CHAPTER 1 -INTRODUCTION

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CHAPTER 1 - INTRODUCTION

Introduction of the study

Globally, the aviation industry has become an important and reliable means of

transportation. It also plays a major role in the economic development of a nation. The

delivery of high quality service has therefore become a marketing instrument among air

carriers as a result of competitive pressure. Archana & Subba (2012) stated that the

aviation sector is the most important segment in the economic development of a nation

where it plays a vital role in moving people and products domestically and internationally

especially over long distance.

Many companies have been disappointed by the lack of results from their quality

efforts. If customers receive low quality service from the same airline frequently,

customers will be dissatisfied and eventually might decide to take their business

elsewhere. One way to strengthen an airline firm’s competitive position is to retain

customers as loyal users of their airlines. Loyal customers not only increase the value of

business, but also enable to maintain costs lower than those associated with attracting

new customers. Customer loyalty has become a key factor for success in the service

industry. In such a highly competitive market, service providers in many industries have

discovered the importance of customer retention. The longevity of a particular business is

supported by loyal customers who keep stay with the company. In ensuring customers’

loyalty, the issue of the company’s effort in retaining the existing customers is a vital

concern. Organizations are working to meet customer’s expectations and bridging the gap

between the service provided and customer expectations to create satisfied, happy and

loyal customers. A key element of organizations success is the nature of the relationship

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between the customer and the service provider in term of SERVQUAL elements, which

will lead to customers’ loyalty. SERVQUAL elements are tangibles, reliability,

responsiveness, assurance and empathy (Parasuraman et al., 1988, p.23).

There are numerous domestic airlines that take visitors or travelers to different

parts of Nepal. Domestic Airlines in Nepal are Air Kasthamandap, Flying Dragon

Airlines, Goma Air, Makalu Air, Nepal Airlines, Saurya Airlines, Shree Airlines, Sita

Air, Simrik Airlines, Tara Air, Buddha Air and Yeti Airlines. Among all of the airlines,

Buddha Air and Yeti Air in Nepal have fierce competition as their flight destinations are

same and facilitate same service and price where other domestic airlines have different

flight destinations and limited flight destination, some focuses on cargo.

The study thus an attempt to put light into the relation of the service quality and customer

loyalty in Domestic Airlines- domestic carrier of Nepal for which it adopted the

SERVQUAL model by Parasuranam et al., (1988).

Problem Statement

Air transport is important to the nation as it plays a vital role in the economic

development of the country. Generally, an aviation industry is the centre of globalization

for other industries (Suhartanto & Noor, 2012). In a highly competitive environment,

customer loyalty has become an increasingly effective means for securing a firm’s

profitability (Reinartz & Kumar, 2002). In the airline industry, profitability of airline

companies has always been challenged by a number of external factors. According to

Doganis (2006), running airlines profitable has always been a great challenge. In addition

to intense competition diminishing airlines’ profits, airlines are exposed to market

volatility, legal regulations restricting operations, and a disadvantageous cost structure

with high fixed costs (Delfmann et al., 2005; Shaw, 2007). New competitors are being

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encouraged to enter the market due to the ongoing deregulation and liberalization of

airline industry over time. Therefore, it is highly required that aviation industry

reevaluate the level of SERVQUAL which offered to customers and understand the

critical service factors that most effect customer loyalty to accomplish greater benefits

and big returns. This study is an attempt to address the relation among service quality and

customer loyalty of Domestic Airlines of Nepal.

Research Objectives

To analyze the service quality effects on customer loyalty in Domestic Airlines.

