Exploring the prospect of operating low cost carriers and legacy carriers from the same main airport terminal - a service quality perspective.
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Exploring the prospect of operating low cost carriers and legacy carriers from the same main airport terminal - a service quality perspective.

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- Looking into the aspect of variation in service quality, delivered to the passengers of low cost carriers and legacy carriers across the world. ...

- Looking into the aspect of variation in service quality, delivered to the passengers of low cost carriers and legacy carriers across the world.

- Understanding the main deliverables in the service quality paradigm of airport terminals across the world, by means of a passenger questionnaire survey and Importance Performance Analysis.

- Establishing service quality criteria, analysing the needs of the customers, setting up minimum performance threshold matrix for service quality in airport terminals and assessing customer satisfactions

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Exploring the prospect of operating low cost carriers and legacy carriers from the same main airport terminal - a service quality perspective. Exploring the prospect of operating low cost carriers and legacy carriers from the same main airport terminal - a service quality perspective. Document Transcript

  • EXPLORING THE PROSPECT OF OPERATINGLOW COST AND LEGACY CARRIERS FROM THESAME MAIN AIRPORT TERMINALA service quality perspectiveNikhil MenonDissertation submitted for obtaining the degree ofMaster in Complex Transport Infrastructure SystemsJuryPresident: Prof. Luis Guilherme Picado SantosSupervisor: Prof. Maria do Rosário Mauricio Ribeiro MacárioMember: Prof. Vasco Domingos Moreira Lopes Miranda dos ReisDecember 2012
  • iThis thesis was completed to obtain aMaster of Science DegreeInComplex Transport Infrastructure SystemsA part of the MIT Portugal Program
  • iiACKNOWLEDGMENTSI would like to express my deepest gratitude to my family – amma and achan, back home inIndia, who have given me the opportunity to undertake the master degree program in ComplexTransport Infrastructure Systems, as part of the MIT Portugal Program. Their constant supportand encouragement is the main reason I am here.To the MIT Portugal Program - for giving me the opportunity to be part of it through the provisionof the corporate fellowship, thereby enabling me to pursue my education. Many thanks tosupervisor Prof. Maria do Rosário Mauricio Ribeiro Macário, for her encouraging words ofadvice and wisdom during the course of the master dissertation. I am sure that the expertguidance obtained on the various aspects of the airlines/ airports theme, not just on matterspertaining to the dissertation shall go a long way in broadening my horizon on the field.This dissertation would be incomplete if not for the passenger questionnaire survey conductedas part of the research. My sincere thanks to all the respondents, from across the world whohave put in their time and effort in answering the questionnaire, thereby contributing their bit inbeing part of this work. I am ever – so – indebted to you for making this dissertation, a success.The role of the MIT Portugal Program would be incomplete without the mention of a few peoplewho have made my stay in Lisbon, a very amazing experience. First of all, my colleagues in theprogram – especially Joao, Minas, Shant, Andrej and Aivin – for the vast amounts of time spenttogether in discussions, sharing amazing insights (academic and otherwise) and for theconstant source of encouragement and assistance during the course of the dissertation. Next,to Teresa, Elaine, Liliana, Prof. Viegas, Prof. Vasco, Prof. Filipe Moura, Alex, Ryan, Dimitris andeveryone else, part and parcel of the program in Lisbon for being such wonderful hosts andmaking my stay, a very enjoyable and enchanting experience. I am glad to have met someamazing people here, some of whose friendships I shall definitely be able to nurture for thefuture.Mata, pita, guru and next in line is dev (the almighty) for making everything work without anyhindrances and giving me the strength and will to excel in strive for knowledge.
  • iiiABSTRACTThe world has been witness to a spurt in the global airline passenger throughputs mainlythrough the burgeoning of low cost aviation since the airline deregulation of the 70s. Low CostCarriers (LCCs) - with the initial push from Southwest Airlines in the USA, through smartbusiness models have realized that they can not only make the legacy carriers (LC) customersshift towards flying low cost, but also that they could create a new niche segment of passengerswho would not have flown otherwise.This dissertation strives to explore the prospect of operating low cost carriers and the legacycarriers out of the same main airport terminal, from a service quality point of view. Servicequality delivered in the airport terminals would be the main focus of the dissertation. Analysiswill be made to determine the service attributes which will impact the overall quality perceivedby the passengers inside an airport terminal. Focus would then shift towards establishing qualitycriteria. It is the endeavour of the dissertation to define service levels for establishing qualitycriteria in airport terminals and later set up a service quality level matrix, which shall give a stateof all possible scenarios in the service quality jargon, concerning the airport terminal.The impact of service attributes in defining the overall quality of service perceived by thepassenger in an airport is analyzed by means of an Important Performance Analysis, whichgives an insight into the customer’s understanding of the product or service that is being offeredto them. Subsequently, an effort is made into establishing quality criteria for airport terminals.The various approaches that look into establishing service quality are analyzed and one of themethods (The 4 Q’s method) is chosen to work on the current dissertation. The customer needsare analyzed by means of the Expected and Perceived quality scores. Minimum performancethresholds are analyzed as part of being in a level of service, ranging from the best (A) to theworst (D), finally leading into a matrix of all possible scenarios arising out of the serviceattributes.To conclude, this is then modelled into a synergy conflict analysis to analyze whether there is asynergy effect or a conflicting effect on the prospect of operating low cost carriers (LCCs) andlegacy carriers (LCs) from the same main airport terminal, on the basis of each service attribute.It is seen that 10 of the 12 service attributes have a synergy effect and 4 of the 12 seem to havea conflicting effect on the objective of the dissertation. There is an overlap in two instances,where it is strongly felt that the policies of the airport might play a great role in determining thepossibility or not of operating the low cost carriers and legacy carriers from the same mainairport terminal.Keywords: Airport Terminals, Low Cost Carriers, Service Quality, Importance PerformanceAnalysis, The 4 Q’s Method.
  • ivINDEXACKNOWLEDGMENTS............................................................................................................iiABSTRACT.............................................................................................................................. iiiINDEX ..................................................................................................................................... ivLIST OF FIGURES.................................................................................................................. viiLIST OF TABLES................................................................................................................... viiiACRONYMS AND DEFINITIONS..............................................................................................x1. INTRODUCTION................................................................................................................11.1 INTRODUCTORY NOTE ...........................................................................................11.2 OBJECTIVE...............................................................................................................11.3 STRUCTURE AND METHODOLOGICAL APPROACH OF THE DISSERTATION......22. LOW COST AND LEGACY CARRIERS .............................................................................42.1 IMPACT OF DEREGULATION IN THE AVIATION SECTOR......................................42.2 BUSINESS MODEL ANALYSIS.................................................................................62.3 LCC IMPACT ON AVIATION ...................................................................................113. AIRPORT TERMINALS....................................................................................................143.1 INTRODUCTION .....................................................................................................143.2 LOW COST AIRLINE REQUIREMENTS FROM THE AIRPORT TERMINALS..........153.3 TERMINAL ACTIVITIES, COSTS AND REVENUES ................................................183.3.1 TERMINAL ACTIVITIES AND COSTS .................................................................183.3.2 REVENUES.........................................................................................................203.4 PROCESS ANALYSIS.............................................................................................263.4.1 INTRODUCTION .................................................................................................263.4.2 DEPARTURE.......................................................................................................263.4.3 ARRIVAL.............................................................................................................273.4.4 TRANSFER .........................................................................................................283.4.5 BAGGAGE HANDLING........................................................................................293.4.6 TURNAROUND PROCESS .................................................................................294. IMPORTANCE PERFORMANCE ANALYSIS...................................................................36
  • v4.1 INTRODUCTION .....................................................................................................364.2 PASSENGER QUESTIONNAIRE SURVEY .............................................................384.3 ADEQUACY OF THE SAMPLE SIZE.......................................................................384.3.1 SAMPLE SIZE CRITERIA....................................................................................394.3.2 STRATEGIES FOR DETERMINING SAMPLE SIZE.............................................404.3.3 SAMPLE SIZE ESTIMATION...............................................................................414.3.4 OTHER SAMPLE SIZE DETERMINATION CONSIDERATIONS ..........................424.4 FINDINGS ...............................................................................................................424.4.1 IMPORTANCE VERSUS PERFORMANCE OF ATTRIBUTES .............................424.5 INTERPRETATION OF THE RESULTS...................................................................484.5.1 IPA (SCALE-CENTERED APPROACH)...............................................................484.5.2 IPA (DATA-CENTERED APPROACH) .................................................................484.5.3 IPA (MEDIAN – CENTRED APPROACH) ............................................................504.5.4 ATTRIBURE DISTRIBUTION BASED ON THE DIFFERENT APPROACHES.......504.6 SENSITIVITY ANALYSIS.........................................................................................515. ESTABLISHING QUALITY CRITERIA FOR AIRPORT TERMINALS ................................525.1 INTRODUCTION .....................................................................................................525.2 APPROACHES THAT LOOK INTO ESTABLISHING QUALITY CRITERIA...............525.2.1 IMPORTANCE PERFORMANCE ANALYSIS (IPA)..............................................525.2.2 SERVQUAL.........................................................................................................535.2.3 SERVICE QUALITY INDEX (SQI)........................................................................545.2.4 THE 4 Q’s METHOD............................................................................................545.3 CHOICE OF METHODLOGY...................................................................................555.4 THE 4 Q’s METHOD................................................................................................555.5 ANALYSIS OF CUSTOMER NEEDS AND FUTURE TRENDS.................................585.6 SETTING UP MINIMUM PERFORMANCE THRESHOLDS......................................595.7 HARMONIZATION OF SERVICE ATTRIBUTES ......................................................645.8 ASSESSMENT OF CUSTOMER SATISFACTION ...................................................65
  • vi5.9 SYNERGY CONFLICT ANALYSIS...........................................................................745.9.1 SYNOPSIS ..........................................................................................................816. CONCLUSION AND DIRECTIONS FOR FURTHER RESEARCH ....................................836.1 CONCLUSION.........................................................................................................836.2 DIRECTIONS FOR FURTHER RESEARCH ............................................................84BIBILIOGRAPHY ....................................................................................................................85ANNEXE.................................................................................................................................89QUESTIONNAIRE ..............................................................................................................89
  • viiLIST OF FIGURESFigure 1.1 – Structure and the Methodological approach of the dissertation...............................3Figure 2.1 – Comparison between LCC and Legacy carriers [Source: (Esplugas 2008)] ............7Figure 2.2 – Operational Characteristics of LCC and legacy carriers [Source: (Civil AviationSection 2002) & (Alderighi et al. 2004)] .....................................................................................8Figure 2.3 – Scope of the current hub and spoke model [Source:(Franke 2004)] .......................8Figure 2.4 – Distinction between the LCC and legacy carrier business models [Source:(Biegeret al. 2002)].............................................................................................................................11Figure 2.5 – Impact of LCCs on the aviation scenario in the UK [Source:(Airways British 2004)]...............................................................................................................................................11Figure 3.1 – Terminal Configurations [Source:(Wikipedia 2012b) ]...........................................15Figure 3.2 – Traditional Airport Airline relationship [Source: (Francis et al. 2004)] ....................17Figure 3.3 – Modern airline – airport relationship [Source: (Francis et al. 2004)] ......................17Figure 3.4 – Non – Aeronautical revenues [Source: (ANA Aeroportos de Portugal 2011b)] ......21Figure 3.5 – Share of non – aeronautical revenue in ANA airports [Source: (ANA Aeroportos dePortugal 2011b)] .....................................................................................................................22Figure 3.6 – Growing Importance of Non – Aeronautical revenues [Source: (Airports CompanySouth Africa 2012)] .................................................................................................................25Figure 3.7 – Typical Departure process [Source: (DLR EU 2008)] ...........................................26Figure 3.8 – Typical Arrival process [Source:(DLR EU 2008)] ..................................................27Figure 3.9 – Arrival process analysis [Source: (DLR EU 2008)]................................................28Figure 3.10 – Transfer Passenger handling process [Source: (DLR EU 2008)] ........................28Figure 3.11 – Baggage handling process [Source: (DLR EU 2008)].........................................29Figure 3.12 – Typical turnaround times observed in a B 777 [Source: (DLR EU 2008)] ............34Figure 3.13 – Typical turnaround times observed in a B 737 [Source:(DLR EU 2008)] .............34Figure 4.1 – Importance Analysis ............................................................................................43Figure 4.2 – Performance Analysis..........................................................................................44
  • viiiFigure 4.3 – Distribution of the mean scores of the Importance Analysis..................................46Figure 4.4 – Distribution of the mean scores of the Performance Analysis ...............................47Figure 4.5 – IPA Scale Centred Approach ...............................................................................49Figure 4.6 – IPA Data Centred Approach.................................................................................49Figure 4.7 – IPA Median Centred Approach ............................................................................49Figure 4.8 – Results of the Sensitivity Analysis........................................................................52Figure 5.1 – Importance Performance Analysis .......................................................................53Figure 5.2 – The 4 Q’s method................................................................................................55Figure 5.3 – Decoupled version of the quality definition (The 4 Q’s method) ............................56Figure 5.4 – Quality gaps in definition of service quality...........................................................57Figure 5.5 – Congestion Level of Service A.............................................................................60Figure 5.6 – Congestion Level of Service B.............................................................................61Figure 5.7 – Congestion Level of Service C.............................................................................61Figure 5.8 – Congestion Level of Service C, Queuing..............................................................61Figure 5.9 – Congestion Level of Service D.............................................................................62LIST OF TABLESTable 3-1 – Sources of Airport Revenue [Source:(Francis et al. 2003)] ....................................23Table 3-2 – Sources of Airport Revenue [Source: (Odoni 2007)]..............................................23Table 3-3 – Sources of Airport Revenue [Source: (Odoni 2007)].............................................23Table 3-4 – Sources of Airport Revenue [Source: (Graham 2007)] ..........................................24Table 3-5 – Turnaround processes for low cost and legacy carriers.........................................32Table 4-1 – Demographic information (IPA).............................................................................37Table 4-2 – Mean scores of the Importance Analysis...............................................................45
  • ixTable 4-3 – Mean scores of the Performance Analysis ............................................................46Table 4-4 – Mean scores of the Importance and Performance Analysis ...................................47Table 4-5 – Quadrant wise distribution of service attributes (Importance Performance Analysis)...............................................................................................................................................51Table 4-6 – Sensitivity Analysis on the level of precision..........................................................51Table 5-1 – Expected Quality scores.......................................................................................59Table 5-2 – Perceived Quality scores ......................................................................................66Table 5-3 – Satisfaction Gap scores........................................................................................72Table 5-4 – Service Quality Level Matrix .................................................................................73Table 5-5 – Availability of transport modes for commute from the terminal...............................75Table 5-6 – Time taken to do check – in..................................................................................75Table 5-7 – Level of Congestion (Crowding)............................................................................76Table 5-8 – Number of working check – in counters.................................................................76Table 5-9 – Walking distances inside the terminal ...................................................................77Table 5-10 – Accessibility to food and beverages ....................................................................78Table 5-11 – thermal comfort (Temperature Control) ...............................................................78Table 5-12 – Seat Availability inside the terminal.....................................................................79Table 5-13 – Visual impact of the terminal (cleanliness and design).........................................79Table 5-14 – Availability of choices in food or retail..................................................................80Table 5-15 – Availability of trolleys ..........................................................................................80Table 5-16 – Accessibility to retail and concessions.................................................................81Table 5-17 – Synergy Conflict Analysis ...................................................................................82
  • xACRONYMS AND DEFINITIONSANA Aeroportos de PortugalATC Air traffic ControlBA British Airwaysbmi British Midland InternationalEC European CommissionETDS Explosive Trace Detection SystemsEU European UnionFIS Federal Inspection ServicesHCM Highway Capacity ManualIPA Importance Performance AnalysisLC Legacy CarriersLCC Low Cost CarriersLOS Level of ServiceNC Network CarrierNLR National Aeronautics LaboratoryP2P Point to PointQD Delivered QualityQE Expected QualityQP Perceived QualityQT Targetted QualitySQI Service Quality IndexUK United KingdomUSA United States of America
  • 11. INTRODUCTION1.1 INTRODUCTORY NOTEThe tremendous growth experienced by the airline/ aviation sector is the main source of interestfor the current study. The spurt in the global airline passenger throughputs mainly through theburgeoning of low cost aviation has been the single largest contributor on this aspect. Low costcarriers (LCCs), with the initial push from Southwest Airlines in the USA, through smartbusiness models have realized that they can not only make the legacy carriers (LC) customersshift towards flying low cost, but also that they could create a new niche segment of passengerswho would not have flown otherwise. This realization was further strengthened when Ryanairstarted operations in Europe, quickly followed by easyJet during the 90s. And thus the wavespread over to Asia and subsequently all other parts the world.In the due process, the airlines had to constantly innovate in order to keep their cost advantageintact. Those who failed to do so eventually disappeared from the scene, while the lucky fewflourished and took up a huge market share. When the LCC business model started to gainprominence, they started to realize the need to operate from smaller airfields, secondaryairports in order to reduce the costs and also to achieve time advantages. This use of using thesecondary airports came with need to have a trade-off between costs and quality of service.The passengers flying LCCs sure had lesser costs on the airline tickets, but had the servicequality compromised. Sometimes the secondary airports was so far off that additional costsneeded to be required for commute into the main city (as is the case of Girona (Barcelona) andHahn (Frankfurt) amongst others). A recent study showed that over 57% of the Southwestcustomers would recommend the airline to their friends over the aspect of its cost advantage,despite the lower quality of service they receive when compared to a legacy airline passenger.It is the endeavour of this dissertation to study in detail, the service quality aspect delivered tothe LCC passengers in the airport terminals, to understand their requirements and set upservice quality levels that look into the aspect of quality delivered in airport terminals.1.2 OBJECTIVEThis dissertation strives to explore the prospect of operating low cost carriers and the legacycarriers out of the same main airport terminal, from a service quality point of view. In doing so, itaims to achieve the situation where the low cost carriers, which now operate from the low costairports or the secondary airports/ terminals would be taken off service from there and startedoperating from the main airport terminal purely looking at it from the point of view of servicequality.
