Customer satisfaction and service quality in the Chinese airline industry

This paper focuses on studying the relationship between customer satisfaction, measured by customer complaints, and the service quality of Chinese carriers. By using a quarterly unbalanced panel data set covering twelve large and small carriers, our fixed effect Tobit analysis shows that customer complaints rise with increases in the number of damaged bags, but at a declining rate. By contrast, the on-time performance of scheduled flights has no significant effect on customer complaints. Furthermore, non-state or privately owned carriers receive significantly more customer complaints compared with state-owned carriers, and the largest number of complaints are made in the third quarter, which covers the high season of the summer holidays.     

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.     

A new hybrid simulation-based assignment approach for evaluating airlines with multiple service quality criteria

Evaluation of airlines based on service quality criteria can help to improve the processes of airlines, and also can give guidance to travel agencies to provide better choices for passengers and tourists. In this study, a hybrid simulation-based assignment approach is proposed to deal with multi-criteria decision-making problems with a group of decision-makers. A probability distribution is used to model decision-makers’ opinions and constructing a stochastic decision matrix. Then some efficient multi-criteria decision-making methods are utilized for evaluating alternatives in a simulation process. The proposed approach is applied to a problem of evaluation of five airlines with respect to opinions of 58 experts on 28 criteria. The results show the efficiency of the proposed to handle decision-making problems with a large number of experts. Moreover, the evaluation results are more reliable than the other decision-making approaches because of simulating decision-makers’ opinions, using multiple methods and evaluating based on aggregative results.     

Improving service quality using quality function deployment: The air cargo sector of China airlines

Recent-rising crude oil prices have impacted on the development of the air-freight industry making improved service quality and competitiveness— pressing issues for management. To examine the performance of China Airlines this paper employs quality function deployment to integrate inside quality technology and the voice of outside consumers, and using “House of Quality” charts, illustrates the company's performance in terms of service and offer suggestions for improvement. The conclusion shows, in terms of outside consumer voice, the three main factors demanding improvement and the three in greatest need of improvement regarding quality technology.     

Resilience of passenger boarding strategies to priority fares offered by airlines

Increased efficiency of airplane boarding via the jetway is achieved by sequencing passengers at the airport terminal. Various strategies have been developed and implemented at airports. However, even the best strategy can be distorted by the airlines priority fare. Priority passengers board in a random order which destroy the desired boarding sequence. This causes the aircraft aisle to be blocked in different locations. The article analyses the sensitivity of most common boarding strategies to the number of priority passengers. The article gives an example for Airbus A320 with single aisle cabin, configured in 30 rows of 6 seats each. To investigate this issue an original simulation model was developed, which allows to estimate the impact of the number of passengers with priority on the implementation of selected boarding strategies. The results obtained are astonishing. Such distortions have a negative impact on some strategies, while for some strategies better results are obtained. This discrete event based simulation model allows the process manager to choose the appropriate strategy or to abandon the jetway and use the airport stairs to avoid or reduce delaying the aircraft.     

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.     

Synergy of corporate social responsibility and service quality for airlines: The moderating role of carrier type

The potential exists for airlines' confronting challenges when providing high quality service while simultaneously adopting corporate social responsibility (CSR) in a cost efficient manner. This study explores synergistic effects of CSR and service quality on firms' performance in the U.S. airline industry. In particular, the examination involves synergistic effects according to types of air-carriers: low-cost carriers (LCCs) and full-service carriers (FSCs). Findings reveal: 1) a positive synergistic effect of service quality and CSR for FSCs, and 2) a negative synergistic effect of service quality and CSR for LCCs. These findings suggest that although improving service quality is apparently crucial, the improvement does not always increase firm performance when integrated with CSR activities. This study provides important implications for airline firms, suggesting efforts toward development and implementation of a strategy that can optimize competitive advantages.     

A productivity comparison of the world's major airlines

This paper measures and compares productivity and unit cost of the world's 23 major airlines using yearly panel data (1986–1993). An extensive effort was expended to put together a reliable database. These data are then used to accomplish the following: first, unit cost per unit of aggregate output is measured and compared. The effect of input price changes on the unit costs are also examined. Second, the ‘gross’ Total Factor Productivity (TFP) is measured and compared. In order to compare true productive efficiency across airlines and over time, a ‘residual’ TFP index is computed after removing effects of the variables beyond managerial control such as average stage length and composition of outputs. Log-linear TFP level, and TFP growth rate regressions are used to accomplish this task. Our results show that:

1. (a) during the sample period (1986–1993), the major European carriers and the carriers in newly industrialized countries in Asia have achieved significantly higher productivity growth than their North American counterparts;

2. (b) as a result, the productivity gap between North American and other carriers have diminished significantly;

3. (c) however, on average, the North American carriers still enjoy higher productive efficiency than the carriers in Asian NICs and European carriers, but the gap is closing very rapidly; and

4. (d) it is observed that, over time, the productive efficiency of carriers competing in the same markets tends to converge.

