complete final year project report

Impact of customer service quality on customer loyalty in Airline Industry:

comparison between international airline and domestic airline

Submitted to:

Mr. Hasan Javaid

Co-Advisor:

Mr. Wamiq

Submitted by:

Mohsin Ahmed

(11K-2279)

Date of Submission:

28th May, 2015

University Name:

National University of Computer and Emerging Sciences

FAST school of Management

CERTIFICATE OF RECOMMENDATION

The final year project, hereto attached titled “Impact of customer service quality on customer

loyalty in an airline industry in comparison between international airline and domestic

airline”, prepared by Mohsin Ahmed to fulfill the requirement of the degree of Bachelors of

Business Administration (BBA).

______________________________

Mr. Hassan Javaid

HEAD OF THE DEPARTMENT

2

CERTIFICATE OF COMPLETION

The final year project, hereto attached titled “Impact of customer service quality on customer

loyalty in an airline industry in comparison between international airline and domestic

airline”, prepared by Mohsin Ahmed to fulfill the requirement of the degree of Bachelors of

Business Administration (BBA).

______________________________

Mr. Hassan Javaid

HEAD OF THE DEPARTMENT

FAST SCHOOL OF MANAGEMENT

________________________________

Mr. Hassan Javaid

Advisor

3

ACKNOWLEDGEMENT

All praises and thanks are for Almighty Allah, who is the source of all knowledge and

wisdom gifted to mankind and to the humanity as a whole. I take immense pleasure in

thanking my project advisor Mr. Hasan Javed for having permitted me to carry out this

research work and also for his able guidance and useful suggestions throughout the research,

which helped me in completing the research work, in time. He has given all his precious time

to go through the research and make necessary correction as and when needed.

My deep sense of gratitude to Mr. Wamiq for his best support and pure guidance, his

guidance and support proved to be useful tool in making the report a quality one. I would also

thank my institution and my faculty members without whom this final year project would

have been a distant reality.

Lastly, I would thank my colleagues and parents for helping in getting important information

in different parts of the report. The encouragement and assistance of my parents and friends

provided me a great deal of wisdom towards the completion of this report. I hope this project

will be beneficial for other students also in their researches.

4

TABLE OF CONTENTS

1.1 BACKGROUND OF THE STUDY............................................................................................6

1.1.1 Overview...............................................................................................................................6

1.2 PROBLEM STATEMENT..........................................................................................................7

1.3 OBJECTIVE OF THE STUDY...................................................................................................8

1.4 SIGNIFICANCE OF THE STUDY.............................................................................................8

1.5 JUSTIFICATION OF THE STUDY...........................................................................................9

1.6 SCOPE OF THE STUDY............................................................................................................9

1.7 LIMITATION OF THE STUDY.................................................................................................9

1.8 BASIC ASSUMPTIONS OF THE STUDY..............................................................................10

1.9 EXPLANATION OF THE STUDY..........................................................................................10

1.9.1 Service quality....................................................................................................................10

1.9.2 Price perception..................................................................................................................11

1.9.3 Value Offers........................................................................................................................11

1.9.4 Customer trust....................................................................................................................11

1.9.5 Customer Satisfaction.........................................................................................................11

1.9.6 Customer Loyalty................................................................................................................11

2. LITERATURE REVIEW................................................................................................................12

2.1 INTRODUCTION.....................................................................................................................12

2.1.1 Service................................................................................................................................12

2.1.2 Service Quality....................................................................................................................12

2.1.3 Customer Satisfaction.........................................................................................................13

2.1.4 Customer Loyalty................................................................................................................14

2.1.5 Relationship between Service Quality and Customer Loyalty.............................................15

2.1.6 Service Quality Dimensions................................................................................................16

2.1.7 Consequences of Service Quality towards Customer loyalty..............................................18

2.1.8 Airline Marketing................................................................................................................20

2.1.9 Passenger’s Flight Experience...........................................................................................21

2.1.9 Service Quality Tools..........................................................................................................21

2.1.10 Conceptual Model of Service Quality...............................................................................22

2.1.11 SERVQUAL in Airline Industry........................................................................................23

5

2.2 HISTROICAL PERSPECTIVE.................................................................................................24

2.3 CURRENT PERSPECTIVE......................................................................................................26

2.4 RESEARCH GAP FILLED BY THIS RESEARCH.................................................................28

2.5 AREA FOR THIS RESEARCH................................................................................................28

3. RESEARCH METHODOLOGY.....................................................................................................29

3.1 RESEARCH DESIGN...............................................................................................................29

3.1.1 Research Philosophy...........................................................................................................29

3.1.2 Research Approach.............................................................................................................29

3.1.3 Research Strategy...............................................................................................................30

3.1.4 Research Choice.................................................................................................................30

3.1.5 Research Time Horizon.......................................................................................................30

3.1.6 Research Technique............................................................................................................30

3.1.7 Research Procedure............................................................................................................31

3.2 RESEARCH STRUCTURE......................................................................................................31

3.2.1 Statement of the Problem....................................................................................................31

3.2.2 Research Questions.............................................................................................................32

3.2.3 Research Objectives............................................................................................................32

3.2.4 Conceptual Framework......................................................................................................33

3.2.5 Research Variables.............................................................................................................33

3.2.6 Scale for Measurement of Variables...................................................................................34

3.2.7 Hypothesis..........................................................................................................................34

3.3 RESEARCH TOOLS AND TECHNIQUES.............................................................................35

3.3.1 Justification for Selected Tools and Techniques.................................................................35

3.3.2 Population and Target Population......................................................................................35

3.3.3 Sample Size.........................................................................................................................35

3.3.4 Method of Sampling Selected and its Justification..............................................................35

4. DATA INTERPRETATION AND ANALYSIS...........................................................................................36

4.1 DEMOGRAPHICS OF PAKISTAN INTERNATIONAL AIRLINE..........................................................36

4.2 CORRELATION OF PAKISTAN INTERNATIONAL AIRLINE.............................................................44

4.3 DEMOGRAPHICS OF EMIRATES AIRLINE....................................................................................51

4.4 CORRELATION OF EMIRATES AIRLINE........................................................................................59

6. QUESTIONNAIRE..............................................................................................................................66

BIBLIOGRAPHY...............................................................................................................................72

6

1. INTRODUCTION

1.1 BACKGROUND OF THE STUDY

1.1.1 Overview

Airline Industry has been constantly struggling cost cutting, managing customers demand,

maintain the airline quality requirements, maintaining superior services and to satisfy needs

of various customer groups.

“In the competitive environment, airlines are diverting their focus on customer oriented

service quality (Chen, Fang-Yuan, & Yu-Hern, 2005)”.

"Airlines should understands that what customers are demanding from them, as the pay a

ticket price, they should know the point of view of the passenger regarding their airline

(Chen, Fang-Yuan, & Yu-Hern, 2005) and what type of services customer would prefer”.

Very well said that Airlines dealing with the passengers every time must be delivering well

services as well as good services, as it is understood that airlines only deliver intangible

service not the tangible thing (Gursoy & Kim, 2005). Deliverance of high quality of services

is only kept to satisfy the high value customers (J.J.H & Tzeng, 2007).

“Airlines are the industries whose success depends upon the quality of service which is

delivery to the passenger (Kloppenborg & Gourdin, 1992)(Shostack, 1977)”. “The air travel

industry is considered as the gradually growing service division (Lovelock & Wirtz, 2004).

(Ostrowski, O‟Brien, & Gordon, 1993) Suggest that the growth of the service sector not only

propose business opportunities but also create competitive threats for many service marketers

and this is mainly the case for the air travel industry”.

Usually the airline industry was regulated by governments on where and how airlines could

operate (Piercy, 2001). The act 1978 Airline Deregulation has changed the competitive

7

structure of the airline industry (Levin, 1987) (Bailey, 1985). Airline companies were

permitted by government to set prices and to enter and exit the industry upon fully filling

insurance and safety requirements. Because of this revolution many airlines enter into this

industry.

“Customer satisfaction in airline processes has become very much important and (Dennet,

Ineson, Stone, & Colgate, 2000) suggest that as competition created by removing restrictions

has become more severe and service quality in the airline industry has gain attention. In early

1990s it become necessary for airlines to deliver high performance in delivering services to

the customers, most of the airlines began to offer various incentives and allowances and

frequent flyer programs in order to build and maintain the customer loyalty (Miller, 1993)”.

