An emprirical investigation into factors affecting service quality among indian airline service providers
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    An emprirical investigation into factors affecting service quality among indian airline service providers An emprirical investigation into factors affecting service quality among indian airline service providers Document Transcript

    • International Journal of Management IJMVolume 1 • Issue 1 • May 2010 • pp.71 - 87http://iaeme.com/ijm.html ©IAEM AN EMPRIRICAL INVESTIGATION INTO FACTORS AFFECTINGSERVICE QUALITY AMONG INDIAN AIRLINE SERVICE PROVIDERS J. Joseph Francis 1, Dr S. Balasubramanian 2Abstract The Indian airline industry exists in an intensely competitive market. India has awell-developed and large civil aviation network. There are 122 airports in the country,controlled by the Airports Authority of India, of which 11 are international airports. Theair services of the country were liberalised in 1994 through a move towards an open-skiespolicy of the Government. The Indian Airline market is characterised as a hugelypotential and under penetrated market. Service quality has received a great deal of attention from both academicians andpractitioners. The firms ability to create and sustain competitive advantage depends uponthe high level of service quality provided by the service provider. Given the context of huge losses faced by Indian Airline services, it is imperativefor us to study the service quality levels of these companies. The study explores thevarious constructs that are critical to service quality among the Indian Airline serviceproviders as perceived by the Passengers.1 Lecturer, School Of management, VLB Janakiammal College of Engineering andTechnology, Kovaipudur, Coimbatore – 641 042 and Part time Research Scholar, AnnaUniversity Coimbatore, Coimbatore E-mail: francis_jos@yahoo.com, Cell No: 98429843442 Former Director – IPR, Anna University Coimbatore, Coimbatore - 47, E-mail: s_balasubramanian@rediffmail.com Cell No: 94422 56272
    • International Journal of ManagementA sample of 200 respondents were selected based on convenience sampling and thequestionnaire was distributed to them. The Samples are those using the CoimbatoreAirport. The researches felt that the users of the Coimbatore Airport would not only bethose from Coimbatore but from across the country and hence there was not a need to gothe various cities per se. The questionnaire designed was the survey instrument. Thequestionnaire comprised of 12 sections constituting the various dimension of ServiceQuality among the Indian Airline service providers. From the data analysis, it was clearthat the Price, Politeness of crew members, Consistency between communication andexperience, Check in of luggage and convenience of flight- timings are the top fivefactors of service quality as perceived by the passengers. It was inferred that thepassenger perceives service quality as a combination of the three dimensions namelyphysical, interaction and corporate and all the three dimensions have to be given equalpriority by the Indian Airline service providers.Key words: Airlines, Service Quality, Service providers, passenger.1.0 Introduction Few inventions have changed how people live and experience the world as muchas the invention of the airplane. The airline industry exists in an intensely competitivemarket. In recent years, there has been an industry-wide shakedown, which will have far-reaching effects on the industrys trend towards expanding domestic and internationalservices. In the past, the airline industry was at least partly government owned. This isstill true in many countries. Almost all airlines have shown losses in the recent past andthings don’t look to improve unless some revolutionary changes are initiated by thegovernment as well as by the airlines owners. Even as the slowdown in the industry andrising losses have made equity investment currently impossible, Indian carriers’ cash flowhas been maintained through large scale loans from financial institutions. This has made 72
