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RESEARCH PAPER
CUSTOMER PERCEPTIONS, EXPECTATIONS AND GAPS IN SERVICE
QUALITY: AN EMPIRICAL STUDY OF CIVIL AVIATION INDUSTRY IN
INDIA
BY
DR. MOHAMMED NAVED KHAN Senior Lecturer
Department of Business Administration Faculty of Management Studies & Research
Aligarh Muslim University Aligarh-202002 (UP) INDIA
e-mail: mohdnavedkhan@gmail.comPh: 0091571 2701184(R) Mobile : +919411800860
VIPPAN RAJ DUTT Doctoral Research Scholar (Corresponding author)
Faculty of Management Studies and Research Aligarh Muslim University, AMU. Manager (System / Maintenance)
NACIL (I)
Correspondence Address: Dutt Niwas,
809 Sector 17 A Gurgaon 122001
Haryana – 122001 INDIA e-mail : vrdutt@indianairlines.co.in
Ph. (R) 0091 124 2397809 Mobile : +919818207809
&
Dr. S C BANSAL Associate Professor
Indian Institute of Management Lucknow – 226 013 (India) e-mail: bansal@iiml.ac.in
Ph. 0091 522 2736637
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CUSTOMER PERCEPTIONS, EXPECTATIONS AND GAPS IN SERVICE
QUALITY: AN EMPIRICAL STUDY OF CIVIL AVIATION INDUSTRY IN
INDIA
ABSTRACT
Civil aviation is a catalyst for economic development and trade in an increasingly
globalized world where people and goods are moving farther, faster and cheaper than
ever. The Indian civil aviation sector too is presently witnessing a boom with a host of
private airlines taking to the skies. Leading players in the Indian aviation industry
include Air India, Indian Airlines, Jet Airways, Sahara Airlines, Kingfisher, Spicejet,
Paramount, Indigo and Go Air. While the growth rate of the civil aviation sector has
slowed down in the mature international markets, it is increasing at a brisk pace in India.
This growth is fuelled by the liberalization of the industry, increase in investments,
emergence of low cost carriers (LCCs), positive impetus by regulatory authorities and
improvement in the standards of living in the region.
With the entry of LCCs, the domestic airline industry in India is presently experiencing its
second phase of liberalization. The winds of competition have changed the rules of the
game. As airfares drop, an increasing number of middle-income travelers are preferring
to travel by air. In fact, domestic air travel has grown at the rate of around 38 per cent in
the period Jan – July 2007.
The pressure to provide better customer services has never been greater. Consequently,
the primary purpose of this study was to compare the quality of service on domestic
flights of various Indian airlines. The service components considered for the study were
expectations and perceptions. The research questions and the derived hypotheses were
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examined comparing expectations and perceptions and the gap between them. An
analysis of demographics like age, gender and level of income for the airlines surveyed
was also carried out.
The validity of the “classical” five-dimensions of SERVQUAL could not be resolved for
service quality in case of domestic airlines. The reliability estimates for SERVQUAL as a
unidimensional instrument were found to be higher. The main findings of the study
indicated that there were significant differences between expectations and perceptions of
service quality on domestic flights. Dimensions of Tangibility (Legacy Support Service,
Additional LCC Support Service and Flight) and Reliability were significant drivers of
customer service. Passengers expect airlines to ensure safe journey, support in mitigating
problems due to critical incidents and of course meet time commitments. The study has an
applied bias as the findings of the study can help the airlines, government and regulating
agencies in evaluating the level of existing services being offered by the players as also in
deciding on the portfolio of services to be made mandatory in the interest of passengers.
JEL classification : M31, L93, N75
Key words: Customer Satisfaction, Airline, Customer Service, SERVQUAL, India, Civil
Aviation
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CUSTOMER PERCEPTIONS, EXPECTATIONS AND GAPS IN SERVICE
QUALITY: AN EMPIRICAL STUDY OF CIVIL AVIATION INDUSTRY IN
INDIA
INTRODUCTION
Civil aviation industry has been swept by a wave of liberalisation throughout the world
(Chan 2000, InterVISTAS-ga 2006). The aviation industry has moved towards
liberalisation in the ownership of national carriers, capacity sharing, price controls and
market access, leading to greater competition among airlines. Open sky policy is being
followed in increasing number of countries. Airline alliances are being forged for
enhanced networking of destinations and code sharing among airlines is becoming
common. With facilities for easy entry, exit and freedom over fare structure, domestic
private operators are competing with national carriers. Airports, apart from providing
range of facilities to airlines, are evolving into multifaceted hubs containing hotels,
conference centres, duty free shops, and shopping malls.
Air travel, driven by liberalization and globalization, remains the fastest-growing market.
Over 2.1 billion passengers departed on scheduled journeys in 2006 (IATA 2007). Strong
economies saw international passenger demand grow by 5.9%. Driving these
developments are further market liberalization and the availability of more fuel efficient
and longer-range aircraft that are better able to serve thinner routes.
Focus on service quality is the need of the hour if the airlines aspire to improve market
share and further enhance financial performance in domestic and international markets. A
necessary corollary is that domestic airlines need to have valid and reliable measures to
better understand the variables likely to have a bearing on the service quality offered by
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their organization, e.g. expectations and perceptions of airline passengers vis-à-vis service
quality.
The article provides introduction to theoretical foundations for measurement of service
quality in the context of airline industry. This is followed by a brief profile of civil
aviation industry in India. Research objectives, hypotheses and methodology are
discussed followed by results from the data analysis. The study has an applied bias as it
also discusses practical implications for airline marketing managers in India.
SERVICE QUALITY MEASUREMENT: THEORITICAL FOUNDATIONS
Much of the research in services marketing centers on understanding services and service
quality from customer’s point of view (Brown et al. 2006). The use of service quality as a
competitive edge has been extensively addressed in marketing literature (Shostack 1977;
Lovelock 1983; Gronroos 1978, 2006; Parasuraman, Zeithaml & Berry 1985, 1988, 1991,
1994A, 1994B; Bitner, Booms & Tetreault 1990; Rust, Zahorik & Keiningham 1995;
Rust & Chung 2006; Kasper, Helsdingen, & Gabbott 2006). However, service quality is
an elusive and abstract construct that is difficult to measure (Cronin et al. 2000).
The disconfirmation model of service quality provides a customer referenced method for
assessing service quality. In this model quality is implied if the customers’ expectations
of the service experience beforehand are exceeded by the service when it is delivered.
Disconfirmation has had a huge impact upon service quality and has been subject to a
series of refinements. Grönroos (1978) identified that services are not one big amorphous
event but comprise of different components – technical quality and functional quality –
which interact to determine overall quality. SERVQUAL (Parasuraman et al. 1985; 1988)
based service quality approach in academic literature, takes into account disconfirmation
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and different service attributes and links them together with management activity through
a gap framework.
Six-Sigma model of service quality was developed by Motorola in 1980’s, and is an
organizational change model driven by customer demand. Customer equity framework
(Rust et al. 2000; 2004; 2006) provides an information-based, customer-driven,
competitor-cognizant, and financially accountable strategic approach to maximizing the
firm’s long-term profitability. Customer equity projections are built from a new model of
Customer Life-Time Value (CLV)—which permits the modeling of competitive effects
and brand switching patterns.
Service-dominant-logic (SDL) model (Vargo and Lusch 2004; Lusch et al 2006) – work
in progress status - represents an inversion from goods dominant logic, that places
activities driven by specialized knowledge and skills, rather than units of output, at the
center of exchange processes. While according to Kano’s model (Yueh-Ling et al 2007),
quality elements can be classified into three categories, namely Must-be, One-
dimensional and Attractive needs, depending on their ability to create customer
satisfaction or dissatisfaction.