“Airline companies also tried to distinguish their services through the use of automated

reservation systems which were also designed to create customer loyalty in the distribution

channels (Lee & Cunningham, 1996)”. “But despite the airlines struggle to differentiate their

services from other airlines, a wide survey of regular fliers conducted by (Ott, 1993) exposed

that consumers did not distinguish any difference from one carrier to another”. “(Ostrowski,

O‟Brien, & Gordon, 1993) suggest that when all airline companies have equivalent fares and

matching regular flyer programs the company with improved service, which is in good

perception of customers, will catch passengers’ attention from other carriers”.

1.2 PROBLEM STATEMENT

Passenger satisfaction will increase when airlines provide their customers with benefits and

comforts as well as value-added services. If the customers are well satisfied they become

loyal to the airline and show their loyalty by repeat purchase of the ticket or traveling through

the same airline again and again and therefore customer satisfaction is important for Airlines

to focus on. Airlines are continuously working on the on board services to differentiate

8

themselves from other airlines and to create a good perception among regular travelers.

Numbers of new innovations have brought in on-board services and several new technologies

have entered into the market. In-flight services aircraft seats and dinning task on long flights

should be improved as the passenger noticed more and well in the long haul flights. The

current development in plane business seats roll out show the significance of this component,

which definitely influence the buying choice of the passengers on long hour’s flights.

According to Archana if the customer is not satisfied due to any negative reason, the

customer would look for considering other flights, which can satisfied their need in more

better way. Therefore, this research will provide the indication about the impact of on-board

services on customer’s loyalty.

1.3 OBJECTIVE OF THE STUDY

There are seven objectives of this study, they are as follows;

1. To determine the impact of Tangibility of on-board services on customer satisfaction.

2. To determine the impact of Tangibility of on-board services on customer loyalty.

3. To determine the impact of reliability of on-board services on customer satisfaction.

4. To determine the impact of reliability of on-board services on customer loyalty.

5. To determine the impact of responsiveness of on-board services on customer

satisfaction.

6. To determine the impact of responsiveness of on-board services on customer loyalty.

7. To determine the impact of customer satisfaction on customer loyalty.

9

1.4 SIGNIFICANCE OF THE STUDY

The significance of this study is that this research would cover the impact of service quality,

which is delivered by airlines personnel on customers’ satisfaction. Moreover, if the

satisfactions of customers’ lead them to customer loyalty and they purchase and prefer the

same airline again and again or not. Ultimately, this research will help airlines to see the

impact of different on-board services on their customers.

1.5 JUSTIFICATION OF THE STUDY

There are several reasons to conduct this research, some of these are;

Main perception of passengers, whether it’s good or bad about airlines are made

during the duration when passengers are travelling to their destination with airlines

personnel, and observing their services. This research is necessary to see the impact of

service quality on passengers’ perception.

This research will benefit airline customers as well as air traveling companies to find

new opportunities for customers.

1.6 SCOPE OF THE STUDY

The research will be conducted from different areas of Karachi; this includes travel agencies,

Airline offices and Karachi Jinnah International Airport. Customers arriving for ticket

booking in offices would be given questionnaire to fill out. The study focuses on people from

the age of 18-55; it includes all the classes that are upper, middle and lower class.

Furthermore, this study will be done on people who have travel experience through airlines.

And people of economy class will be on focus and therefore airlines can see the result of their

efforts on the passengers travelling through economy class.

10

1.7 LIMITATION OF THE STUDY

This study will not answer about the measurement of traditional and other customer

relationship management techniques in Airlines.

This study will only be applicable in Airline industry of Karachi and it will be related

to the on-board services on airlines.

This study will not focus all the operation of the Airlines that includes ticket

reservation, flight schedule, and baggage claim service, customer complaint center,

recruiting of employees, marketing promotion and asset management.

This study will contain limited information, because Airlines are not willing to share

their confidential information.

This study contains only few factors of customer satisfaction.

This study is limited to Karachi due to time constraint.

1.8 BASIC ASSUMPTIONS OF THE STUDY

Assumption of the study is that the research will be conducted in Karachi only and all the

travel agencies and airline management will help out in this research. The customers filling

questionnaire will be provide right information.

1.9 EXPLANATION OF THE STUDY

1.9.1 Service quality

Service quality refers to a number of inter-related factors including the way in which

individuals are treated by providers.

11

1.9.2 Price perception

A customer’s judgment of a price in terms of whether it is thought to be too high about right

or extremely good value for money; this judgment might different circumstances and is often

formed in the light of what other alternatives products are available.

1.9.3 Value Offers

Package offers by different airline companies operating in Pakistan to final consumers.

1.9.4 Customer trust

Customer certainty based on past experience with services of the company.

1.9.5 Customer Satisfaction

A business term is a measure of how products and services supplied by a company meet or

surpass customer expectation. It is seen as a key performance indicator within business.

1.9.6 Customer Loyalty

The degree of a customer staying with a specific vendor or brand is called customer loyalty.

12

2. LITERATURE REVIEW

2.1 INTRODUCTION

2.1.1 Service

The type of economic activity that is intangible is not saved and does not result in possession.

A service is consumed, where it is offered. (ChandujiThakor & Mistri, 2012).

“Airlines industries provide a healthy safe journey to passengers from one location to

another, with their luggage safe and sound, in case of any damage or loss airline given

allowance to passenger with a sorry. Airlines fly their planes or run their operations by

having a government authority or permission (ChandujiThakor & Mistri, 2012)”.

2.1.2 Service Quality

A service is defined as the activity that provide satisfaction, comfort and benefits to the

customers/passengers at a certain time when the service is needed the service may include the

physical or non physical products that are delivered to passengers and this performance is

temporary and limited (Lovelock & Wirtz, 2004).

However “being able to satisfy given needs reflects the value or quality of the product or

service to the customer, including the economic value and safety and reliability as well as

maintainability (Garvin, 1989)”.

“Therefore, a customer’s evaluation of service quality and the resulting level of satisfaction

are perceived to affect bottom line measures of business success (Lacobucci, 1994)”.

13

“To some service quality can also be defined as the difference between customers

expectations for the service encounter and the perceptions of the service received (Zeithaml

V. A., 2003);(Munusamy, 2010)”.

According to “(Suman, 2012), (Oliver, 1997) said it is that customer/passenger will perceived

service quality as high if he/she received the best service on the other hand

customer/passenger will perceived service quality as low if he/she does not received the

service they expected”.

2.1.3 Customer Satisfaction

Researchers define customer satisfaction as concept or idea that entails both process of

understanding and emotional components, furthermore it is a consumer related, doing

business and incorporating an evaluation of both benefits and sacrifices.

However, “(Roest & Pieters, 1997) Mentioned that satisfaction might become manipulative

on product attitude, which may be observed as an aggregative but not relativistic construct

involving a readiness to act”.

“(Yi, 1990) Stated that customer satisfaction is influenced by factors, which are prospect and

knowledge with service performance”

But, “(Fornell, 1992) said that customer satisfaction has a direct impact on the organization’s

performance and the expectations over time are brought in line with the actual performance”.

In fact the loyal and satisfied customer of a product and service would likely to consume the

same service or product likely in the future. Hence, “customer satisfaction has turn into the

essential indicator of quality and revenue in the future (Andreassen, 1994)”.

14

Furthermore, “a lot of authors come to the answer to show or highlight that service quality

and satisfaction are distinct constructs (Bitner & Hubbert, 1994)”

“(Bitner, 1990) Uses the “expectation disconfirmation model” as well as attribution theories

to clarify customer satisfaction from services come across with lower perception than

expectation”. Furthermore, it can also be explained as that a “positive disconfirmation leads

to customer satisfaction and a negative disconfirmation leads to customer dissatisfaction”.

“(Peter & Olson, 1994) Said that rate of unhappiness or displeasure is depends on the degree

of disconfirmation and the consumer’s level of interest or interest with the product and the

problem solving procedure (Patterson & Spreng, 1997)”.

2.1.4 Customer Loyalty

“The term customer loyalty is as the defined the repeat purchase of some product or service,

as well as those that offer good ratings, reviews, or testimonials (Kumar, 2009)”. The loyal

customer and satisfied customer would spread the word of mouth in favor of product or

service to his friends and family members, so the companies must create the loyal customer

or either creates brand ambassadors.