  • 21.3 STRUCTURE AND METHODOLOGICAL APPROACH OF THEDISSERTATIONMethodologically speaking, in terms of data collection, the main tool used for the course of thisdissertation would be a passenger questionnaire survey. The survey is to be floated amongst atarget audience which shall consist of airline passengers, with special reference to low costpassengers. The main task entrusted with the target group during the survey would be toidentify and illustrate the set of service attributes, which in their opinion shall hold forte indefining service quality in an airport terminal. The target group would be advised to give scoreson each of the service attributes in two main aspects – importance and performance.The service attributes, a total of 12 in number have been chosen after extensive literaturereviews on the aspect of defining service quality in various industries including airports. Basedon the results of the survey, Importance Performance Analysis (IPA) would be resorted to, inorder to place the service attributes on the IPA grid. Once the IPA grid is established, the resultsinterpreted, the next stage of this dissertation would focus on the establishment of qualitycriteria for setting up service quality parameters in an airport terminal. And the final parts of thisdissertation would focus on the setting up of a service quality level matrix and eventually on theaspect of addressing the main objective, having all these results in hand.On the structural point of view of the report, this dissertation would begin with an attempt tounderstand low cost carriers and legacy carriers. Main aspects of interest would be to examinethe impact that the deregulation of the 70s had on global aviation. The main focus of the saidlow cost and legacy carriers would be to understand the business models of the respectiveclass of airlines. This will be followed by the impact of LCC on aviation.Section 3 starts with a thorough exploration of the airport passenger terminals that are in use,the world over. Airport passenger terminals henceforth referred to as Terminals in this work aregenerally divided into categories on the basis of major airport activities such as commercialservices, primary, cargo services, reliever and general aviation airports. For the course of thisstudy, only commercial service airports with more than 2500 enplaning or deplaning passengersper year for any calendar year has been found to be relevant. A thorough analysis of thedifferent kinds of airport terminals – based on their design featuring their main characteristics,would be detailed during the course of this dissertation. The LCC requirement from airportterminals is the next topic of discussion here.Next focus will be on the revenues generated by the airport – namely the aeronautical and thenon – aeronautical revenues. The terminal activities, costs and revenues are another area ofexploration as far as this dissertation is concerned. It is the endeavour of the currentdissertation to look into the growing importance of the non – aeronautical revenue in airportsand similar attempts shall be made on this regard.
  • 3This will be followed by an overall process analysis in an airport terminal. Ground HandlingProcesses, especially the turnaround process assumes a very big importance in achievingeconomy, especially in the case of low cost carriers. As for the dissertation, it is believed thatthe turnaround times (ground handling operations) will end up being one of the most premierconstraints in operating both classes of airlines from the same airport terminal into reality.Taking this view into regard, a complete analysis of the turnaround process will be explored inthe subsequent session and it will be modelled on the operations happening on the ground for alow cost as well as a legacy carrier. Analysis, when done this way will aid in understanding theturnaround process in greater detail, emphasizing the possible advantages that one airline classstands to receive against the other – something which has been seen to be inherent of theirrespective business models.The final part of the dissertation will involve the analysis of the importance and performance ofthe service attributes, subsequent establishment of quality criteria and setting up of a servicequality level matrix addressing the prospect of operating low cost and legacy carriers out of thesame main airport terminal.The structure of the dissertation can be explained by the flow chart described below:Figure 1.1 – Structure and the Methodological approach of the dissertationCONCLUSION AND DIRECTIONS FOR FURTHER RESEARCHCONCLUSION DIRECTIONS FOR FURTHER RESEARCHESTABLISHING QUALITY CRITERIAINTRODUCTIONAPPRAOCHESTHAT LOOKINTOESTABLISHINGQUALITYCRITERIACHOICE OFMETHODOLOGYTHE 4QsMETHODANALYSIS OFCISTOMERNEEDS ANDFUTURETRENDSSETTING UPMINIMUMPERFORMANCETHRESHOLDSHARMONIZATION OF SERVICEATTRIBUTESASSESSMENTOF CUSTOMERSATISFACTIONSYNERGYCONFLICTANALYSISIMPORTANCE PERFORMANCE ANALYSISINTRODUCTIONADEQUACY OF THE SAMPLESIZEFINDINGSINTERPRETATION OF THEANALYSISSENSITIVITY ANALYSISAIRPORT TERMINALSINTRODUCTIONLOW COST AIRLINE REQUIREMENTSFROM THE AIRPORT TERMINALSTERMINAL ACTIVITIES, COSTS ANDREVENUESPROCESS ANALYSISLOW COST AND LEGACY CARRIERSIMPACT OF DEREGULATION IN THE AVIATION SECTOR BUSINESS MODEL ANALYSIS LCC IMPACT ON AVIATION
  • 42. LOW COST AND LEGACY CARRIERS2.1 IMPACT OF DEREGULATION IN THE AVIATION SECTORThe airline/airport industry, which is collectively referred to as the aviation industry haswitnessed widespread changes in the way it has been operating, since the turn of themillennium. A large contribution to this change has been attributed to the diverse patterns oftravel that have resulted due to the numerous needs of the passengers. Gone are the dayswhen flying used to be a businessman’s thing or confined even to the upper strata of thesociety. The deregulation in 1978 played a great role in realizing this dream. With the advent ofthe low cost phenomenon, flying has turned from being a niche segment into a completelyglobal character, cutting across regional and monetary lines. Passenger movement hasincreased over the turn of the millennium, fuelled by the low cost phenomenon which made itaccessible to more and more people all across the world. But as every phenomenon, it camewith its own drawbacks.More passengers would mean that the main airports were getting more and more congested.The airport terminals which host the passengers before enplaning and after deplaning becamethe major sources of bottleneck, unable to encapsulate the growing demand. This is majorly dueto the fact that most airports which were built during the 1960s to the 1980s did not account forthis unprecedented growth in air travel. Forecasting techniques were seldom employed duringthose days and if at all they were, it turned out to be always wrong in estimating the future stateof affairs. Thus it became evident that the existing airports had two options in front of them: i)expansion to meet the needs of the present and account for the future. ii) pave way for theconstruction of new airports (and impending possibility of shutting down or not, depending on acase by case basis) because of capacity constraints in the existing airports.By the turn of the 90s, this was realized by almost all the major airports existing and efforts wereon to either expand facilities or to build new airports which would have larger capacities than theexisting ones. Huge facilities with gargantuan designs for terminals were built by the turn of themillennium and this meant that millions of dollars were spent by the respective countries ingetting the airports, up and ready for meeting newer challenges. This was about the time, whenthe low cost revolution had kicked up in most parts of the world, succeeding the South Westrevolution which had taken place in the United States of America, much earlier. The Southwestmodel was copied blatantly by most of the airlines of that time, which later modified a fewaspects from their business models in order to stand out in the crowd.The low cost revolution meant that airlines were now looking in a new direction altogether. Theyoperated differently from the existing legacy carriers. Simple measures included recruitingyounger, non-union staff, having uniform fleets among other innovative measures as a means tocut costs. A major portion of their success involved a very innovative business model which wasbuilt around the idea of cutting costs wherever permissible. This did not mean that they had bad
  • 5seats or used old aircraft with lesser safety measures; it just was an innovative outlook towardsmaking air travel accessible to everyone. In order to do this, they explored the various avenuesof costs incurred to the airlines and figured out, that a large portion of it was concentrated on theaspect of airport charges that the airports used to levy on the airlines.From the point of view of the airline, the airport charges composed of all activities related toaviation activities, called the aeronautical charges. The aeronautical charges encompassed allthe aviation – related activities that the airline will undergo at the airports like the landing fees,the air traffic control (ATC) fees, the passengers and cargo boarding fees, the handling chargesamong others. And logically speaking, the airports which experienced greater traffic (the mainairports) had higher airport charges than the small/ secondary/medium sized airports. This factwas realized by the low cost airlines at a very nascent stage and most of the pioneers in thatsegment like Southwest, Ryanair etc. had made it clear that they would not like to fly to the mainairports in view of their higher landing charges. And fortunately for them, most of the areasaround Europe and North America had multi airport systems already existing. The mostfrequent type is a multi-airport system with one primary airport and one secondary airport (like inthe case of Frankfurt, Dallas, Melbourne) and in some cases with more than one primary andmore than one secondary airport in the vicinity (like in Paris, London, New York etc.).The secondary airports were largely unused military bases which were suffering from little or notraffic due to the fact that they did not boast of the kind of facilities, which their counterparts (themain airports) had amongst them. This turned out to be the perfect solution for the low costairlines that were looking at the aspect of cutting costs. Secondary Airports were cheaper to usefor the low cost airlines because they just had the bare minimum infrastructure required for theairport to function and the air travel to become a reality. Most of these airports consisted ofsingle terminals where arrival and departure would take place at the same level. They weredevoid of ornamental facilities like the air bridge for which costs were incurred from the airline,upon their usage. There were good facilities for ground transport existing in these airports and amajority of the low cost airlines preferred to make their passengers walk to the aircraft from theterminal. Another major factor attracting the low cost carriers to the secondary airports was onthe aspect of the turnaround times. The turnaround time is defined as the total amount of timespent by the aircraft, right from landing at a particular airport to the time when it takes off fromthe airport for its next flight. Low cost airlines commanded a turnaround time of 25-30 minswhich was impossible to achieve in the main airports mainly due to the high traffic that theseairports experienced. This was very much possible to achieve in the secondary airports sincethe terminals were usually very closely located to the ends of the runway owing to the small sizeof these airports.Thus the low cost revolution kicked off and air travel turned very global in character with moreairports, and more choices for the passengers to travel to, with lesser fares. This was a big blowto the legacy carriers. The low cost carriers not only managed to create a new segment of air
  • 6travellers but also ended up taking a share of the passengers who used to earlier fly by thelegacy carriers. So much so that Southwest currently accounts for half of the total domesticpassengers travelling across the United States of America. Similar ripples were observed inEurope with the advent of Ryanair and easyJet which took a huge chunk of the market sharefrom the legacy carriers as well. The legacy carriers were no facing mounting losses. Some ofthem were forced into bankruptcies (like Delta, US Airways, Spanair, Malev, Swiss Air) while afew others were forced into mergers in order to avoid bankruptcies themselves (like KLMbrought by Air France, Austrian Air and Swiss Air brought by Lufthansa, and US being broughtby America West). The passenger share of the legacy carriers decreased, which also meantfurther cancellations of routes, non – utilization of facilities at main airports among others.The main airports which had built enormous facilities for the legacy carriers are now facingsurging losses, because of the events that transpired within the legacy carrier industry. Add tothat, cases of some secondary airports which had turned out to become hubs of the low costairlines (like Brussels Charleroi) which are giving the main airports, very stiff competition forhandling aircrafts and passengers.2.2 BUSINESS MODEL ANALYSISTo assess the achievement of any business model one needs criterion to set it against;essentially some form of matrix and a benchmark. Success in business can be assessed onseveral dimensions. In terms of the business community it may relate to profits, the standardneo-classical rent seeking criteria, but business success may also be seen in relation to marketshare or in terms of sales revenues (Baumol 1962). The LC model is essentially one based on adifferentiation strategy, in contrast to the LCC approach based on cost leadership or costminimisation (Alamdari & Fagan 2005) within each model companies will seek competitiveadvantage through some variation in their operational vision, business routines, architectureand practiceThe business models of low cost airlines and legacy carriers vary widely. Low cost airlines arebuilt up on two key words, “efficiency” and “effectiveness”. And in order to reach these goals,they start off by optimizing their processes in order to bring minimal loses. Cost reduction isanother mantra practiced very much by the low cost airlines, to good effect. The changes in thebusiness model have impacted not just the airlines and the passengers themselves, but also theairports and every other party involved in the flying business.What the low cost aviation did was to widen the horizons of flying from being an elitist aspect tomaking it affordable for the masses. Although this came at a price of not having any frills on-board, flying has definitely become more accessible to people from various economic strata.The emphasis is on cost reduction and the service is defined by cost cuts rather thanpassengers’ perception of level of service.
