Title: Key Words: Introduction Table 1. Global Airline Industry Value ( ) Source: Year $ Million % Growth

Transcription

1 Title: Class of Travel The Moderator Role of the Customer Satisfaction Model in Five-Star Airlines. Key Words: Service Quality, Customer Satisfaction, Customer Loyalty, Five-Star Airlines, Class of Travel Introduction The global airline industry had a significant growth in the period of in terms of value because of a strong growth in volume and a rise in air fares (Global Airlines, 2015). The global airline industry earned $588,277 million of the total revenue in 2014, and had a compound annual growth rate (CAGR) of 7.6% in the period between 2010 and The table 1 demonstrates global airline industry value from 2010 to Table 1. Global Airline Industry Value ( ) Source: Global Airlines (2015) Year $ Million % Growth , , , , , CAGR For the market volume, it had 3,141.2 million passengers in 2014 which increased 5.7% from the total passengers in 2013 (Global Airlines, 2015). The compound annual growth rate (CARG) between the periods from 2010 to 2014 was 5.2% (Ibid). The table 2 shows the global airline industry volume from 201 to Table 2. Global Airline Industry Volume ( ) Source: Global Airlines (2015) Year Million Passengers % Growth , , , , , CAGR Furthermore, the airline industry is one of the most vital transportations for the tourism. Thus, if the airline industry face the crisis, it will totally affect the tourism sector inevitably. In Thailand, Suvarnabhumi Airport which is the biggest airport in Thailand has been reported of the increasing in numbers of passengers for the last three years. In 2011, the total passengers using Suvarnabhumi Airport was 47,910,904 (Airport of Thailand PLC., 2012). In 2012, the total passengers using Suvarnabhumi Airport was 53,002,328 (Airport of Thailand PLC., 2012). Furthermore, in 2013, the total passengers using Suvarnabhumi Airport has been

2 significantly increased to 86,134,962 (Airport of Thailand PLC., 2012). For the five-star airlines, the rating is given by Skytrax. The five-star airline rating is awarded to airlines that are able to achieve the highest overall quality performance (Skytrax Airline Rating and Reviews, 2016). In 2015, there are seven airlines awarded five-star rating, which are All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, Garuda Indonesia, Hainan Airlines, Qatar Airways, and Singapore Airlines (Ibid). Nevertheless, some previous researches tried to investigate the factors of service quality in the airline industry (Munusamy & Chelliah, 2011; Nakamusa, 2013; Norazah, 2014; Leong, Hew, Lee, & Ooi, 2015). However, there were few researches about comparing these factors between business class customers and economy class customers. An & Noh (2009) investigate the influence of service quality on customer satisfaction in business class passengers and economy class passengers, and found that there is a difference between those passengers. Thus, this concept paper aim to study on the moderator effect of class of travel. This research will benefit the five-star airlines executives to understand more on the different preference between business class passengers and economy class passengers. Thus, it will lead to the improvement in service quality and cost reduction. Conceptual Framework Figure 1. Research Conceptual Framework Source: Parasuraman et al., This conceptual framework is based on Parasuraman et al. (1988). This framework explains the influence of service quality on customer satisfaction, the influence of customer satisfaction on customer loyalty, and the direct influence of service quality on customer loyalty. Service Quality Dimensions Literature Review Parasuraman et al. (1988) mention that the first dimension is Tangible which referred to the physical facilities, equipment, and appearance of personnel. The tangible resources of the firms that customers evaluate as the service quality are atmosphere, building and physical layout of the company offices (Bitner, 1990; Yu & Tang, 2013). Norazah (2014) states that customer satisfaction is affected by airlines tangible resources such as, the cleanliness of airplane interior

3 toilets, quality of the catering, and air-conditioning. Moreover, several researchers found that tangible has significant influence on customer satisfaction (Kumar, Mani, Mahalingam, & Vanijikovan, 2010; Norazah, 2013). Parasuraman et al. (1988) next define the Reliability as the ability to perform the promise service accurately and dependably. Bebko (2000) posits that reliability is the most vital dimension in the service quality. The third dimension is Responsiveness which is defined as the willingness to help customers and provide prompt services. Parasuraman, Zeithaml, & Berry (1985) define responsiveness as the willingness or readiness of employees to provide services. Bebko (2000) also defines responsiveness as the company s willingness to help customers and provide prompt services. The Assurance dimension is defined as employees knowledge and courtesy and their ability to inspire trust and confidence. This dimension is originally based on the research of Parasuraman et al. (1985), which is the combination of communication, security, credibility, courtesy, and competence. However, they develop their research in Parasuraman et al. (1988) put all these attributes into a single dimension which is assurance in their SERVQUAL model. The last dimension is Empathy which is defined as caring individualized attention the firm providing its customers. Norazah (2013) explains that customers will feel special and valued when they receive attention from the company. Furthermore, several researchers found that customer satisfaction is significantly influenced by empathy (Ahmed, Nawaz, Usman, Shaukat, Ahmad, & Uqbal, 2010; Kumar et al., 2010; Norazah, 2013). Customer Satisfaction Dominici & Guzzo (2010) define customer satisfaction as the fundamental philosophy of business which emphasizes the significance of creating values for customers, anticipating and managing customers expectations, and providing the ability and responsibility to satisfy the needs of customers. Customer satisfaction is one of the most important factors in achieving organizational goals which is considered to be the criteria for the excellence of the organization (Munusamy & Chelliah, 2011). Boulter (2015) suggests that maintaining the current level of customers is more profitable and efficient than finding new customers to replace the customers who have been lost. However, customer satisfaction not only brings good things to the company, but it also brings the bad effect to the company if the company let the customer satisfaction turn into negative feelings of customers. Babin & Harris (2014: ) state that the advancement of technology in digital communication let the word spread rapidly either positive or negative perspective which can hurt the reputation of the company. Customer Loyalty Several studies mention that characteristics of customer loyalty are the repurchase intention or the intention of purchasing additional products or services from the same providers, the willingness to recommend the providers to other consumers, the resistance of switching to purchase products or services from other providers (Cronin & Taylor, 1992; Prus & Brandt, 1995; Narayandas, 1996). Moreover, Zeithaml, Parasuraman, & Berry (1996) posit that