According to “(Iddrisu, 2011) mentioned that loyalty is developed over a period of time from

a steady record of gathering, and sometimes even beyond customer potential. Customer

loyalty can therefore be achieved in some cases by offering a quality product. The ultimate

goal of these is to develop happy customers who will return to purchase again and persuade

others to use that company's products or services”.

“This equates to great cost savings and profitability to the company through the keeping of

current customers as against attracting new ones (Kotler, 2002) as well as making

15

stakeholders happy (Mukherjee, 2009)”. The loyal customers are not easily converted to

unsatisfied or non loyal customers.

2.1.5 Relationship between Service Quality and Customer Loyalty

The numbers of researchers have examined the relationship between service quality and

customer loyalties we can take an example of focusing on repurchase intentions as a measure

of loyalty.

“(Cronin J. J., 1994) observed that service quality does not have a significant have positive

effect on repurchase intentions in contrast to the significant positive impact of satisfaction on

repurchase intention”.

However, “(Boulding, 1993) focusing on the elements of repurchasing as well as the

enthusiasm to recommend as measures of customer loyalty, found positive relationships

between service quality and repurchase intentions and willingness to recommend (Akbar,

2009)”.

Nevertheless, “some customers may remain loyal due to high switching barriers or the lack of

real substitutes, while others will continue to be loyal because they are satisfied with the

services provided (Lam, 2006)”.

“Service provider must not always look for retaining of satisfied customer this is because the

satisfied customers are not being retained every time. Research has pointed out that perceived

service quality has a positive impact on customer loyalty (Wong, 2005)”.

“This is because service quality has been found to relate to behavioral outcomes especially in

the form of unfounded information, complaint, proposal and switching (Al- Rousan, 2010)”.

16

2.1.6 Service Quality Dimensions

There are five dimension of service quality that includes responsiveness, assurance,

reliability, tangibility and empathy.‟ expectations are identified and applicable in assessing

airline service quality (Parasuraman, Zeithaml, & Berry., 1988). All of the dimensions are

used as a main construct in measuring service quality for this study”. The items for each

constructs are based on the mix study of past research on airline’s service quality.

2.1.6.1 Reliability

Reliability is defined as the ability to perform the promised service dependably and

accurately.

“According to (Lindstrom, 2009) the in-flight passenger perspective, the dimension of

reliability refers to on-time departure, consistent service delivery, doing things right the first

time and consistent inspections and cabin announcements”.

“With regards to (Chang., 2005) study, on time departure and the clear thought and rapidity

in inspections and announcements have been considered important as compared to other

dimensions”.

2.1.6.2 Tangibles

Tangibles can be defined as the appearance of physical services like cabin crew in Airlines,

tools and techniques, staff, staff services include such as cleanliness, emergence of staff and

appropriate technical equipment for support and entertainment.

17

“According to (R. Lindstrom, 2009), in-flight services include seats comfort, cleanliness of

the aircraft interior, the appearance of the flight crew and the in-flight equipment and

entertainment facilities”.

“From a similar GAP analysis on the Taiwan airline passenger market by (Chang., 2005), it

was found that seats comfort, equipment facilities and cleanliness of aircraft interior are

important factors”.

2.1.6.3 Responsiveness

Responsiveness refers to general willingness to help customers and provide prompt service,

which is responding to passengers’ problems and providing them with different solutions.

“(Lindstrom, 2009) mentioned that the responsiveness dimension considers factors of

efficiency in passenger guidance such as smooth seating, safety instructions, to name a few”.

“Moreover, willingness to help and prompt handling of requests, complaints and inquiries are

measured within this dimension. It should be noted that (Chang., 2005) has found that prompt

handling of requests is more important”.

2.1.6.4 Assurance

Assurance includes the competence and courtesy of employees and their ability to convey

trust and credibility. This would include the staff training and feeling of safety among

customers.

18

“According to (Lindstrom, 2009), the dimension of assurance is connected to underlying

attributes such as trustworthiness among flight crew, knowledge and competence to answer

questions and inquiries, and the level of courteousness among the flight crew”.

“According to (Chang., 2005), (Prebezac., 2008), the most important element within this

quality dimension is the level of politeness, since this element receives the strictest penalty

from passengers if not performed desirably. Still, knowledge and competences in regards to

answering inquiries are considered important”.

2.1.6.5 Empathy

Empathy is defined as the meeting with customers finding out the their point of view about

their product or service, understanding and attention of the customers also included in

empathy.

Furthermore, “courteousness is closely related to this dimension and can be considered as an

important element in performing successful customized people management (Prebezac.,

2008)”.

2.1.7 Consequences of Service Quality towards Customer loyalty

Many researchers have previously been examine the relationship between service quality and

customer loyalty.

“The study by (Taylor, 1992) focused solely on repurchase intentions. In their study, service

quality did not appear to have a significant effect on repurchase intentions”.

19

“On the other hand, study conducted by (W. Boulding, 1993) has found positive relationships

between service quality and repurchase intentions and willingness to recommend”. “Besides

that, the relationship between service quality and loyalty had led to a suggestion that the gap

between performance and expectations moderates the relationship between performance and

behavioral outcomes (V. A. Zeithaml, 1996)”. “As a result, a positive relationship existed

between the perceptions of service quality and behavioral outcomes as customer loyalty,

reluctance to switch, willingness to pay a premium and increased probability of purchase.

Consistent with the research objective for this study, besides identifying a direct relationship

between service quality and customer loyalty, the researchers have also tried to measure the

relationship and the contribution of each dimension of service quality towards customer

loyalty. The results of each dimension are very useful for the industry to be used in service

strategy. A part from that, many researchers uses SERVQUAL to measure the service quality

(Simpson, 2006), (Lindstrom, 2009), (Chang., 2005), (J. Lee, 2001), (C. Young, 1994)”.

“In simple terms quality refers to some attribute of what is offered whereas satisfaction or

dissatisfaction refers to a customer’s emotive reaction to that offer (H. Kasper, 2006). In this

logic they are separated, where quality is something the company is responsible for and

satisfaction is an experience in the customer’s domain. However, the concepts are clearly

related since we might use customer reaction either they satisfied or dissatisfied as means of

evaluating whether the right quality has been delivered. However in some other marketing

literature, service quality and customer satisfaction have been conceptualized as a distinct,

but closely related constructs”. “However, there is still a positive relationship between the

two constructs (G. C. Saha and Theingi, 2004).” “On the other hand, service quality and

customer satisfaction have been found to be related to customer loyalty through repurchase

intentions (A. Caruana, 2008)”.

20

2.1.8 Airline Marketing

Airline companies are service companies which have three additional P’s in its marketing

mix. First, staff plays a key role in developing customer loyalty towards the airline. Second,

process is how airlines manage its customer loyalty. For example; first class lounges and

system desk. Third, physical evidence is which the airline presents its quality of service from

ground courteous behavior to in-flight hospitality.

From the customer perspective, marketing is all about knowing the needs, wants and desires

of the customers and how to meet and satisfy them. In airline marketing the segmentation is

based upon the needs and wants. In this study, according to the literature reviews, the

customers are segmented into business, tourist, visiting friends and relatives, education and

medical purpose traveler to traveler. Although some needs are common in nature between

segments such as the aspect of safety.

In airline service marketing its important to understand the decision making process which

will lead to develop effective marketing plan. It can be though as (IATA/ATDI, 2002)

Decide time and cost parameters.

Short list destinations

Compare brochures

Making booking

Environmental scanning is the foremost step of marketing process in airlines to learn their

marketing initiatives. (IATA/ATDI, 2002) Describe it as “A process by which checklist of

different areas of the airline’s business environment is scanned.” The process of

environmental scanning includes total market environment such as political, social etc.

21

Consumers are shifting their demand and travel behaviors which should be taken into careful

considerations by the airlines management because the consumer behavior is the most

important element in airline marketing process. (IATA/ATDI, 2002).

Airlines must know about their competition and how to overcome and excel in that. For the

purpose of data collection in this research, this important fact was considered and the

responses are collected from the airline’s hub where the diverse competition lies. Another

important aspect in the airline marketing is the regulations of government and organizations

affecting airline operations. (IATA/ATDI, 2002).