To analyze the relationship effect between tangibility and customer loyalty in Domestic

Airlines in Nepal

To analyze the relationship effect between reliability and customer loyalty in Domestic

Airlines in Nepal

To analyze the relationship effect between responsiveness and customer loyalty in

Domestic Airlines in Nepal

To analyze the relationship effect between assurance and customer loyalty in Domestic

Airlines in Nepal

To analyze the relationship effect between empathy and customer loyalty in Domestic

Airlines in Nepal

To analyze the relationship effect between age group of respondents and customer loyalty

in Domestic Airlines in Nepal

To analyze the relationship effect between education level of respondents and customer

loyalty in Domestic Airlines in Nepal

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To analyze the relationship effect between gender and customer loyalty in Domestic

Airlines in Nepal

To analyze the relationship effect between occupation of respondents and customer

loyalty in Domestic Airlines in Nepal

To analyze the relationship effect between purpose of travel and customer loyalty in

Domestic Airlines in Nepal

Research Questions

What is the effect of service quality on customer loyalty in Domestic Airlines in Nepal?

What is the relationship between tangibility and customer loyalty in Domestic Airlines of

Nepal?

What is the relationship between reliability and customer loyalty in Domestic Airlines in

Nepal?

What is the relationship between responsiveness and customer loyalty in Domestic

Airlines of Nepal?

What is the relationship between assurance and customer loyalty in Domestic Airlines of

Nepal?

What is the relationship between empathy and customer loyalty in Domestic Airlines of

Nepal?

What is the relationship between age group of respondents and customer loyalty in

Domestic Airlines of Nepal?

What is the relationship between education level of respondents and customer loyalty in


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What is the relationship between gender of respondents and customer loyalty in Domestic

Airlines of Nepal?

What is the relationship between occupation of respondents and customer loyalty in


What is the relationship between purpose of travel and customer loyalty in Domestic

Airlines of Nepal?

Research Hypothesis

This research study has set following alternative hypothesis:

H1: Service quality has positive relationship on customer loyalty in Domestic

Airlines in Nepal.

H2: Tangibles has positive effect on customer loyalty in Domestic Airlines in

Nepal.

H3: Reliability has positive effect on customer loyalty in Domestic Airlines in

Nepal.

H4: Responsiveness has positive effect on customer loyalty in Domestic Airlines

in Nepal.

H5: Assurance has positive effect on customer loyalty in Domestic Airlines in

Nepal.

H6: Empathy has positive effect on customer loyalty in Domestic Airlines in

Nepal.

H7: Age group of respondents has positive effect on customer loyalty in

Domestic Airlines in Nepal.

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H8: Education level of respondents have positive effect on customer loyalty in


H8: Gender of respondents has positive effect on customer loyalty in Domestic

Airlines in Nepal.

H9: Occupation of respondents has positive effect on customer loyalty in


H10: Purpose of travel has positive effect on customer loyalty in Domestic

Airlines in Nepal

Significance of the study

Basically, the intense competition between Domestic Airlines in Nepal has put

continuous pursuers on both airlines to improve service quality. The significance of the

study stems from the from the fact that appropriate decision making process relies on

appropriate analytical studies , which expected to create a solid base to stay in touch with

customer expectations on one side and holding strongly competitive strength over rivals

on the other side. The appropriate decisions and solutions should lead to improve service

quality to create loyal customers, since management leaders closely focus on service

quality as a critical success factor for organizations.

Meanwhile, t is very vital and important for organizations to prove its capabilities

and competencies in exploiting the huge benefits of utilizing such model like

SERVQUAL on airlines sector. This study should indeed help decision makers review

their plans and see the real picture of the domestic airlines market within its components.

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Limitations of the Study

The study is done only for academic purpose within limited time and financial resources.

The result of the study completely relies on the honesty of the respondents.

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CHAPTER 2- LITERATURE REVIEW AND THEORITICAL FRAMEWORK

Service Quality

Traditionally, service quality has been conceptualized as the difference between

customer expectations regarding a service to be received and perceptions of the service

being received (Groonos, 2000). In some earlier studies, service quality has been referred

as the extent to which a service meets customers‟ needs or expectations (John & John,

1994). It is also conceptualized as the consumer‟s overall impression of the relative

inferiority or superiority of the services (Zeithaml, Parasuraman & Berry, 1990). In

recent years, it is commonly agreed that service quality is the outcome of evaluations

made by the customers. The general logic is obvious, since the customer‟s own

evaluation influences his/her future behavior such as returning next time or positive

accounts to relatives (Brown et al., 1991). This fact indicates that service companies

cannot solely deliver service according to internal standards which might not match the

customers‟ expectations.