The Gaps Model Of Service Quality
(Parasuraman et al. 1985) developed a model which depicts how various gaps in the
service process may affect the customer’s assessment of the quality of the service. The
foundation of the model (see Figure 1) is a set of four gaps which are the major
contributors to the service quality gap which customers may perceive:
Gap 1 (Consumer Expectation – Management Perception Gap): In formulating its
service delivery policy, management does not correctly perceive or interpret consumer
expectation.
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Gap 2 (Management Perception – Service Quality Specification Gap): Management
does not correctly translate the service policy into rules and guidelines for employees.
Gap 3 (Service Quality specification – service delivery Gap): Employees do not
correctly translate rules and guidelines into action.
Gap 4 (Service Delivery – External Communications Gap): External communications
– promises made to customers – do not match the actual service delivery.
These four gaps emerge from an executive perspective on a service organization’s design,
marketing and delivery of services. These gaps are located throughout the organization
between frontline staff, customers and managers. They, in turn, contribute to another gap,
i.e. gap 5, which is the discrepancy between customers’ expected services and the
perceived service actually delivered. This gap is a function of the other four gaps: i.e. Gap
5 = f (gaps 1, 2, 3, 4).
It is this gap that Parasuraman et al. (1985) sought to measure using the SERVQUAL
instrument. The instrument has been further developed and promoted through a series of
publications (Parasuraman et al. 1988; 1991, 1994a, 1994b; Zeithaml et al. 2003). Much
of the research in this area since then has been concerned with validating or challenging
the construct (Cronin et al 1992; Babakus et al 1992a, 1992b; Teas 1993; Smith 1995;
Buttle 1996; Genestre & Herbig 1996; Asubonteng McCleary & Swan 1996; Nel, Pitt &
Berthon 1997; Llosa, Chandon & Orsingher 1998; Hussey 1999; Brady, Cronin & Brand
2002; Myerscough 2002; Nyeck et al. 2002) and suitability of SERVQUAL vs
SERVPERF scale (Cronin et al 1994; Elliot 1994; Jain & Gupta 2004). Chang & Lim
(2002) carried out comparative study of relevance of SERVQUAL and SERVPERF
scales to airline industry. In their opinion, SERVQUAL model is more appropriate for
airline service industry than SERVPERF.
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Figure 1: Conceptual Model of Service Quality
Word of Mouth
Personal Needs
Expected Service
Perceived Service
Service Delivery
External Communication to Consumers
Translation of Perceptions into Service
Gap 2
Management Perceptions of Consumer Expectations
Gap 5
Gap 4
Consumer
Marketer
Gap 1
Past Experience
Gap 3
Source: Zeithaml, V.A., Berry, L.L., Parasuraman, A. (1988), Communication and
Control Processes in the Delivery of Service Quality, Journal of Marketing, 52, p. 36
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The development of SERVQUAL by Parasuraman et al. (1988) as a generalisable
measure of service quality was a seminal contribution that has been adapted and widely
used across industries around the world (Dabholkar et al. 1996). The instrument
empirically relies on the difference in scores between expectations and perceived
performance. It consists of 22 items divided along the 5 dimensions, with a seven-point
scale accompanying each statement to test the strength of relations. These 22 items are
used to represent five dimensions viz. reliability, responsiveness, tangibles, assurance
and empathy (RATER). Mathematically, the same may be expressed as:
∑=
−=k
j
ijiji EPSQ1
)(
where,
SQi = Perceived service quality of individual ‘i’
k=Number of service attributes / items
P=Service quality perception of individual ‘i’ for service attribute ‘j’
E=Service quality expectation of individual ‘i’ for service attribute ‘j’
A variant of SERVQUAL scale, SERVPERF scale contains perceived performance
component only. A higher perceived performance implies higher service quality. In an
equation form, it can be expressed as follows:
∑=
=k
j
iji PSQ1
where,
SQi = Perceived service quality of individual ‘i’
k=Number of service attributes / items
P=Service quality perception of individual ‘i’ for service attribute ‘j’
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The identification of five dimensions of service quality has dominated the literature in the
field of service quality. There are now over 5500 research articles on this model (Kasper
et al. 2006). According to EBSCO database (30 Sept’07), SERVQUAL as a keyword is
appearing in 102 publications. Major published studies include Banking (Arasli,
Katircioglu & Mehtap-Smadi 2005; Bexley 2005; Baumann et al. 2007; Aga & Safakli
2007), Education (Arambewela & Hall 2006), Health (Lam 1997; Kilbourne et al. 2004;
Pakdil & Harwood 2005), Hotel (Antony, & Ghosh 2004; Juwaheer 2004), Information
System & E-Commerce (vanDyke, Kappelman & Prybutok 1997; Cook 2000; Jiang,
Klein & Carr 2002), Internal Marketing (Frost & Kumar 2000, 2001; Straughan 2002),
Public Services (Orwig, Pearson & Cochran 1997; Donnelly & Shiu 1999; Wisniewski
2001; Brysland & Curry 2001), Retail (Finn &Lamb 1991; Dabholkar, Thorpe, & Rentz
1996; Zhao, Changhong & Hui 2002) and Tourism & Hospitality (Saleh & Ryan 1991;
Kouthouris & Alexandris 2005; Home, Peter & Pikkemaat 2005), Transportation (Crosby
& LeMay 1998; Mehta & Durvasula 1998; Durvasula & Lysonski 1999) .
SERVICE QUALITY IN THE CONTEXT OF AIRLINE INDUSTRY
Continued liberalisation and ‘open skies’, the impact of global alliances, new low-cost,
no-frills carriers, on-line ticket selling, and privatisation of state-owned airlines are some
of the crucial developments that have been impacting on airline business at a time of
continually falling average fares and yields. Increasing competition from low cost, low
fare carriers is one of the fundamental challenges being faced by the traditional full
service carriers (Chen, Gupta & Rom 1994; Cerasani 2002; Gillen & Morrison 2002;
Sayanak 2003; Franke1 & Hamilton 2004; Cary 2004; O’Connell 2005; and Pant 2006)
and it has also led to reduction in average quality of service provided to the customer
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(Trapani & Olson 1981; Bhatt 1997; Chan 2000; Butler 2001; Servitopoulos 2002;
Mazzeo 2003; Morrison 2004; Manuela 2007).
The airline industry is inherently unstable (Doganis 2006) and highly competitive, where
all airlines have comparable fares and matching frequent flyer programs. In such a
scenario, service quality is a significant driver of passenger satisfaction, loyalty and
choice of airline (Sultan et al 2000; Chang et al 2002, Gilbert et al 2003; Rust et al 2006).
Figure 2 outlines airline service delivery mechanism.
Airlines need to have valid and reliable measures for a better understanding of the
variables likely to impact the perception of service quality being offered by them. They
need to measure not only customer perceptions but also expectations of airline
passengers. If significant variations are found in the perceptions of airline passengers’
vis-à-vis service quality on the different flights, changes in the marketing mix need to be
implemented to improve the perception of quality. But, in general, passenger hardships
have increased after Sept 11 attacks (Leone & Liu 2003; Gkritza, Niemeier & Mannering
2006).
Several papers have been written during the past few years examining the service quality
of airline industry. These papers focus primarily on measuring the performance of airlines
using SERVQUAL instrument (Gourdin & Kloppenborg 1991; Ostrowski, O'Brien &
Gordon 1993; Young, Cunningham, & Moonkyu 1994; Bejou & Palmer 1998;
Gustafsson, Ekdahl & Edvardsson 1999; Sultan & Simpson 2000; Chang et al 2002;
Tsaur, Chang & Yena 2002; Gilbert & Wong 2003; Alter 2003; Kozak, Karatepe & Avci
2003; Boland, Morrison & O’Neill 2003; Natalisa & Subroto 2003; Scheraga 2004; Truitt
& Haynes 1994; Heracleous, Wirtz, & Johnston 2004; Bel 2005; Ling et al 2005; Gursoy,
Chen. & Kim 2005; Knibb 2005; Rhoades & Waguespack 2005; Anitsal & Paige 2006;
Hunter 2006; Pham 2006; Pham & Simpson 2006; Park, Robertson & Wu 2005, 2006;
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Sima, Kohb & Shetty 2006; Venkatesh & Nargundkar 2006; Chitnis 2007; Pakdil &
Aydin 2007; Chitnis 2007; Lioua & Tzeng 2007).