  • 7Figure 2.1 – Comparison between LCC and Legacy carriers [Source: (Esplugas 2008)]As can be seen from the figure above, the business models of the low cost and legacy carriersvary leaps and bounds. There are some intermediaries which have tried to inculcate the bestparts of both realms like jetBlue, Aerlingus etc. These airlines have tried to balance the spheresof cost reductions, not compromising a lot on the customer perception of the level of service.(CESUR & TPR 2007) classify the low cost business models into 5 types and they are asfollows: 1) Southwest copycats; 2) Subsidiaries; 3) Cost cutters; 4) Diversified – charter carriers;and 5) State subsidized companies competing on price.The legacy carrier business model is essentially one based on a differentiation strategy, incontrast to the low cost carrier approach based on cost leadership or cost minimisation(Alamdari & Fagan 2005) within each model companies will seek competitive advantagethrough some variation in their operational vision, business routines, architecture and practice.Thus, there is room for heterogeneity within sectors and between sectors as well. A ‘typical’profile of a legacy carrier and low cost carrier model organization is as follows:Another perspective onto the varying business model situation is described by (Franke 2004) inhis work. Starting with the legacy carriers, he observes the most common patterns andaccording to him, major airlines capitalized on the progress of computer technology andoptimization models, developing the concept of “legacy management” in the 90s. This wasencouraged by the deregulation and liberalisation, major carriers built up global legacies aroundlarge hubs. Maximum hub connectivity is typically reached by waved traffic patterns in the hubs,increasing the probability of reaching a variety of outbound flights from any inbound flight. Thenegative aspects of this strategy are a loss of convenience for the passengers, and aconsiderable cost penalty for the airline on the operational side. Waved traffic means massivepeaks in hub operation leading to congestion during peak hours, time – critical connections andstrongly fluctuating utilization of ground handling facilities.
  • 8Figure 2.2 – Operational Characteristics of LCC and legacy carriers [Source: (Civil Aviation Section2002) & (Alderighi et al. 2004)]With no alternative business model, airline clients had no choice but to comply with theoperational model the legacy carriers had created, paying for this inherent complexity. Theproduct differentiation they received in return was – and still is – rather poor on continentalroutes. The main focus of product differentiation is on booking restrictions (eg: rebookingflexibility) and on in – flight product; landside processes are seldom reassessed. In effect, thecarriers had built their complex operational model around the needs of their least valuableclients (low – yield connecting passengers) whom they forced to connect at hubs in order tomaximize their overall destination portfolio; a situation paid for by their own premium clients. Acrisis soon developed during the second half of the 2000s when faced with the economicdownturn, these high – value passengers, showed a growing reluctance to pay premium prices.Figure 2.3 – Scope of the current hub and spoke model [Source:(Franke 2004)]
  • 9Major legacy carriers became trapped in a vicious cycle; as long as their competitors optimizedtheir destination portfolio and hub connectivity at the expense of productivity ad clientconvenience, they were forced to act likewise. Any deviation from this could prove fatal. Theonly remaining business innovations open to legacy airlines were alliances and partnershipswhich boomed in the second half of the 90s. Major carriers organized themselves in a variety ofpartnerships, and three main global alliances developed. A certain value for the client (eg:seamless global travel) as well as some low hanging fruits for the carriers (eg: scale effects inprocurement, aligned IT systems) made these alliances quite successful. However thederegulation efforts of the last 20 years have failed to change restrictive ownership clauses andbilateral traffic right arrangements thus making them not ready to face competition from their low– cost counterparts. (Franke 2004)He further goes on to explore the low – cost business model.After the “invention” of the low – cost business model by Southwest in the early 70s, it tookmore than 15 years in the US and 20 years in Europe before major legacy carriers began totake the challenge of this new business model. The network carrier executives perceived thislow cost model as restricted to a niche market sector, luring low - low – yield passengers whowould have never flown otherwise (and whom the network carriers would not like to attractanyhow), by offering the lowest service standards possible. Even at the beginning of the crisis,this perspective remained largely unchanged.Studies of the low – cost phenomenon have challenged this very thought. It has becomeobvious that LCCs have not merely expanded from their original niche in times of crisis, buthave established an alternative business model that is better prepared to adapt to the changesin demand for continental travel than that of the legacy carriers’. Studies by (Doganis 2001)show that LCC business model can operate sustainably at a 40 – 50% of the unit cost of theaverage legacy carrier. This cost gap can be only explained by the assumption of lower wagesand a ‘no frills’ approach to business. For example, point – to – point (P2P) service is offeredonly in continental traffic with a homogeneous fleet of cost efficient aircraft (B737 or A320/319).This cost gap can be explained by lower number of flights between major destinations, resultingin a considerably higher productivity of aircraft and crew. Other success factors are: lowermaintenance costs due to homogeneous fleets and lower landing/ ground handling fees, beingnegotiated with secondary airport without congestion problems.He further goes on to sayAirline strategists from NCs have identified at least three major errors in their initial perceptionsof the LCC model: The LCC service level is focussed, not poor. In most cases, the LCC product is highlyreliable and convenient for passengers; the LCC product can, in fact even be more
  • 10convenient than that of NCs who force their clients into congested off – site megaairports. They offer what most clients value at least in continental travel; directconnections with minimum interaction at the airport. LCCs do attract low – low – yield passengers and heavy bargainers who would not haveflown otherwise, but they also alienate “regular” coach travellers and even price –sensitive business class clients from the NCs. While the LCC model started in a niche, it can thrive equally well in significant parts ofcontinental air traffic markets. With the exception of highly served hub connections, LCCcould – at least in theory – enter all local markets that provide enough demand for atleast one direct flight with a B 737 per day. This segment accounts for some 70% of theEuropean continental market and more than 70% market in the US.All said, there are for sure a set of experts who are obviously not thrilled to play party to the lowcost model. They maximize the use of their factors of production. Aircraft turnaround times arekept short because there is no-belly-hold cargo to unload/unload, there are no window shadesto open, there are no seat-back pockets to be emptied, less congested airports are favoured,planes are only cleaned once a day, there are no on-line passengers to worry about, etc.Another approach of comparing the low cost carriers and the legacy carrier business modelsarises from the work by (Bieger et al. 2002). The work summarises the business modeldifferentiations from eight dimensions. It can be summarised as given in the figure below.
  • 11Figure 2.4 – Distinction between the LCC and legacy carrier business models [Source:(Bieger et al.2002)]2.3 LCC IMPACT ON AVIATIONThis section will delve into the details regarding the impacts that the low cost revolution had onthe aviation sector. Focus will be given on the various steps that were taken by the legacycarriers as a counter – measure to the spiralling low cost phenomenon.Low-cost airlines have continued to grow and increase their share of the market, especially inrecent years. Europe’s LCCs are growing at annual rates of 20–40%. They have won a 10%market share (24 million passengers) of the total intra-European market. This figure is predictedto grow to 33% (or 148.5 million passengers) by 2010 (Aviation Strategy, 2002). The figurebelow shares the growth story of the low cost airlines in the United Kingdom. This illustrationgives a very good picture into the impact of the LCCs on the aviation scene in the UnitedKingdom. Values are the percentage share of passengers on board all UK short-haul inbound,outbound and domestic scheduled flights of Ryanair, Buzz, easyJet and Go. (Alamdari & Fagan2005)Figure 2.5 – Impact of LCCs on the aviation scenario in the UK [Source:(Airways British 2004)]
  • 12After deregulation, the airlines quickly moved to a hub-and-spoke system, whereby an airlineselected some airport, the hub, as the destination point for flights from a number of originationcities, the spokes. Because the size of the planes used varied according to the travel on thatspoke, and since hubs allowed passenger travel to be consolidated in “transfer stations”,capacity utilization increased allowing fare reduction. The hub-and-spoke model survivesamong the legacy carriers, but the low-cost carriers (LCCs), now 30 percent of the market,typically fly point to point. The legacy hubs model offers consumers more convenience forroutes, but point-to-point routes have proven less costly for airlines to implement. Over time, thelegacy carriers and the LCCs will likely use some combination of point to point and legacy hubsto capture both economies of scope and pricing advantages. (Wikipedia 2012a)The success and the constant competition from the low cost carriers had made it imperative onthe part of the legacy carriers to go for a re – think on their business model and the strategiesimplemented on the ground. The strategies implemented by major airlines in reaction to thecompetitive threat from the low – cost carriers include means of reducing labour costs orincreasing productivity within the mainline airline operation. There is also the possibility oftransferring services to regional partners, franchises or alliances and even setting up a low –cost carrier subsidiary. (Dennis 2007)Some of the largest changes have been achieved by selling off whole departments (eg. groundhandling at bmi). Low cost airlines have sought to achieve dramatic growths in productivity bytaking on the bare minimum number of extra flight and cabin crew to support their vastlyexpanded operations. And unlike the low cost carriers, the major airlines have not generallytried to shift any flight and cabin crew to lower cost economies. (Dennis 2007) Support servicessuch as catering, cleaning and ground handling have come under much more severe pressure(David & Michaels 2003). An example of the above situation is elucidated by the drop inrevenue of Gate Gourmet by 30% despite a growth in passenger numbers. (Ott 2005)British Airways (BA) is generally accredited with having the most realistic strategy for dealingwith the low – cost airlines, perhaps alongside Aer Lingus who are the only real example of atraditional legacy airline converting much of the way into a low – cost carrier. (Aviation Strategy2004) Others have done with minimum by changing strategy only where head – to – head witheither a low cost airline or BA. Some have adopted aggressive tactics through legal proceduresor control of slots, facilities or capacity to keep new entrants out. (Dennis 2007)The adoption of differentiation strategies by airlines is also a result of the impact of the low costairlines in the aviation sector. And this is not just reserved for the legacy carriers alone. Therehave been instances where LCCs have departed from the conventional low cosy businessmodels to enable differentiation strategies into their models. (Alamdari & Fagan 2005) studiedthis in detail with respect to ten low cost carriers and their conclusions are summarised asbelow. For the purpose of the study, they identified ten LCCs with special regard to 17 of their
  • 13operational and product features of their low – cost business models. This was later utilized tostudy departures from convention.Overall, the selected carriers, in pursuit of their differentiation strategy, deviated slightly morefrom the product features of the original model (40%) than from the operational features (36%).The evidence also suggests that European carriers tend to adhere to the original model morethan their counterparts in the USA. However, this could change in the future as more low-costairlines enter the European market and the legacy carriers react by offering low fares as well asservice frills.Nevertheless, the main change in airport management is that airlines are no longer their primarycustomers. Rather, passengers become a significant source of revenue. Airport managers hadto reduce aeronautical revenues (in charges) to increase attractiveness, and had to develop andbecome more dependent on non-aeronautical activities such as retail, parking and advertising.“(…) the airport has better use of its facility, can attract new entrants, and is better equipped tomanage growth and expansion. But there’s risk as well. Unlike a residual agreement thatrequires the airlines to help cover airport debt and operational expenses, in this scenario theairport is solely responsible for potential revenue shortfalls.” (Lennane, A. 2010)Although the LCCs in all continents have continued to experience traffic growth, such growthcan be adversely affected by factors including a lack of access to suitable slots at airports, anincrease in airport costs when start-up tariffs are removed, lower credit card and Internetpenetration in some targeted markets, reaction by legacy carriers offering low fares, as well asservice frills and increased rivalry amongst the growing number of LCCs. (Alamdari & Fagan2005)And finally, as efficiency and cost cutting were the two main features the low cost revolutionbrought onto the table, efforts were made to optimize the ground handling processes takingthese two above given factors into consideration. Positive steps in this direction included self-check – in kiosks, web/ mobile check – in, electronic display, common use check – in countersamongst others.