Service Quality Dimensions

Five dimensions of service quality that link specific service characteristics to

consumers‟ expectations are identified and applicable in assessing airline service quality.

The items for each constructs are based on the mix study of past research on airline‟s

service quality.

1) Reliability

Reliability refers to the ability to perform the promised service dependably and

accurately. According to Lindstrom (2009) the inflight passenger perspective, the

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dimension of reliability refers to on-time departure, consistent service delivery, doing

things right the first time and consistent inspections and cabin announcements.

2) Tangibles

Tangibles can be referred to as the appearance of physical facilities, equipment,

personnel and communication materials in the service process, such as cleanliness,

appearance of staff and appropriate technical equipment for support and entertainment.

3) Responsiveness

Responsiveness refers to general willingness to help customers and provide

prompt service, which refers to the ability of responding to individual customer

requirements and showing sincere interest in problem solving.

4) Assurance

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

convey trust and credibility. The dimension would include staff training for competent

and courteous charisma among employees, and the feeling of safety in the transactions

with the customers.

5) Empathy

Empathy encompasses the access to customers, communication to customers and

understanding of customers resulting in individualized attention to customers. This is

considered a very important element of in-flight service process and covers the level of

individual and personal attention and the understanding of specific customer needs.

Customer Loyalty

The globalization of competition, saturation of markets and development of

information technology have enhanced customer awareness and created a situation where

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long-term success is no longer achieved through optimized product price and qualities.

Nowadays, without the awareness of consumer behavior and correct understanding of it,

it is impossible for companies to take appropriate measures to meet their customers’

needs and wants. How to build good relationship with customers becomes more and more

important. Customer loyalty is often recognized as being a strategic objective for firms

and it is a critical aspect for firms. At a very general level, customer loyalty is the feeling

of the attachment or affection for a company’s people, products or services (Jones and

Sasser, 1995). The most comprehensive definition of customer loyalty is from Oliver

(1999). He stated that customer loyalty is a deeply held commitment to rebuy or re-

patronize a preferred products or services consistently in the future. Loyalty of a firm’s

customers has been recognized as the dominant factor in a business organization’s

success and sustainability.

Customer Loyalty towards airlines industry

Since airline companies are very concerned about customer loyalty, they need to

review and reexamine their strategies not only to sustain customer loyalty but also to

remain competitive. Natalisa and Subroto (2003) suggested that domestic airline

operators need to honor promises made in their promotional and external communication

materials. Due to the dynamic environment and increasing demand of better service from

the customer, it is a must for airline to provide excellent service and focus on continuing

improvement, so that they can remain the uniqueness of their services and create more

competitive advantages than the competitors. Continuous training activities should also

be provided to frontline operators, in addition to developing various kinds of loyalty

programs to ensure continued customer loyalty. Chin (2002) stated that an attractive

frequent flier program could actually contribute to increased loyalty from the repeat

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business of an increased number of customers. In addition, Dick and Basu (1994)

suggested that reliability and confidence might encourage loyalty to the service provider.

Customer loyalty is very important for the survival of service provider companies.

Theoretical Framework

Figure 2.1 Theoretical Framework

H2

H3

H1

H4

H5

H6

(Source: Adapted from Parasuraman, et al., 1988; Sudhahar, et al., 2006)

Service Quality

Tangibility

Reliability

Responsiveness

Assurance

Empathy

Customer Loyalty

Comparison

Commitment

Referral

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CHAPTER 3- RESEARCH METHODOLOGY

Research methodology deals with the various sequential steps to be adopted by

researcher to study the concerned problem with certain objectives in view. The chapter

includes the research design, nature and source of the data, population and sample,

respondents profile and the method of the analysis. This study followed the quantitative

approach using survey method to investigate the service quality and customer loyalty in

Domestic Airlines. The service quality dimensions- tangibility, reliability,

responsiveness, assurance, and empathy are independent variables in the study whose

impact upon customers’ loyalty as the dependent variables is studied.

