Customer Satisfaction in the Airline Industry

Introduction

In the highly competitive airline industry, customers become the most important factor of the whole producing process. Besides flight safety, enhancing service quality, and therefore customer satisfaction, is the most crucial strategies of the airlines (Fried, 1989; Gardner, 2004; Zaid, 1995).

Customer complaints serve as a critical dimension of service quality and customer satisfaction. Both the great affect that complaint handling has on customer retention and the beneficial usage of complaint information for service quality improvements have been widely recognized by the airlines and evaluative institutions (Strauss & Schoeler, 2004).

Complaint management continues to be a focal point of research as more companies have become convinced that defensive marketing is a highly profitable endeavor (Davidow, 2003). Customer complaints provide organizations with an opportunity to rectify their mistakes, retain dissatisfied consumers, and influence consumers’ future attitudes and behavior (Estelami, 1999).

There is much empirical evidence showing that the complaint satisfaction with a company’s response has an enormous impact on customers’ future behavior (Stauss, 2002). Therefore if the customer relation department is doing the job effectively and getting complains from customers it can be used a tool to make improvements in the company as their feedback will tell the airlines where there are lacking and how they can improve. So it will just not increase customer satisfaction but also the loyalty and the profit for airline as customers will like to use the services again and again.

These days Airlines are in fierce competition with each other and they are trying to gain each others market share by using different strategies some are giving cheap tickets some are giving extra weight and so forth. The point here is no matter what strategies airlines are using the thing that matters is if they are satisfying the customers or not. Getting market share from other airlines might be easy but retaining that share is very difficult to retain.

Nowadays people are highly price sensitive and they will switch the airlines for a minor difference too. So now the airlines really have to work on something so that they can retain the customer while satisfying them too. In Pakistan there wasn’t any survey which was precisely on Airline industry. So that is why this topic was chosen so as to provide better insight in this industry regarding the customer satisfaction. The Airlines really have to do something extra to attract more and more customers as the biggest problem airlines are facing are the economic problems like fuel prices and very tough competition from other carriers and getting very strict regulations from governments.

The airlines have to develop new ways to attract the customers those days are long gone when airlines could charge as much as they want because of many new competitors now they can’t do that. After 9/11 the whole industry saw a major sets backs and increased fuel prices and security conditions were totally changed since then. The industry was facing setback economically and viably. They had to improve their operations so as to reduce as much costs as they can as they fixed costs were going sky high and it was getting very hard for the airlines to operate in such environment. While reducing costs they cannot ignore customers as they are the one who are getting them revenues.

The Airlines have made their operations better so they were able to reduce operational costs and can give better fares with respect to other airlines. Airlines have started customer relationship programs so as to have better relations with customers so they can travel on the same airline again and again. But there were many airlines that went bankrupt because of high operational costs and low revenues even majors airlines were failed to make profits after 9/11. During the last eight years there were many airlines who ceased there operations mainly due to revenues and there were many airlines who are going in loss or hardly on break up. Due to this there were many mergers in the airlines too. All this happened due to the economic conditions across the world.

It is worth mentioning here that air traffic has increase many times but still airlines are not making very high profits. It is all due to very high operating costs and due to security conditions. The losses faced by airline industry is also caused by many low cost carriers which are not giving other benefits and just taking from places to places and many travelers prefer to save on tickets. The security conditions has forced many airlines to step up their operations and make sure of the safety of passengers which has ultimately increased the fixed costs but in return they are giving complete satisfaction to passenger while providing safe journey.

The passenger’s satisfaction differs from person to person some want more off board facilities some want onboard some like extra luggage some are satisfied with good food. Now the question arises here how an airline can satisfy so many people. This is the reason this research has been conducted to get a better insight of the customers that what customers are expecting and what airlines are giving them. The gap will tell us where airlines are lacking and how they can give better services to customers with better fares.

The Main Hypothesis for the thesis is:

Airlines with higher satisfied customers are getting more passengers.

The Sub hypotheses are following.

1. Reliability

Airlines with higher Reliability are getting more passengers.

2. Responsiveness

Airlines with higher Responsiveness are getting more passengers.

3. Assurance

Airlines with higher Assurance are getting more passengers.

4. Empathy

Airlines with higher Empathy are getting more passengers.

5. Tangibility

Airlines with higher Tangibility are getting more passengers.