  • 143. AIRPORT TERMINALS3.1 INTRODUCTIONThe simplest definition of airport terminal is as follows:An airport terminal is a building at an airport where passengers transfer between groundtransportation and the facilities that allow them to board and disembark from the aircraft.The terminal is the area within which the passengers purchase tickets, transfer their luggageand go through the security processes. The term terminal is synonymously used with the wordconcourse, which are defined as the buildings that provide access to the airplanes (via gates) –depending on the configuration of the airport. Smaller airports have one terminal while largerairports have several terminals and/or concourses. The design philosophy of terminals hasevolved over the years into a matter of intricacy and extreme importance. While the number ofterminals in an airport is always defined by the passenger throughput and the demand that theairport is handling, the configurations of these terminals have been the centre of attraction,where they are altered on a case by case basis depending on the situation at hand.At smaller airports which have only one terminal, the single terminal building typically serves allof the functions of a terminal and a concourse. Some larger airports have one terminal that isconnected to multiple concourses via walkways, sky – bridges, or underground tunnels. Someother large airports have more than one terminal, each with one or more concourses. Still, someother airports have multiple terminals, each of which incorporates the functions of a concourse.So, as can be seen there is a lot of scope for variety in the design of an airport terminal. Thenext section will highlight in brief, the most common configurations of airport passengerbuildings. (Wikipedia 2012b)The evolution in the design of airport terminals is an interesting story to explore. Due to therapid rise in popularity of passenger flight, many early terminals were built in the 1930s – 1940sand reflected the popular art deco style architecture of the time. The earliest of the philosophiesinvolved every airport terminals directly opening onto the tarmac: passengers would walk ortake a bus to the aircraft. This design, however is still common among the smaller airports andas will be seen later, is starting to take prominence in the designs of the modern day as well.(Wikipedia 2012b)Airport Passenger Buildings -- midfield concourses, finger piers or terminals -- now representthe major capital expenses at airports worldwide. This is because they are expensive, easilycosting several hundred million dollars apiece at the largest airports (Suebsukcharoen 2000).Airport managers and designers are increasingly under pressure to be efficient from aneconomic perspective. In most cases, private companies have replaced the government ownedoperators and therefore expect a high rate of return on investment. (Neufville & Belin n.d.) This
  • 15paradigm shift, from the once famous penchant for huge and gorgeous terminals into theterminals which are more economically efficient, came about as a result of the low costrevolution.The most common airport terminal configurations are as described in the figure below:Figure 3.1 – Terminal Configurations [Source:(Wikipedia 2012b) ]Economic efficiency is a prime motive for the spread of shared – use, multi – functional facilitiesin airport terminals. The low cost airlines look for operational efficiency ahead of passenger’sperception of the level of service in choosing their terminals of operation. (Neufville & Belin n.d.)This chapter will mainly deal with the airport terminal and associated aspects. Focus will be onthe requirements of the low cost airlines as the main aim of this study is to explore the prospectof accommodating both low cost carriers and legacy carriers in the same terminal. An overallreview of the terminal activities, costs involved, revenues and airport systems will subsequentlyfollow, thus providing a complete insight into airport terminals.3.2 LOW COST AIRLINE REQUIREMENTS FROM THE AIRPORT TERMINALSThe airport passenger terminal constitutes one of the main elements of the infrastructure cost ofan airport and can be defined as a building which facilitates connectivity between airside andlandside access and where a complex interaction between airport operators, airline companiesand passengers takes place. The airport business has often been characterised by investmentsin expensive facilities which appear to be unsuitable for the needs and specific requirements ofLCCs. Most modern airport terminals have been designed for maximum convenience andcomfort, whereby high standards, expensive materials and sometimes architectural monumentsare applied with the aim of delivering a prestigious image to represent the culture of the regionor country. Such developments are associated with higher costs such as capital investment,
  • 16operating and maintenance costs. Thus, some designs have little to do with the function theterminal is intended to achieve. (Ashford, N., & Wright 1992)The incentives for over-investment may be attributed to the method used to regulate airports. Inthis sense, (Niemeier 2009) argues that cost-based regulation is a major cause of the poorperformance of airports, in that it results in incentives for gold-plating, high costs and highcharges for airlines and passengers.In todays airport business, two main terminal types can be distinguished, namely, traditionalterminals and low-cost terminals. Whereas the traditional terminal can be defined as a terminaldesigned to process the flights and passengers associated with the operation of NCs with fullservice facilities, the low cost terminal can be thought of as an airport terminal that has beendeveloped with low capital investment cost and with the aim of reducing costs and increasingefficiencyIn choosing which airports and airport terminals to operate from, the low cost carriers bring intoconsideration a lot of different factors before making a decision. Quite often, these decisionsdiffer from one airline to another, in line with their policies and preferences. For Ryanair, airportchoice factors include low airport charges, quick turnarounds, simple terminals, rapid check-infacilities, good passenger facilities and accessibility. (Barrett 2004) Deregulation was a firstfactor in determining the philosophy of low cost airlines to look at other options for startingoperations from secondary airports.For example, the most mature route deregulation, Dublin–London, could not have happened ata Heathrow monopoly in 1986.The new market entrant, Ryanair, did not have access to slotsthere. Luton airport was thus an indispensable part of deregulation as was Stanstedsubsequently. (Barrett 2004)Before the discussion moves into the LCC requirements from airports, specifically airportterminals, the relationship between the airlines and the airports deserves a special mention.Traditionally, the contract between airlines and airport stated the conditions of use of airportfacilities and services in exchange for the aeronautical fees paid by the airlines. (Graham 2003)A simple buyer-seller relationship existed. (Albers et al. 2005) As shown in Figure, airportsviewed airlines as their primary customers (Francis et al. 2004); (Graham 2003) The intention ofobtaining revenues from the passengers was almost non – existent as the idea was still verynascent and also due to the initial thought process of including the passengers as part of theairline business. (Francis et al. 2004) As a result, airports relied heavily on aeronauticalrevenues.
  • 17Figure 3.2 – Traditional Airport Airline relationship [Source: (Francis et al. 2004)]Figure 3.3 – Modern airline – airport relationship [Source: (Francis et al. 2004)](Francis et al. 2004) slowly realized and argued that the airline-airport relationship wasgradually becoming more complex as airlines are increasingly cost minded for the sake of theirown financial performance, as a result, aeronautical charges are under increasing scrutiny fromairlines. (Graham 2003) This situation is more prevalent in the case of LCC. Many LCCs areattempting to negotiate a better deal in aeronautical charges from airports. Some airports,particularly those that are not utilized to its full extent, are willing to offer discounts to LCCs(Barrett 2004) or even waive their landing fee for the first few years. (Graham 2003) Now inorder to compensate the loss of aeronautical charges, airports must find new source of income,while non-aeronautical incomes from concessions, tenants and visitors are the most readilyavailable source of revenues to airports. (Francis et al. 2004)As for the LCC requirements from the airports and airport terminals, there has been enoughresearch done on this aspect to give a good indication of where things stand at the moment.That includes requirements such as -I. low airport charges [(Barbot 2006);(Barrett 2004);(Graham 2003);(Francis et al.2004);(Warnock-Smith & Potter 2005)];II. quick turnaround time [(Barrett 2004);(Gillen & Lall 2004); (Warnock-Smith & Potter2005)];
  • 18III. spare airport capacity [(Warnock-Smith & Potter 2005)];IV. convenient slot times [(Warnock-Smith & Potter 2005)];V. single storey airport terminals [(Barrett 2004); (Francis et al. 2004)]VI. quick check-in [(Barrett 2004)]VII. good catering at airport [(Barrett 2004)]VIII. good shopping at airport [(Barrett 2004)]IX. good facilities for ground transport high potential demand for LCC services andno gold-plating facility [(Barrett 2004)]So, as can be seen the traditional way of negotiations with the airports for an LCC is verystraightforward and basic.LCCs usually avoid expenditures on services that are not strictly necessary for the provision ofthe core air transport product, such as the use of air bridges or escalators, the need for transferand complex systems of the NCs. (Njoya & Niemeier 2011)With regard to the implications for airports, (Barrett 2004) is of the opinion that low cost andsmaller secondary airports (i.e. those accommodating 0.5–5 million annual passengers) havebeen greatest beneficiaries of low-cost carriers growth over the last two decades. LCCstriggered new demand and even shifted traffic away from congested airports to regionalairports.3.3 TERMINAL ACTIVITIES, COSTS AND REVENUES3.3.1 TERMINAL ACTIVITIES AND COSTSThe Airport Terminal consists of both airside and landside segments, which deem it necessaryto perform a whole range of activities apart from the conventional airport operations. As isobvious, most of the activities taking place in an airport terminal are on the landside, less so onthe airside.The airport landside is controlled by a variety of agents such as airport users and governmentagencies. In addition to these two are the airlines, with whom the airport operators co-operatefor the smooth operations. An attempt is made here to enlist all the components of the AirportTerminal landside system based on (TRB 1987)Terminal Building General Configurationo Pier; Satellite; Linear; Transporter Terminal Kerbo Departures; Arrivals
  • 19 Terminal Transitiono Entry ways and foyers; Lobby area Airline Facilitieso Office; Ticket counter, Baggage check/ claim Circulationo Corridors; Stairs; Escalators; Security Screening Passenger amenitieso Food/ beverage; news/ tobacco; Drugs; Gifts; Clothing;o Florists; Barber and shoeshine;o Car rental and flight insurance;o Public lockers and telephones;o Post office’ Amusement arcades; Vending machines;o Restrooms and nurseries’ Showers and health club;o Chapels; VIP waiting areas Departure lounges (Passenger waiting areas) International facilities/ Federal Inspection Services (FIS)o Immigration and naturalisation; Customs;o Plant and animal health (Agriculture);o Public health Airline Operationso Flight operations/ crew ready rooms’o Valuable/ outsized baggage storage, Air freight and mail;o Administrative offices Airport Operations and Serviceso Offices; Police Medical and first aids;o Fire fighting; Building maintenance; Building Mechanical Systems Communication Facilities Electrical Equipment Government Officeso Air traffic control; Weather; FIS and public health Conference and press facilitiesThe airport passenger terminal constitutes one of the principal elements of the infrastructurecost at the airport. (Ashford, N., & Wright 1992) It forms the zone of transition around whichpassengers’ transit providing the link between the ground and air transport. The rate at whichaircrafts are handled, the overall ground access provided, the capacity of the airside – all aredependent on the design and operation of the terminal. (Wells A I 1992) A specific order andprocedure are maintained, under which airport terminals perform several functions
  • 20simultaneously in accordance with the practices adopted, which tow in line to the airportregulations. (Mumayiz 1985)Three main functions are performed by the airport terminals and have been described by(Ashford, N., & Wright 1992) as follows:Change of Mode: Few air trips are made direct from origin to destination. By their nature, "air"trips are mixed-mode trips, with surface access trips linked at either end to the line haul air trips.In changing from one mode to the other, the passenger physically moves through the airportterminal according to a prescribed pattern of movement. These movement patterns areaccommodated by passenger circulation areas.Processing: The terminal is a convenient point to carry out certain processes associated withthe air trip. These may include ticketing and checking in the passengers, separating them fromand reuniting them with their baggage, and canying out security checks and governmentalcontrols. This function of the terminal requires passengerChange of Movement Type: Although aircraft move passengers in discrete groups in what istermed "batch movements", the same passengers access the airport on an almost continuousbasis, arriving and departing in small groups mainly by bus, auto, taxi, and limousine. Theterminal, therefore, functions on the departure side as a reservoir that collects passengerscontinuously and processes them in batches. On the arrivals side, the pattern is reversed. Toperform this function, the terminal must provide passenger holding space.(Ashford et al. 1984) discussed in good detail the individual terminal facilities based on theairport operational standing. Terminal activities were classified into five principal componentgroups: (1) direct passenger services; (2) airline – related passenger services; (3) governmentalservices; (4) non – passenger related airport authority functions; (5) airline – related operationalfunctions.A rising challenge at present for airport managers is to ensure the optimization of the air sideand also the terminal facilities available to the users of the airlines. This has gained moreprominence in the era of the surging LCC ridership, the accompanying change from theconventional hub and spoke model to point – to – point services of the LCCs and change inpassenger ridership structures experienced across the various airports and airlines.3.3.2 REVENUESAn airport receives revenue both from aeronautical as well as non – aeronautical sources.Aeronautical revenues are those which are the revenues that are obtained from the airport by
  • 21activities that are relating to the air transport. Non – Aeronautical revenues are those which areobtained by the airport through activities that are not related to air transport.3.3.2.1 AERONAUTICAL REVENUESAeronautical revenues are essentially the charges that the airlines will have to pay for using theairport space including some additional servicesIn Europe, all airlines, with no exceptions, have to pay the same aeronautical charges despitefollowing different business models. These charges are listed next: Taking off and landing charges based on the planes’ maximum weight specified fortake-offs; Parking charges which can be divided in traffic and maintenance areas depending ontime spent on platforms, (which again can depend varying on the situation – as fortraffic operation and maintenance); Aircraft shelter charges; Passenger service charges (depending on destination – Schengen, non – Schengenand International); Passenger security charges.(ANA Aeroportos de Portugal 2011a)Based on the method of boarding, there are additional charges to be paid. For instance, the useof air bridges represents a higher cost structure than the bus and walking gates. Low costcompanies do not prefer to use the air bridges as they use the two door boarding policy as ameans to reduce the boarding time.3.3.2.2 NON – AERONAUTICAL REVENUESNon – Aeronautical revenues are said to be consisting of six main sources in the (ANAAeroportos de Portugal 2011a). It is as given below:Figure 3.4 – Non – Aeronautical revenues [Source: (ANA Aeroportos de Portugal 2011b)]Rents and concessions form the two major parts of the commercial revenues. (Doganis 1992)Rental income is obtained by leasing the airport space to the users of the airport – among whoare airliners, freight forwarders, travel agents, tour operators and warehouses and other major
  • 22beneficiaries from airport space, such as hotels, banks, and caterers and so on. (Parappallil2007) It is usually determined by the amount of space taken up by the user and also on theamount of facilities used by the tenants such as check in kiosks, lounges etc.Concessions on the other hand are charges levied by the airport authorities from variousservice providers for letting them use the apace in the airport to sell their products. This isusually a variable, dependent on the amount of turnover of the concessionaires and not on thespace provided, calculated as a percentage of the total turnover. (Parappallil 2007)Some airports have also marketed themselves in innovative ways paving way for more revenuefrom these activities. Unlike rents and concessions, these incomes go directly into the accountof the airport. However these direct sales activities carry a certain amount of risk due to the highcapital investment, labour costs and possible inexperience on the part of the airport in dealingwith such business deals. (Freathy, P. & O’Connell 1998) Other examples of innovative revenuegenerating schemes include operating taxi services, sightseeing tours amongst others.The graphic below gives the share of the non – aeronautical revenues at the ANA airports inPortugal –Figure 3.5 – Share of non – aeronautical revenue in ANA airports [Source: (ANA Aeroportos dePortugal 2011b)]As can be seen from the above graphic, it is clear that of the 26% of total non – aeronauticalrevenue obtained by the ANA airports, more than half is obtained through retail. Real Estate,car park and Rent – a – car follow suit, finally culminating with Advertising and other measures.