Research Design

Research design is a work plan that ensures the evidence obtained to allow the

researchers to answer each of the research questions as clearly as possible (DeVaus,

1991). Under the quantitative research approach, descriptive study is selected as the

research purpose. Descriptive study was undertaken to find out and describe the

characteristics of variables of interest in a situation (Sekaran &Bougie, 2011). Therefore,

in this research, the goal of descriptive study offers a profile about the personal

information when choosing airlines services in Nepal.

Nature and Sources of data

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The primary data have been collected from the travelers of both Buddha and Yeti

Airlines with the help of the questionnaires developed based on the SERVQUAL models.

The questionnaires are structured on five-point Likert Scale.

Population and Sampling Method

The population of the current survey is comprised of those who have actually

experience airline services offered by the aviation industry, specifically air travelers. The

travel agencies were visited and the managers were humbly requested for the contact

information about the travelers. The location of the travel agencies were purposively

selected at Putalisadak, Airport Side, Hattisar, Thamel, Nagpokhari as most of the travel

agencies are located in these condensed areas. After taking consent from the customers

and confirming that they deal with the respective travel agencies and have at least

travelled once by both airlines, the customer was taken as the sample for the study. Data

were collected by telephone interviewing, sending and collecting questionnaire from

mail, travelers visited in travel agencies. One hundred and ten respondents were

approached and data were collected from them. The study of loyalty towards an airline

will be based on individual manner. Sampling technique of non-probability sampling was

chosen in the sample's collection.

Reliability

The internal consistency reliability or homogeneity was conducted to test the

reliability and consistency of the results of data in the research. The most common

statistical index used in the internal consistency reliability test is Cronbach’s alpha.

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Cronbach’s alpha is to explain and interpret the reliability among the items surveyed. In

addition, Cronbach’s alpha is preferably used when there was an existence of multiple 5-

point Likert scale questions in questionnaire (Lund, 2013 cited in Ting, et al., 2014).

Besides, Cronbach’s alpha coefficient is range from 0.0 to 1.0 and it was used to check

whether the construct is reliable or not. Cronbach’s alpha coefficient over 0.6 is adequate

for basic research (Hair et al., 2006). All questionnaires of the Likert cale were analyzed

for reliability test using SPSS 21.0 to check the internal consistency of the questionnaire

scale items. The scale item has been eliminated when needed to increase the value of

Cronbach’s alpha.

Data Analysis

In this study, descriptive statistics is used to better understanding about

demographic profile of respondents and test the level of respondent's understanding

towards Service quality, its elements tangibility, reliability, responsiveness, assurance,

empathy, and customer loyalty. Frequencies, means, standard deviation, one way

ANOVA was used to measure the differences between groups, Pearson Correlation and

finally stepwise regression analysis was implemented to assess the impact of

SERVQUAL factors on customer loyalty.

SPSS 21.0 and Microsoft Excel 2007 software were used for the results of the

descriptive and the inferential analysis, testing of the hypothesis.

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CHAPTER 4- RESULTS AND DISCUSSION

This chapter brings about the figures and facts finding of the study and the

application of the different statistical tests. The aim of the chapter is to represent the

findings of the study and the impact of them upon the existing hypotheses formulated

during the study period.

Respondents’ Profile

The respondents profile presents the information about the gender, age, marital

status, education level and occupation of respondents; the airlines from which

respondents travel, and frequency of travel by respondents.

Table 4.1 Respondents by Gender

Gender Frequency Percent

Male 69 69.0

Female 31 31.0

Total 100 100.0

Table 4.1 shows that the gender distribution of the respondents was 69 percent

were male and 31 percent were female.

