International Journal of Business

Management & Research (IJBMR)

ISSN(P): 2249-6920; ISSN(E): 2249-8036
Vol. 6, Issue 5, Oct 2016, 25-32
TJPRC Pvt. Ltd.

A STUDY ON RELATIONSHIP BETWEEN AIRLINE SERVICE QUALITY,

PASSENGER SATISFACTION AND LOYALTY OF LOW COST AIRLINES
RAJESH GANESAN1 & ASHOK BABU J2
1

Research Scholar, School of Management, Hindustan University, Chennai, Tamil Nadu, India
2

Professor, School of Management, Hindustan University, Chennai, Tamil Nadu, India

ABSTRACT
Airline industry plays a most important role in every countries economic movement and it supports in starting
up of the countries market to both local and foreign investors [1]. Globalization has made it even more essential for
everyone to be every-where at any time. Passengers are essential participants in airlines industries and their satisfaction
is a main concern to the airline operators. Passenger satisfaction has been a subject of great interest to organizations
and researchers in a similar way. In recent years, airline operators are obliged to extract more services with their
budgeted fare in addition to their normal offers to the passenger. The quality of service has become a vital aspect of
passenger satisfaction. It has been confirmed by many researchers that service quality is positively correlated to
passenger satisfaction and it leads to obtain the loyalty of the passenger. This study was conducted only in low cost
quality of services offered by low cost airlines and also to study the relationship between the service quality provided by
the airlines, passenger satisfaction on their offers and passenger loyalty with their availability. In this research paper,
the service quality regular model has been used for assessment of service quality, Gremler and Brown model with some
alteration was used for evaluating the loyalty and the apparatus offered by Bitner and Hubbert was used for assessment
of passenger satisfaction [2, 3]. The focus of this study is a Low cost airline, and 817 passengers were sampled.
The results of this study shows that in all aspects, passenger need is higher than their opinions of the low cost airlines

Original Article

airlines in the period of Oct15/ Mar16. This report is the outcome of a field study, which aimed to determine the

operation and in fact the passenger are satisfied with the service quality offered by the airlines but quite not reliabilities
by their service quality. Moreover, this study results shows that the passenger satisfaction plays the vital role of a
mediator in the possessions of service quality on service loyalty. These findings are further explored.
KEYWORDS: Service Quality, Factor Analysis, Mediator, Passenger Satisfaction, Loyalty

Received: Aug 23, 2016; Accepted: Sep 15, 2016; Published: Sep 21, 2016; Paper Id.: IJBMROCT20163

INTRODUCTION
Airline industry plays a most important role in economic development of a nation [1]. In the recent years,
as the airline industry has gained momentum and has become more challenging, many airlines have turned their
attention on the airline service quality to increase passenger satisfaction. Passengers are essential participants in
airlines industries and their satisfaction is a main concern to the airline operators. In recent decade, airline
industries are indebted to dig out more services with their budgeted fare in addition to their normal offers to the
passenger as the quality of service has become a vital aspect of passenger satisfaction. The association among
passenger service quality and loyalty has confirmed its position and importance in airline industry [4, 5, 6].
In service marketing area service quality and passenger satisfaction have been extremely measured and used.
Many researchers have confirmed that service quality is positively correlated to passenger satisfaction and

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Rajesh Ganesan & Ashok Babu J

subsequently to loyalty of the passenger [7]. Satisfaction and loyalty are not substitutes for each other, because customers
who are loyal may not be highly satisfied and highly satisfied customers may not be loyal [8]. Thus in a highly scenario,
delivering of high quality superior services to passengers is the core competitive advantage for an airline's profitability and
sustained growth. Although these concepts have been familiar in the marketing literature, the relationships between these
three concepts (service quality, passenger satisfaction & passenger loyalty) are still unclear. Therefore, we intended to
study the relationship between these concepts which would assist airline industries to better serve their customers to
achieve the superior level of their passengers satisfaction.