In US, Airline quality ratings (AQR) that also take in to account 12 customer complaint
categories are being published annually since 1991 (Headley and Bowen 1997, Bowen &
Headley 2007). Gardner (2004) carried out a dimensional analysis of airline quality based
on on-time arrivals, denied boardings, mishandled baggage and customer complaints,
which is in conflict with the results of AQR 2004.
The travel industry has been a pioneer in the innovative use of Information Technology
(IT) (Feldman 2001; Gareiss 2001; Gareiss 2003; Kelemen 2003; Botha 2004; Ghobrial
& Trusilov 2005). The airline industry is embracing cutting edge technology to gain
competitive edge (Jiang & Doukas 2003; Baker 2007). O’Toole (2004) predicts that air
travel could become world’s first web-enabled industry as online sales, e-tickets and
range of new technologies gain ground with increasing speed. The dramatic growth of
web and self-service technologies permit customers and airlines to bypass the complexity
and cost of old legacy systems (McIvor, O’Reilly & Ponsonby 2003; Shon, Chen &
Chang 2003).
Researchers have employed Structural Equation Modelling (SEM) to investigate the
effects of individual dimensions of airline service quality (Cezard 1999; Kalamas,
Laroche & Cezard 2002); Park et al 2005, 2006; Ling, Lin & Lu 2005; Cassab &
MacLachlan 2006). Chang & Yeh (2001) suggested a multiattribute decision making
model to measure and compare overall competitiveness of airlines on five dimensions and
their associated objective performance measures. Danaher (1997) employed a method
based on conjoint analysis to determine the relative importance of service attributes
measured in airline customer satisfaction surveys.
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Figure 2 : Customer Service Delivery in Airline Industry PASSENGER (Pax) LINE OF INTERACTION FRONT LINE LINE OF INTERNAL INTERACTION SUPPORT
Pax makes Flight Reservation –Bkg Office / Internet
Ticketing Check-in at Airport (Pax, Baggage)
PreboardingSecurity Check
Boarding and Seating
Inflight Service
Transport-ation of Pax to Aircraft Cabin Crew – Greet, assistance to seat & store bags
Cabin Crew – Safety Demo, Meals, Adhoc Request
Security – Passenger & Hand Baggage Check
Check-In Counter – Issue Boarding Pass & Tag Baggage Security – Check-in Baggage Security Check
Ticket Office – Payment & Collection of Ticket
Reservation Desk – Check Availability, Quote Fare & Reserve Seat
IT – Reservation Database, Frequent Flyer Database Catering – Meal Request
Finance – Accounts IT – Ticketing Database
IT – Check-In Database Commercial – Check-in Baggage Reconcilia-tion & Loading
Engineering – A/c Check & Flight Clearance Refuelling Catering – Loading of Meals Cabin
Preparation of Trim Sheet, Aircraft fueling & preparation for Take-off
Baggage –Unload Baggage and load it on airport carousel
Internet based Reservation & Ticketing
Commercial - Flight Monitor ing
Arrival Helpdesk –Special need passengers, Transfer case, Pax Feedback
Arrival, Baggage Retrieval
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CIVIL AVIATION IN INDIA
The Indian air transport sector is among the most vibrant and fastest growing in the
world. As per IATA forecasts, with GDP growth of 7.2% for 2005 to 2009, air traffic
growth can be expected to be in the 15% range (Bisignani 2005). With less than 1% of its
population currently traveling by air, India's growth potential is enormous. Within a
period of 15 years, the number of Indian carriers has grown from 2 players to more than
10 today. More than 24.85 million passengers traveled between January and July 2007 as
against 18.03 million in the same period last year (Awasthi 2007). Figure 3 details the
growth of domestic passenger traffic in last 10 years.
Figure 3: Growth of Domestic Passenger Traffic in last 10 Years
Domestic Passenger Traffic for last 10 Years
0
5
10
15
20
25
30
1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Year
Pas
sen
ger
Tra
ffic
in M
illio
ns
NATIONAL CARRIERS PRIVATE CARRIERS TOTAL
Source: Directorate General of Civil Aviations (DGCA) 2007
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In India, Air Deccan, which started operations in August 2003, was the first airline to
adopt the low-cost business model. But low fares translate into sustainable gains when
backed by safety and on-time performance (Gopinath 2007). Five new carriers—Air
Deccan, SpiceJet, GoAir, IndiGo and Paramount Airways—have already started
operations and many more such as Indus Air, AirOne, East-West and Magic Air are on
the horizon. Presently, Indian Airlines, Jet Airways, Sahara and Kingfisher are the Full
Service Carriers (FSC), whereas Air Deccan, Spicejet, Paramount, IndiGo and Go Air fall
in the category of Low Cost Carriers (LCC). Table 1 gives the profile of domestic airlines
operating in India.
The National Council for Applied Economic Research (NCAER) Report (2000) identified
the factors restraining the Civil Aviation sector from fully contributing to the growth and
progress of the country. Naresh Chandra Committee Report, (2003) delineated the
problems being faced by airline industry in India and proposed a roadmap for its rapid
growth and improvement in services to the passengers. According to Bhandari (2002)
regulatory – policy framework has prevented this sector from being transformed into a
mass transport system. He suggested minimal intervention of the government to unlock
its potential. The International Air Transport Association (IATA) has identified five
challenges for the successful development of air transport in India (1) enhancing safety,
(2) urgent infrastructure improvement, (3) reasonable taxation, (4) commercial freedom
and (5) Simplifying the Business through effective use of technology (Concil 2005).
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Table 1: Profile of Various Players in the Civil Aviation Sector in India FSC-
PUBLIC FSC – PRIVATE LCC
Indian Airlines
Jet Sahara King fisher
Air Deccan Spice Jet
Para mount
Go Air IndiGo
IC 9W S2 IT DN OS I7 G8 6E Start Date Aug, 1953 May, 1993 Dec, 1993 May 2005 Aug 2003 May 2005 Oct 2005 Nov 2005 Aug 2006 Web Site www.indian
airlines.in www.jetair ways.com
www. Airsahara.net
www.fly kingfisher.com
www. airdeccan.net
www. spicejet.com
www.paramount airways.com
www. goair.in
www.indigoairlines.com
Technology Partner
In-house Sabre Gabriel Sabre Radixx Navitaire Amadeus BIS Inter Globe Technologies
Current Fleet # (Classic / Small)
71 / 6 57 / 8 17 / 7 21 / 10 21 / 22 13 / 0 0 / 5 4 / 0 11 / 0
Destinations @ (Domestic/ International)
62/18 44/8 34 31 65 15 8 11 15
Daily Flights 250 340 147 180 350 86 53 56 78 Domestic Market # Share (2006)
21.5 31.2 8.8 8.7 18.3 6.9 0.7 2.8 1.3
Passengers Carried in Millions (2006)
6.903 10.028 2.816 2.793 5.875 2.216 0.225 0.905 0.412
Operating Revenue in Millions (2005-06)
63,193.5 56,960.6 20,617.2 4,250.1 13,518.1 3,418.6 144.2 384.0 Not Available
Operating Expenses in Millions (2005-06)
62,873.2 51,573.0 21,212.1 6,587.8 16,741.4 3,903.9 321.9 968.0 Not Available
Operating Result in Millions (2005-06)
320.3 5,387.6 -594.9 -2,337.7 -3,223.3 -485.3 -177.7 -584.0 Not Available
Passenger Load Factor (2005-06)
63.8 73.7 70.8 59.3 74.7 82.9 44.1 45.1 Not Available
Fleet on Order 43 40 84 90 20 10 20 95 Owner / Business Group
Government of India
Naresh Goyal
Sahara India Pariwar
Kingfisher UB Group
Air Deccan / Capt. Gopinath
Royal Holding / Kansagra Family
Paramount Group
Wadia Group
InterGlobe Enterprises
Source : Prepared by researchers with inputs from official websites of DGCA and domestic airlines (as on 19th Aug 2007)
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Baisya (2004), while identifying the key attributes that influence customer choice in
airline selection, also presented a comparative analysis of the performance of domestic
airlines on the attributes. Khan, Dutt & Bansal (2007), in a preliminary study,
investigated the service quality provided by different domestic airlines. Bansal, Khan &
Dutt (2006a) employed the concept of customer lifetime value in measuring marketing
ROI for domestic airlines in India. Khan, Dutt & Bansal (2006c) also discussed at length
the deployment of IT by the airline industry in India for providing upgraded services to
the passengers thereby leading to enhanced customer satisfaction and improvement in
overall efficiencies. In yet another research, Khan & Dutt (2006b) traced developments in
the aviation sector in India with special reference to LCCs and their role in the emerging
borderless world.