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Table 4.2 Respondents by Marital Status

Marital Status Frequency Percent

Unmarried 49 49.0

Married 51 51.0

Total 100 100.0

Table 4.2 shows that 49 percent of respondents were married and 51 percent of

respondents were unmarried.

Table 4.3 Respondents by Age Group

Age Group Frequency Percent

V

a

l

i

d

16-25 20 20.0

26-35 42 42.0

36-45 26 26.0

46-55 10 10.0

56-65 2 2.0

Total 100 100.0

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Table 4.3 depicts that most of the respondents 42 percent were between the age

group of 26-35 years, 26 percent were between the age group of 36-45 years, 20 percent

were between the age group of 16-25 years, 10 percent were between the age group of

46-55 years and 2 percent were between the age group of 56-65 years.

Table 4.4 Respondents by Education Level

Education Level Frequency Percent

V

a

l

i

d

High school 7 7.0

10+2 23 23.0

Bachelor degree 36 36.0

Master degree 26 26.0

Other 8 8.0

Total 100 100.0

Table 4.4 represents that 36 percent of the respondents have education level of

bachelor degree, 26 percent have master degree, 23 percent have 10 +2, 8 and 7 percent

have education level of high school and other respectively.

Table 4.5 Respondents By Occupation

Occupation Frequency Percent

V

a

l

Employed 44 44.0

Self employed 28 28.0

Unemployed 4 4.0

18

i

d

Student 20 20.0

Retired/renter 3 3.0

Other 1 1.0

Total 100 100.0

Table 4.5 represents that 44 percent were employed in some kind of occupation,

28 percent were self employed, 20 percent were student, 4 percent were unemployed, 3

percent were retired/renter and 1 percent were in other field.

Table 4.6 Preference of airlines to travel

Airlines Frequency Percent

V

a

l

i

d

Buddha air 67 67.0

Yeti air 30 30.0

Others 3 3.0

Total100 100.0

Table 4.6 signifies that 67 percent of respondents prefer to travel with Buddha Air

to their destinations whereas 30 percent of respondents prefer to travel with Yeti Air.

Only 3 percent respondents prefer to travel with other airlines for their destinations.

Table 4.7 Frequency of Travel

Frequency of Travel Frequency Percent

V

a

Less than 1 31 31.0

1-2 times 42 42.0

19

l

i

d

3-5 times 19 19.0

6-10 times 6 6.0

10 times or above 2 2.0

Total 100 100.0

Table 4.7 represents that 42 percent of respondents travel around 1-2 times in a

month for various purposes. 31 percent of respondent travel less than 1 time in a month,

19 percent of respondents travel around 3-5 times in a month, 6 percent of respondents

travel around 6-10 times and 2 percent of respondents travel 10 times or above in a

month.

Table 4.8 Purpose of Travel

Purpose of Travel Frequency Percent

V

a

l

i

d

Business 37 37.0

Visiting friends/relatives 39 39.0

Visitor/Tourist 24 24.0

Total100 100.0

Table 4.8 shows that 39 percent of the respondents indicated the purpose of their

travel was to visit friends/relatives, 37 percent respondents travel for business purpose

and 24 percent of respondents travel to visit the places.

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Replacing Missing Values

One of the respondents has missed to select the answer in item TAN3 and TAN5

of variable tangibility, similarly one respondent has missed to select the answer in item

ASS2 of variable Assurance.

All of the missing variables were replaced by using replace missing values in

SPSS 21.0 selecting the missing item and replacing the missing value by using median by

nearby points. So, TAN3,TAN5 and ASS2 is replaced by TAN3_1, TAN4_1 and

ASS2_1 respectively.

Reliability Analysis

The reliability of used measurement scales was tested using Cronbach’s alpha coefficient.