2.1.9 Passenger’s Flight Experience

A complete process is involved from passenger’s booking to the destination they arrive which

is also known as the chain of services that consists of (IATA/ATDI, 2002):

Reservation/Booking

Getting to the airport

Checking In

Getting On-Board

Flying to destination

Baggage delivery

Final destination

Unpacking and settling

2.1.9 Service Quality Tools

Most popular tools for service quality evaluation describe by (Fanceshini and cinnetti 1998)

are mentioned below;

22

1. SERVQUAL: “This instrument was developed by Parasuraman, Zeithaml and Berry

inspired by a conceptual model of 1985(Parasuraman, Zeithaml, & Berry., 1988). This

model assesses the gap between customer’s expectations and perceptions”.

2. Two-ways: “It was developed by Schvaneveldt in1991, evaluates the service quality

from two view points. First ‘objective’ defines the presence or absence of quality

dimensions, and second ‘subjective’ tells the customers sense of satisfaction”.

3. SERVPERF: This tool was made by Cronin and Taylor in 1992, which focus on the

customers’ perceptions.

4. NQ: Normal quality was proposed by Teas in 1993 that defines the meaning of

expectations. Expectations further could be divided in ideal level and feasible level.

5. QUALITOMETRO: It was conceived by Franceschini and Rossetto in 1997 for

evaluating online quality and service control. It is also used in case of periodical

service users.

2.1.10 Conceptual Model of Service Quality

In this section a detailed description is given about the instrument used in this research as

formal indicators for the research model, SERVQUAL. “It was developed by (Parasuraman,

Zeithaml, & Berry., 1988) inspired by a conceptual model of 1985. This model assesses the

gap between customer’s expectations and perceptions. It is based on the conceptual

framework called GAPs model”. This model was first offered in 1985 and has been revised

many times after that. The table below presents an outline of SERVQUAL development:

23

Table 1: SERVQUAL development (Source: (Parasuraman A. , 2004))

2.1.11 SERVQUAL in Airline Industry

“According to Zeithmal Service quality can be defined as a consumer’s overall feeling of the

relative efficiency of the organization and its services. Understanding exactly what customers

expect is the most crucial step in defining and delivering high quality service (Zeithaml V.

A., 1996)”. “SERVQUAL is one of the best models for evaluating customers’ expectations

and perceptions (Pakdil, 2007)”. “Regardless of criticism from other research, SERVQUAL

remains the most commonly used diagnostic model for evaluating service quality.

SERVQUAL has five main dimensions to measure service quality: tangibles, reliability,

responsiveness, assurance, and empathy (V. A. Zeithaml, 1996)”. “Furthermore the

SERVQUAL related studies, many scholars have measured airline service quality through

24

various quality dimensions. (Gourdin, 1998) categorize airline service quality in terms of

three items: safety, timelines and price”.

“(Elliott, 1993) , suggest food and beverage, timely luggage transport, seat comfort, the check

in process, and in-flight service dimensions”.

“(Haynes, 1994) us end the processing of luggage, seat cleanliness, and the check-in process,

the convenience of transit, timeliness, and handling of customer complaints as the standards

of service quality”.

2.2 HISTROICAL PERSPECTIVE

“Customer satisfaction has become very important in airline operations (Dennet C. I., 2000)

said that as competition establish by deregulation has become more severe, service quality in

the airline industry has also received more attention”. “Airlines of the world are trying to

differentiate their services through adoption of modern technology, which were also designed

to make a customer loyalty in the distribution channels. (Lee M. a., 1996)”. “However, the

airline efforts to differentiate their services, and survey of customers who are frequent fliers

are conducted by (Ott, 1993) revealed that consumers did not perceive any difference from

one carrier to another”. “(Cronin & Taylor, 1992) Originate the empirical provision for the

idea that perceived service quality led to satisfaction and argued that service quality was an

antecedent of consumer satisfaction”. “(Bitner & Hubbert, 1994) find that service encounter

satisfaction was quite distinct from overall satisfaction and perceived quality. Service quality

will differ; the definitions are all made from the customer perspective, that’s why it is

important that what customer perceives are important dimensions of quality”. “(Gronroos,

25

1982)(Parasuraman, Zeithaml, & Berry., 1988) were the prepare in the conceptualization of

the service quality construct, these authors keep that the overall perception of quality was a

not authentication of a customer’s expectation and evaluation of a services delivered”.

“According to Theingi (G.C & Theingi., 2009) indicated that the emergence of low cost

airlines has raised concerns on how satisfied are the customers with the services provided.”

“(Doyle & Wong, 1998) Initiate that successful companies have a differential advantage in

overall company status and communicate it as quality to their customers (Solomon, 1985)”.

“Often they are able to control premium prices (Tepeci, 1999). It is found that the most

important criterion for customers selecting a bank is reputation (Boyd, Leonard, & White.,

1994) while (Rogerson, 1983), “affirmed that good reputation could amplify an

organization’s sales, attract more customers, and reduce customer going away”. Maintaining

quality are main concerns of business today “Providing quality is not a concern of

manufacturing companies alone”. The delivery of high quality service becomes a marketing

requirement among air carriers as a result of competitive pressure (Ostrowski, O‟Brien, &

Gordon, 1993). (Chang & Keller, 2002) argue that quality in airline service is difficult to

describe and measure due to its heterogeneity, intangibility and inseparability and only the

customer can truly define service quality in the airline industry (Butler & Keller, 1992).

Previous airline service studies are concentrated in modeling the effect of perceived service

quality at the aggregate construct level, though examine the effects of individual dimensions

of service attributes has potentially great utility for airline managers (Patterson & Spreng,

1997). (Haynes & Percy, Perception paradox: Airline service quality issues, 1994) argues

that the perceptions of airline service quality are quite diverse and do not seem to fit any

single existing quality model such as the service quality”.

26

2.3 CURRENT PERSPECTIVE

The international airline industry provides service to almost every part of the world and it has

the important part of the creation of world’s economy. “Service quality, a consumer's

judgment about the overall superiority of a product or service (Zeithaml V. A., 2009) is

usually recognized as one of the important determinant or aspect of brand loyalty”. “Business

organizations survival as well as success is depending on strategy of service quality, because

it can influence customer purchase behavior and organization performance (V. A. Zeithaml,

1996). Considering the significance of service quality for any industry, a great contract of

service quality research in current decades has been devoted to examine this construct across

industries. In spite of a number of service quality studies, there has been little consensus not

only in its conceptualization, but also its measurement, dimensionality, and consequences”.

“An evaluation of the service marketing literature point out that there are primarily two types

of service quality conceptualizations Nordic and American. The Nordic move toward

proposes that a customer’s overall perception of service quality consists of functional and

technical quality, with technical quality being what customers receive after the service

delivery process in buyer and seller connections and functional quality is the relations

between employees and customers during the service encounter (Lau, 2005)”. “The American

approach proposes that service quality consists of reliability, responsiveness, empathy,

assurances, and tangibles dimension, known as SERVQUAL (Zeithaml V. A., 1996). This

model based on “Expectancy Disconfirmation Theory”, this is defined as the vision in service

quality is a gap between customers’ perceptions and expectations of service performance.

Although researchers tend to use the American approach over the Nordic approach, neither

approach has been considered universally superior”.

27

“Acknowledging the underperformance of SERVQUAL in terms of theoretical and

experiential evidence, (Cronin J. J., 1992) recommended the SERVPERF model to assess

service quality”. “SERVPERF measures service quality by capturing customers’ performance

perceptions in comparison to their expectation of the services they came across. The debate

between SERVQUAL and SERVPERF is extensive with some scholars despite the

differences in their opinions (Carrillat, 2007) meta-analytic study reports that both models are

equally valid predictors of overall service quality. Other scholars conclude that SERVQUAL

is a appropriate tool for diagnosing service shortfall and measuring the variance of dependent

constructs, while SERVPERF is commonly recognized as a suitable method for predicting

consequences variables such as customer satisfaction and brand loyalty (Cronin J. J., 2000)

(Zeithaml V. A., 1996)”.

“Price is defined as what customers actually pay in exchange for the benefits accruing from a

product or service (Lovelock & Wirtz, 2004)”. Services firms are relatively undifferentiated

from competing offerings need to keep a look at on what competitors are charging and should

to try price consequently. If there is a little or no difference between the services offered in

the marketplace, customers may just choose the cheapest (Lovelock & Wirtz, 2004). Thus,

price can be an effective way to influence demand. Price keeps a message inside in itself; the

lower prices in off peak phase may rouse demand at that time but delay other customers.

Pricing is one of the interesting aspects as buyers tend to use price as an indicator of both

service costs and service quality price is at once an attraction variable and very unpleasant.