    • International Journal of Managementthe Indian Airline service providers as some of the most over leveraged companies in theworld. India has a well-developed and large civil aviation network. There are 122 airportsin the country, controlled by the Airports Authority of India, of which 11 are internationalairports. The air services of the country were liberalised in 1994 through a move towardsan open-skies policy of the Government. Civil aviation sector in India has been badly hitin recent times by high Aviation Turbine Fuel prices which made the ticket prices soarleading to a fall in demand. The Indian Airline market is characterised as a hugely potential and underpenetrated market. The total passenger market in India is around 50 million. Thepassenger trip per annum of India is 0.05, while the same for US is 2.02. The above figureexplains the under penetration of the Indian Airlines market. The Indian Domestic marketis forecasted to grow at 12 % annually. IATA projects the growth of the Indian Airlinemarket at 8.8 % annually for the next 10 years. The Indian Government has introducedthe open sky policy. The Government has introduced deregulations in various spheres ofthe Aviation Industry. A major change has been the focus of the Government in bringinginvestments in the industry. FDI limits have been increased to 49 % in airlines and evenup to 100 % in airports. The socio – cultural factors are also favourable for Indian airline Industry.India has a huge growing middle class, which aspires to travel by air. There is increasethe leisure travel segment within the country. The foreign tourist arrival in India has beensteadily increasing. The technological advancements and privatisation of green fieldairports are adding to the increasing numbers of passengers. Also, the low cost carriersare playing a vital role increasing the market. The business model of low cost carriers areproving to be successful and thereby increasing the Airline market. Currently, there is atrend of consolidation in the Airline industry. 73
    • International Journal of Management Even as the slowdown in the industry and rising losses have made equityinvestment currently impossible, Indian carriers’ cash flow has been maintained throughlarge scale loans from financial institutions. Service quality has received a great deal of attention from both academicians andpractitioners. In the services marketing literature service quality is defined as the overallassessment of a service by the customers. Lehtinen (1982) conceptualized service qualityas a three dimensional construct viz. "physical", "interactive" and "corporate." Physicalquality is the quality dimension which originates from the physical elements of servicelike physical product and physical support. Interactive quality indicates the interactionbetween the customer and the service organization. And corporate quality is symbolic innature and indicates the perception of customers about the image of the organization. Thefirms ability to create and sustain competitive advantage depends upon the high level ofservice quality provided by the service provider. They defined perceived service qualityas the extent to which a firm serves the needs of its customers successfully. Given the context of huge losses faced by Indian Airline services, it is imperativefor us to study the service quality levels of these companies. The study explores thevarious constructs that are critical to service quality among the Indian Airline serviceproviders as perceived by the Passengers.2.0 Review of Literature2.1 Service Quality: Like price, quality is a critical dimension of a firm’s competitivestrategy (Porter, 1980). Service quality has received a great deal of attention from bothacademicians and practitioners. In the services marketing literature service quality isdefined as the overall assessment of a service by the customers. Parasuraman et al.defined perceived service quality as "global judgment, or attitude, relating to thesuperiority of the service". Parasuraman et al. (1985) conceptualized service quality asperceptions resulting from the comparison of customer expectations and actual serviceperformance. 74
    • International Journal of ManagementOne of the most accepted facts is that service quality in most cases depends on a numberof factors or aspects (Berry, Zeithaml and Parasuraman, 1985; Johnston and Lyth, 1991;Sasser, Olsen and Wyckoff, 1978; Fitzgerald, Johnston, Brignalls, Silvestro and Voss,1991; Collier, 1991; Juran, Gryna, Frank and Bingham, 1988. Parasuraman, Zeithaml andBerry (1985) identified ten determinants: reliability, responsiveness, competence, access,courtesy, communication, credibility, security, understanding/knowing the consumer, andtangibles (Berry, Zeithaml and Parasuraman, 1985). Later these were reduced to five:tangibles, reliability, responsiveness, empathy and assurance (Parsuraman, Zeithaml andBerry, 1988). Grönroos (1988) added a sixth dimension recovery to these five. This refersto having a clear-cut strategy