Table 4.9 Cronbach’s alpha of Constructs

Construct Cronbach’s alpha No.of items

Tangibility 0.767 5

Reliability 0.751 4

Responsiveness 0.743 4

Assurance 0.732 4

Empathy 0.627 3

Customer Loyalty 0.900 3

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Table 4.9 shows that the results of reliability of measurement scales used for

measuring independent and dependent variables of service quality dimensions, customer

loyalty. The applied measurement scales exhibits satisfactory levels of reliability. One

scale item in Assurance- ASS2 (probability of flight break downs; among 5 items) and

another item in Empathy- EMP3 (having travel related partners, car rental, hotels etc;

among 4 Items) is eliminated from Assurance and Empathy respectively.

Descriptive Statistics of Variables

Table 4.10 Descriptive Statistics of Service Quality variables

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Tangible 100 1.00 5.00 2.3500 .56809

Reliability 100 1.00 4.00 2.0750 .58225

Responsiveness 100 1.25 3.75 2.6075 .59698

Assurance 100 1.00 4.25 2.1400 .56889

Empathy 100 1.00 5.00 2.1300 .63369

Valid N (Listwise) 100

Table 4.10 shows the mean and standard deviation of tangibles, reliability,

responsiveness, assurance and empathy. The mean of the variables are more than 2 with

standard deviation near 0.6.

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Regression Analysis

Table 4.11 Regression Analysis of Service Quality and Customer Loyalty

Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .467a .218 .210 .67551

a. Predictors: (Constant), servicequality

Table 4.11 provides the R and R2 values. The R value represents the simple

correlation which is 0.467 that indicates moderate positive degree of correlation. The R2

value indicates that only 21.8 % variation in the customer loyalty is explained by

variation in service quality.

Table 4.12 Regression Analysis of Tangible and Customer Loyalty

Model Summary

Model R R Square Adjusted R Square Std. Error of the

Estimate

2 .290a .084 .075 .73114

a. Predictors: (Constant), tangible


correlation which is 0.290 that indicates low positive degree of correlation. The R2 value

indicates that only 8.4 % variation in the customer loyalty is explained by variation in

tangible.

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Table 4.13 Regression analysis of Reliability and Customer Loyalty

Model Summary


Estimate

3 .382a .146 .137 .70610

a. Predictors: (Constant), reliability




variation in reliability.

Table 4.14 Regression analysis of Responsiveness and Customer Loyalty

Model Summary


Estimate

4 .371a .138 .129 .70939

a. Predictors: (Constant), responsiveness




variation in responsiveness.

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Table 4.15 Regression analysis of Assurance and Customer Loyalty

Model Summary


Estimate

5 .463a .214 .206 .67739

a. Predictors: (Constant), assurance




variation in assurance.

Table 4.16 Regression analysis of Empathy and Customer Loyalty

Model Summary


Estimate

6 .222a .049 .039 .74505

a. Predictors: (Constant), empathy


correlation which is 0.222 that indicates low positive degree of correlation. The R2 value

indicates that only 4.9 % variation in the customer loyalty is explained by variation in

assurance.

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Table 4.17 One way ANOVA test between the age groups and customer loyalty

ANOVAcustomerloyality

Sum of Squares df Mean Square F Sig.Between Groups 3.014 4 .754 1.321 .268Within Groups 54.198 95 .571

Total 57.212 99

Table 4.17 shows the output of the ANOVA analysis and whether we have a

statistically significant difference between the group means. We can see that the

significance level is 0.268 (p = .268), which is above 0.05, therefore; there is a no

significant and positive relationship between the different age groups and customer

loyalty.

Table 4.18 One way ANOVA test between the education level and customer loyalty

ANOVA

customerloyalitySum of Squares df Mean Square F Sig.

Between Groups 3.466 4 .866 1.532 .199Within Groups 53.746 95 .566

Total 57.212 99



significance level is 0.199(p = .199), which is above 0.05, therefore; there is a no

significant and positive relationship between the different age groups and customer

loyalty.