It depends upon several factors, “that price is an indicator of quality used by customers, one

of which is the availability of information to them (Zeithaml V. A., 2009)”. When service

quality is hard to detect or price varies great deal within a class of services, these conditions

is characterize situation face consumers when purchasing services, customers tend to use

price as an indicator of quality. Customers react to products or services and their prices have

28

associated by their quality. Customers often consider purchasing the item only when the

products meet negligible quality standards and hardly ever purchase with the highest quality.

Many observers assume that service quality is directly connected with price. “That is, higher

price serves as an indicator of higher quality. If such a relationship exists, it would seem to

complicate the ability to determine value. Customer often see price as an indicator to service

quality, so that price has an impact to the degree of quality (V. A. Zeithaml, 1996)”. “To

airline industry, pricing strategy is used to maximized profit by targeting different market

segment; vacationers, business travelers and group operators. The segmenting or the

distribution of customer takes to price differentiation in an airline industry (De Pew,

2003)”.The cheap airlines whose operations and planes are easy to accommodate as compare

to the services and operations of the full service airlines. This is the factor that shows that low

cost airlines pricing strategy go in front to relatively low fare.

2.4 RESEARCH GAP FILLED BY THIS RESEARCH

The research gaps filled by this research are in-flight services of the Emirates’ Airline, Qatar

Airline and Pakistan International Airline; “the previous researches conducted on in-flight

service are on Indian airline (R.ARCHANA & DR.M.V.SUBHA, A STUDY ON SERVICE

QUALITY AND PASSENGER SATISFACTION ON INDIAN AIRLINES, 2012)”.

2.5 AREA FOR THIS RESEARCH

This research do not cover other operations of Emirates’ Airline, Qatar Airline and Pakistan

International Airline like baggage claim services, customer complaint center, Financial

operations of Airlines, Marketing Operations of Airline, Advertisements of Airlines,

Allocations of budget to different departments of Airlines, Audit department and so on.

29

3. RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

This is a Quantitative research as it will examine the impact on passengers’ by services

provided by Airline crew. The data can be change into numbers, in a formal, objective,

systematic process to obtain information of research variables. This study is exploratory

research because the objective of the exploratory research is to explore or search through a

problem or situation to provide insights and understandings. Furthermore, this research is

using exploratory research, because problem is formulated and defines in this research.

Development of hypothesis and key variables is performed.

3.1.1 Research Philosophy

The philosophy of this research is positivism. “It is suitable to the fact that the research is

based on quantitative methods and tools for data collection and relationship is built between

variables, which is done through hypothesis. Such hypothesis can be analyzed and observed

through research (Saunders & Thornhill, 2009)”.

3.1.2 Research Approach

Deductive approach has been used in this research. “In deduction approach variables are

operationalized if they are not appropriate, so that they could become meaningful. Once the

variables become meaningful it can be easily measured (Saunders & Thornhill, 2009)”.

30

3.1.3 Research Strategy

The research strategy of this research is Survey. According to (Saunders & Thornhill, 2009)

the research strategy is defined as the general plan of how the researcher will go about

answering the research question.

3.1.4 Research Choice

The research choice of this research is mono method. “According to (Saunders & Thornhill,

2009) the research choice is defined as the single data collection technique and corresponding

analysis procedures”.

3.1.5 Research Time Horizon

The time horizon of this research is cross-sectional. According to (Saunders & Thornhill,

2009) it is defined as the study of particular phenomena at the particular time. This is because

of the reason that most research projects undertaken for academic courses are necessarily

time constrained (Saunders & Thornhill, 2009).

3.1.6 Research Technique

The research technique of this research is survey questionnaire, which is use for collecting

the data. Pearson correlation checks the relationship and significance between dependent and

independent variable.

31

3.1.7 Research Procedure

This research will be done by a review of literature or research papers, which are related to

the research topic. After that the questionnaire will be form to collect the data from the target

population. Then the data collected through questionnaire will be analyzed by using different

research tools. Hypothesis will also be tested through analyzed data to draw the result.

3.2 RESEARCH STRUCTURE

3.2.1 Statement of the Problem

Passenger satisfaction will increase when airlines provide their customers with benefits and

comforts as well as value-added services. If the customers are well satisfied they become

loyal to the airline and show their loyalty by repeat purchase of the ticket or traveling through

the same airline again and again and therefore customer satisfaction is important for Airlines

to focus on. Airlines are continuously working on the on board services to differentiate

themselves from other airlines and to create a good perception among regular travelers.

Numbers of new innovations have brought in on-board services and several new technologies

have entered into the market. In-flight services aircraft seats and dinning task on long flights

should be improved as the passenger noticed more and well in the long haul flights. The

current development in plane business seats roll out show the significance of this element,

which definitely influence the buying decision of the passenger especially on long haul

flights. According to “(R.ARCHANA & DR.M.V.SUBHA., A study on service quality and

on passenger satisfaction in Indian Airline., 2012) if the customer is not satisfied due to any

32

negative reason , the customer would look for considering other flights, which can satisfied

their need in more better way”. Therefore, this research will provide the indication about the

impact of on-board services on customer’s loyalty.

3.2.2 Research Questions

The research questions are as follows;

What is the impact of Tangibility on customer satisfaction?

What is the impact of Tangibility on customer loyalty?

What is the impact of Reliability on customer satisfaction?

What is the impact of Reliability on customer loyalty?

What is the impact of Responsiveness on customer satisfaction?

What is the impact of Responsiveness on customer loyalty?

What is the impact of customer satisfaction on customer loyalty?

3.2.3 Research Objectives

There are seven objectives of this study, they are as follows;

1. To determine the impact of Tangibility of on-board services on customer satisfaction.

2. To determine the impact of Tangibility of on-board services on customer loyalty.

3. To determine the impact of reliability of on-board services on customer satisfaction.

4. To determine the impact of reliability of on-board services on customer loyalty.

33

5. To determine the impact of responsiveness of on-board services on customer

satisfaction.

6. To determine the impact of responsiveness of on-board services on customer loyalty.

7. To determine the impact of customer satisfaction on customer loyalty.

3.2.4 Conceptual Framework

3.2.5 Research Variables

Independent Variable

Tangible

Reliability

Responsiveness

Moderating Variable

Customer satisfaction

Dependent Variable

34

Customer Loyalty

3.2.6 Scale for Measurement of Variables

Nominal scale

The nominal scale is defined as the level of measurement in which the data consists of

discrete categories and classifications. Furthermore, the data or variable can be labeled,

identified or classified depending on the presences or absence of some characteristics or

attributes.

3.2.7 Hypothesis

Ho: Tangibility of on-board services has no impact on customer satisfaction.

H1: Tangibility of on-board services has impact on customer satisfaction.

Ho: Tangibility of on-board services has no impact on customer loyalty.

H2: Tangibility of on-board services has impact on customer loyalty.

Ho: Responsiveness of on-board services has no impact on customer satisfaction.

H3: Responsiveness of on-board services has impact on customer satisfaction.

Ho: Responsiveness of on-board services has no impact on customer loyalty.

H4: Responsiveness of on-board services has impact on customer loyalty.

Ho: Reliability on-board services have no impact on customer satisfaction.

H5: Reliability on-board services have impact on customer satisfaction.

Ho: Reliability on-board services have no impact on customer loyalty.

H6: Reliability on-board services have impact on customer loyalty.

35

Ho: Customer Satisfaction of on-board services has no impact on customer loyalty.

H7: Customer Satisfaction of on-board services has impact on customer loyalty.

3.3 RESEARCH TOOLS AND TECHNIQUES

The tools that are used for this research are Microsoft Word, Microsoft Excel and SPSS 20.

3.3.1 Justification for Selected Tools and Techniques

SPSS is a tool used in research for data analysis. It manipulates data and draw conclusion in a

statistical form. The research data will collect from questionnaires.

3.3.2 Population and Target Population

The populations of this research are people who have travel through airlines and have on-

board service experience. This research target audience would be passenger from Airport,

audience at travel agency and people at Airline offices for ticket reservation or booking.

3.3.3 Sample Size

The sample size of this research is 384 (Advisor, 2006).

3.3.4 Method of Sampling Selected and its Justification

36

The Method of sampling for this research is non-probability convenience sampling. This is

because every individual do not have equal chance of occurring, the data is collected from

people or units that are conveniently available.(Babin).