for removing the unwanted elements of service offer to thesatisfaction of the consumer. All have not universally accepted these dimensions. Various researchers havereported that their research do not support these dimensions. Finn and Lamb (1991)researching on retailing negated the Parasuraman et al.’s claim that their instrument isapplicable to a wide range of services. They concluded that the five dimensions areinsufficient to measure service quality in the retail setting. Similarly, Cronin and Taylor(1992), researching for services like banks, dry-cleaning, etc. found little support forBerry et al.’s (1985) five dimensions. They did not have any research sample thatconfirmed Parasuraman’s five dimensional construct of service quality. Silvestro andJohnston (1989) and Fitzgerald et al. (1991) in their studies enlarged Parasuraman et al.’sefforts by redefining some of the previous dimensions and enlarging this list to as manyas 15 factors. They caution against relying exclusively on the market (or consumers) todetermine all the key attributes of service quality. Thus, they maintain that due attentionto the specific tasks of operations is also desirable. Among others, Collier (1991)identifies the following service quality attributes: accuracy, volume and activity,convenience, time-oriented responsiveness, reliability, professionalism and competence,friendliness and consumer empathy, atmosphere and aesthetics, security and safety,productivity and efficiency, overall market and performance indicators, technology, and 75
    • International Journal of Managementprice/value/cost/relationships. Earlier, Juran et. al. (1988) identified three aspects ofservices that should be measured: timeliness, consumer well being, and continuity ofservices. Armistead (1990) classified the service dimensions as ‘soft’ and ‘firm’. Thestyle (attitude of staff, accessibility of staff, and ambience), steering (the degree to whichcustomers feel in control of their own destiny) and safety (trust, security andconfidentiality) are the soft dimensions whereas; timeliness, consumer well being, andcontinuity of services. Armistead (1990) classified the service dimensions as ‘soft’ and‘firm’. The style (attitude of staff, accessibility of staff, and ambience),steering (the degree to which customers feel in control of their own destiny) and safety(trust, security and confidentiality) are the soft dimensions whereas; time (availability,responsiveness and waiting), fault freeness (in physical good, intangible activities andinformation) and flexibility (recovery, customization and augmented services) are the‘firm’ dimensions. They further pointed out that service quality perceptions are not solely theoutcomes of service but it also involves the evaluation of the service delivery process bythe customers. Lehtinen (1982) conceptualized service quality as a three dimensionalconstruct viz. "physical", "interactive" and "corporate." Physical quality is the qualitydimension which originates from the physical elements of service like physical productand physical support. Interactive quality indicates the interaction between the customerand the service organization. And corporate quality is symbolic in nature and indicatesthe perception of customers about the image of the organization. Garvin (1988) provideda comprehensive definition of service quality comprising of the attributes viz.performance, features, conformance, reliability, durability, aesthetics, serviceability andcustomers perceived quality. Asubonteng et al. (1996; p.64) defined service quality as"the difference between the customers expectations for service performance prior to theservice encounter and their perceptions of the service received." Yoo and Park (2007)state that the firms ability to create and sustain competitive advantage depends upon thehigh level of service quality provided by the service provider. They defined perceived 76