LITERATURE REVIEW
In the face of the significance of service quality, only few studies have been done in this area in India so far, but
numerous researches have been accomplished in other countries than India. These statistical reports clearly show that the
importance of passenger service quality, and the researchers attentions to this topic [9]. Bloemer has presented a model to
show how the psychological representation, service quality and passenger satisfaction influence passenger loyalty [10].
Service quality is an extent to which a service meets or exceeds customer needs and expectations [8]. In the recent decades,
service quality has become a major focus because of its strong impact on business performance, lower costs, and return on
investment, customer satisfaction, customer loyalty and gaining higher profit [9].
According to Atilgan et al. (2008), in most of the service settings customers may not receive the level of service
they expect [11]. The service experience may be either under customers expectations or above expectation.
When expectations are met, service is supposed to be of high quality and satisfactory. When expectations are not met,
service quality is supposed to be unacceptable. However, service quality has a great influence on customer satisfaction
[12]. Service quality and customer satisfaction are two different variables which are gaining the attention of the researchers
[13]. The service quality is validated by the actual service performance in terms of particular service attributes in a
particular context, whereas satisfaction is validated by the customers overall service experiences [14].
Customer satisfaction is based on different factors such as service quality, customers mood, emotions, social
interactions, and other experience-specific subjective factors [15]. Crompton and Love (1995), reported that the two
distinct variables ie. Service quality and customer satisfaction are expected to be positively correlated, but not linear [16].
Delivering a high-quality service to passengers is the need of the hour for the survival and sustenance of the airline
industries. Hence airline industries should understand that service quality is one of the best models for evaluating
customers expectations and perceptions and thus may gain high profit in market shares by retaining the customers. Service
quality can also be defined as a customers overall impression 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 [17].

METHODS
Population and Sample
Respondents involved in this study consist of passengers who travel to various destinations to and from the low
cost airlines. Our study centers the passengers in and around Chennai. Hence, we opted for a purposive sampling method
as this approach involved the practical selection of the passengers who can provide accurate and fastest information, thus
fulfilling the research requirements.
Impact Factor (JCC): 5.4362

NAAS Rating: 3.07

A Study on Relationship between Airline Service Quality, Passenger

Satisfaction and Loyalty of Low Cost Airlines

27

Data Collection Procedures

In this study data was collected through distributed of structured Questionnaires to the passenger in and around
Chennai airport. Approximately 980 structured questionnaires were distributed, out of which 88% (860) responded
received, from that 83% (817) only became a part of this study.
We distributed approximately 1000 questionnaires to passengers centered around the domestic airport of Chennai.
A total of 860 participants responded to our queries, wherein, 817 (83%) respondents gave full consent and became a part
of this study at the end of March 2016, amidst many difficulties faced during data collection.
The primary aim of this study is to analyze the association among passenger service quality, loyalty through
passengers satisfaction and to use this to improve the revenue of the airline companies and to promote their strategies to
survive & sustain in the current competitive scenario. In this study, the seven points Likert scale with 27 items in three
major airlines variable such as passenger service quality (15), passengers satisfaction (4) & loyalty (8) that ranges from
"Strongly agree" (1) to "strongly disagree" (7) is used.

RESULTS & DISCUSSIONS

Exploratory Factor Analysis on Passenger Service Quality
Exploratory factor analysis (EFA) was performed on passenger service quality strategies including fivefold
dimension namely, tangibility, assurance, empathy, responsiveness and reliability. Three items of each were used for all
fivefold passenger service quality variables. The results of exploratory factor analysis on the passenger service quality are
presented in table 1. The table shows the factor loading of fivefold dimensions of passenger service quality variables were
compressed into fourfold variable with a factor value > 0.5. The explored four dimensions of this study consists of fourfold
such as Credibility with six items, Assurance with three items, Tangibility with three items and Empathy with three items
respectively. The Kaiser-Meyer-Olkin Measure of Sampling Adequacy (MAS) for all items in our exploratory analysis was
0.74, which was within the acceptable level of appropriateness i.e. between 0.51 and 0.90 [18]. We also observed that the
Bartlett's Test of Sphericity was significant. If the MAS is more than 0.60 and the Bartlett's test of Sphericity is significant,
then the assumptions of factor analysis were met and there are important inter-correlations for factor analysis [19-21].
We observed a Cronbach's Alpha of 0.9 which also indicated the reliability. These results supported the discriminate
convergent validity of service quality. Table 1 summarizes the results of exploratory factor analysis
Table 1: Results of the Exploratory Factor Analysis
Service Quality Factored Components
Factor 1
Factor 2
Factor 3
Factor 4
Credibility
Assurance
Tangibility
Empathy
Reliability 1 (0.832)
Assurance 1 (0.877)
Tangibility 1 (0.873)
Empathy 3 (0.867)
Reliability 3 (0.751)
Assurance 2 (0.850)
Tangibility 3 (0.768)
Empathy 2 (0.669)
Responsiveness 2 (0.749)
Assurance 3 (0.735)
Tangibility 2 (0.748)
Empathy 1 (0.668)
Reliability 2 (0.725)
Responsiveness 3 (0.665)
Responsiveness 1 (0.655)
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 7 iterations.
The Examination of Service Quality that has more Impact on Passengers' satisfaction - to examine which
component of service quality has more impact on passengers' satisfaction, on the basis of this the following hypotheses
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Rajesh Ganesan & Ashok Babu J