4. DATA INTERPRETATION AND ANALYSIS

4.1 DEMOGRAPHICS OF PAKISTAN INTERNATIONAL AIRLINE

Age

Frequency Percent Valid PercentCumulative

Percent

Valid 18-30 22 22.0 22.0 22.0

31-40 53 53.0 53.0 75.0

44-56 18 18.0 18.0 93.0

56 & Above 7 7.0 7.0 100.0

Total 100 100.0 100.0

37

Interpretation

The above table and chart shows that, that there are 22% of people of age 18-30. The highest

respondents have the age of 31-40 with 53%, whereas there are 18% people who have

respondent have the age of between 44-56. In the last the people who are old are 7%.

38

Gender

Frequency Percent Valid Percent Cumulative Percent

Valid Male76 76.0 76.0 76.0

Female 24 24.0 24.0 100.0

Total 100 100.0 100.0

Interpretation

The total numbers of respondent for Pakistan International Airline are 100 out of which 76%

are male respondents and 24% are female respondent.

39

Income


Percent

Valid 20,000-49,999 3 3.0 3.0 3.0

50,000-79,999 29 29.0 29.0 32.0

80,000-109,000 43 43.0 43.0 75.0

110,000 & Above 25 25.0 25.0 100.0

Total 100 100.0 100.0

Interpretation

The incomes of the respondents are as 3% from 20,000-49,999. 29% are those people who

have income range from 50,000-79,999. The people who have income range from 80,000-

109,000 are 43%. In last there are 25% people who have income 110,000 and above.

41

How often do you travel domestically in a year?


Percent

Valid Once 18 18.0 18.0 18.0

Twice 48 48.0 48.0 66.0

Thrice 15 15.0 15.0 81.0

More than Thrice 19 19.0 19.0 100.0

Total 100 100.0 100.0

Interpretation

The question answered by the respondents of how often they travel domestically in a year.

The people who respondent once are 18%, the people who respondent twice are 48%, the

people thrice are 15% and the people who respondent more than thrice are 19%.

43

4.2 CORRELATION OF PAKISTAN INTERNATIONAL AIRLINE

Correlations

Tangibility11CustomerSatisfacti

on11

Tangibility11 Pearson Correlation 1 .589**

Sig. (2-tailed) .000

N 100 100

CustomerSatisfaction11 Pearson Correlation .589** 1


N 100 100

**. Correlation is significant at the 0.01 level (2-tailed).

Interpretation

The above chart shows that there is positive relation between these two variables as the 1

value of tangibility increase the customer satisfaction increase by 0.589 values. Furthermore,

there is Sig. (2-Tailed) value is 0.000. This value is less than .05. Because of this, we can

conclude that there is a statistically significant correlation between tangibility and customer

satisfaction.

45

Correlations

Tangibility11 CustomerLoyalty11

Tangibility11 Pearson Correlation 1 .824**


N 100 100

CustomerLoyalty11 Pearson Correlation .824** 1


N 100 100


Interpretation


value of tangibility increase the customer loyalty increase by 0.824 values. Furthermore,



loyalty.

46

Correlations

Reliable11CustomerSatisf

action11

Reliable11 Pearson Correlation 1 .636**


N 100 100



N 100 100


Interpretation


value of reliability increase the customer satisfaction increase by 0.636 values. Furthermore,


conclude that there is a statistically significant correlation between reliability and customer

satisfaction.

47

Correlations

Reliable11CustomerLoyalty

11

Reliable11 Pearson Correlation 1 .846**


N 100 100



N 100 100


Interpretation





satisfaction.

48

Correlations

Responsiveness11CustomerSatisfacti

on11

Responsiveness11 Pearson Correlation 1 .653**


N 100 100



N 100 100


Interpretation


value of responsiveness increase the customer satisfaction increase by 0.653 values.

Furthermore, there is Sig. (2-Tailed) value is 0.000. This value is less than .05. Because of

this, we can conclude that there is a statistically significant correlation between

responsiveness and customer satisfaction.

49

Correlations

Responsiveness11 CustomerLoyalty11

Responsiveness11 Pearson Correlation 1 .653**


N 100 100



N 100 100


Interpretation


value of responsiveness increase the customer loyalty increase by 0.653 values. Furthermore,


conclude that there is a statistically significant correlation between responsiveness and

customer loyalty.

50

Correlations

CustomerSatisfaction11 CustomerLoyalty11

CustomerSatisfaction11 Pearson Correlation 1 .483**


N 100 100



N 100 100


Interpretation


value of customer satisfaction increase the customer loyalty increase by 0.483 values.


this, we can conclude that there is a statistically significant correlation between customer

satisfaction and customer loyalty.

51

4.3 DEMOGRAPHICS OF EMIRATES AIRLINE

Gender

Frequency Percent Valid Percent Cumulative Percent

Valid Male 74 74.0 74.0 74.0

Female 26 26.0 26.0 100.0

Total 100 100.0 100.0

Interpretation

The total numbers of respondent for Emirates Airline are 100 out of which 74% are male

respondents and 26% are female respondent.

52

Age


Percent

Valid 18-30 17 17.0 17.0 17.0

31-40 40 40.0 40.0 57.0

44-56 27 27.0 27.0 84.0

56 & Above 16 16.0 16.0 100.0

Total 100 100.0 100.0

Interpretation

The ages of the respondent are 17% from 18 to 30. There are 40% of respondent who belong

to age group 31 to 40. Age group of 44 to 56 are 27% and from age group 56 and above are

16%. The total numbers of respondent of Emirates airline are 100.

54

Income


Percent

Valid 20,000-49,999 19 19.0 19.0 19.0

50,000-79,999 20 20.0 20.0 39.0

80,000-109,000 31 31.0 31.0 70.0

110,000 & Above 30 30.0 30.0 100.0

Total 100 100.0 100.0

Interpretation

The income of the respondents are as describe as, people belong to 20,000 to 49,999 income

are 19%. The respondent income from 50,000 to 79,999 are 20%, similarly from 80,000 to

109,000 are 31%. And in the end the 110,000 and above are 30% respondents. The total

numbers of respondents are 100.

56

How often do you travel internationally in a year?


Percent

Valid Once 22 22.0 22.0 22.0

Twice 43 43.0 43.0 65.0

Thrice 18 18.0 18.0 83.0

More than Thrice 17 17.0 17.0 100.0

Total 100 100.0 100.0

Interpretation

The question answered by the respondents of how often they travel internationally in a year.

The people who respondent once are 22%, the people who respondent twice are 43%, the

people thrice are 18% and the people who respondent more than thrice are 17%. The numbers

of respondents are 100.

58

4.4 CORRELATION OF EMIRATES AIRLINE

59

Correlations

Tan CS

Tan Pearson Correlation 1 .592**


N 100 100

CS Pearson Correlation .592** 1


N 100 100


Interpretation


value of tangibility increase the customer satisfaction increase by 0.592 values. Furthermore,



satisfaction.

60

Correlations

Tan CL

Tan Pearson Correlation 1 .889**


N 100 100

CL Pearson Correlation .889** 1


N 100 100


Interpretation


value of tangibility increase the customer loyalty increase by 0.889 values. Furthermore,



loyalty.

61

Correlations

Rel CS

Rel Pearson Correlation 1 .619**


N 100 100



N 100 100


Interpretation





satisfaction.

62

Correlations

Rel CL

Rel Pearson Correlation 1 .779**


N 100 100



N 100 100


Interpretation


value of reliability increase the customer loyalty increase by 0.779 values. Furthermore, there

is Sig. (2-Tailed) value is 0.000. This value is less than .05. Because of this, we can conclude

that there is a statistically significant correlation between reliability and customer loyalty.

63

Correlations

Res CS

Res Pearson Correlation 1 .686**


N 100 100



N 100 100


Interpretation


value of responsiveness increase the customer satisfaction increase by 0.686 values.


this, we can conclude that there is a statistically significant correlation between

responsiveness and customer satisfaction.

64

Correlations

Res CL

Res Pearson Correlation 1 .728**


N 100 100



N 100 100


Interpretation


value of responsiveness increase the customer loyalty increase by 0.728 values. Furthermore,


conclude that there is a statistically significant correlation between responsiveness and

customer loyalty.