    • International Journal of Managementservice quality as the extent to which a firm serves the needs of its customerssuccessfully. Again, Dabholkar et al. (2000) considered service quality as a set ofdifferent sub-dimensions like reliability and responsiveness which form the antecedentsto customer satisfaction. SERVQUAL (Parasuraman et al. 1988) emerged as an instrument to measureservice quality consisting of the five dimensions of service quality viz. reliability,tangibility, responsiveness, assurance and empathy. But it had its own share of criticismsbecause it was based on the difference between the expectations and performance. Itsreliability and validity has been questioned by many researchers (Carman 1990; Croninand Taylor 1992; Strandvik and Lijander 1994; Babakaus and Boiler 1992). Thus,service quality is conceptualized both as a one dimensional and a multidimensionalconstruct in the literature. Furthermore, there is strong evidence in the literature forservice quality being an antecedent of customer satisfaction.2.2 Passenger satisfaction and service quality in Airline ServicesMatrin Dresner and Kefeng Xu ( 1995 ) of University of Maryland have studied therelationship between customer service, customer satisfaction and corporate performancein services sector. This study examines the effect of three customer service variables oncustomer satisfaction and in turn on profitability for U.S. airlines, a service sectorindustry. The airline industry was chosen for the study because of the availability of anexcellent stream of Government-collected data on customer service, customersatisfaction, and corporate performance. Air transportation data are used to test thesignificance of both links in the customer service to customer satisfaction and tocorporate performance relationship. In addition, the empirical results from the study areused to quantify the effect of increasing customer service levels on the level of customersatisfaction and on profitability in the airline industry. With the growth of the Airline services around the world, a significant body ofliterature has emerged over the past several years. Diah Natalisa and Budiarto Subroto 77
    • International Journal of Managementhave studied the effects of management commitment on service quality to Increasecustomer satisfaction of domestic Airlines in Indonesia. The results showed that amajority of the customers were satisfied with the services provided. The five dimensionsof service quality positively affected the customers’ level of confidence and amongthose dimensions; assurance has the strongest effect on the level of customers’satisfaction. The customers level of satisfaction or dissatisfaction were not differentiatedby price and personal variables, but rather by other variables like 1) the customerperception of service quality , 2) the appropriation between the service quality and theexternal communication, and 3) the situational variable. The situational variable proved tobe the differentiating variable in the level of satisfaction or dissatisfaction for businesssegment customers. Claire Dennett, Elizabeth M Inseon, Grahaivi J Stone and Mark Colgate studiedthe role of differentiation in increasing satisfaction of pre-bookable services in thechartered Airline Industry. Their focus was to assess the impact of introduction of aninnovation in the charter airline industry. In particular they analysed whether customersperceptions of satisfaction and behavioural intentions in terms of repurchase aresignificantly higher amongst those consumers who availed themselves of newlyintroduced pre-bookable chartered airline services.. The findings highlight that althoughthis innovation can increase satisfaction and repurchase intentions its potential has notbeen maximised.3.0 Research Methodology The Research design adopted for the survey was Descriptive research as theresearcher aims to study the below mentioned objectives.3.1 Objective The following research objectives are postulated: 1) To determine the significant factors that contribute towards service quality as perceived by the passengers 78
    • International Journal of Management 2) To provide suitable recommendations to the Airline service providers based on the factors of service quality identified.3.2 Sampling Procedure A sample of 200 respondents were selected based on convenience sampling andthe questionnaire distributed to them. The Samples are those using the CoimbatoreAirport. The researches felt that the users of the Coimbatore Airport would not only bethose from Coimbatore but from across the country and hence there was not a need to gothe various cities per se.3.3 Research instrument The questionnaire designed was the survey instrument. The questionnaire wascomprised of 12 sections namely Flight Timings, Flight Delay, Flight Connection,Frequent flyer programme, Cabin baggage, Baggage, Crew members, Food, Seatingarrangement, Booking, Pre-flight and Miscellaneous constituting the various dimensionof Service Quality among the Indian Airline service providers. Statements related to allthe factors identified are used to develop a Likert scale, asking respondents to rate thefactors on a five point scale consisting of Strongly agree, Agree, Neutral, Disagree,Strongly Disagree. The various factors identified were as followsTable 1.0 Various service quality factors identified S. No Factors I Flight timings 1 Convenience of timings 2 On time take off 3 On time landing II Flight Delay 4 providing food 79