Finally, Asian NIC carriers clearly enjoy unit cost advantages over other major carriers. Our results show that European aviation liberalization which began in 1987 appears to have produced substantial productivity gains.     

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.     

On load balancing strategies for baggage screening at airports

We study load balancing policies for an airport baggage handling system (BHS). The performance of the screening subsystem is important as it can potentially cause traffic congestion of the whole BHS during peak period. Currently, the round-robin (RR) and the first-available (FA) polices are implemented at airports. This paper presents a simulative approach to evaluate the impact of load balancing policies on the system performance. Using discrete-event simulations, airport practitioners can assess the effectiveness of the policies according to the actual layout of a particular passenger terminal. In addition to the RR and FA, a join-shortest-queue (JSQ) policy is introduced. This scheme can be applied jointly with the RR for daily operations. A case study is presented to illustrate the characteristics of this scheme. Simulation results demonstrate that the RR-JSQ can replace the existing RR-FA for a better balanced load distribution and improve the overall system performance.     

The impact of service quality and price on passengers' loyalty towards low-cost airlines: The Southeast Asia perspective

The objective of this study is to examine the impact of service quality by adopting AIRQUAL model and price on passengers' loyalty through the linkage of passengers' satisfaction toward low-cost airlines from the perspective of Southeast Asia. With 200 questionnaires analyzed, the results suggest that service quality and price have a positive significant impact on passenger satisfaction, and as a result lead to passengers’ loyalty. Besides, the findings of this research also confirm the mediating role of customer satisfaction between service quality and loyalty, price and loyalty separately, which implies that customer satisfaction is a vital factor for an LCCs to survive in such a highly competitive aviation market.     

An analysis of the greenhouse gas emissions profile of airlines flying the Australian international market

International commercial flights (with the exception of flights between countries in European Union including Iceland, Norway and Liechtenstein) are currently not subject to greenhouse gas emission reduction regulation. To formulate effective and efficiency policy to manage greenhouse gas emissions from air transport, policy makers need to determine the emissions profiles of all airlines currently flying into their country or region. In this paper, we use 2012 data on airlines' aircraft characteristics, passenger load and cargo load (obtained from statistics reported by Australian Government Bureau of Infrastructure, Transport and Regional Economics) to estimate the volume and carbon efficiency on each international route flying to and from Australia. This is the first study to use actual passenger and cargo load data to determine the greenhouse gas (specifically CO₂) efficiency of airlines operating in the Australian international aviation market. Airlines' CO₂ emission profile is dependent on many factors including but not limited to the aircraft used, payload, route taken, weather conditions. Our results reveal that the airlines’ CO₂ emission profile is not only dependent on the aircraft used and the number of passengers but also the amount of cargo on each flight.     

An analytic hierarchy process for ranking operating costs of low cost and full service airlines

This paper develops an application of the analytic hierarchy process to rank the operating cost components of full service and low cost airlines. It takes into account the financial balance sheets and answers to a questionnaire submitted to the managers of selected airlines. The results suggest that the analytic hierarchy process can be appropriately used to obtain the ranking of the costs taking into account different views: financial, management and operative. Rental, office equipment and other supplies costs show the highest importance in the cost ranking, both for full services and low cost airlines. The robustness of the results is tested by Monte Carlo analysis.     

Productivity efficiency analysis of the airlines in China after deregulation

Using data envelopment analysis and the Malmquist productivity index, this paper studies productivity efficiency of various airlines in China after the Chinese government deregulated the aviation industry in 2005. The results show that the productivity efficiency of non-state-owned airlines improves rapidly and eventually exceeds state-owned airlines after the deregulation policy. Among the state-owned airlines, the productivity of the local airlines and their technical changes are better than those of the central airlines.     

Benchmarking the performance of Chinese airlines: An investigation of productivity,yield and cost competitiveness

In the past decade, the Chinese airline industry experienced extraordinary growth in size and profitability. However, no quantitative study has investigated the performance of Chinese airlines in terms of productivity and cost competitiveness. This study investigates the leading Chinese airlines' productivity, yield, cost competitiveness and input prices, and benchmarks them against major airlines around the world. It finds that Chinese airlines' productivity has improved significantly in the past decade but still lags behind that of industry leaders. Chinese carriers enjoyed high yields and low input prices in the domestic market, which led to high profitability in recent years. However, their cost advantage has been diminishing. To sustain long-term growth, Chinese airlines need to adopt the industry's best practices in a timely manner. Both the aviation markets and input markets in China should be further liberalized.     