65

Correlations

CS CL

CS Pearson Correlation 1 .537**


N 100 100



N 100 100


Interpretation


value of customer satisfaction increase the customer loyalty increase by 0.537 values.


this, we can conclude that there is a statistically significant correlation between customer

satisfaction and customer loyalty.

66

5. Conclusion and Recommendation

5.1 Conclusion

My study investigates the impact of customer service quality on customer loyalty in airline

industry in comparison between domestic and international airline. The three independent

variable shows positive effect on customer satisfaction as well as for customer loyalty.

Moreover, the result shows that tangibility impact on customer satisfaction is high in Pakistan

international airline and little low in Emirates airline, similarly the impact of tangibility on

customer loyalty is high in emirates and low in PIA. Furthermore the reliability impact of

customer satisfaction is high in PIA then Emirates airline and the impact of reliability impact

on customer loyalty is also the same for both. The responsiveness impact on customer

satisfaction is high in emirates airline and low in Pakistan international airline whereas the

responsiveness impact on customer loyalty is also high in Emirates Airline. Thus, the result

shows that the impacts of three independent variables are high directly on customer loyalty in

Emirates Airline whereas the impact of three variables on customer satisfaction is high on

customer satisfaction. People tend to become more loyal to Emirates airline as compare to

Pakistan international Airline.

5.2 Recommendation

The main recommendation for airlines is that they should focus on their in-flight services and

full fill their desire promise accurately in order to make loyal customers. This study shows

that people are satisfied with the services of Pakistan international airline but they don’t

become loyal to the airline the situation is completely opposite for Emirates airline as the

satisfied passengers are becoming loyal because the airline are completing their prompt

services and responding to passengers problem and providing them with different solutions.

67

6. QUESTIONNAIRE

Dear Respondents,

I am an undergraduate student of National University of FAST completing my

graduation. This is a part of my university project. All the information from survey

would only be used for academic purposes only.

Please answer the questions honestly, accurately and accordingly.

1. Gender Male Female

2. Age 18-30 31-43 44-56 56 &

above

3. Income 20,000-49,999 50,000-79,999 80,000-109,999 110,000 &

above

4. How often do you travel in a year internationally? If No do not fill

Once

Twice

Thrice

More than thrice

5. How often do you travel in a year domestically? If No do not fill

Once

Twice

Thrice

More than thrice

68

6. If you travel internationally, what is the purpose? If No do not fill

Business Trip

Vacation

Visit friends and relatives

Others

_____________________________________________________________________

__

7. If you travel domestically what is the purpose? If No do not fill

Business Trip

Vacation

Visit friends and relatives

Others

_____________________________________________________________________

___

8. Please state your importance of the following factors for Pakistan International

Airline:

S.No Strongly

Disagree

Disagree Partially

Disagree

Neither

Agree nor

Disagree

Partially

Agree

Agree Strongly

Agree

1. Reliability -Service

must be dependable

and consistent.

2. Tangible - Physical

evidence of service.

69

3. Responsiveness -

Provide promptly

services to passengers.

4. Quality of services - in

flight services.

5. Quality of food and

beverage – meals on

board.

6. The punctuality of

flights and ground

services.

7. Ticket flexibility

8. Location of airline

offices and authorized

agents.

9. Airfare’s price - Is the

price reasonable?

10. Decoration - Interior

design of a aircraft and

air-hostess

11. Onboard entertainment

services.

12. Loyalty program – VIP

card, frequent flyer

program

70

13. Flight safety

9. Please state your importance of the following factor for Emirates Airline:

S.No Strongly

Disagree

Disagree Partially

Disagree

Neither

Agree nor

Disagree

Partially

Agree

Agree Strongly

Agree

1. Reliability -Service

must be dependable

and consistent.

2. Tangible - Physical

evidence of service.

3. Responsiveness -

Provide promptly

services to passengers.

4. Quality of services - in

flight services.

5. Quality of food and

beverage – meals on

board.

6. The punctuality of

flights and ground

services.

7. Ticket flexibility

71

8. Location of airline

offices and authorized

agents.

9. Airfare’s price - Is the

price reasonable?

10. Decoration - Interior

design of a aircraft and

air-hostess

11. Onboard entertainment

services.

12. Loyalty program – VIP

card, frequent flyer

program

13. Flight safety

10. If you do return to Pakistan International Airline, why would you do so?

In-flight and ground services

Airfare’s price

Flight safety

Onboard entertainment service

Loyalty program

Ticket flexibility

11. If you do return to an Emirates Airline, why would you do so?

72

In-flight and ground services

Airfare’s price

Flight safety

Onboard entertainment service

Loyalty program

Ticket flexibility

12. If you are completely satisfied with the Pakistan international Airline, would you still

prefer to travel in future with that PIA? Yes No

13. If you are completely satisfied with the Emirates Airline, would you still prefer to

travel in future with that Emirates Airline? Yes No

Thank You

73

BIBLIOGRAPHY

A. Caruana. (2008). “Service loyalty: The effects of service quality and the mediating role of

customer satisfaction. European Journal of Marketing, 811-828.

Advisor, R. (2006). Sample size table. Retrieved from Research Advisor.

Air Transport Association of America. (2007). Economic Report.

Akbar, M. a. (2009). Impact of Service Quality, Trust and Customer Satisfaction on

CustomerLoyalty. ABAC Journal, 24-38.

Al- Rousan, M. R. (2010). Customer Loyalty and the Impacts of Service Quality: The Case of

Five Star Hotels in Jordan. International Journal of Human and Social Sciences.,

5:13.

America, A. T. (2004). Statement on the State of the Airline Industry, Statement for the

Record of the Sub-committee on Aviation, Transportation and Infrastructure

Committee, US House of Representatives.

Andreassen. (1994).

Babin, W. G. (n.d.). Sampling design and sampling procedure. In Z. a. Babin, Essentials of

Marketing Research (p. 312). South-western.

Bailey, E. R. (1985). Deregulating the Airlines. MIT Press Series on Regulation of Economic

Activity, Cambridge, MA.

Bitner. (1990).

74

Bitner, M., & Hubbert, A. (1994). Encounter satisfaction vs. overall satisfaction and quality.

72-94.

Boulding, W. ,. (1993). A Dynamic Process Model of Service Quality: From Expectations to

Behavioral Intentions. Journal of Marketing Research, 7-27.

Boyd, Leonard, & White. (1994). Customer preferences for financial services: An analysis.

International Journal of Bank Marketing, 9-12.

Butler, & Keller. (1992). “The cost-constrained global airline industry environment: what is

quality? Transportation Quarterly, 599-618.

C. Young, L. C. (1994). Assessing service quality as an effective management tool: The case

of the airline industry. Journal of Marketing, 76-96.

Carrillat, F. A. (2007). The validity of the SERVQUAL and SERVPERF scales. International

Journal of Service Industry Management., 472.

ChandujiThakor, & Mistri, K. (2012). A STUDY OF THE CONSUMER BEHAVIOR

CONCERNING SERVICE QUALITY AND VARIOUS DIMENSIONS OF

SERVICES PROVIDED BY AIRLINES SERVICES. Jorunal of research in

management and Technology, 50-78.

Chang, & Keller. (2002). “A survey analysis of service quality for domestic airlines”.

European Journal of Operational Research, 166-177.

Chang., T. Y. (2005). Reducing consumers‟ perceived risk through banking service quality

cues in Taiwan. Journal of Business and Psychology, 521-540.

Chen, Fang-Yuan, & Yu-Hern, C. (2005). Examining airline service quality from a process.

Journal of Air transport management , 79-87.

75

Cronin, J. J. (1992). Measuring service quality: A re-examination and extension. Journal of

Marketing, 56-55.

Cronin, J. J. (1994). SERVPERF versus SERVQUAL; Reconciling Performance-Based and

Perception-Minus-Expectations. Journal of Marketing, 125-31.

Cronin, J. J. (2000). Assessing the effects of quality, value, and customer satisfaction on

consumer behavioural intentions in service environments. Journal of Retailing., 193.

Cronin, J., & Taylor, S. (1992). Measuring service quality: a reexamination and extension.

Journal of Marketing, 55-68.

De Pew, T. &. (2003). Leveraging the airlines, Using pricing and yield managment in the

field service optimaztion.

Dennet, C. I. (2000). Pre-Bookable Services in the Chartered Airline Industry: Increasing

Satisfaction through Differentiation. Service Industries Journal, 82-94.