    • International Journal of Management 5 Providing rooms / accommodation 6 Providing transportation 7 Providing message at the airport regarding delay III Flight connection 8 Timings 9 Availability of timings 10 Baggage 11 Guidance of airline staff at interchange point IV Frequent flyer programme 12 Card 13 Implementation 14 Tracking 15 Communication 16 Reimbursement V Cabin baggage 17 Missing 18 Tracking VI Baggage 19 check in 20 Misplaced 21 How to track VII Crew members 22 Approach 23 Serving 24 Vernacular language 25 Guiding to seat 26 Instruction 27 Pilot communication regarding flight take off 28 Pilot communication regarding regarding 80
    • International Journal of Management environment details VIII Seating arrangement 29 Seat leg room 30 Seating arrangement 31 Size of seat 32 Preflight Wheel chair 33 Tele check in IX Food 34 Type of food 35 How the food is served 36 Taste of the food 37 Packaging of the food 38 Time of delivery of food 39 Non delivery of food 40 Price of food X Booking 41 Price 42 Ease of booking 43 Cancellation of flight 44 Website design 45 Ticket cancellation methods XI Pre flight 46 Arrangement at the Airport 47 Guidance at the airport 48 Check-in facilities XII Miscellaneous 49 Complimentary items 50 Image of the airline 81
    • International Journal of Management 51 Consistency in communication 52 Airline magazine 53 Advertising within the airline3.4 Reliability of the research instrument The reliability of the various factors is tested using the Cronbach Alpha method ofvalidity. Reliability test was conducted for determining the proportion of systematicvariation in a scale that assesses reliability. This is done by determining the associationbetween scores obtained from different administrations of scale. If the association is high,the scale yields consistent results and therefore reliable (Malhotra 1999). In this survey,Cronbach Alpha was used to test the internal consistency for all items under respectivevariables. The table shows that all factors in the variables form a single stronglyconsistent and conceptual construct. The value recorded for alpha for all four variableswere under the acceptable range α = 0.7 (Nunnally 1978).Table 2.0 Cronbach Alpha values for each factor S. No Factors No of Cronbach statements Alpha I Flight timings 3 0.856 II Flight Delay 4 0.826 III Flight connection 4 0.828 IV Frequent flyer 5 0.750 programme V Cabin baggage 2 0.846 VI Baggage 3 0.896 VII Crew members 6 0.788 VIII Seating arrangement 5 0.952 IX Food 7 0.948 82
    • International Journal of Management X Booking 5 0.878 XI Pre flight 3 0.786 XII Miscellaneous 5 0.7453.5 Data Analysis The scores from the Likert scale for various factors are calculated. The below tablegives details of the mean score and the standard deviation for the various service qualityfactors.Table 3.0 Factors with the highest mean scores from the Likert Scale S. Factors Mean Standard No Deviation 1 Convenience of flight timings 4.56 1.72 2 On time take off of flights 4.10 1.2 3 On time landing of flights 3.80 0.8 4 providing food during flight delays 3.40 1.3 5 Providing rooms / accommodation during 3.50 1.4 flight delays 6 Guidance of airline staff at interchange point 4.24 1.5 during flight connection 7 Communication regarding the frequent flyer 3.70 0.9 programme 8 check in of luggage 4.60 1.3 9 Handling of misplaced luggage 3.84 1.4 10 Politeness of the crew members 4.70 1.3 11 Time of delivery of food 3.90 1.9 12 Price 4.78 0.9 13 Ease of booking through the company website 4.0 1.3 83
    • International Journal of Management 14 Check-in facilities 4.2 1.9 15 Image of the airline 4.4 0.8 16 Consistency between communication and 4.64 1.9 experience 3.4 Findings The research identifies the factors contributing to service quality as perceived bythe customers of Indian Airline service providers. The ranking of the service qualityfactors as perceived by the passengers have been identified as followsTable 4.0 Ranking of service quality factors as perceived by passengers Ranks Factors I Price II Politeness of the crew members III Consistency between communication and experience IV check in of luggage V Convenience of flight timings VI Image of the airline VII Guidance of airline staff at interchange point during flight connection VIII Check-in facilities IX On time take off of flights X Ease of booking through the company website XI Time of delivery of food XII Handling of misplaced luggage XIII On time landing of flights 84