4 willingness to a higher price or a premium price for products or services from a certain provider is also the characteristic of customer loyalty. Hypotheses Development Service Quality and Customer Satisfaction There are several researchers found the influence of service quality on customer satisfaction. (Deng, Lu, Wei, & Zhang, 2010; Santouridis & Trivellas, 2010; Hussain, Al Nasser, & Hussain, 2014). Thus, the following hypotheses are proposed; H1: Service quality has significant influence on customer satisfaction. H1a: Tangible has significant influence on customer satisfaction. H1b: Reliability has significant influence on customer satisfaction. H1c: Responsiveness has significant influence on customer satisfaction. H1d: Assurance has significant influence on customer satisfaction. H1e: Empathy has significant influence on customer satisfaction. Customer Satisfaction and Customer Loyalty Khan (2012) summarize that customer satisfaction has significant effect on customer loyalty. Hussain et al. (2014) found that customer satisfaction has positive association with customer loyalty. There are several researchers found a similar conclusion (Nakamusa, 2013; Anyadighibe, 2014; Leong et al., 2015). Thus, the following hypothesis is proposed; H2: Customer satisfaction has significant influence on customer loyalty. Service Quality and Customer Loyalty There are several researches investigating the relationship between service quality and customer loyalty. Santouridis & Trivellas (2010) found that service quality significantly affect customer loyalty. Chodzaza & Gombachika (2013) also found that service quality is significantly associated with customer loyalty. Giovanis, Zondiros, & Tomaras (2014) confirm that service quality has significant association with customer loyalty. Thus, the following hypothesis is proposed; H3: Service quality has significant influence on customer loyalty. Class of Travel as a Moderator There are several researchers investigating the influence of service quality on customer satisfaction, influence of service quality on customer loyalty, and influence of customer satisfaction on customer loyalty (Deng et al, 2010; Santouridis & Trivellas, 2010; Khan, 2012; Chodzaza & Gombachika, 2013; Nakamusa, 2013; Anyadighibi, 2014; Giovanis et al, 2014; Hussain et al, 2014; Leong et al, 2015). Furthermore, An & Noh (2009) emphasize more on this

5 relationship. An & Noh (2009) found that class of travel affects these influences. They found that business class passengers and economy class passengers have different results on these influences. Thus, the following hypotheses are proposed. H4: Class of travel moderates the influence of service quality on customer satisfaction. H5: Class of travel moderates the influence of customer satisfaction on customer loyalty. H6: Class of travel moderates the influence of service quality on customer loyalty. Methodology The target population will be the passengers of five-star airlines. The scope of this research is the Suvarnabhumi Airport, Bangkok, Thailand. The optimal sample size is 400 respondents by Yamane (1967: 886). For the research tools, this research uses quantitative questionnaire which is self-administered questionnaire. According to the Skytrax Airline Rating and Reviews (2016), in 2015, there were seven of five-star airlines which were All Nippon Airways, Asiana Airlines, Cathay Pacific Airways, Garuda Indonesia, Hainan Airlines, Qatar Airways, and Singapore Airlines. Multi-Stage Sampling is adopted in this research. The first stage, the researcher adopts the cluster sampling. The population is categorized into seven groups by the airlines, then two airlines are selected which are Qatar Airways and Singapore Airlines. The criteria for choosing these two airlines are based on the flight schedule flexibility and the willingness to share the information. According to the policy of some airlines, they will not allow individual to collect the survey from their customers. However, quota sampling is adopted in the second stage. The quota sampling limits the samples into 100 of business class and 100 of economy class for each airline. In total, 400 samples are selected through the multi-stage sampling. Results According to the relevant literature reviews, the researcher found that class of travel is the moderator in the conceptual framework. Thus, the conceptual framework is adapted. Figure 2. Class of Travel as a Moderator Framework Source: Adapted Parasuraman et al., 1988.

6 However, this conceptual model is waiting to be confirmed by empirical study to test the result in the future. After the empirical results are found, this research will be useful to the fivestar airlines executives. The findings will provide more understanding on the different preference of business class passengers and economy class passengers. This will lead to the improvement in service quality and cost reduction. References Ahmed, I., Nawaz, M., Usman, A., Shaukat, M., Ahmad, N., & Uqbal, H. (2010). Impact of service quality on customers satisfaction: Empirical evidence from telecom sector of Pakistan. Interdisciplinary Journal of Contemporary Research in Business, 1(12), Airport of Thailand PLC. (2012). Statistic of Air Transport. Retrieved from nid=35&filename=map Akbar, M. M. & Parvez, N. (2009). Impact of service quality, trust, and customer satisfaction on customer loyalty. ABAC Journal, 29(1), An, M. & Noh, Y. (2009). Airline customer satisfaction and loyalty: impact of in-flight service quality. Service Busines, 3, Anyadighibe, J. M. (2014). The relationship between customer satisfaction and loyalty: A study of selected eateries in Calabar, Cross River State. Interdisciplinary Journal of Contemporary Research in Business, 5(9), Babin, B.J. & Harris, W.G. (2014). Consumer Bahavior. CB, third ed. South-Western, Cengage Learning, Mason, OH, USA.

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