RESEARCH OBJECTIVES AND HYPOTHESES
Review of literature conducted as a prelude to the present study revealed that majority of
the available studies on customer services are confined to US and Europe. Studies,
particularly, in the context of Indian airline industry, are few and far between.
Although, airlines have introduced various measures to improve their service profile in
the eyes of the customer, yet there is a need to continually assess the dimensions of
service that customers look forward to in an airline.
LCCs are relatively a new phenomenon in India, and service quality expectations from
these carriers have till date not been covered by any researcher in detail. The present
study attempts to bridge this gap. Thus, the primary objective of the study was to examine
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the customer’s perceptions and expectations of service quality in domestic airline
industry with special reference to LCCs. Specifically the study attempts to measure the:-
1) Dimension of services valued by the passengers,
2) Satisfaction levels of customers on various dimensions of services,
3) Compare the quality of services on domestic flights of selected airlines in India,
4) Compare service expectations; perceptions and the gaps between them using the
SERVQUAL scale, and
5) Investigate the extent of applicability of the SERVQUAL instrument to airline
industry in India.
Based on the above objectives, the following relationships were hypothesized:
H01: There is no difference in the gap between customers’ perceived and expected service
quality vis-à-vis ‘Tangibility - Legacy Support Services’ among different categories
of airlines.
H02: There is no difference in the gap between customers’ perceived and expected service
quality vis-à-vis ‘Tangibility – Additional LCC Support Services’ among different
categories of airlines.
H03: There is no difference in the gap between customers’ perceived and expected service
quality vis-à-vis ‘Tangibility – Flight’ among different categories of airlines.
H04: There is no difference in the gap between customers’ perceived and expected service
quality vis-à-vis Reliability among different categories of airlines.
H05: There is no difference in the gap between customers’ perceived and expected service
quality vis-à-vis Empathy among different categories of airlines.
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H06: There is no difference in the gap between customers’ perceived and expected service
quality vis-à-vis Responsiveness among different categories of airlines.
H07: There is no difference in the gap between customers’ perceived and expected service
quality vis-à-vis Assurance among different categories of airlines.
H08: There is no difference between customers’ expected service quality among different
categories of airlines.
H09: There is no difference between customers’ perceived service quality among different
categories of airlines.
H10: There is no difference in the gap between customers’ perceived and expected service
quality among different categories of airlines.
It is expected that the findings of the study will help the airlines, government and
regulating agencies in evaluating the level of existing services being offered by the
players as also in deciding on the portfolio of services to be made mandatory in the
interest of passengers. Thus, analysis of various dimensions of service could help evolve
a model of service parameters that airlines could adopt.
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RESEARCH METHODOLOGY
The tool used primarily in the present research was SERVQUAL (Parasuraman et al.,
1988, 1991). SERVQUAL is a survey instrument that purports to measure the quality of
service rendered by an organisation along five dimensions: reliability, assurance,
tangibles, empathy and responsiveness (RATER). The instrument is viewed as a basic
“skeleton” that requires modification to fit airline industry (Sultan et al., 2000; Gilbert et
al., 2003; Park et al., 2006).
The gap analysis as per SERVQUAL instrument has been carried out first time across the
domestic airline industry in India. SERVPERF analysis has also been simultaneously
carried out to provide further insight. Combination of SERVQUAL and SERVPERF
instrument makes this study unique in Indian context.
The study was carried out across three categories of airlines:
• Full Service Carriers – Public Sector, which includes Indian Airlines and Alliance Air
• Full Service Carriers – Private Sector, which includes Jet Airways, Air Sahara and
Kingfisher Airlines
• Low Cost Carriers, which includes Air Deccan, Spicejet, Paramount, IndiGo and Go
Air
Questionnaire Design and Measurements
The questionnaire is primarily based on 22 items of SERVQUAL model. In depth
interviews were held with airline staff, airline passengers and academics connected with
the aviation industry to develop the questionnaire. In addition, the service quality
measures were checked against other independent sources of literature related to service
21
quality. These resulted in the identification of 7 service quality dimensions and 31
measurement items suitable for the airline industry. Tangibility dimension was modified
to reflect unique characteristics of airline service industry. The instrument used in the
present study for measuring airline service quality encompasses 31 items grouped under
seven dimensions is given in Table 2. All the items were measured on a 7 point Likert-
type scale. The survey instrument contained questions pertaining to expectation and
perception rating for each driver. In addition, the research instrument also had questions
related to demographics.
Service quality feedback was obtained from passengers and domestic airline staff. Gaps 1
– 4 were measured using quality service audit questionnaire (Messinger 2003) that was
filled by staff of the airlines.
Pilot Study
The main study was preceded by a pilot study in order to check for appropriateness of the
items used in the study. A convenience sample of passengers who had recently traveled
by air was used. The pilot study was carried out in two stages.
Stage I: In all 65 questionnaires were distributed to passengers to check for clarity of the
measurement items. Passengers were asked to complete the questionnaire and also give
overall comments about the questionnaire. A total of 45 passengers responded. Based on
the feedback, the questionnaire was revised.
Stage II: The revised survey questionnaire was tested a second time using 75 passengers
who had used domestic airline service during the last 12 months. In total, 66 individuals
responded. The revised survey questionnaire was then used on the final sample.
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Table 2: Instrument for Measuring Airline Service Quality
Service Quality Parameters Abbreviation Tangibility – Legacy Support Services 1 Visually Appealing Physical Facilities VAPF 2 Vast Sales and Support Network VSSN 3 Vast Network of Destinations VND
Tangibility – Additional LCC Support Services 4 Economical Airfare and Discount Schemes EADS 5 Web-site and Call Center usage WCCU
Tangibility – Flight 6 Modern Aircraft with up-to-date Facilities MAUF 7 Neat Well Dressed and Visually Appealing Staff VAS 8 Seat in Flight of Choice SFC 9 Hassle free Check-in and Boarding HCB 10 Efficient Baggage Handling Mechanism EBHM 11 Excellent Quality In-Flight Services EQIS 12 Multiple Meal Options of High Quality MMO
Reliability 13 Special Need Customers SNC 14 Problems due to Critical Incidents PCI 15 Meet Time Commitment MTC 16 Keep Error Free Records EFR 17 Perform Service right the first time PSRF
Responsiveness 18 Prompt Service to Customers PSC 19 Always Willing to Help Customers AWHC 20 Staff Behavior should Instill Confidence SBIC 21 Keep Customer informed about time of Service CITS 22 Staff never too busy to respond to customer's request SNB
Assurance 23 Safe Planes and Facilities During Journey SPF 24 Consistently Courteous Staff CCS 25 Knowledge to Answer Customers' Queries KACQ 26 Individual Attention to Customer IAC
Empathy 27 Staff gives Personal Attention to Customer PAC 28 Customer's Best Interest at Heart CBIH 29 Understand Specific Needs of Customers USNC 30 Convenient Flight Schedules CFS 31 Overall Satisfaction with the Airline OSA
23
Data and Sampling
Illustrative data was mainly obtained from real airline passengers at domestic terminals at
Indira Gandhi International Airport, Delhi (IGIA); Sardar Vallabhbhai Patel International
Airport at Ahmedabad; Chatrapati Shivaji International Airport at Mumbai and Bangalore
Airport. It should be noted that the airports covered are the busiest in their respective
sectors and thus expected to provide an unbiased representative sample.