were developed:
HYPOTHESIS 1: There is a significant and positive relationship between service quality and passenger's
satisfaction.
With a largest beta coefficient of =0.460, we observed a strongly significant contribution of Tangibility in the
prediction of the outcome variable, passenger's loyalty (sig=0.00). Also the other independent variables such as Credibility
(=0.267), Assurance (=0.158) and Empathy (=0.102) also contributed significantly to the prediction of passengers
loyalty in the respective order (Table 2).
The regression model analysis showed an adjusted coefficient of determination, (R=0.45), which indicates that
0.45% of the variation in the passenger's satisfaction is dependent on the variations in the independent predictors of service
quality. The Four (4) forecaster dimensions were observed to correlate positively to the passenger's satisfaction.
From the Table 2 below, it shows that all the service quality components are significant and supportive of the hypotheses
regression. These results reveal that there was a highly significant relationship between service quality and passenger's
satisfaction and the variation between them was statistically explained by the regression equation which is stated as
follows: The service quality =6.589 + 0.218 (Credibility) +0.210 (Assurance) +0.657 (Tangibility) -0.163 (Empathy).
The results of the multiple regression models indicate that service quality strategy explained the variance in passenger's
satisfaction. The multiple regression analysis results are shown in Table 2.
Table 2: Regression Result of Service Quality with Passenger's Satisfaction
Model Summary
Model
R
R Square
Adjusted R Square Std. Error of the Estimate
1
.671a
.450
.447
1.399
a. Predictors: (Constant), Empathy, Tangibility, Assurance, Credibility
Co-Efficientsa
Unstandardized
Standardized
Coefficients
Coefficients
Model
T
Sig.
Std.
B
Beta
Error
(Constant)
6.589
.702
9.383
.000
Credibility
.218
.029
.267
7.607
.000
1
Assurance
.210
.042
.158
4.996
.000
Tangibility
.657
.042
.460
15.529
.000
Empathy
-.163
.052
-.102
-3.141
.002
a. Dependent Variable: Passengers' Satisfaction
The Examination of Service quality that has more Impact on Passengers' Loyalty - to examine which component
of service quality has more impact on passenger's loyalty.
HYPOTHESIS 2: There is a significant and positive relationship between service quality and passenger's loyalty.
With a largest beta coefficient of =0.554, we observed a strongly significant contribution of Credibility in the
prediction of the outcome variable, passenger's loyalty (sig=0.00). Also the other independent variables such as Tangibility
(=0.171) and Empathy (=0.098) also contributed significantly to the prediction of passengers loyalty.
However, Assurance (=0.041) did not contribute to the outcome variable (Table 3). The adjusted coefficient of
determination (R) indicates that 0.538 percent of the variation in the dependent variable is explained by variations in the
independent variables, In other words, these dimensions can explain the change in passenger's loyalty.
Impact Factor (JCC): 5.4362

NAAS Rating: 3.07

A Study on Relationship between Airline Service Quality, Passenger

Satisfaction and Loyalty of Low Cost Airlines

29

The four (4) forecaster dimensions were observed to correlate positively to passenger's loyalty. From Table 3, it is shown
that other than Assurance all service quality components were found to be significant and supportive of the hypotheses
regression. This variation in the passenger's loyalty was statistically explained or accounted for by the regression equation.
The result shows that there was a significant relationship between service quality stated as follows: The Service quality
=5.473 +0.912 (Credibility) + 0.111 (Assurance) +0.491 (Tangibility) +0.315 (Empathy). The results of the multiple
regression models indicated that service quality strategy explained the variance in passenger's loyalty as well all the service
quality components are positively correlated and significant. The multiple regression analysis results are shown in Table 3.
Table 3: Regression Result of Service Quality with Passenger's Loyalty
Model Summary
Model
R
R Square
Adjusted R Square
Std. Error of the Estimate
1
.733a
.538
.536
2.586
a. Predictors: (Constant), Empathy, Tangibility, Assurance, Credibility
Coefficientsa
Standardized
Unstandardized Coefficients
Coefficients
Model
t
Sig.
B
Std. Error
Beta
(Constant)
5.473
1.298
4.216
.000
Credibility
.912
.053
.554
17.231
.000
1 Assurance
.111
.078
.041
1.426
.154
Tangibility
.491
.078
.171
6.282
.000
Empathy
.315
.096
.098
3.294
.001
a. Dependent Variable: Passengers' Loyalty
HYPOTHESIS 3: Passenger's Satisfaction is significantly and positively related to Passengers loyalty.
With a beta coefficient of =0.685, we observed a highly significant contribution of the dependent variable, ie
passenger loyalty in the prediction of the outcome variable, passenger's satisfaction (sig=0.00). Thus our results established
a significant relationship between passenger's loyalty and passenger's satisfaction. In addition, the variation in passenger's
satisfaction was statistically explained by a regression equation, which is stated as +1.381. Passengers loyalty was
positively correlated with the passengers satisfaction as indicated by the positive R-value of 0.685 (Table 4).
A computed R-square value of 0.469 suggested that the variable was responsible for more than 47 percent of the variance
in the passenger's satisfaction with a standard error of estimate of 2.767. The multiple regression analysis results are shown
in Table 4.
Table 4: Regression Result of Passenger's Satisfaction with Passenger's Loyalty
Model Summary
Model
R
R Square
Adjusted R Square Std. Error of the Estimate
1
.685a
.469
.468
2.767
a. Predictors: (Constant), Passengers' Satisfaction
Coefficientsa
Unstandardized
Standardized
Coefficients
Coefficients
Model
T
Sig.
B
Std. Error
Beta
(Constant)
10.375
1.176
8.819
.000
1
Passengers'
1.381
.051
.685
26.823
.000
Satisfaction
a. Dependent Variable: Passengers' Loyalty
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Rajesh Ganesan & Ashok Babu J