Dennet, C., Ineson, M., Stone, G., & Colgate, M. (2000). “Pre-Bookable Services in the

Chartered Airline Industry: Increasing Satisfaction through Differentiation. The

Service Industries Journal, 82-94.

Doyle, & Wong. (1998). “Marketing and competitive performance, an empirical study.

European Journal of Marketing, 514-535.

Elliott, K. M. (1993). Service quality in the airline industry: are carriers getting an unbiased

evaluation from consumers? Journal of Professional Services, 71-82.

Fornell. (1992).

G. C. Saha and Theingi. (2004). Service quality, satisfaction, and behavioral intention, A

study of low-cost airline carriers in Thailand. Managing Service Quality, 350-372.

76

G.C, S., & Theingi. (2009). Service quality, satisfaction, and behavioral intentions: A study

of low-cost airline carriers in Thailand. Managerial Service Quality, 350-372.

Garvin, D. A. (1989). Quality in Manufacturing and Service.

Gourdin, K. (1998). Bringing quality back to commercial travel. Transportation Journal, 23-

29.

Gowrisan. (2002). Competition and Regulation in the Airline Industry. FRBSF ECONOMIC

LETTER.

Gronroos, C. (1982). Strategic Management and Marketing in the Service Sector. Helsinki,

Finland: Swedish School of Economics and Business Administration.

GROSSMAN, D. (2010). The World’s First Flight Attendant. Airships.net.

Gursoy, D. C.-H., & Kim, H. (2005). The US airlines relative positioning based on attributes

of service quality. Tourism management, 57-67.

H. Kasper, P. H. (2006). Services Marketing Management – A Strategic Perspective, 2nd ed.

West Sussex. England: John Wiley & Sons Ltd, 554.

Harris, A. (2010). Demand Media and Great Lakes Brewing News.

Haynes. (1994).

Haynes, & Percy. (1994). Perception paradox: Airline service quality issues. Proceedings of

Decision Sciences Institute - Annual Meeting, 1950-1952.

IATA/ATDI. (2002). Airline marketing course.

Iddrisu, A. M. (2011). Service Quality and Customer Loyalty: The Case of the Mobile

Telecommunication. Institutional Repository for KNUST.

77

J. Lee, J. L. (2001). The impact of switching costs on the customer satisfaction-loyalty link:

mobile phone service in France. Journal of Services Marketing, 35 – 48.

J.J.H, L., & Tzeng, G.-H. (2007). A non-additive model for evaluating airline service quality.

Journal of Air Transport, 131-138.

John. (1946). Reregulation by a New Name - Forced Access.

Kloppenborg, T. J., & Gourdin, K. (1992). “Up in the Air about Quality". Quality progress,

31-35.

Kotler, P. a. (2002). Country as Brand, Product and Beyond: A Place Marketing and Brand

management perspective. Journal of Brand Management, pp249-261.

Kumar, R. S. (2009). Factors Affecting Branding Loyalty: A study in an Emerging Market on

Fast Moving Consumer Goods. Indian Institute of Management Bangalore.

Lacobucci, D. G. (1994). The Calculus of Service Quality and Customer satisfaction.

Lam, R. a. (2006). SME Banking Loyalty (and Disloyalty): A Qualitative Study in Hong

Kong. Journal of Bank Marketing, 37-52.

Lau, P. M. (2005). Service quality: A study of the luxury hotels in Malaysia. Journal of

American Academy of Business, 7-26.

Lee, M. a. (1996). Customer Loyalty in the Airline Industry. Transportation Quarterly, 57-

72.

Lee, M., & Cunningham, L. (1996). “Customer Loyalty in the Airline Industry”.

Transportation Quarterly, 57-72.

78

Levin, M. E. (1987). “Airline Competition in Deregulated Markets: Theory, Firm Strategy,

and Public Policy". The Yale Journal on Regulation, 393-494.

Lindstrom, R. (2009). Delivering Excellent Service Quality in Low Cost Avation. Thesis of

International Marketing Management.

Lovelock, C., & Wirtz, J. (2004). Services Marketing-People, Technology, Strategy. 5th

edition. Prentice Hall.

Miller, C. (1993). “Rewards for the Best Customers: Loyalty Programs Increase as Marketers

try to Build Relationships”. Marketing news, 1-6.

Mukherjee, P. (2009). Budget Speech.

Munusamy, J. C. (2010). International Journal of Innovation, Management and Technology.

International Journal of Innovation, Management and Technology, 399.

Oliver, R. R. (1997). Customer Delight: Foundations, Findings and Managerial Insights.

Journal of Retailing, 311-366.

Ostrowski, O‟Brien, & Gordon. (1993). “Service quality and customer loyalty in the

commercial airline industry”. Journal of Travel Research, 16-28.

Ott, J. (1993). Airline Customer Service Rated „Average in Survey. Aviation Week and Space

Technology, 31.

Pakdil, F. a. (2007). Expectations and perceptions in airline service: an analysis using

weighted SERVQUAL scores. Journal of Air Transport Management, 229-237.

Parasuraman, "., Zeithaml, V. A., & Berry., L. L. (1988). A SERVQUAL multiple-item scale

for measuring consumer perceptions of service quality. A journal of Retailing, 12-40.

79

Parasuraman, A. (2004). Assessing and improving service performance for maximum

impactL insights from a weo decade long research journey. Performance Measurment

and Metrics, 45-52.

Patterson, & Spreng. (1997). “Modeling the relationship between perceived value,

satisfaction, and repurchase intentions in business-to-business, services context: An

empirical examination”. International Journal of Service Industry Management, 414-

434.

Peter, & Olson. (1994).

Piercy, N. (2001). Reinventing the Airline Business: If you want dinner, go to a restaurant!

Business case organizations, Case no-068.

Prebezac., J. M. (2008). Prioritizing improvement of service attributes using impact range

performance analysis and impact asymmetry anaylsis. Managing Service Quality,

559-576.

R. Lindstrom. (2009). Delivering Excellent Service Quality in Low Cost Avaition. Thesis of

International Marketing Management.

R.ARCHANA, & DR.M.V.SUBHA. (2012). A STUDY ON SERVICE QUALITY AND

PASSENGER SATISFACTION ON INDIAN AIRLINES. Zenith, 1-14.

R.ARCHANA, & DR.M.V.SUBHA. (2012). A study on service quality and on passenger

satisfaction in Indian Airline. ZENITH, 51-62.

Roest, & Pieters. (1997). Journals of Service marketing.

Rogerson. (1983). Reputation and product quality. Journal of Economics, 500-510.

80

Saunders, M. L., & Thornhill, A. (2009). Research methods for business students (5th

edition). Harlow:Rotolito Lombarda.

Shostack, L. G. (1977). “Breaking Free form Product Marketing”. Journal of Marketing, 73-

80.

Simpson, F. S. (2006). International Service Variants: Airline Passenger Expectations and

Perceptions of Service Quality. Journal of Services Marketing, 188-216.

Solomon. (1985). Packaging the service provider. Service Industry Journal, 64-71.

Suman, M. a. (2012). Consumer Perception Towards Quality of Financial Services.

Consumer Perception Towards Quality of Financial Services.

Taylor, J. J. (1992). “Measuring Service Quality: A Reexamination and extensions. Journal

of Marketing, 55-68.

Tepeci. (1999). “Increasing brand loyalty in the hospitality industry. International Journal of

Contemporary Hospitality and Management, 223-229.

V. A. Zeithaml, A. P. (1996). The Behavioral consequences of service quality. The Journal of

Marketing, 31-46.

W. Boulding, A. K. (1993). A dynamic process model of service quality: form expectations

to behavioral intentions. Journal of Marketing Research, 7-27.

Wong, C. B. (2005). The Influence of Customer Satisfaction and Switching Cost on

Customer Retention. A Survey of Retail Internet Banking Users in Hong Kong.

Yi. (1990). A critical view of customer satisfaction. a review of marketing, 68-123.

81

Zeithaml, V. A. (1996). The behavioral consequences of service quality. Journal of

Marketing, 31-52.

Zeithaml, V. A. (2003). Services Marketing. Integrating Customer Focus. Mc Graw-Hill.

Zeithaml, V. A. (2009). Services marketing: Integrating customer focus across the firm. New

York: McGraw-Hill/Irwin.

82

complete final year project report

Documents

customer loyalty152

customer loyalty182

customer loyalty142

customer trust111

customer satisfaction132

customer satisfaction111

customer loyalty112

airline industry