  • 233.3.2.3 LITERATURE ON AIRPORT REVENUES(Francis et al. 2003) sums up a list of activities that generate revenue to the airport, both froman aeronautical as well as a non – aeronautical perspective. It is as enlisted below:Table 3-1 – Sources of Airport Revenue [Source:(Francis et al. 2003)](Odoni 2007) defines the revenues generated by airports tabulating them as follows:Table 3-2 – Sources of Airport Revenue [Source: (Odoni 2007)]He further goes on to define another class of revenues which could be generated by the airport,naming them off airport revenues – revenues which are derived from activities that are notrelated to the movement of aircraft, passengers or cargo through the subject airport. Therevenue generated from these sources could be defined under non – aeronautical revenues inany other classification system but he chooses to segregate them into a separate class. Givenbelow is the list of off airport revenues enlisted –Table 3-3 – Sources of Airport Revenue [Source: (Odoni 2007)]Aeronautical Non - AeronauticalLanding, departure and parking fees Direct sales (duty free shop/ duty paid)Passenger fees RoyaltiesFreight charges Concessions (Rentals)Apron services and aircraft handling AdvertisingOther non - aeronauticalCar ParkRechargesAirport RevenueAeronautical Non - AeronauticalLanding (and/ or take off) Concession fees for aviation fuel and oilTerminal area - air navigation Concession fees from commercial activitiesPassenger service (terminals) Revenues from car parking and car rentalsCargo service Rentals for airport land, space in buildings and equipmentAircraft parking and hangars Fees charged for tours, admissions etcSecurity Fees derived from the provision of engineering services, utlities etc, by the airport operatorAirport NoiseNoxious emissions (air pollution)Ground (ramp and traffic) handlingEn route air navigationAirport RevenueOff Airport RevenueConsulting servicesEducation and training servicesManagement contracts at other airportsManagement contracts for other activitiesEquity investments in travel related or other venturesEquity investments in other airports
  • 24(Graham 2007), in her book on Managing Airports presents another perspective on the aspectof airport revenues. It is as given below –Table 3-4 – Sources of Airport Revenue [Source: (Graham 2007)](Wells & Young 2003) made a more elaborate classification into the various revenue generatedby the airport, to give a five group classification as follows:I. Airfield area (landing fees, aircraft parking charges, fuel flowage fees etc);II. Terminal area concessions (food and beverage concessions, travel services andfacilities, specialty stores and shops, personal services, amusement, displayadvertising, outside terminal concessions – auto parking, hotel, motels etc);III. Airline leased areas (ground equipment rentals, cargo terminals, office rentals, ticketcounters, hangars, operations and maintenance facilities);IV. Other leased areas ( freight forwarders, fixed – base operators, governmental units andbusinesses in the airport industrial area);V. Other operating revenue (distribution systems for public utilities – electricity and steamcontract performed for tenants)3.3.2.4 GROWING IMPORTANCE OF NON – AERONAUTICAL REVENUESIn the last two decades, the importance of non – aeronautical revenue has been widelyrecognised as being of concern for airports since it opened up as being an opportunity for theairports to generate some extra income from activities that were not related to aviation. Thetransition of the airports from being candidates of traditional models of business to businessmodels that are trending to the current times (commercialization, privatization, increased role forthe airport manager in enhancing the commercial viability of the airport) should be one of themain reasons for the recognition of the importance of the non – aeronautical revenues.Four broad reasons have been identified as possible precursors to this phenomenon:I. Increasing competition, along with falling yields and erratic world events have ledairlines to bargain for cheaper landing charges at airports. This has led to the airportlooking elsewhere in order to remain profitable and also as a means of increasingrevenues. The main airports have mainly reacted to this situation by trying to expandtheir commercial activities in an endeavour to be more profitable.Aeronautical Non- AeronauticalLandingfees ConcessionsPassengerfees RentsAircraftparkingfees DirectSales (shops, cateringand otherservices provided by the airportoperator)Handlingfees (if handlingis provided by the operator) CarPark (if provided by the airportoperator)Otheraeronautical fees (airtrafficcontrol, lighting, airbridges etc) Recharges (forgas, water, electricity etc)Othernon - aeronautical revenues (consultancy, visitorand business services etc)AirportRevenue
  • 25Figure 3.6 – Growing Importance of Non – Aeronautical revenues [Source: (Airports Company SouthAfrica 2012)]II. Changing travel patterns of the air passengers is another reason why there is a need forairports to focus on non – aeronautical revenues. Gone are the days when only whenthe elite class used to fly. Air travel has become much more accessible and due to theadvent of the LCCs, a niche segment called the leisure class of passengers hasemerged, who are focussing their attention on the commercial activities at theseairports.III. Increasing competition between hub airports is another major contributing factor. Whilepassengers who fly from point – to – point might fly from airports which offer betterconvenience of flights for them, the transfer passengers’ decisions can be altered byairports which can offer a variety of commercial services.IV. Stricter environmental regulations have meant that most airports have restrictions onnight flights (after 2300) until 0600, resulting in the airport having to be shut technicallyduring this period of time. This has led many an airport manager to rethink on theaspect of shifting focus from generating slot revenues towards non – aeronauticalrevenues to compensate for the loss of revenue due to the new restrictions.(Parappallil 2007)
  • 263.4 PROCESS ANALYSIS3.4.1 INTRODUCTIONIn this section, a detailed analysis on the various processes involved on the landside and theairside of the airport are explored:This starts from the very point of initiating the idea of travel to the actual check in process fordeparture, finally culminating in being seated inside the aircraft and getting ready for the flight.Similarly, certain number of processes are involved during the arrivals as well – starting fromdisembarking the aircraft to baggage retrieval, passing the customs inside the terminal,eventually leading to exiting the airport for the onward journey/ activity. All these can be handledin a variety of ways.3.4.2 DEPARTUREThe departure processes can be explained through the graphic below. Note that the colour blueis representative of all the processes which are mandatory inside the airport, right from checkingin to boarding the aircraft.Although, not all the processes mentioned above are mandatory. For example: Border Controlis an issue which does not come into the picture if the passenger is travelling inside the countryor even in the European Union, for that matter. Similarly, passengers may choose to travel withor without baggage to be dropped off.Figure 3.7 – Typical Departure process [Source: (DLR EU 2008)]A better understanding of the above processes has been initiated through the report of the(IATA 1989) which goes into the depths of the passenger process analysis during the departure.To go through the process steps the passenger and staff have to do the following: Registration, seat allocation and confirmation passenger details (e.g. passenger withreduced mobility, special meals, unaccompanied minor, etc.) Passenger ID verification Travel document verification (including payment verification) Baggage suitability (size, weight/pieces, security questions) Baggage labelling and drop-off Boarding Pass Control
  • 27 Required security search processes include the use of metal detectors and X Raysystems Existing security processes are sometimes augmented by explosive trace detectionsystems (ETDS) as well as random hand search Border Control Passenger boarding (registration passenger on board)The sequence of events is explained by the following graphic.3.4.3 ARRIVALThe arrival process is less complicated than the departure process and can be explained by thefollowing graphic:Figure 3.8 – Typical Arrival process [Source:(DLR EU 2008)]As explained in the departure process, not all steps are necessary here too. For example,passengers travelling inside a country or even the European country need not go through theborder and/ or customs control. Same is the case with passengers travelling only with cabinbaggage, as they do not have to go through the step of Baggage claim.For the correct implementation of these steps, the airport authority or the government has toprovide the airport with the following: Border Control by the government authority Checking passport Checking travel document (Visa, Immigration documents, etc.) Collect baggage from baggage claim, bulk luggage return Customs control by the government authority Further transportation
  • 28Figure 3.9 – Arrival process analysis [Source: (DLR EU 2008)]3.4.4 TRANSFERFor purposes of transfer, the most important factor to consider is the origin and the destinationof the passenger. For example inside Europe, countries who have signed the SchengenAgreement permits free and hassle free transfer of passengers within the member nationswithout the need to go through border and/or customs control. Whereas, passengers from acountry like Great Britain, for example are treated as Internationals as they have not signed theSchengen Agreement. The process analysis for a transfer passenger can be depicted asfollows:Figure 3.10 – Transfer Passenger handling process [Source: (DLR EU 2008)]
  • 293.4.5 BAGGAGE HANDLINGThe whole baggage processes involves three main tasks: Move bags from the check-in area to the departure gate Move bags from one gate to another during transfers Move bags from the arrival gate to the baggage-claim areaIt can be explained by the following process diagram:Figure 3.11 – Baggage handling process [Source: (DLR EU 2008)]3.4.6 TURNAROUND PROCESSIn order to assess the possibility of operating low cost and legacy carriers out of the same mainairport terminal, an analysis of the airport turnaround process needs to be done. The NationalAeronautics Laboratory NLR, which has done extensive work on modelling the turn-aroundprocess, defines it as an encompassment of all ground handling activities that has to beperformed at an aircraft when parked at a stand. These activities have to be performed betweenin – block, when the aircraft arrives at the stand, and off block, when the aircraft leaves thestand. Ground Handling services include baggage and cargo (un)loading, passenger and crew(de)boarding, cleaning, catering, fuelling and other associated activities.Basically, the turnaround process has been divided into three sub processes namely: Passenger Processes Baggage Processes Airline ProcessesA high level of planning has to be ensured in order to make sure that these processes do notclash with each other, thus leading to loss of time. Certain processes of ground handling aresuch that they cannot happen at the same time. So, one process has to be over to ensure thesmooth continuation of the subsequent one. For example: it is well known that baggage
  • 30(un)loading and fuelling cannot take place at the same time because the area of concentrationis close to each other and thus, there is a good chance that a loss of time can be experiencedduring this situation.The processes involved in a typical turnaround are as explained as below:I. Docking: Docking is the arrival at the exact location for arranging the handlingprocesses. As pilots are not able to see the location of their wheels, a flagger isnecessary to signal the crew how to move and where exactly to stop. At many airports,the flagger is replaced by an automated docking system where on the wall in front of theaircraft, electronic signals indicate the pilot what to do.II. De-boarding: De-boarding starts with bringing an aerobridge or stairs to the aircraft. Incase passengers and crew de-board via stairs, additional airport personnel arenecessary to guide them to the building. This can be a brief walk over the airport’ssurface or through a bus connection. The crew gets a special treatment as they willleave after the passengers and need more time for final checks.III. Baggage and cargo unloading: Baggage unloading can typically start immediatelyafter the aircraft has come to a stop. A dedicated company will take out the baggageand bring this to the terminal building. Cargo, if not too voluminous, is unloaded at theaircraft’s stand. More commonly, cargo from combined – aircraft is unloaded at theairport’s cargo area, in which case the aircraft will be towed to that position with a towvehicle.IV. Security: Aircraft with passengers from certain countries need a security check whenthey arrive at the airport.V. Cleaning: Cleaning concerns the interior of the aircraft, which is prepared for thefollowing flight.VI. Fuelling: Fuelling is performed with pump vehicles which take the kerosene fromhydrant wells, which are located at the gates. Alternatively, tank vehicles bring the fuelto the aircraft.VII. Catering: Catering delivers the necessary food to the aircraft. Depending on thedestination of the flight, certain types of food are not allowed. Some airlines allowpassengers to indicate special wishes (like vegetarian meals) beforehand. Severalairlines, do not serve food to every passenger; instead they provide food and drinks at acost. In this case, fewer catering items will be required.VIII. Baggage and cargo loading: Like cargo unloading, if necessary, cargo loading isperformed at the cargo area. Specific rules exist concerning livestock and cooling.
  • 31Those are not allowed to wait at the cargo area too long. Baggage loading is handled atthe stand.IX. Passenger boarding: Passengers can board the way they de – board, either throughan aerobridge, through a short walk on the surface or through a bus connection.X. Security: All passengers and their luggage have to pass a security check. If this isperformed at the gate, the process is included in the handling process. At some airports,the security check is performed at a central area. In this case, the security check is notincluded in the handling process.XI. Aircraft check: The crew is responsible for the flight and will check the aircraftthoroughly before each flight. Aircraft checks concern inspections on the outside of theaircraft and proper functioning of the aircraft machinery and equipment (cockpit checks).XII. Push – back: When all the boarding processes have been completed, the aircraft candepart. Aircraft at gates need to be pushed – back using dedicated push – backvehicles. Aircrafts at stands mostly require push – backs as well, depending on theconfiguration of the stand. At some stands, aircraft can directly start up their enginesand start taxiing.(Leeuwen 2007)The section above depicted the typical turn around process that an aircraft goes through once itreaches the stand to the moment it takes off for its next flight. For the purpose of this study, wetry to explore into more detail of the turnaround process. It is felt that the turnaround process isone of the most processes to be explored due to the fact that ground handling is recognised asone of the important sources of delay in the air transport system. And especially at a time when,the current study explores the possibility to operate low cost and legacy carriers out of the samemain airport terminal, it is believed that the turnaround times become a major factor to be takeninto consideration.The following table shows the specific turnaround processes usually involved in a low cost andlegacy carrier:
  • 32Table 3-5 – Turnaround processes for low cost and legacy carriersTurnaround Process /Airline ClassLegacy Carriers Low Cost CarriersDocking Mixed fleets – so differentpositions to stop the aircraft,conveyed to the pilot by theaid of a flagger or anelectronic signal on theadjoining wall.Single fleet – so sameposition to stop the aircraft,conveyed to the pilot by theaid of a flagger or anelectronic signal on theadjoining wall.De-boarding Mostly through aerobridges –so only through one door. Ifthrough stairs – one or twodoors depending on the case.Don’t use aerobridges even ifavailable, because theyincrease time and cost. Usestairs – usually one doorutilized, sometimes two.Baggage and cargounloadingMedium to long haul flights –considerable amount ofbaggage stored in theunderbelly. Time taken tounload is more.Short hauls – stricter baggagelimits. Considerable amountstored in the cabin. Therefore,time taken to unload is less.Security Same for low cost and legacycarriers since its dependenton the specific airport policiesand regulations.Same for low cost and legacycarriers since its dependenton the specific airport policiesand regulations.Cleaning Elaborate cleaning requiredafter each flight due to themedium/ long haul nature offlights and in – flight catering.Elaborate cleaning notrequired after each flight dueto the short haul nature offlights and no in – flightcatering.Fuelling Usually performed after eachflight because of the medium/long haul nature. Takes 15 –20 minutes.Tankering technique adopted- 1st flight in the morning isfilled upto full capacity andcan be used for multiplenumber of flights due to theshort haul nature. Reduces
  • 33turnaround time.Catering Presence of in – flightcatering, so requires loadingand unloading with eachflight.No free in – flight catering, sorequires lesser time to loadand unload food due to thelower demand.Baggage and cargo loading Medium to long haul flights –considerable amount ofbaggage stored in theunderbelly. Time taken to loadis more.Short hauls – stricter baggagelimits. Considerable amountstored in the cabin. Therefore,time taken to load is less.Passenger boarding Mostly through aerobridges –so only through one door. Ifthrough stairs – one or twodoors depending on the case.Don’t use aerobridges even ifavailable, because theyincrease time and cost. Usestairs – usually one doorutilized, sometimes twoSecurity Same for low cost and legacycarriers since its dependenton the specific airport policiesand regulations.Same for low cost and legacycarriers since its dependenton the specific airport policiesand regulations.Aircraft check Aircraft checks are conductedfor every carrier, irrespectiveof whether it is a low cost or alegacy carrierAircraft checks are conductedfor every carrier, irrespectiveof whether it is a low cost or alegacy carrierPush – back When all the boardingprocesses are completed, theaircraft is ready to depart. Thepush – back process isinitiated, irrespective ofwhether it is a low cost or alegacy carrier.When all the boardingprocesses are completed, theaircraft is ready to depart. Thepush – back process isinitiated, irrespective ofwhether it is a low cost or alegacy carrier.On closer examination of the turnaround process, as has been done above it is seen that thereare several factors which differentiate the turnaround times achieved by the low cost as well asthe legacy carriers. This plays a key role in ensuring the lesser turnaround times for low costairlines in comparison with the turnaround times observed for the legacy carriers. The EuropeanCommission project on the Aeronautic Study for seamless transport (DLR EU 2008) has been a
  • 34pioneer in process analysis studies and they have researched on the turnaround timescommonly observed for both long/ medium and short haul aircrafts. Their observations of theturnaround timelines and critical paths are depicted in the following graphic:Figure 3.12 – Typical turnaround times observed in a B 777 [Source: (DLR EU 2008)]The graphic above shows the turnaround times observed for a medium/long haul aircraft, theBoeing 777 – 300 ER. This is in line with the common turnaround times observed for legacycarriers, which is around 60-75 minutes. As can be seen, this is in contrast to that of a low costairline which manages to do turnarounds in 20-30 minutes, even in the busiest of times. Theturnaround timeline and the critical path usually adopted are as depicted below. The graphicbelow displays the turnaround time observed for a common short haul aircraft, the Boeing 737 –900. One important thing to notice however is the inclusion of fuelling in the turnaround timeline.It is usual for low cost airlines which are short haul to adopt the tinkering technique which willreduce the need to refuel after every flight. Thus, the typical turnaround times observed are inthe range of 25-30 minutes, as can be elucidated from the graphic below.Figure 3.13 – Typical turnaround times observed in a B 737 [Source:(DLR EU 2008)]Thus, some of the main reasons of the low cost airlines achieving the said shorter turnaroundtimes are identified and are as given below: Single fleet, so personnel on the job are very well trained. No in-flight catering, which reduces the time to load and unload food.