In all, 1081 passengers were randomly approached during the months of March 2006 –
Feb 2007. Of these, 477 agreed to participate in the study. During editing phase of the
questionnaires, it was observed that 57 responses were incomplete in various respects and
thus had to be discarded. This resulted in a total of 420 responses. It included 171 FSC –
Public, 169 FSC – Private and 80 LCC passengers. Of these, New Delhi accounted for
around 40%, Mumbai 30%, Bangalore 20% and Ahmedabad 10%. Most of the
respondents were Indian. Table 3 gives the demographic profile of the respondents.
24
Table 3: Demographic Profile - Passenger
Primary Airline Total Dimension FSC – Public
FSC – Private
LCC
Male 148 143 70 361 Gender Female 23 26 10 59
Less than 21 1 2 5 8 21 to 40 101 125 61 287 41 to 60 66 40 14 120
Age Group
Above 60 3 2 0 5
Graduation or Below 32 35 27 94 Post Graduation 67 70 25 162
Highest Qualification
Professional 72 64 28 164
Self Employed 16 15 13 44 Employed (Private Sector) 60 105 53 218 Employed (Govt/ Public Sector
76 33 7 116
Occupation
Others 19 16 7 42
Less than 0.5 Million 104 75 51 230 0.5 – 1.0 Million 48 64 22 134 1.0 – 2.0 Million 14 17 5 36
Annual Income Bracket
Above 2.0 Million 5 13 2 20
Less than 1 Year 6 6 7 19 1 - 5 Years 62 84 49 195 5 – 10 Years 32 32 11 75
Since how long Flying
More than 10 Years 71 47 13 131
1 – 5 102 92 51 245 6 – 10 38 34 22 94 10 – 20 17 26 5 48
Domestic Flights in last 1 Year
Above 20 14 17 2 33
No 115 109 62 286 Frequent Flyer Member
Yes 56 60 18 134
No 73 73 54 200 Travel to International Sector
Yes 98 96 26 220
Total 171 169 80 420
25
A non-probability sampling design was used to collect the data from staff who were
approached individually during their rest periods for the feedback. Of the 218
questionnaires distributed, 72 were returned. A total of 15 questionnaires were rejected as
they were incomplete in various respects. This resulted in 57 usable responses. Table 4
gives the demographic profile of the respondents.
Table 4 Demographic Characteristics – Airline Staff
Primary Airline Dimension FSC - Public
FSC - PRIVATE LCC
Total
Male 16 15 11 42 Gender Female 4 7 4 15
Less than 30 2 15 13 30 30 to 40 8 4 1 13 41 to 50 4 3 1 8
Age Group
Above 50 6 0 0 6
Graduation or Below 6 11 12 29 Post Graduation 3 6 3 12
Highest Qualification
Professional 11 5 0 16
Less Than 1 Year 0 7 4 11 1 to 5 Years 2 9 11 22 5 to 10 Years 1 6 0 7
Duration in Present Airline More than 10 Years 17 0 0 17
Passenger Services 7 9 14 30 In Flight Services 5 10 0 15
Functional Area Support Services 8 3 1 12
Junior Management 4 15 10 29 Middle Management 13 7 5 25
Level in the Organization
Top Management 3 0 0 3
Less than 5 8 10 7 25 5 to 10 5 8 3 16 11 to 50 4 1 2 7
Staff Reporting to You More than 50 3 3 3 9
Total 20 22 15 57
26
The responses were analyzed using SPSS, LISREL and MS-Excel 2000 spreadsheet
program. Appropriate statistical tools like EFA, CFA, cross tabulation and one-way
ANOVA have been applied on the data collected for the study.
FINDINGS AND DISCUSSION – CUSTOMER SERVICE
The validity and reliability analyses of SERVQUAL were conducted as part of the study
to determine the extent of the applicability of the dimensions of SERVQUAL to this
study.
Validity Analysis
Face validity, a subjective criterion reflecting the extent to which scale items are
meaningful and appear to represent the construct being measured, has been explicitly
assessed a priori in most studies (Babakus et al 1992; Carman, 1990; Parasuraman et al.,
1988). In the instant case too, extensive discussions were held with airline executives,
passengers and academicians who reviewed the questionnaire and confirmed that
modified SERVQUAL - with minor wording changes in few items - had face validity.
After evaluation of the questions they judged that all questions were appropriate to be
used in measuring passengers’ attitudes about service quality of domestic airlines in
India.
Factor analysis was conducted on perceived performance scores (P) and gap between
perceived and expected service quality scores (G), using principal component analysis
with varimax rotation (Table 5). Items for perception and gap loaded on five factors each.
27
The validity of the “classical” five-dimensions SERVQUAL is still an unresolved issue
when applied to studying airline service quality. The items related to expectations and
perceptions might be too general for such a study. Also, the fact that passengers are
required to respond to both expectations and perceptions of service quality at the same
time could affect the instrument’s validity and reliability.
28
Table 5: Factor Analysis on Perception (P) and Gap (G) Service Quality Parameters 1 2 3 4
Visually Appealing Physical Facilities P, G
Vast Sales and Support Network P, G
Vast Network of Destinations P, G
Economical Airfare and Discount Schemes P, G
Web-site and Call Center usage P, G
Modern Aircraft with up-to-date Facilities P, G
Neat Well Dressed and Visually Appealing Staff P, G
Seat in Flight of Choice P, G
Hassle free Check-in and Boarding P, G
Efficient Baggage Handling Mechanism P, G
Excellent Quality In-Flight Services P, G
Multiple Meal Options of High Quality P, G
Special Need Customers P, G
Problems due to Critical Incidents P, G
Perform Service right the first time P, G
Meet Time Commitment P, G
Keep Error Free Records P, G
Keep Customer informed about time of Service P, G
Prompt Service to Customers P, G
Always Willing to Help Customers P, G
Staff never too busy to respond to customer's request P, G
Staff Behavior should Instill Confidence P, G
Safe Planes and Facilities During Journey P, G
Consistently Courteous Staff P, G
Knowledge to Answer Customers' Queries P, G
Individual Attention to Customer P, G
Staff gives Personal Attention to Customer P, G
Customer's Best Interest at Heart P, G
Understand Specific Needs of Customers P, G
Convenient Flight Schedules G P
Extraction Method : Principal Component Analysis. Rotation Method : Varimax with Kaiser Normalization. Rotation converged in 6
iterations for both Perception and Gap.
29
Reliability Measures
To assess reliability, Cronbach’s alpha was used. Cronbach’s alpha is the average of all
possible split-half coefficients resulting from different ways of splitting the scale items
and a value of 0.6 or less generally indicates unsatisfactory consistency reliability
(Malhotra 2005). Reliability analysis was conducted for perception and gap on each
category of airline and reliability values were calculated for each dimension of
SERVQUAL. The reliability value for SERVQUAL as a uni-dimensional instrument was
high in all cases. The Cronbach’s alpha values for each measure are presented in Table 6.