    • International Journal of Management XIV Communication regarding the frequent flyer programme XV Providing rooms / accommodation during flight delays XVI providing food during flight delaysFrom the above ranking, it is clear that the Price, Politeness of crew members,Consistency between communication and experience, Check in of luggage andconvenience of flight- timings are the top five factors of service quality as perceived bythe passengers. It is clear from the above findings that the passenger perceives servicequality as a combination of the three dimensions namely physical, interaction andcorporate and all the three dimensions have to be given equal priority by the IndianAirline service providers.4.0 Conclusions The research has identified the key factors contributing to service quality asperceived by the passengers. It is now up to the Indian Airline service providers toconcentrate on these key factors of service quality so as to have an enhanced passengersatisfaction. Enhanced passenger satisfaction will result in loyalty, willingness to pay apremium and willingness to recommend the service to others. These surely will result inbetter financial performance for the airlines.5.0 Future scope and limitation This research has provided insights into various factors that customers considerimportant while evaluating the Service Quality of Indian Airline service providers.However it does have certain limitations, which are discussed below. The sample size is small due to time and cost constraints, which may not besuitable to conclude the generalization of this research survey. The data is proposed to be 85
    • International Journal of Managementcollected from the customers using the Coimbatore Airport. The research considers thecustomers as a homogenous group, which may not be the case. Hence there is a scope forfurther research based on segmenting of the customers. Further study can explore thefactors contributing to service quality as perceived by the airline companies. The samecan be compared with the factors as perceived by the customers. This can be used toidentify the service gap, if anyREFERENCE 1. Andaleeb, S. S. (1998), "Determinants of Customer Satisfaction with Hospitals: A Managerial Model," International Journal of Health Care Quality Assurance, 11 (6), pp. 181-187. 2. Anderson, E. W. and M. Sullivan (1993), "The Antecedents and Consequences of Customer Satisfaction for Firms," Marketing Science, 12, pp. 125-143. 3. Anderson, E. W., C. Fomell and D. Lehmann (1994), "Customer Satisfaction, Market Share, and Profitability," Joumal of Marketing, 58 (3), July, pp. 53-66. 4. Anderson, Eugene W. and C. Fomell (1994), "Firm, Industry, and National Indices of Customer Satisfaction: Implications For Services 5. Anderson, E. W., C. Fomell and S. Mazvancheryl (2004), "Customer Satisfaction and Shareholder Value," Joumal of Marketing, 68 (October), pp. 172-185. 6. Andreassen, T.W. and B. Lindestad (1998), "Customer Loyalty and Complex Services," International Joumal of Service Industry Management, 9(1), pp. 7-23. 7. Athanassopoulos, A. D. and A. Anastasiosiliakopoulos (2003), "Modelling customer satisfaction in Telecommunications: Assessing the Effects of Multiple Transaction Points on the Perceived Performance of the Provider," Production and Operations Management, 12 (2), pp. 224 - 245 8. Asubonteng, P., K. McCleary and J. E. Swan (1996), "SERVQUAL Revisited: A Critical Review of Service Quality," The Joumal of Services Marketing, 10 (6), pp. 62-81. Aydin, S. and G. Ozer (2005) "National 9. Customer Satisfaction Indices: An Implementation in the Turkish Mobile Telephone Market," Marketing Intelligence and Planning, 23 (5), pp. 486 – 504 86
    • International Journal of Management 10. Sukandi, “ Differentiation Strategy in PT Merpati Nusantara Airlines “ , Graduate Thesis, School of Management, University of Indonesia, 1996 11. Carman.JM, “ consumer perceptions of service quality : An Assessment of the Serqual Dimensions”, Journal of Retailing, 1990, 66; 33-45 12. Cockerell, N., 1991, Outbound Markets/Market Segment Studies, Travel and Tourism Analyst,Vol.6, No.4, pp.38-49. 13. Costa, J., 1995, International Perspectives on Travel and Tourism Development, International Journal of Contemporary Hospitality Management, Vol.7, No.7, pp. 10-29. 87