  • 35 Minimal or no cargo loading/ unloading No refuelling done after every flight Boarding and de - boarding through both doors or alternating processes through eachdoors. Close proximity of gates to the aircraft High employee morale to produce efficient results
  • 364. IMPORTANCE PERFORMANCE ANALYSIS4.1 INTRODUCTIONThe Importance Performance Analysis (IPA) is a well-documented business research techniquedeveloped by (Martilla & James 1977). It is a method to evaluate the attributes of a product orservice based on measures of importance and performance from the perceptual viewpoint ofthe customers. (Chiang 2008)According to (Bacon 2003)The importance and performance measures give the management a richerunderstanding of customer reactions to a product or service. From the IPA, themanagement will not only know which attributes require immediate attention, but alsowhy they require immediate attentionImportance and Performance differences not only have consequences for the management asthey predict purchase behaviour, but also have a direct impact on repurchase intentions as theyaim to provide an asymmetric impact of negative and positive attribute level performance onoverall satisfaction as well.(Mittal et al. 1998) In today’s highly competitive world, high qualityand customer satisfaction are achieved only when the firm’s performance exceeds what thecustomers expect from them.(Oliver 1997) The IPA is valuable in helping the service providersto assess the quality of their efforts in satisfying the needs of the customers. (Chiang 2008)Thus, there is always room for improvement in every sphere regardless of the conclusions thatthe IPA analysis gives.The IPA follows a systematic five-step approach as follows: (1) Identification of product/serviceattributes; (2) Development of the data collection instrument; (3) Data collection; (4) Tabulationof the Results; and (5) Interpretation of results. (Chiang 2008)The list of attributes was first generated by a thorough review of existing literature and pastresearches relevant to the particular industry being studied. A questionnaire survey with aselection of users of this service, (in this case, the passengers flying in airlines with specialreference to low cost airlines) were then conducted in order to arrive at a more accurate list ofservice factors, which played an important role in defining the quality inside an airport terminal.According to (Chiang 2008),The importance and performance of the attributes can be interpreted by examining whichquadrants each of these attributes fall into on the grid. The analyses regardless of thepositioning of the gridlines are similar. Quadrant A: Attributes that fall into this quadrant are deemed important to thecustomers. However, the service provider falls short of customers’ expectationswith regards to the provision of these product or service attributes. Negativeperformance on an attribute has a greater impact than a positive performance on
  • 37that same attribute. (Mittal et al. 1998) Hence, extra attention has to be focused onthese attributes to rise. Quadrant B: Attributes falling within this quadrant are of importance to thecustomers, and in this case, the service provider has at least achieved anacceptable level of satisfaction. Possible courses of action include exploring thepossibilities to further delight the customers or at least to maintain status quo. Quadrant C: Customers are generally unsatisfied with the performance of theproduct or service attributes that fall within this quadrant. Fortunately for the serviceprovider, customers also place little emphasis on these attributes. In this instance, itis less of a concern but the service provider would do well to improve on theperformance of the attributes nonetheless. Quadrant D: Services providers can be said to be over-providing for customers interms of the attributes that falls into this quadrant. Customers are satisfied with theperformance of these attributes but do not place great emphasis on them. Theservice provider may see benefits in continuing to maintain their level ofperformance although in some cases they may see a need to de-emphasize someof their efforts.Table 4-1 – Demographic information (IPA)Response % Response CountResidenceEurope 48.4 75Asia 26.7 41America (North and South) 17.6 27Africa 1.4 2Oceania 5.9 9GenderMale 67.4 104Female 32.6 50AgeLess than 20 4.1 620 - 29 44.8 6930 - 39 26.2 4040 - 49 10.0 15More than 50 14.9 23Flying FrequencyOnce every 2 weeks 8.6 13Once a month 11.3 17Once every 2 - 3 months 29.9 46Once every 6 months 27.6 43Once a year 22.6 35Trip PurposeLeisure 35.3 54Work 33.5 52Study 9.5 15Friends & Family 21.7 33Experience flying low cost airlineYes 80.8 124No 19.2 30Sa mp le s ize = 154VARIABLE
  • 384.2 PASSENGER QUESTIONNAIRE SURVEYThe crux of the methodology adopted for this dissertation involves the passenger questionnairesurvey. The survey was aimed at concluding on the passenger’s opinions on the various serviceattributes listed – specifically on their importance and performance, which shall aid in definingthe service quality delivered in an airport terminal. The target group for the survey involved allpassengers who used air as a mode of transportation with special reference to low costpassengers.It was felt that since the dissertation would be addressing on the need or not to shift the low costcarriers from their present terminal (secondary airport/ terminals and low cost terminals) into themain airport terminals, the target group was made specific to obtain results which align with theresearch objective. 12 service factors were adopted for the course of this dissertation afterreferring into various literatures which addressed similar issues of service quality in an airport.Some of the references used for the dissertation were (Park 1994), (Yeung et al. 2012), (Magri& Alves 2005) and (Australian Competition & Consumer Commission 2004) .The survey was taken in the month of October over the online survey platform, Survey Monkey.Respondents were supplied with the links to the survey and were made to answer it and submitit online. Since this was an online survey and not a personal level survey, there were largeamounts of non – response. Non – response is common because the surveys were notconducted at a personal level, which would have taken more time than the current procedure.Thus, paucity of time was a major constraint in the decisions regarding the conducting of thepassenger questionnaire survey. The survey was hosted online for a period of 1 month from the2ndweek of October to the 1stweek of November.Apart from survey monkey, mails were sent to prospective respondents and the survey was alsohosted on social media (LinkedIn, Twitter, Facebook etc) The survey yielded 217 responses outof which 63 were ineligible because of incomplete responses and patterning in the way therespondents answered the survey. In the end, 154 responses were taken to be valid and thus,the sample size used for the present dissertation is 154. Table above gives a detaileddescription on the demographical aspects of the passenger questionnaire survey.4.3 ADEQUACY OF THE SAMPLE SIZEA common goal of a survey research is to collect data which represents the population. Theinformation gathered from the survey serves as the main source for the researcher to infer hisviews over a population.(Bartlett et al. 2001) Here is where the sampling size question comesinto effect.According to (Israel 1992)
  • 39The answer to this question is influenced by a number of factors, including the purposeof the study, population size, the risk of selecting a “bad” sample, and the allowablesampling error.(Wunsch D 1986) stated that disregard for sampling error when determining sample size, anddisregard for response and nonresponse bias two of the most consistent flaws included.4.3.1 SAMPLE SIZE CRITERIAThere have been many interpretations on this regard by several authors.According to (George Miaoulis & Michener 1976)In addition to the purpose of the study and population size, three criteria usually willneed to be specified to determine the appropriate sample size: the level of precision, thelevel of confidence or risk, and the degree of variability in the attributes being measured.(Israel 1992) treats the three main criteria for determining sample size as follows: THE LEVEL OF PRECISIONThe level of precision, sometimes called sampling error, is the range in which the truevalue of the population is estimated to be. This range is often expressed in percentagepoints (e.g., ±5 percent) THE CONFIDENCE LEVELThe confidence or risk level is based on ideas encompassed under the Central LimitTheorem. The key idea encompassed in the Central Limit Theorem is that when apopulation is repeatedly sampled, the average value of the attribute obtained by thosesamples is equal to the true population value. Furthermore, the values obtained bythese samples are distributed normally about the true value, with some samples havinga higher value and some obtaining a lower score than the true population value. In anormal distribution, approximately 95% of the sample values are within two standarddeviations of the true population value (e.g., mean). DEGREE OF VARIABILITYThe third criterion, the degree of variability in the attributes being measured, refers tothe distribution of attributes in the population. The more heterogeneous a population,the larger the sample size required to obtain a given level of precision. The lesservariable (more homogeneous) a population, the smaller is the sample size.
  • 404.3.2 STRATEGIES FOR DETERMINING SAMPLE SIZEThere are four possible strategies for determining sample sizes (Israel 1992):I. Using a census for small populations: If the population is small, it is advised to usethe entire population as the sample. Costs are bound to be high, but the results arebound to be more accurate.II. Using a sample size of a similar study: Consulting similar studies that wereconducted and using the sample sizes prescribed in those studies or in the literature,prescribed for the same subject. More chances of being error prone if not checked indetail.III. Using published tables: Relying on published tables which are set for particularcriteria. The information given on the tables are prescribed for the selected criteria andif the survey research involves some other peculiar considerations, this method cannotbe resorted to.IV. Using formulas to calculate a sample size: Although tables provide a good indicationin calculating the sample size, for a different level of precision desired, formulas mayhave to be resorted to.This study involves the determination of sample size for a research survey whose populationsize is large. The population which was being looked at during the course of this study includedall the passengers who are flying in the various airlines around the world, with special referenceto those flying with low cost companies. This is indeed a huge number and thus the literatureinvolves only those mathematical formulations which taken into account, large populations.(Cochran 1963) developed an equation to yield a representative sample for proportions. It canbe illustrated as below:where no is the sample size, Z2is the abscissa of the normal curve that cuts an area α at thetails, e is the desired level of precision, p is the estimated proportion of an attribute that ispresent in the population and q is 1-p.If the population is small then the sample size can be reduced slightly. This is because a givensample size provides proportionately more information for a small population than for a largepopulation.( )where n is the sample size and N is the population size. As can be seen, the above correctionformula significantly reduces the necessary sample size for small sizes.