Table 6 Reliability of SERVQUAL Dimensions Cronbach's ALPHA PERCEPTION GAP Overall ( 30 Items ) 0.964 0.955 Tangible – Legacy Support Services ( 3 Items ) 0.695 0.660 Tangible – New Support Services ( 2 Items ) 0.685 0.660 Tangible – Flight ( 7 Items ) 0.873 0.845 Reliability ( 4 Items ) 0.878 0.863 Responsiveness ( 5 Items ) 0.921 0.896 Assurance ( 4 Items ) 0.891 0.864 Empathy ( 4 Items ) 0.832 0.799
Confirmatory factor analysis was conducted using LISREL 8.5 to validate the
relationship between observed and the latent variables. The results of CFA suggested that
the seven dimension conceptualization fitted the data for Indian domestic passengers
(Table 7).
30
Table 7: Confirmatory Factor Analysis Summary Goodness of Fit Statistics PERCEPTION GAP
Degrees of Freedom 384 384 Minimum Fit Function Chi-Square 1246.665 (P = 0.0) 1127.628 (P = 0.0)
Root Mean Square Error of Approximation (RMSEA) 0.0760 0.0694 Normed Fit Index (NFI) 0.972 0.968 Non-Normed Fit Index (NNFI) 0.978 0.976
Comparative Fit Index (CFI) 0.981 0.979
Root Mean Square Residual (RMR) 0.110 0.131 Standardized RMR 0.0552 0.0527
Goodness of Fit Index (GFI) 0.827 0.844 Adjusted Goodness of Fit Index (AGFI) 0.791 0.811
PERFORMANCE OF AIRLINES ON VARIOUS SERVICE PARAMETERS
The performance of the airlines on various service parameters was analyzed and the same
is presented below:
a) Tangibility – Legacy Support Services
FSC – Public has the biggest network of destinations. It also has vast sales & support
network. FSC – Private have visually appealing physical facilities. Gap was highest in
case of LCC for network of destinations.
Airline staff exhibited higher perception of customer’s expectation across all the airlines.
Passengers expected LCCs to fly to more destinations.
b) Tangibility – Additional LCC Support Services
LCCs were rated high on economical airfares and use of website/call center.
Passengers expected more discount and economical airfares in case of full service
carriers.
c) Tangibility – Flight
Passengers had high perception regarding the quality of in-flight service of private
airlines. Gap regarding aircraft quality and facilities available was high in case of FSC –
31
Public as the aircrafts are quite old, especially those used by Alliance Air. Passengers
were not satisfied with the quality of food provided during the flight. Interestingly, the
gap was also high for LCC vis-à-vis in flight meal options, even though the LCC
guidelines are quite clear regarding non-supply of meals to the passengers. Passengers
were clearly not satisfied with baggage handling procedure of LCCs. FSC - Private and
LCC staff was perceived to be neat and good looking.
FSC – Private customers expected more from the airlines. They wanted better quality
service during check-in and baggage handling. They desired seat of choice and better
quality meals during the flight. FSC – Public passengers expected more with respect to
in-flight services.
d) Reliability
Gap was high in case of reliability of service for LCCs. Respondents were not satisfied
with their service in case of special needs, problems due to critical incidents1 and their
inability in meeting time commitments. The service of FSC – Public was also perceived
to be poor during the critical incidents. The general perception was that FSC – Private
keep error free records and performed service right the first time.
During critical incidents, FSC – Private customers expect airline to provide better service.
FSC – Public passengers have higher expectation from the airline to meet time
commitment. Private airline’s (both FSC and LCC) passengers expect airlines to keep
error free records.
1 Negative customer encounters, which do not proceed normally but create friction, irritation and
dissatisfaction. According to Edvardsson (1992) the major critical incidents in the view of business passengers are delays, cancelled flights, delayed or damaged luggage and overbooking.
32
e) Empathy
Gap between passenger’s expectation and perception was high for LCC on all the
parameters, namely, staff giving personal attention to customer, airline having customer's
best interest at heart; staff attending to specific needs of customers, and convenient flight
schedules. It is worth mentioning that LCCs started operations in India during the last few
years and their fleet size is not big. To extract maximum revenue, they tend to fly aircraft
for longer durations leading to inconvenient flight schedules and inconvenience to
passenger in case of any snag in aircraft. Overall, all airlines scored low on empathy.
FSC – Private passengers expect airline staff to have customer’s best interest at heart.
Passengers expect FSC to provide more convenient flight schedules.
f) Responsiveness
LCCs were unable to provide prompt service to customers perhaps due to low staff to
passenger ratio owing to rapid expansion in their operations. At Delhi airport, the number
of counters available to them are few (and small) leading to congestion and delay in
service to customers. Most of the LCC passengers are first time flyers and consequently
they have high anxiety regarding when service will be performed. LCCs have not been
able to keep pace with their expectations. The perception was that FSC – Private provides
prompt service to customers and that their staff was always willing to help customers, and
they keep the customer informed about the time of service. Overall, FSC – Private scored
high on responsiveness.
Passengers expect FSC – Private staff to meet their requirements and provide prompt
service.
33
g) Assurance
Findings suggest that LCC staff were poorly trained to answer customers’ queries. In fact,
most of the passenger handling staff is freshly recruited and at times they find it
impossible to handle all the passenger queries. They also do no have adequate staff to
provide individual attention to customers. The first time flier, who probably is paying
beyond his means, expects higher level of personal attention, which, unfortunately for
him, is not a part of package. FSC – Private scored high on assurance.
FSC – Public and LCC staff was expected to provide more individual attention to the
customer. Customer’s also expected FSC – Private staff to have more knowledge to
answer their queries.
Overall, airline’s have higher perception of customer’s expectation. However, customer
expect FSC – Private to provide even higher level of service in case of tangibility –
additional LCC support services, tangibility – flight, reliability and responsiveness. A
summary of the above findings is presented in Table 8 given below:
34
Table 8: Airlines’ Performance on Service Parameters
FSC – Public FSC – Private LCC Overall Service Quality Dimension E P G E P G E P G E P G
Pax 6.064 5.213 -0.851 5.97 5.209 -0.761 6.008 4.546 -1.462 6.016 5.084 -0.932 Staff 6.483 5.717 -0.766 6.288 5.5 -0.788 6.422 5.756 -0.666 6.392 5.643 -0.749
Tangibility – Legacy Support Services Gap -0.419 -0.504 -0.085 -0.318 -0.291 0.027 -0.414 -1.210 -0.796 -0.376 -0.559 -0.183
Pax 6.368 4.714 -1.654 6.432 5.039 -1.393 6.563 5.494 -1.069 6.431 4.993 -1.438 Staff 6.525 6.15 -0.375 6.386 5.296 -1.09 6.633 6.633 0 6.5 5.947 -0.553
Tangibility – Additional LCC Support Services Gap -0.157 -1.436 -1.279 0.046 -0.257 -0.303 -0.070 -1.139 -1.069 -0.069 -0.954 -0.885
Pax 6.17 4.62 -1.55 6.22 5.11 -1.11 6.03 4.37 -1.65 6.16 4.77 -1.39 Staff 6.39 5.04 -1.35 6.08 5.55 -0.54 6.45 5.33 -1.11 6.29 5.31 -0.98
Tangibility – Flight
Gap -0.22 -0.42 -0.2 0.14 -0.44 -0.57 -0.42 -0.96 -0.54 -0.13 -0.54 -0.41 Pax 6.31 4.66 -1.65 6.43 5.07 -1.35 6.29 4.57 -1.71 6.35 4.81 -1.54 Staff 6.47 5.33 -1.14 6.36 5.51 -0.85 6.43 5.65 -0.77 6.42 5.49 -0.93
Reliability
Gap -0.16 -0.67 -0.51 0.07 -0.44 -0.5 -0.14 -1.08 -0.94 -0.07 -0.68 -0.61 Pax 6.15 4.65 -1.5 6.24 5.01 -1.23 6.16 4.55 -1.61 6.19 4.78 -1.41 Staff 6.36 5.21 -1.15 6.26 5.51 -0.75 6.45 5.75 -0.7 6.35 5.47 -0.88
Empathy
Gap -0.21 -0.56 -0.35 -0.02 -0.5 -0.48 -0.29 -1.2 -0.91 -0.16 -0.69 -0.53 Pax 6.27 4.63 -1.64 6.34 5.15 -1.2 6.23 4.59 -1.64 6.29 4.83 -1.46 Staff 6.53 5.06 -1.47 6.28 5.64 -0.65 6.39 5.53 -0.85 6.4 5.41 -0.99
Responsiveness
Gap -0.26 -0.43 -0.17 0.06 -0.49 -0.55 -0.16 -0.94 -0.79 -0.11 -0.58 -0.47 Pax 6.18 4.81 -1.37 6.28 5.26 -1.02 6.16 4.67 -1.49 6.21 4.96 -1.25 Staff 6.39 5.03 -1.36 6.38 5.67 -0.7 6.33 5.53 -0.8 6.37 5.41 -0.96
Assurance
Gap -0.21 -0.22 -0.01 -0.1 -0.41 -0.32 -0.17 -0.86 -0.69 -0.16 -0.45 -0.29 Pax 6.21 4.72 -1.49 6.27 5.12 -1.15 6.17 4.6 -1.57 6.23 4.86 -1.37 Staff 6.44 5.26 -1.19 6.27 5.55 -0.72 6.43 5.63 -0.8 6.37 5.47 -0.9
Overall
Gap -0.23 -0.54 -0.3 0.00 -0.43 -0.43 -0.26 -1.03 -0.77 -0.14 -0.61 -0.47 Legend: Expectation: E; Perception: P; Gap: G; Pax: Passenger
35
Reasons for Gaps
Gap 1 (Consumer Expectation – Management Perception Gap). 5 items
LCCs do not undertake market research or utilize its findings. The regular interaction
with customers is also low in their case. FSC – Public, because of its size and legacy
procedures, is not able to disseminate information to all levels. The staff agreed that
levels of management inhibits communication with the customers.