HYPOTHESIS 4: Passenger Satisfaction mediates the relationship between Service quality and the passenger
loyalty.
MacKinnon et al. suggested that in a regression model analysis, independent variable significantly affects the
mediator variable and also affects the dependent variable in the absence of the mediator variable. The mediator variable has
a significant effect on the dependent variable and the effect of independent variable on the dependent variable is minimized
when the mediator variable is added [22]. Accordingly, our regression results showed that the independent variable
(Service quality) and mediating variable (Passenger satisfaction) have a positive and significant affect on the dependent
variable (Passenger's Loyalty). Table 5 summarizes the relationship of passenger's satisfaction between service quality and
passenger's loyalty.
Table 5: Summary of Beta Value on the Relationship of Passenger's
Satisfaction between Service Quality and Passenger's Loyalty

Model

Co efficientsa
Unstandardized
Standardized
Coefficients
Coefficients
B
Std. Error
Beta
5.473
1.298
.912
.053
.554
.111
.078
.041
.491
.078
.171
.315
.096
.098
-.815
1.171
.704
.047
.428
-.090
.068
-.034
-.136
.076
-.047
.470
.082
.147

(Constant)
Credibility
1 Assurance
Tangibility
Empathy
(Constant)
Credibility
Assurance
2 Tangibility
Empathy
Passenger
.954
.056
.473
Satisfaction
a. Dependent Variable: Passengers' Loyalty
Note: F= Full mediator, P= Partial mediator P<0.01.

Sig.

4.216
17.231
1.426
6.282
3.294
-.696
14.999
-1.325
-1.777
5.701

.000
.000
.154
.000
.001
.487
.000
.185
.076
.000

17.166

.000

Table 6 indicates that credibility only had been a partial mediator between Passenger's Satisfaction and
Passenger's Loyalty even though Assurance & Tangibility satisfy the condition with passengers satisfaction the beta value
which is less is not a significant one whereas Empathy did not mediate the relationship because the beta value with
Passenger's Satisfaction is more compared to beta value without Passenger's Satisfaction.

CONCLUSIONS
The finding of this study indicates that the factored service quality components namely Credibility, Assurance,
Tangibility & Empathy have a positive and strongly significant impact on passenger's satisfaction whereas other than
Assurance all service quality components are correlated and have a significant impact on passengers loyalty. It means that
passengers were satisfied by service quality components of the domestic airlines which increased passengers loyalty
levels. This study clearly shows that passengers service quality fulfills the requirements of passenger satisfaction as well
as passengers loyalty. Even though passengers service quality component of assurance is not positively significant with
the passengers loyalty it shows that assurance may not affect the passenger loyalty because it is satisfied their
requirements.

Impact Factor (JCC): 5.4362

NAAS Rating: 3.07

A Study on Relationship between Airline Service Quality, Passenger

Satisfaction and Loyalty of Low Cost Airlines

31

As per the regression analysis, results show that the passengers loyalty depended on passengers satisfaction.
It is also clearly stated that the passengers loyalty positively correlated and is significant with the passengers satisfaction.
Also the passengers satisfaction partially mediates with the service quality variables of Credibility. Finally in service
quality variables of credibility was positively correlated & mediates through passengers satisfaction and loyalty.
Service quality has a direct relation with loyalty as well as passenger satisfaction. Thus our results emphasizes how the
low-cost airline can improve their service quality to maintain their sustainability and customer loyalty by offering high
quality services to the passengers.

LIMITATION & FUTURE STUDY

This research was conducted at Chennai domestic airport; India thus may not be generalizable to other states.
Therefore this study can be extended to other states and International airports as well and based on which a more clear
picture can be arrived at. It is also suggested that other related factors of service quality such as service marketing mix
variables, passengers behavior & Intention is to be included in the future researches.
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