  • 41(Yamane 1967) provides a simplified formula to calculate sample sizes. A 95% confidence leveland P = .5 are assumed. The use of the level of maximum variability (P=.5) in the calculation ofthe sample size for the proportion generally will produce a more conservative sample size (i.e.,a larger one) than will be calculated by the sample size of the mean.( )where n is the sample size, N is the population size, and e is the level of precision.For the course of this research work and the dissertation, the formula employed for determiningthe sample size is that one proposed by (Yamane 1967)( )4.3.3 SAMPLE SIZE ESTIMATIONFor the study under consideration, the adequacy of the sample size is determined as follows: Confidence Interval = 95% Degree of variability = 0.5The most important factor to be taken into consideration here is the population size, N. Thepopulation size for the current study should involve all the passengers who are using airlines tofly with special emphasis on low cost airlines. This number is estimated to be a very hugenumber going into 10s of millions of passengers.According to (ANA Aeroportos de Portugal 2011b), the five main low cost carriers operatingfrom Faro Airport are Ryanair (1.52 million passengers in 2011), easyJet (1.1 million), Monarch(537,000), Transavia (380,000) and Jet2.com (303,000).Thus, the total representative number of passengers flying in low cost airlines is taken to bearound 40 million per month, on a global scale. As for the purpose of this study, the populationsize is assumed to be 100,000 as any number above 100,000 would give more or less the sameextent of the sample size required to be used for a research study. Therefore, Population Size, N = 100,000A next criterion to be established is the required level of precision, e. The usual values of thelevel of precision range from 0.05 to 0.1 depend on the study concerned. For a research studyat the academic level, lower values of precision are generally tolerable, if it is difficult to obtainhigher levels of precision. (Bartlett et al. 2001) This study takes the value of the level ofprecision to be 0.09, which is found to be within the specified ranges. Thus, Level of precision, e = 0.09According to the formula designed by (Yamane 1967), the optimal number of samples requiredfor the study will be( )
  • 42( )The current survey conducted as part of the study for the dissertation obtained 154 responses,which is more than 123, as was suggested by the formulation for obtaining the optimum samplesize.4.3.4 OTHER SAMPLE SIZE DETERMINATION CONSIDERATIONSOften, there are a few other considerations that are to be taken in mind when sample sizedetermination techniques are employed. A few of them are listed below:1. The sample size formulas provide the number of responses that need to be obtained.Many researchers commonly add 40% for nonresponse bias. Thus, the number ofmailed surveys or planned interviews can be substantially larger than the numberrequired for a desired level of confidence and precision.(Israel 1992)Employing that into the current study, it would mean that there will be an increase of40% to the number of responses obtained, which will increase the sample size to 216 (= 154 + 0.4*154), which is seen to be well above the number of responses determinedthrough the sample size determination techniques.2. Budget, time and other constraints. Often, the researcher is faced with variousconstraints that may force them to use inadequate sample sizes because of practicalversus statistical reasons. These constraints may include budget, time, personnel, andother resource limitations. In these cases, researchers should report both theappropriate sample sizes along with the sample sizes actually used in the study, thereasons for using inadequate sample sizes, and a discussion of the effect theinadequate sample sizes may have on the results of the study. (Bartlett et al. 2001)4.4 FINDINGS4.4.1 IMPORTANCE VERSUS PERFORMANCE OF ATTRIBUTESA total of 12 attributes were chosen to be included in the study. The study involved sending outquestionnaires to passengers who have been flying both low cost and legacy carriers. Theobjective of the questionnaire was to determine the aspects perceived by the passengers asrelevant for determining the quality of an airport terminal. The Importance Performance Analysiswas performed on the 12 service factors and the following observations were obtained.The first figment of analysis was to see how the passengers or the customers of the airlines andairports rated their experiences with respect to the factors listed for determining the quality of anairport terminal. Figure below will aid in making this clearer. The Importance analysis of thefactors taken into consideration for the course of this study shows the following resultsThe Importance Analysis threw open user perspectives on the service factors that are deemedto be more important than some others. In the most important criteria, Availability of transport
  • 43modes for commute from the airport terminal was deemed to be topmost in the pecking order.87% of the total responses in Availability of transport modes for commute from the airportterminal fell into the categories most important and important, suggesting how much furthercommute played a role in the minds of an airline passenger. Most people travelling in airlines,both low cost carriers and legacy carriers had shown a trend of continuing their journeysonward, from the airport terminal and this required the availability of transport modes from theterminal. This has been well realized and is reflected on the findings conducted. Another factorwhich had a lot of importance given to by the passengers was the Time taken to do check – in.In retrospect, it turned out to be the single most important factor receiving 88% responses in thecategories of Most Important and Important.Figure 4.1 – Importance AnalysisSimilar analysis on the other factors reveals that the factor Accessibility to retail andconcessions was thought to have least importance in the minds of a passenger inside an airportterminal with only 9.4% of the survey respondents treating them to be Most Important and 64%of people deeming it to be in the categories of Slightly Important and Least Important.Availability of trolleys was another factor which the passengers surveyed during the course ofthis work felt was not such an important factor. This is reinforced with the almost 48% featuringin the categories Slightly Important and Least Important. Other factors can be analyzed bysimilar way.The graphic below explains the analysis done on the performance of these service factors. Andthe following observations are observed.The Performance Analysis threw open interesting perspectives on how in the opinion of thepassengers travelling in airlines (with special reference to low cost airlines) did the servicefactors perform in the airport terminals. Frequent flyers were told to quote their most commonexperiences. As can be seen from the graphic above, not many of the respondents were happy
  • 44with the services meted out to them. The top three High Performing factors determined on thesurvey conducted on a global survey put Visual Impact of the terminal (cleanliness and design),Availability of food and beverages and Seat Availability inside the terminal to at the top twospots polling 24.5%, 22.3% and 22.3% respectively. Thermal Comfort (Temperature Control)and Visual Impact of the terminal (cleanliness and design) are the factors which mostpassengers surveyed were satisfied as is evidenced by the high percentages of votes fallinginto the categories of High Performance and Medium Performance (81% and 80% respectively).Figure 4.2 – Performance AnalysisThis could also indicate that these two factors did not play a great role in defining quality insidethe airport terminal from a passenger point of view. All the airport terminals (low cost terminalsas well as the main airport terminals) served the purpose of transit, in concordance with themoney spent on the same. The service factor receiving the worst performance ratings wasdetermined to be the Level of Congestion, which polled almost 51% votes in the BadPerformance and Low Performance categories. In retrospect, this was quite expected since therespondents surveyed were low cost passengers. The low cost airports or terminals havealways been minimal facilities aimed at cutting costs. Thus, the levels of service experienced atthese terminals are always bound to be low in comparison with their counterparts in the mainairports. Other factors can be analyzed by similar way.The graphical representations which follow will give more insight into the results obtainedthrough the Importance Performance Analysis by introducing the mean scores received for eachfactor during the course of this survey.The study gave interesting results as can be seen from the observations on the table above. Onthe one hand, it gave an insight into the fact that the levels of importance were considered highonly in the case of 3 factors (Availability of transport modes for commute from the terminal),
  • 45(Time taken to do check – in) and (Level of congestion). This study emphasised mostimportance of transport modes from the airport terminal, for further travels of the passengers.Passengers gave greater importance at having choices of commute from the airport terminal tothe destinations of their choice rather than being forced to rely on a single mode of transport ascan be the case when the airport for the low cost airline is located away from the city. The timetaken to check – in was second in priority which gave insights into the times spent bypassengers in completing the check – in process.Table 4-2 – Mean scores of the Importance AnalysisNot many of the passengers were happy in spending time in the long queues at the check incounter. This could mean that they were looking to save time at the check – in process toensure they had enough time to go through the retail and concessions most airports terminalshad. For those terminals, that lacked this facility, this result throws an insight on what thepassenger would ideally prefer, which when worked out well by the airport operators, couldincrease in substantial increase in revenue for the airport. The third aspect that got a lot ofimportance from the eyes of the passenger was on the level of congestion experienced. Ahigher degree of importance simply means that the passenger is not happy with the idea ofincreasingly congested terminals.Imp o rta nce3,333,273,062,842,812,792,782,782,592,532,422,23Number of working check - in countersThermal Comfort (Temperature control)Visual impact of the terminal (cleanliness and design)Availability of trolleysAvailability of choices in food or retailWalking distances inside the terminalSeat Availability inside the terminalTime taken to do check - inLevel of congestion (crowding)Accessibility to retail and concessionsAvailability of transport modes for commute from the terminalAccessibility to food and beveragesSe rvice Attrib ute
  • 46Figure 4.3 – Distribution of the mean scores of the Importance AnalysisTable 4-3 – Mean scores of the Performance AnalysisThis could mean two things: One being that the passengers were expecting more roomyterminals instead of the small and often congested designs of the low cot secondary airports.The second being that they did not favour the main terminals which are often having traffic at alltimes, apart from the peak hours. The least important was the availability of retails andconcession, an obvious indicator that the long check in queues could be hampering theirchances at spending on an airport. This is further enhanced by the non – presence of enoughretail and concession options while flying from a low cost terminal.Pe rfo rma nce2,992,992,902,862,842,832,802,792,792,602,572,47Level of congestion (crowding)Visual impact of the terminal (cleanliness and design)Thermal Comfort (Temperature control)Accessibility to food and beveragesAvailability of trolleysAccessibility to retail and concessionsSeat Availability inside the terminalAvailability of transport modes for commute from the terminalNumber of working check - in countersTime taken to do check - inWalking distances inside the terminalAvailability of choices in food or retailSe rvice Attrib ute
  • 47Figure 4.4 – Distribution of the mean scores of the Performance AnalysisAs for the main inferences from the performance analysis, the worst performing service factor isthe congestion scene at the airport terminal. Passengers found the existing airport terminaldesigns to be failing at countering the congestion that was experienced in air travel. And thishas been reflected on a global scale as the respondents included people from all parts of theworld. The next indicator of worse performance came from the Availability of choices in foodand retail. This was bound to arise considering the fact that the research study focussed onpassengers travelling on low cost carriers using low cost terminals and/ or secondary airports.These kinds of small compact terminals, which are usually managed by low cost airlines, usuallydo not possess adequate choices that passengers might be looking into, from the aspect of foodand beverages as well as on the retail and concession. As for the most performing servicefactors, passengers felt that attributes such as Thermal Comfort and Visual Impact of theterminals did not hinder their impressions on the quality of an airport terminal so long as theyserved the purpose.Progressing from the general observations, the attribute importance means were matched withthe performance means for the corresponding attributes to form coordinates for each of theattributes as shown in Table 3. These coordinates were plotted into the 2-dimensional IPA gridwith ‘Performance’ on the X-axis and ‘Importance’ on the Y-axis.Recommendations for IPA would be carried out in order of relative importance. In addition,special attention was given to extreme outlying points since they represented the greatestdisparity between importance and performance and thus might be indications of customerdissatisfactions.Table 4-4 – Mean scores of the Importance and Performance Analysis
  • 484.5 INTERPRETATION OF THE RESULTSAs mentioned earlier, the results of the Importance – Performance Analysis can be analysed inthree ways. They are as follows:I. IPA (Scale – Centred Approach)II. IPA (Data Centred Approach)III. IPA (Median – Centred Approach)There has always been a discussion on which of the three IPA approaches yielded betterresults. And it is felt that a combined use is found to give a better understanding of the servicefactors. For the purpose of clarity, this study shall be approaching the results based on all thethree methodologies instead of having just a single approach for the analysis.4.5.1 IPA (SCALE-CENTERED APPROACH)Plotting each of the attributes into the IPA grid using the coordinates, the initial IPA grid wasformed and depicted below in Figure 4.5. For this grid, scale mean was used as the importance(Y) and performance (X) axes intersection point in accordance with the original IPA frameworkdeveloped by Martilla and James (1977).4.5.2 IPA (DATA-CENTERED APPROACH)The second IPA grid was formed using data means as the intersection point of the X(performance) and Y (importance) axes. Data means used were the average of the meanscores of attribute importance and attribute performance. From the findings presented in FigureImportance Performance13,33 2,8323,27 2,7933,06 2,4742,84 2,7952,81 2,6062,79 2,9072,78 2,9982,78 2,8092,59 2,99102,53 2,57112,42 2,86122,23 2,84Thermal Comfort (Temperature control)Seat Availability inside the terminalVisual impact of the terminal (cleanliness and design)Availability of choices in food or retailAvailability of trolleysAccessibility to retail and concessionsAvailability of transport modes for commute from the terminalTime taken to do check - inLevel of congestion (crowding)Number of working check - in countersWalking distances inside the terminalAccessibility to food and beveragesService Factor
  • 494.6, it is evident that the use of the data-centered approach will yield more distinctive results ascompared to the scale-centered approach.Figure 4.5 – IPA Scale Centred ApproachFigure 4.6 – IPA Data Centred ApproachFigure 4.7 – IPA Median Centred Approach
  • 504.5.3 IPA (MEDIAN – CENTRED APPROACH)The third IPA grid was formed using the median value of the mean score of attribute importanceand performance respectively as the intersection- point of the X (performance) and Y(importance) axes. The results are presented in Figure 4.7.4.5.4 ATTRIBURE DISTRIBUTION BASED ON THE DIFFERENT APPROACHESLooking at the IPA grid and the interpretations thrown up by it, there are some importantconclusions to be made. The first discussion on this aspect would be the impact of havingservice factors distributed across various quadrants in view of the differing approachesemployed. The transition of the service factors from one quadrant to the other may or may nothave an impact on the strategy to be employed and this will be explored in this section.Take for instance, the transition of a service factor from Quadrant B (Keep up the Good Work)to Quadrant A (Concentrate Here). The focus towards the service factor has changedconsiderably from the point where the efforts are said to be good enough to ensure betterperformance to that where there is a need to be concentrating on this aspect to achieve betterresults. Service Factor 2 (Time taken to do check – in) and Service factor 1 (Availability oftransport modes for commute from the terminal) swing in between Quadrants A and B duringthe course of the interpretation of the results using the three approaches.Similar swing from Quadrant B (Keep up the Good Work) to Quadrant C (Low Priority) wouldcreate a shift in focus towards a particular service factor as it would mean a move towards nonprioritization of the service factor from a state of being good enough to ensure sustainableperformance. Service Factor 4 (Number of working check – in counters) swings from QuadrantB to Quadrant C, but the impact of the said swing is proved to be minimal comparing the swingfrom Quadrant A to Quadrant B or that from Quadrant C (Low Priority) to Quadrant D (PossibleOverkill).Another of the quadrant swings we need to pay attention to is the possibility of a swing fromQuadrant D (Possible Overkill) to Quadrant C (Keep up the Good Work) where the emphasistowards the service factor changes from being that of a warning for over use to a state where itis felt that enough is being done to ensure the good quality. Service Factor 11 (Availability oftrolleys), Service Factor 12 (Accessibility to retail and concessions) and Service Factor 8(Thermal Comfort) swing from Quadrant D to Quadrant C, but the impact of the said swing isproved to be minimal comparing the swing from Quadrant A to Quadrant B or that fromQuadrant A (Concentrate Here) to Quadrant D (Possible Overkill).Perhaps, the most vital of the swing in quadrants would have been the possibility of a swingfrom Quadrant A (Concentrate Here) to Quadrant D (Possible Overkill) – a change from a stateof requiring emphasis to a state of over emphasizing the service factor. As is common, suchchanges are not bound to occur in an IPA Analysis done with a good sample population. And
  • 51the same has been repeated here with no swing reported from Quadrant A to Quadrant D, anobvious good indicator to the sample and the survey taken up during the course of this study.The table below shows this trend of distribution of the service factors in a clearer manner.Table 4-5 – Quadrant wise distribution of service attributes (Importance Performance Analysis)Quadrant Attributes Importance Performance Aseesement ModelA (Concentrate Here)3, 4 Scale - Centered Approach2,3,4 Data - Centered Approach2,3,4,7 Median - Centered ApproachB (Keep Up the Good Work)1,2,5,6,7,8 Scale - Centered Approach1,6,5 Data - Centered Approach1, 5 Median - Centered ApproachC (Low Priority)10 Scale - Centered Approach10 Data - Centered Approach7, 10 Median - Centered ApproachD (Possible Overkill)9,11,12 Scale - Centered Approach7,8,9,11,12 Data - Centered Approach8,9,11,12 Median - Centered Approach4.6 SENSITIVITY ANALYSISSensitivity Analysis was performed for checking the impact of the level of precision on thesample size. Ranges for level of precision were tabulated from 3% to 15% and thecorresponding sample sizes were determined using the formula proposed by (Yamane 1967)which is again illustrated as follows:( )Table 4-6 – Sensitivity Analysis on the level of precisionSensitivity Analysis on the Level of Precision3% 5% 7% 9% 11% 13% 15%Sample Size n 1099 398 204 123 83 59 44
  • 52Figure 4.8 – Results of the Sensitivity AnalysisThe results of the sensitivity analysis carried out are as given above. As can be seen, the moreaccurate the level of precision, the greater the sample size. When the level of precisiondecreases, it is supplemented by a corresponding decrease in sample size. The level ofprecision taken for the course of this study, as indicated earlier is e = 0.09.40120200280360440520600680760840920100010803% 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15%Sensitivity Analysis on the Level of PrecisionSensitivity Analysis on the Level of Precision
  • 525. ESTABLISHING QUALITY CRITERIA FOR AIRPORT TERMINALS5.1 INTRODUCTIONIn order to ascertain the need for operating both low cost and legacy carriers from the samemain airport terminal, this study looks into the aspect of the establishment of criteria for definingquality in the airport terminals. It is widely understood that the passengers travelling low costairlines and the passengers travelling in the legacy carriers have different views on quality andlevel of service being provided for them at the airports. It is believed that there is a need todefine quality, both from a customer’s perspective as well as from the producer’s perspective.In order to establish quality criteria, there first needs to be a consensus on the definition ofquality. Many works have been published which have tried to define Quality, but the currentstudy would pertain to take definitions, as being of critical importance to managing quality.(Juran 2000) gives two definitions of Quality as follows:Quality means those features of products which meet customer needs and thereby providecustomer satisfaction.andQuality means freedom from deficiencies – freedom from errors that require doing the workagain or that results in field failures, customer dissatisfaction.Predictably, this definition of quality has evolved over the course of time and has distanced itselffrom the definitions which earlier related to the adherence to specification, which implicitlyassumed full knowledge of the needs of the customers and its exact translation into product andservice specifications. (Macario 2011)The broadening of the quality horizon was perpetuated by a more realistic belief that thecustomers were not as predictable as has been thought during the conformance to specificationperiod. In its application to public transport and urban transport, it was further determined thatthe little elements of customer dissatisfaction could be attributed to the strategic and tacticallevels of decision making which brought about the existence of a quality gap at the initiationstage. (Macario 2011)5.2 APPROACHES THAT LOOK INTO ESTABLISHING QUALITY CRITERIAA brief attempt is made here to look into the several approaches that look into the aspect ofestablishing quality criteria.5.2.1 IMPORTANCE PERFORMANCE ANALYSIS (IPA) Designed by (Martilla & James 1977)
  • 53 Used to measure customer satisfaction levels in a variety of segments like education,travel and tourism, healthcare marketing, campus foods etc. Transport perspective: Used extensively by airline companies to assess customersatisfaction, by airport terminals to understand the levels of quality desired bypassengers (current dissertation). Basic premise: Disparities between the Importance and Performance of a particularattribute is the sign of customer dissatisfaction. Methodology: Consists of taking mean scores from a questionnaire asking for ratingsof a particular attribute, both for Importance and Performance and subsequently placingthem in the IPA grid to understand its impact on the choices of the customer and inproviding overall customer satisfaction.Figure 5.1 – Importance Performance Analysis Results Interpretation: Represented on three approaches to get the maximumcoverage into the results obtained – Scale Centred, Data Centred and Median Centred. Gives a clear picture on the attributes that need to be concentrated upon, on theattributes that are performing fine, the attributes that don’t need to be so prioritized andthose which are possibly being overused.5.2.2 SERVQUAL Designed by (Parasuraman et al. 1985) Provides a technology for measuring and managing service quality (SQ).