Evaluating corporate social responsibility of airlines using entropy weight and grey relation analysis

This paper applies entropy weight and grey relation analysis to evaluate corporate social responsibility (CSR) performance of eight Chinese major airlines. This paper intends to achieve two main aims. First, this study uses entropy to find the relative weights of performance measures of CSR. In so doing, we find that on-time performance, accident rate, flight frequency, growth of employees revenue, and employees revenue are relatively most important measures. Second, based on the results of entropy analysis, this study ranks the airlines in terms of CSR performance by grey relation analysis. This result shows that most of the larger state-controlled airlines perform better in performance of CSR. Furthermore, the private airline has made relatively large improvement in its CSR performance. In addition, the listed airlines are better than non-listed airlines in CSR performance.     

Aircraft turnaround time estimation in early design phases: Simulation tools development and application to the case of box-wing architecture

This work deals with the problem of estimating the turnaround time in the early stages of aircraft design. The turnaround time has a significant impact in terms of marketability and value creation potential of an aircraft and, for this reason, it should be considered as an important driver of fuselage and cabin design decisions. Estimating the turnaround time during the early stages of aircraft design is therefore an essential task. This task becomes even more decisive when designers explore unconventional aircraft architectures or, in general, are still evaluating the fuselage design and its internal layout. In particular, it is of paramount importance to properly estimate the boarding and deboarding times, which contribute for up the 40% to the overall turnaround time. For this purpose, a tool, called SimBaD, has been developed and validated with publicly available data for existing aircraft of different classes. In order to demonstrate SimBaD capability of evaluating the influence of fuselage and cabin features on the turnaround time, its application to an unconventional box-wing aircraft architecture, known as PrandtlPlane, is presented as case study. Finally, considering standard scenarios provided by aircraft manufacturers, a comparison between the turnaround time of the PrandtlPlane and the turnaround time of a conventional competitor aircraft is presented.     

Impact of landing fees on airlines’ choice of aircraft size and service frequency in duopoly markets

A one-shot simultaneous game-theoretic model is applied in a duopoly market to investigate how airport landing fees could influence airlines’ decisions on aircraft size and service frequency. It is found that higher landing fees will force airlines to use larger aircraft and less frequency, with higher load factor for the same number of passengers. It is also found that airlines will be better off if some of the extra landing fees are returned to airlines as a bonus for airlines using larger aircraft, which consequently reduces airport congestion.     

Aircraft routing for on-demand air transportation with service upgrade and maintenance events: Compact model and case study

This paper addresses a problem faced by airline companies that offer on-demand flight services. Given a list of flight requests, the company has to assign its aircraft to these requests while minimizing operational costs. The main issue in this planning process involves the positioning of aircraft when they are not available at the airports of customer departure. The cost of this positioning should be as low as possible, as the customers’ expenditures are proportional to the requested flight hours only. We propose a compact optimization model to support decision making in this situation. It takes into account the mandatory aircraft maintenance events and the possibility of flight upgrades according to the their impact on the operational costs. One important and novel feature of this model is that it allows the anticipation or postponement of the beginning of flights and maintenance events within a given tolerance, giving more freedom to the decision making process. This research is motivated by a case study carried out with a fractional management airline company that operates in European and Asian countries. Computational experiments using real-life data collected from the company show that the proposed model can be solved quickly using general-purpose optimization software, including open-source alternatives. The results indicate that the obtained solutions lead to significant reductions in the operational costs and hence can be used in practice for effective decision making.     

A robust mathematical model and heuristic algorithms for integrated aircraft routing and scheduling,with consideration of fleet assignment problem

One of the most important airline's products is to determine the aircraft routing and scheduling and fleet assignment. The key input data of this problem is the traffic forecasting and allocation that forecasts traffic on each flight leg. The complexity of this problem is to define the connecting flights when passengers should change the aircraft to reach the final destination. Moreover, as there exists various types of uncertainties during the flights, finding a solution which is able to absorb these uncertainties is invaluable. In this paper, a new robust mixed integer mathematical model for the integrated aircraft routing and scheduling, with consideration of fleet assignment problem is proposed. Then to find good solutions for large-scale problems in a rational amount of time, a heuristic algorithm based on the Simulated Annealing (SA) is introduced. In addition, some examples are randomly generated and the proposed heuristic algorithm is validated by comparing the results with the optimum solutions. The effects of robust vs non-robust solutions are examined, and finally, a hybrid algorithm is generated which results in more effective solution in comparison with SA, and Particle Swarm Optimization (PSO).