Gap 2 (Management Perception – Service Quality Specification Gap). 17 items
FSC – Public scores lowest on most of the parameters as there are no clear goals for
customer service, no mechanism to measure performance against these goals and there is
no reward to improve service quality. For LCC’s, sales goals are more important than
customer service.
Gap 3 (Service Quality specification – service delivery Gap). 16 items
Here also FSC – Public score low on most of the parameters. The staff is neither
empowered to deliver service, nor do they have the decision making freedom. There is
also no reward for better customer. Staff feels that they spend more time resolving
problems that they have little control over.
Gap 4 (Service Delivery – External Communications Gap). 5 items
FSC – Public customer service staff do not have input in planning and execution of
advertising, nor are they aware of external communication to customers. Their staff feels
that external communication does not accurately reflect what customers receive in the
service encounter.
36
RESULTS OF HYPOTHESES TESTING
One-way ANOVA test for independent samples were conducted at significance level of
0.05 to test the null hypotheses. To gain deeper insight, the same was checked for
different sub groups too i.e. Tangible Support Services, Tangible Flight, Reliability,
Empathy, Responsiveness and Assurance. It was observed that there is no difference
between customers’ expected service quality among different categories of airlines.
However, passengers were found to have significantly higher perception of service
quality for FSC – Private as compared to FSC – Public and LCC’s. Findings also indicate
difference in the gap between customers’ perceived and expected service quality among
different categories of airlines for all dimensions. Table 9 presents the results of ANOVA
test.
37
Table 9: Results of One Way ANOVA
Descriptives Homogeneity of
Variances ANOVA
Hypotheses
N Mean Std. Dev.
Std. Error
Levene Statistic
Sig. F Sig.
Interpre tation
H01 Gap between customers’ perceived and expected service quality (Tangibility – Legacy Support Service) – Airline Category
420 -0.932 1.171 0.057 0.741 0.477 10.897 0.000 Rejected
H02 Gap between customers’ perceived and expected service quality (Tangibility – Additional LCC Support Service) – Airline Category
420 -1.438 1.294 0.631 3.420 0.034 5.897 0.003 Rejected
H03
Gap between customers’ perceived and expected service quality (Tangibility - Flight) – Airline Category
420 -1.393 1.199 0.059 3.380 0.035 8.329 0.000 Rejected
H04
Gap between customers’ perceived and expected service quality (Reliability) – Airline Category
420 -1.545 1.262 0.062 3.182 0.043 3.330 0.037 Rejected
H05
Gap between customers’ perceived and expected service quality (Empathy) – Airline Category
420 -1.410 1.201 0.059 2.942 0.054 3.567 0.029 Rejected
H06
Gap between customers’ perceived and expected service quality (Responsiveness) – Airline Category
420 -1.460 1.315 0.064 5.915 0.003 5.860 0.003 Rejected
H07
Gap between customers’ perceived and expected service quality (Assurance) – Airline Category
420 -1.252 1.298 0.063 4.231 0.015 4.920 0.008 Rejected
H08
Customers’ expected service quality - Airline Category
420 6.230 0.677 0.033 0.464 0.629 0.690 0.502 Not
Rejected
H09
Customers’ perceived service quality – Airline Category
420 4.860 1.000 0.049 2.426 0.090 10.548 0.000 Rejected
H10 Gap between customers’ perceived and expected service quality – Airline Category
420 -1.370 1.038 0.051 4.194 0.016 6.561 0.002 Rejected
Hypotheses H04 and H05 significant at p=0.05 while others were significant at p=0.01.
38
MANAGERIAL IMPLICATIONS
This paper provides some practical implications for airline marketing managers. The
analysis shows that the dimensions of Tangibility (Legacy Support Service, Additional
LCC Support Service and Flight) were significant drivers of customer service. Airline
marketers should realize that improvements in these three factors would enhance
passengers’ repurchase intention and their recommendation to other passengers via a
favorable airline image. In addition, airline marketers should develop strategies to
improve service quality such as meeting passengers’ desired service levels, improving the
quality of in-flight meal, solving service problems effectively and immediately, making
convenient schedules for passengers, preventing service problems from occurring and so
on. These strategies will enhance airline image and result in retaining existing passengers
and enticing passengers from other airlines.
Reliability is one of the most important requirements of airline operations (Sultan et al
2000). Even a minor slip in reliability leads to the formation of a negative airline image.
Therefore, domestic airlines should strive to keep a good safety record and on time
performance in order to attract potential passengers.
