Enathi NdudeSimphiwe TwalaB-tech: Tourism ManagementFaculty of BusinessCape Peninsula University of Technology11 November 2014

Supervisor/Lecturer: Prof K.Swart

Co-Supervisor: Dr C.Dube

AKNOWLEDGEMENTS

INTRODUCTION Background

Problem statement

Research objectives

LITERATURE REVIEW

RESEARCH METHODOLOGY

KEY FINDINGS

CONCLUSIONS AND RECOMMENDATIONS

REFERENCES

PRESENTATION OUTLINE

INTRODUCTION

Low cost airline started by the American domestic carrier Southwest (Kretschmer,

2008:23–25.)

Since 2001, the South African domestic air transport environment has been

characterised by the entry of the low cost carriers. (South Africa.To, 2012: n.d).

In the low cost airline market there is a strong competition (Turner,2003:14)

Background of the study

Problem statement

Low cost airlines faces fuel consumption, oil prices, air-traffic and high competition

Low cost airlines in South Africa have not yet developed extranet facilities for their business clients

South African low cost airlines use low fare strategy which might lead to a negative perception to its targeted customers

Ineffective low fare strategy to passengers can bring failure to deliver high quality service (Yu-Chiun and Yen-Heng, 2012: 406)

INTRODUCTION

Determine passengers’ motives for using low cost airlines

Determine passengers’ perceptions of service delivered by low cost

airlines

Identify the low cost airlines’ strategies in targeting their passengers

Research objectives

Over the past five years the South African airline industry has grown by more than 50

per cent (Economist.com 2013.n.d)

In 2001, the domestic market comprised fewer than 7 million passengers, compared

to almost 12 million in 2006 (Sultan, & Simpson, 2000.:188).

Low cost airline in recent years used to be the primary domain of business travellers

(Webster,1985:n.d).

LITERATURE REVIEW

Mason (2001:103) cited that South African domestic passengers of low cost airlines

were viewed as unpredicted when the low cost airlines came into existence

Bui and Nguyen (2004:34) stated that low cost airlines particularly Mango airlines

has improved its customer’s loyalty and satisfaction via their high quality products

and services

Zeithaml and Bitner (2000:41) said that passengers perceptions of low cost airlines

can be influenced by the image or reputation of the company.

Fare was by far the most important factor for customers in choosing to fly on a low

cost airline (Barret, 1999:21-25)

LITERATURE REVIEW

RESEARCH METHODOLOGY

Quantitative data

Structured survey questionnaire

Closed-ended questions

Population size N=300 and sample size n=100 due to scale of project,

resource and time constraints

Pilot study conducted

Data was analysed using SPSS (Statistical Package for Social

Sciences)

RESEARCH METHODOLOGY

Ethical considerations The participation of respondent in the survey was voluntarily

The respondents were assured that the information would be kept confidential

There was an informed consensus on all those respondents who participated

voluntarily

SIMPHIWE

KEY FINDINGS

Gender of respondents (n=100, in %)

KEY FINDINGS

Age group of respondents (n=100, in %)

KEY FINDINGS

South African Low Cost Airlines (n=100, in%)

KEY FINDINGS

Purpose of travel for respondents (n=100, in %)

KEY FINDINGS

Passenger’s motives for choosing low cost airlines (n=100, in %)

KEY FINDINGS

Table 4.1: Level of Satisfaction (in %, N=100)

FEATURES OF LCA RATING

  Poor Averag

e

Good Excellen

t

N/A

Bookings 1 13 47 39 -

Baggage Service 3 20 53 24 -

Punctuality 3 10 44 42 1

Overall Experience 3 6 55 35 1

KEY FINDINGS

Limitations of the study

Transport to get to the study area

The existing study is limited

Distribution of questionnaire permit

CONCLUSION

Majority of respondents using low cost was young adults

Negative and positive impacts

Importance of service delivery

RECOMMENDATIONS

Improve in prompt service

Offer students discounts

Improve in punctuality

RECOMMENDATIONS

Possible future areas

Extending study to perceptions of passengers on full service airlines with a

bigger sample size on passengers.

REFERENCE Bui, H., & Nguyen, L. 2004. Total quality management. Hochiminh: Vietnam National University. p34-45.

Barrett, S. (1999). Peripheral market entry, product differentiation, supplier rents and sustainability in the deregulated European aviation market—a case study. Journal of Air Transport Management, 2(5): 21–30.

Economist.com, 2013, Flying cheap, viewed 11 August 2013, from http://www.economist.com/blogs/graphicdetail/2013/04/daily-chart-10 [10 October 2014].Kretschmer, C. 2008. Blending models. Ascend magazine (magazine of Sabre airline solutions). 2008 (1):23 – 25.

Mason, K. 2001. Marketing low cost airline service to business travelers. Journal of Air Transport Management, 3(3):7:103-109.

Sultan, F. & Simpson, M.C. 2000. ‘International service variants: Airline passenger expectations and perceptions of service quality’, Journal of Services Marketing, 14(3): 188-216.

SouthAfrica.to, n.d. http://www.southafrica.to/transport/Airlines [02 October 2014].

Turner, S. 2003. Comparison of passenger profiles and selection criteria: a study of London Amsterdam passengers, ATRS Conference, Toulouse.

Webster, M. 1985. Webster`s nith new collegiate dictionary. Meriam - Webster Inc.n.d.

Zeithaml, V.A., & Bitner, M.J.2000. A conceptual model of service quality and its implications for future research. Journal of Marketing, 49(2):41-50.