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Table 4.18 Independent T-Test between the gender of respondents and satisfaction

level

Group Statistics

GENDER N Mean Std. Deviation Std. Error Mean

customerloyalitymale 69 1.8551 .72192 .08691

female 31 2.2903 .76856 .13804

Table 4.18 shows the mean difference where male are less loyal than the males

with the same level of service quality. Looking at the table we see that the group means

are significantly different also because the value in Sig. (2-tailed) row p=0.007 which is

less than 0.05. This shows that there is positive effect of gender on customer loyalty of

domestic airlines in Nepal.

Table 4.19 One way ANOVA test between the occupation and customer loyalty


Sum of Squares

df Mean Square F Sig.

Between Groups

6.344 5 1.269 2.345 .047

Within Groups 50.868 94 .541Total 57.212 99



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significance level is 0.047(p = .0.047), which is below 0.05, therefore; there is a

significant and positive relationship between the occupation and customer loyalty.

Table 4.20 One way ANOVA test between the purpose of travel and customer

loyalty


Sum of Squares df Mean Square F Sig.Between Groups 2.976 2 1.488 2.661 .075Within Groups 54.236 97 .559

Total 57.212 99



significance level is 0.075(p = .0.075), which is above 0.05, therefore; there is a no

significant and positive relationship between the purpose of travel and customer loyalty.

Testing of hypotheses

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H1 is accepted, it means service quality has positive relationship effect of service

quality on customer loyalty in Domestic Airlines in Nepal.

H2 is accepted, tangibles has positive effect on customer loyalty in Domestic

Airlines in Nepal.

H3 is accepted, reliability has positive effect on customer loyalty in Domestic

Airlines in Nepal.

H4 is accepted, responsiveness has positive effect on customer loyalty in


H5 is accepted, assurance has positive effect on customer loyalty in Domestic

Airlines in Nepal.

H6 is accepted, empathy has positive effect on customer loyalty in Domestic

Airlines in Nepal.

H7 is rejected; age group has no significant and positive relationship on customer

loyalty in Domestic Airlines in Nepal.

H8 is accepted, gender of respondents has positive effect on customer loyalty on


H9 is accepted, occupation of respondents has positive effect on customer loyalty

on Domestic Airlines in Nepal.

H10 is rejected, purpose of travel has no positive effect on customer loyalty on


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Major Findings

The most of the respondents (67 %) prefers to travel with Buddha Air, 30 %

prefers to travel with Yeti Air and 3 % with other airlines.

Most of the Respondents trust the safety of Buddha Air compared to Yeti Air.

All the service quality dimensions (tangible, reliability, responsiveness, assurance

and empathy) have positive correlation with the customer loyalty in Domestic Airlines.

Customer Loyalty of Domestic Airlines is moderately affected by service quality.

CHAPTER 5- SUMMARY AND CONCLUSION

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The chapter includes the discussion of major findings, summary and conclusion of

the research work.

SUMMARY

In this study, the service quality dimensions and customer loyalty dimensions

have been the major constructs with the Domestic Airlines being the area of the study.

There is positive moderate correlation of the service quality dimensions-

tangibility, reliability, responsiveness, assurance and empathy- with customer loyalty.

Age group, education level and purpose of travel have no significant relationship with

customer loyalty in domestic airlines of Nepal. But there is significant relationship

between gender and customer loyalty, occupation and customer loyalty Domestic Airline

in Nepal.

There is statistically significant role of the service quality dimensions on customer

loyalty on Domestic Airlines.

Thus it is to be understood that there is vital role of the service quality dimensions

putting an impact on customer loyalty for the Domestic Airlines.

Conclusion

The study dealt with the customers of different travel agencies in Kathmandu and

found that there is room for the both airlines to keep sight of improvement in the overall

dimensions used in the study. With the increasing number of travelers and Nepal being

the tourist destinations, both Airlines need to focus on their service dimensions to build

the loyal customers.

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For any service oriented organizations it become crucial that the managers keep

an eye upon the feedback of the customers and their expected services and keep the

alignment of the services within the vision of the organizations as well as its customers to

bring the customer loyalty and thus get the sustainable growth in this global competitive

market.

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CHAPTER 1 -INTRODUCTION

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