand Relationship and Attributions on Passenger Response to Service Failure

It is important for service companies to develop and maintain consistent and stable consumer loyalty. Although consumer brand relationship and attributions have been applied to various service industries, they have not been investigated in the airline industry where passenger emotions are considered critical. This study addresses the consequences of brand relationship quality, the mediating influence of emotions, and the moderating role of switching costs through structural equation modeling of data collected from passengers who had experienced flight delay. The results suggest that (1) airline relationship with passengers is an important and valuable asset, especially in the case of stability attributions, (2) negative emotions play a partial or full mediator role in the causal relationship between attributions and behavioral intentions, and (3) minimizing negative emotions is more effective than relying on switching costs for behavioral intentions. It can be concluded that the airline industry should try to manage passenger emotions more appropriately since passengers have an emotional attachment to their brands and passengers' negative emotions can be influential to repurchase intentions when service failures occur.     

Crisis Communication and Recovery for the Tourism Industry

Abstract

As the number of disasters and crises affecting the tourism industry increases, it is becoming necessary to understand the nature of these disasters and how to manage and limit the impacts of such incidents. This paper defines crises and disasters before discussing the area of crisis communication management and crisis communication in the tourism industry. The paper then applies the foot and mouth disease (FMD) which occurred in the United Kingdom to crisis communication theory at a national level (by examining the response of the British Tourist Authority) and at a local level (by examining the response of a District Council). The response was limited in part because of a lack of preparedness, but also due to the nature of the foot and mouth outbreak, and the speed and severity of international media coverage. Action was taken in the emergency phase of the crisis and was reactive involving inconsistency in developing key messages to stakeholders, partly due to confusion and a lack of information at the national level. Recovery marketing was also limited due to the length of time of the disease outbreak. This paper provides lessons for destinations and organisations are discussed which may help develop crisis communication strategies for tourism organisations.     

Marketing Culture and Business Performance in the Airline Industry

Abstract

In recent years the airline industry has witnessed increased emphasis on the cultivation of a culture which fosters the effective implementation of marketing programmes. This growing attention stems from the belief that sound marketing practices provide an important source of competitive advantage in the service sector which is characterised by high levels of interaction between firms and their customers. Moreover, marketing academics and managers proclaim that a strong marketing culture leads to customer retention, which in turn, yields higher profitability. In this study an attempt is made to investigate empirically the relationship between UK airline firms' marketing culture and business performance. Our results indicate a strong relationship between marketing culture and business performance. To conclude, implications of the findings for airline managers and avenues for future research are discussed.     

Review of studies on airline website evaluation

The continuous growth of electronic (e) commerce prompted businesses to manage effective websites to attract customers and retain loyalty. Website evaluation has been extensively researched, but a comprehensive and globally accepted model is yet to be established in the tourism and hospitality industry. This review of studies on airline website evaluation reveals an undesirable situation. Existing literature, especially on the low-cost carrier (LCC) sector, is inadequate despite the heavy reliance of this sector on web-based sales. Neither specific nor comprehensive instruments for effectively assessing airline websites are found. Therefore, a comprehensive website evaluation model in the airline or LCC context is necessary.     

Crisis Management and Tourism

Summary

Undoubtedly, the tourism industry is one of the most susceptible and vulnerable industries to crises. Recent major events that had devastating impacts on the industry ranges from natural disasters to epidemics, and from mismanagement to terrorist attacks. These kinds of episodes are not confined to any geographical region, as crises respect no political or cultural boundaries. Two major recent events illustrate this point: the BSE crisis in the UK in the 1990s, which was followed by the foot and mouth disease in 2000 and 2001, crippled the industry in several regions of England. Most recently, the events of September 11th in New York and Washington changed the way the industry operates forever. Crises are not new to the tourism industry. However, it has been observed that tourism management capability and ability to deal with complex and critical situations are limited.

This paper discusses the concept of crisis management and its relevance to tourism. It presents an overview of the general trends in tourism crises events of the last two decades, assesses the impacts of major man-made crises on the industry, and argues for the importance of crisis management in tourism management. The paper also discusses the complex issue of crisis definition and its implications for organizations, and provides an operational definition of crisis management. Critical issues in crisis management, such as crisis anatomy, crisis incubation, risk perception in tourism and destination image, are discussed. Finally, the paper explores and analyses, in the context of crisis anatomy, the public sector handling of a major resort pollution crisis in Southern Brazil.     

The State of the Airline Industry

The present state of the airline industry in the United States is a result of many different factors since the industry was deregulated by Congress in 1978. Poor management decisions, a bad economy, and a change in business travel have all contributed to the current dismal economic state of the industry. The concentration in the industry means that deregulation that was envisioned by its supporters will never have an opportunity to be tested in the market place.     

Travel Agents and Their Survival Thomas

Abstract

The travel agency industry depends upon commissions for a majority of its revenue. When these commissions decrease or stop the industry must change the means in which revenue is made. The Internet has caused a significant reduction in airline ticket sales and therefore has caused travel agencies to change. In addition travel agencies have reduced commissions paid to airlines thus causing more changes. There were four categories of travel agencies discussed in the article along with their adaptation styles. These types include (1) the independent operator of a small travel agency with very limited resources (2) the normal agency with 2 or 3 agents which does a substantial business (3) the larger agency that is high-tech and high touch and depends on automation and the Web to some extent (innovators) (4) agencies that are Web based with very little automation otherwise and who were technologically adaptable and saw opportunity in the Web. The study examines how agencies have adapted and prospered through this transitional period.