The study provides justification to the belief that differences exist in consumer
perceptions and expectations based on airline categories. Although it is understood that
practitioners had used the SERVQUAL model in various countries, it represents the first
use of the model across airline categories in India. The study provides empirical evidence
for the expectations and perceptions differences that may be expected in service quality
and may significantly impact airlines. Airline passengers have different expectations for
airline service quality based on airline category, as well as perceiving the service quality
39
Table 10 : Top Three Service Parameters* for Different Customer Profile Total Expectations Perceptions Gap
FSC - Public 171 SPF, SNC, PCI VND, VSSN, SPF PCI, MAUF, MTC
FSC - Private 169 PCI, SPF, SNC VAS, SPF, CCS EADS, PCI, MTC
Airline Category
LCC 80 WCCU, EADS, SPF WCCU, EADS, VAS MMO, PCI, EBHM
Male 361 SPF, SNC, PCI SPF, VSSN, VAS PCI, MTC, SNC Gender
Female 59 EADS, PCI, HCB VAS, VND, CCS MTC, PCI, EADS
Less than 21 8 SPF, WCCU, CFS WCCU, VAS, SNC PCI, MMO, MTC
21 to 40 287 SNC, EADS, SPF VSSN, SPF, VND PCI, MTC, SNC
41 to 60 120 SPF, PCI, EBHM SPF, VAS, CCS PCI, AWHC, EBHM
Age Group
Above 60 5 EADS, VAS, EBHM WCCU, VND, MAUF PSRF, CITS, SNB
Graduation or Below 94 SNC, SPF, PCI WCCU, VAS, HCB PCI, MTC, SNC
Post Graduation 162 EADS, SPF, PCI VSSN, SPF, VAS PCI, MTC, AWHC
Highest Qualifica- tion
Professional 164 SPF, PCI, EBHM SPF, VND, VAS MTC, PCI, EBHM
Self Employed 44 MAUF, SNC, PCI WCCU, VAS, SPF MTC, MMO, EBHM
Employed (Private Sector)
218 SPF, EADS, PCI SPF, VAS, VSSN PCI, MTC, EADS
Employed (Govt/ Public Sector
116 SNC, SPF, EBHM VND, VSSN, SPF PCI, SNC, EBHM
Occupa- tion
Others 42 EADS, EBHM, PCI VND, CCS, SPF PCI, MTC, EADS
Less than 0.5 Million 230 EADS, SNC, PCI VAS, SPF, CCS PCI, SNC, MTC
0.5 – 1.0 Million 134 PCI, EBHM, SPF SPF, VND, VSSN MTC, PCI, CBIH
1.0 – 2.0 Million 36 SPF, MAUF, EBHM VSSN, EFR, SPF PCI, EBHM, MTC
Annual Income Bracket
Above 2.0 Million 20 SPF, SNC, PCI CFS, VND, VAS MTC, SNC, AWHC
Less than 1 Year 19 CFS, KACQ, SPF VAS, EFR, SBIC MMO, MTC, KACQ
1 - 5 Years 195 PCI, EADS, SNC VAS, SPF, WCCU PCI, MTC, MMO
5 – 10 Years 75 SPF, SNC, EADS SPF, VSSN, VAS PCI, AWHC, MTC
Since how long Flying
More than 10 Years 131 EBHM, SPF, HCB SPF, VND, VSSN PCI, MTC, EADS
1 – 5 245 EADS, SPF, PCI VAS, SPF, CCS MTC, PCI, SNC
6 – 10 94 SNC, PCI, HCB VND, VSSN, SPF PCI, HCB, MTC
10 – 20 48 SNC, MAUF, SPF SPF, VAPF, VAS PCI, MTC, EBHM
Domestic Flights in last 1 Year
Above 20 33 SNC, MAUF, SPF SPF, VSSN, VND PCI, MTC, MAUF
Economy SPF, SNC, PCI SPF, VAS, VSSN PCI, MTC, SNC Class of Travel Business MTC, CCS, MAUF VSSN, CFS, SPF SBIC, MTC, EFR
No 286 SPF, PCI, EADS VAS, SPF, VSSN PCI, MTC, SNC Frequent Flyer Member
Yes 134 SNC, EBHM, HCB SPF, EFR, VAS EBHM, PCI, MTC
No 200 EADS, PCI, SPF VAS, WCCU, SPF PCI, MTC, MMO Travel to International Sector
Yes 220 EBHM, SPF, SNC VND, VSSN, SPF PCI, MTC, EBHM
Overall Parameters 420 SPF, PCI, EADS SPF, VAS, VSSN PCI, MTC, EBHM
Overall Dimensions 7 T-ALSS, REL, RESP
T-LSS, T-ALSS, ASS
REL, RESP, T-ALSS
* Refer table 2 for parameter description
40
of airlines to vary in terms of SERVQUAL model features and overall service quality.
Table 10 gives top three service parameters for different customer profile.
The findings exemplify that merely excellent perceived service quality is insufficient to
develop long-term service loyalty without investigating the mediating effect of customer
satisfaction. Passengers expect airline to ensure safe journey, support to mitigate
problems due to critical incidents and meet time commitments. Thus, service managers
should ensure that the performance on all components of delivered service is perceived as
excellent by customers and also sustain high levels of satisfaction.
In order to meet this objective, service staff must be well trained for keeping good
relationship with customers and for addressing customers’ enquires. As suggested from
the measure of perceived service quality, besides the quality of interactions between
service staff and customers, physical outcomes are also important and need to be well
managed.
LIMITATIONS AND FUTURE RESEARCH DIRECTIONS
The major limitations of this study are as follows:
a) This study was limited to airlines services in a specific domestic market, i.e. India.
b) The study was conducted on a limited number of flights.
c) Collecting respondents’ data on expectations and perceptions of service quality at the
same time could have compromised the reliability of the data.
The nature of this research precluded airlines renowned for service quality internationally
and which do not compete on the designated routes, e.g. Singapore Airlines, Cathay
Pacific, and Emirates. As future growth for airlines competing internationally is forecast
to rise in Asia in general and India in particular, studies of service quality issues
encompassing such airlines and the influence of regional cultures need to be explored.
41
CONCLUSIONS
In India, the domestic airline industry has entered into 2nd phase of liberalization with the
entry of LCCs. There is a growing competition amongst airlines to provide better quality
services to passenger at economical air-fares. Technology is also being extensively used
to improve customer satisfaction.
Analysis of data revealed that items for perception and gap loaded on four factors each.
The validity of the “classical” five-dimensions of SERVQUAL could not be resolved for
service quality in case of domestic airlines. The reliability value for SERVQUAL as a
unidimensional instrument was high.
In the context of customer service vis-à-vis Full Service Carrier – Public Sector, Full
Service Carrier – Private Sector and Low Cost Carriers, expectations were significantly
high for tangibility – additional LCC support service, reliability and responsiveness.
Service quality perceptions were low for tangibility – flight and empathy, especially in
case of Low Cost Carriers. Gap between perceptions and expectations were observed to
be highest for Low Cost Carriers. Overall, reliability of service was an area of concern for
passengers across all categories of airlines.
There was no difference between customers’ expected service quality among different
categories of airlines. However, there was difference between customers’ perceived
service quality. As a result, gap was also observed between customers’ perceived and
expected service quality among different categories of airlines.
Dimensions of Tangibility (Legacy Support Service, Additional LCC Support Service
and Flight) and Reliability were significant drivers of customer service. Passengers
42
expected airlines to ensure safe journey, offer support to mitigate problems due to critical
incidents and particularly meet time commitments.
JEL classification: M31, L93, N75
Key words: Customer Satisfaction, Airline, Customer Service, SERVQUAL, India, Civil
Aviation,
43
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Authors’ Profile
Dr. Mohammed Naved Khan, B. Sc. Engineering (Electrical), MBA, PhD, is at present
working as Senior Lecturer, Department of Business Administration, Faculty of
Management Studies & Research, Aligarh Muslim University, Aligarh. His areas of
interest include Consumer Behavior & Marketing Research. He is the recipient of All
India “PD Agarwal-TCI Award for Doctoral Research in Management” for the year
1997. Several of his research papers have been published in leading national and
international publications. He has to his credit two books viz. “Facets of Indian
Advertising and Consumer Behavior: An Empirical Approach”, Kanishka Publishers,
New Delhi (2002) ISBN: 81-7391-447-8 and “The Encyclopedic Dictionary of
Marketing”, Response Books, Sage Publications, New Delhi/Thousand Oaks/London,
ISBN: 0761935010.His areas of interest include marketing and marketing research.
Vippan Raj Dutt, B Tech. (Electronics and Telecommunication), MBA (Marketing), is
pursuing his research on ‘Dimensions of Customer Service Quality’ at the Faculty of
Management Studies and Research, Aligarh Muslim University. At present, he is also
working as Manager, (System/Maintenance) in the IT Department at NACIL (erstwhile
Indian Airlines). He has previously worked with Engineers India Ltd. and Siemens India
Ltd. His areas of interest include Information Technology and Customer Service in
Service Sector.
Dr S C Bansal, earned his Ph D in Finance at the Department of Commerce, Delhi
School of Economics, University of Delhi, Delhi in 1987. Currently, he is Associate
Professor of Finance and Accounting at the Indian Institute of Management, Lucknow.
He has held senior positions at the Institute of Company Secretaries of India, National
Institute of Financial Management, and University of Delhi. He has teaching experience
of about three decades. Dr Bansal’s teaching interests include corporate finance,
management accounting and corporate restructuring.