  • 54 Used extensively as a topic for research because of its apparent relationship to costs ina variety of segments like hospitality, higher education, accounting, recreationalservices, tyre retailing, banking etc. Transport Perspective: Research done by Gilbert and Wong in documenting linksbetween customer expectations and service quality. Basic premise: Customer’s assessment of SQ is paramount and this assessment isconceptualized as a gap between what the customer expects by way of SQ and theirevaluations of the performance of a particular service provider based on tencomponents of SQ defined in 1988, later modified. Methodology: Consists of taking mean scores from a questionnaire asking for ratingsof a particular attribute, both for Expectations and Performance and subsequentlytesting them for significant differences across the various segments using ANOVA orsomething similar.5.2.3 SERVICE QUALITY INDEX (SQI) Promoted by David Hensher in his work on developing an SQI in the promotion of buscontracts (Hensher et al. 2003) Transport Perspective: Used in evaluating service quality proposed during the deliveryof public transport contracts. Basic Premise: To develop an SQI - this can be incorporated into a performanceassessment regime that measures the service effectiveness meaningfully from apassenger perspective. Methodology: Developing an SQI based on the response obtained in the surveys. Thisis followed by setting up importance weights, which will be identified by the setting up ofthe Multinomial Logit (MNL) models. This is then followed up by the benchmarkingservice quality and finally ranking them in the order of the results obtained. Results Interpretation: From an operator’s perspective, it gives an idea into what thecustomers’ expectations are, with reference to any service.5.2.4 THE 4 Q’s METHOD Designed by the QUATTRO team (EC, OGM, 1998a, p99) during the development of aEuropean standard configuring of quality factors in an urban mobility system. Basic Premise: The relation between the 4 Qs is of utmost importance inunderstanding the needs and adjusting the service to both the stated and revealedpreferences of the customer.
  • 55Figure 5.2 – The 4 Q’s method Transport Perspective: To develop a service quality based model for application inurban mobility systems. Methodology: Assessing the 4 Q’s and later measuring the quality gaps that existbetween them, as a means to understand the deficiencies, re-assessing the customerneeds and finally resetting service quality targets. Results Interpretation: From both the customer as well as the service provider’sperspective, it gives an overall idea of the quality gaps (deficiencies) – giving an overallperspective into defining service quality levels.5.3 CHOICE OF METHODLOGYThe previous section gave an overview of the approaches that look into the aspect ofestablishing quality criteria for defining service quality levels in transportation. More detailedinsights into the approaches concluded that the current study will adopt the 4 Q’s method forestablishing quality criteria. The reasons for the choice of this methodology are as follows:I. The 4 Q’s method gives an overall outlook into the aspect of defining service quality bylooking at both the customer and service provider perspective, thus is considered to bemore stable than the other approaches.II. The other approaches described here have already been utilized in abundance in thefield of airlines/ airports. Adopting the 4 Q’s to airlines/ airports from the initial urbanmobility systems intervention is considered to be a more novel approach in expandingthe horizon of knowledge base in the field.5.4 THE 4 Q’s METHODWithin the work developed in the research project QUATTRO (EC, OGM, 1998a, p. 99), alsoreflected in the norm issued by the European Standardization Committee (TC320/WG5/13816-
  • 562002EN), the definition of quality has been decoupled into four main concepts that are nowbeing adapted to the system level. They are as given under: Expected Quality (QE): This is the level of quality which implicitly or explicitly isrequired by the customer. The level of quality is understood as a composition of anumber of criteria. Qualitative analysis on consumer profiles and preferences canassess to the contributions of these criteria. Targeted Quality (QT): This is the level of quality which the service provider ormanager of the system is aiming to provide to the customers as a consequence of hisunderstanding of the customer expectations and of the capabilities of the productiveside of the system. Targeted Quality must be set in an objective way and decoupledthrough the different services available within the system. Delivered Quality (QD): This is the level of quality effectively achieved in the provisionof services by the different components of the system, although not necessarily acoincident image of what is visible by the customers. Delivered quality must bemeasured also from the customer viewpoint and not only from the supply sideperspective meaning that it should be assessed also against the client’s criteria. Perceived Quality (QP): This is the level of quality perceived by the user – customer.This is influenced by several factors, such as their personal experience of the service,or from associated or similar services, the information received about the service, fromthe provider or other sources, the non-service elements.The figure below described the decoupled version of the quality definition. As can be seenbelow, the four main concepts which have been defined above have been segregated into thecustomer and the producer perspectives.Figure 5.3 – Decoupled version of the quality definition (The 4 Q’s method)
  • 57The operationalization of these concepts can vary from scenario to scenario, or even betweencases inside a scenario. (Macario 2011) The difference between Expected Quality (QE) andPerceived Quality (QP) bring about an indication into the Measure of Satisfaction for thecustomer from the service offered to him. As from the producer/ service provider’s perspective,the difference between the Targeted quality (QT) and the Delivered Quality (QD) give anindication of the Measure of Performance.The relation between these four concepts is of utmost importance to understand and adjust theservice according to the stated and revealed preferences of the customers. This makes thewhole spectrum much more complex with the induction of several agents and their interactionswhich lead to the introduction of the concept of quality gaps, which can be explained with thehelp of the figure below.Figure 5.4 – Quality gaps in definition of service qualityAs said above, the induction of the agents and the various inter – agent processes lead to theintroduction of quality gaps into the system. The difference between the expected quality (QE)and targeted quality (QT) reveals the gaps in quality between what the customer wants and whatthe customer thinks, he has received. This gap is called the “Satisfaction Gap”. The reasons forthese gaps are manifold – ranging from ineffectiveness of the mechanisms for observation tothe errors at the strategic or tactical level of decision making.Gaps between targeted quality (QT) and delivered quality (QD) can be manifold, related to thedeficiencies in the service provider/ producer’s perspective. An underperformance related to thedelivery of services is one of the prime reasons for the occurrence of a “Performance Gap”. This
  • 58gap could also be seen as a measure of the effectiveness of the service provider/ producer inachieving the targets set up.Perceived Quality is often found to vastly differ from the delivered quality (QD). Gaps betweenthe delivered quality (QD) and perceived quality (QP) can be as a reason of the customersaccumulated knowledge of the service, through constant use and the subsequent failure of theservice to live up to his expectation in the mind.(Macario 2011) during the configuration of quality factors in urban mobility systems says thefollowing:The first main step is the explicit and implicit analyze of customers’ expectations, that is observeand understand current state of needs and future trends, with adequate instruments such asdata collection in mobility patterns, attitudinal surveys, key informant interviews, focus groups,participant observer techniques etc. (Cliffton &Handy, 2001, pp 4 – 10). Next there is the needto assure adequate frameworks for the provision of services and, considering thoseexpectations, set minimum performance thresholds for all the components of the mobilitysystem. After this performance, assessment of the several services should be done, consideringadequate deployment of the quality criteria to all components and minimization of theperformance gaps. Finally, the last step consists in the assessment of customer satisfaction,analyze of results and consequent readjust of the quality targets.5.5 ANALYSIS OF CUSTOMER NEEDS AND FUTURE TRENDSIn order to understand the needs of the customers, measure their expectations and also keepan eye on the possible future trends, surveys need to be done. Surveys on the stakeholders ofthe proposed service, in this dissertation, the users of the airlines with special reference to lowcost airlines, aid in giving an unbiased understanding into the needs of the customer. Not justthat, an effective methodology of survey, when adopted can give adequate feedback into thetrends that the customers look forward to obtain from the use of the service.For the purpose of this study, this shall be satisfied by the Importance – Performance Analysis,applied earlier in order to gauge the importance and the subsequent performance of the serviceattributes that define quality in an airport terminal. The mean scores obtained for each serviceattribute on the Importance section give the expectations of the customer from that particularservice attribute. In this quality criteria establishment exercise, it fills up the Expected Quality(QE) component.The Importance Performance Analysis yielded 154 responses from a global respondent base oftravelers who use airlines with special reference to low cost airlines. This sample, statisticallysignificant was determined to be ample enough in understanding the needs of the airlinepassengers who form the customer component of the quality jargon. On a 4 point scale, themean scores for all the service attributes were obtained and are as given below. As can be
  • 59seen, the study takes into account the assumption that the Expected Quality (QE) proposed inthe configuration of quality factors is synonymous to the Importance criterion in the ImportancePerformance Analysis. This is backed up by the fact that most methods that address on servicequality have the same philosophy of assessing the quality based on the phenomenon ofexpectations and perceptions, when taking a customers’ perspective.Table 5-1 – Expected Quality scores5.6 SETTING UP MINIMUM PERFORMANCE THRESHOLDSThe next step in establishing quality criteria is to establish minimum thresholds of performancefor each of the components of the mobility system. This study shall entail the formation of 4scaled bases for assessing the quality, called service levels henceforth. Service Level A shallbe of the highest order and Service Level D shall be of the lowest order in the qualityassessment procedure.The task in the current study involves setting up 4 quality levels for each service attribute, thusproviding a framework for defining the service rendered in an objective manner. Therepresentation of these quality levels shall begin from defining the most preferred scenario tothe least preferred scenario in that order (A to D).1. Availability of transport modes for commute from the terminal Service Level A: Availability of choices in transport modes (public transport, trainsand taxis for instance) for commute from the terminal at all times.ImportanceExpectedQuality (QE)3,33100,03,2794,53,0675,52,8455,52,8152,72,7950,92,7850,02,7850,02,5932,72,5327,32,4217,32,230,0Number of working check - in countersThermal Comfort (Temperature control)Visual impact of the terminal (cleanliness and design)Availability of trolleysAvailability of choices in food or retailWalking distances inside the terminalSeat Availability inside the terminalTime taken to do check - inLevel of congestion (crowding)Accessibility to retail and concessionsAvailability of transport modes for commute from the terminalAccessibility to food and beveragesService Attribute0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50
  • 60 Service Level B: Availability of choices in transport modes (public transport, trainsand taxis for instance) for commute from the terminal during peak hours, butavailability of atleast one mode at all times other than taxi. Service Level C: Availability of atleast one transport mode apart from taxi duringpeak hours and availability of the taxi during non – peak hours. Service Level D: Availability of one transport mode (taxi) at all times.2. Time taken to do check - in Service Level A: Time taken to do check – in not exceeding 15 minutes. Service Level B: Time taken to do check – in not exceeding 25 minutes. Service Level C: Time taken to do check – in exceeding 30 minutes, but less than40 minutes. Service Level D: Time taken to do check – in exceeding 40 minutes.3. Level of Congestion Service Level A: The best service quality level being the one where the terminal iscapable of handling passenger and airline traffic without much hindrance to themaintenance of flows and fulfilling spatial requirements at all times including thepeak hours. A Service Level A terminal would resemble the following:Figure 5.5 – Congestion Level of Service A Service Level B: The second best service quality level being the one where theterminal is capable of handling passenger and airline traffic without much hindranceto the maintenance of flows at all times except the peak hours. At the peak hours,the terminal experiences little congestion and would resemble the following:
  • 61Figure 5.6 – Congestion Level of Service B Service Level C: The next best service quality level being the one where theterminal is found to be not capable of handling passenger and airline traffic becauseof the hindrance to the maintenance of flows at most times including the peak hours.During the peak hours, the terminal experiences long queues and the situation canbe described by the following:Figure 5.7 – Congestion Level of Service CFigure 5.8 – Congestion Level of Service C, Queuing Service Level D: The least favourable service quality level being the one where theterminal is found to be not capable of handling passenger and airline traffic because
  • 62of the hindrance to the maintenance of flows at all times including the peak hours.During the peak hours, the terminal experiences extremely long queues, delays incheck – in and related activities severely congesting the terminal. This situation canbe as described as shown below:Figure 5.9 – Congestion Level of Service D4. Number of working check – in counters Service Level A: Number of working check – in counters being good enough toensure that the total time spent in the check – in process does not exceed 15minutes. Service Level B: Number of working check – in counters being good enough toensure that the total time spent in the check – in process does not exceed 25minutes. Service Level C: Number of working check – in counters being good enough toensure that the total time spent in the check – in process lies between 30 and 40minutes. Service Level D: Number of working check – in counters at the present momentresulting in the total time spent in the check – in process exceeding 40 minutes.5. Walking distances inside the terminal Service Level A: Walking distances inside the terminal not exceeding 300 metres (5minutes of walking) Service Level B: Walking distances inside the terminal not exceeding 500 metres(10 minutes of walking) Service Level C: Walking distances inside the terminal not exceeding 800 metres(15 minutes of walking) Service Level D: Walking distances inside the terminal exceeding 800 m. ( 15 - 20minutes of walking)
  • 636. Accessibility to food and beverages Service Level A: Accessibility to food and beverages at a walking distance of 100metres from any point inside the airport terminal. Service Level B: Accessibility to food and beverages at a walking distance of 200metres from any point inside the airport terminal. Service Level C: Accessibility to food and beverages at a walking distance of 300metres from any point inside the airport terminal. Service Level D: Accessibility to food and beverages at a distance, exceeding 300metres from any point inside the airport terminal.7. Thermal Comfort (Temperature control) Service Level A: Ambient temperature inside the airport terminal not exceeding thebasic human comfort temperature of 23 °C. Winter temperatures adjustedaccordingly. Service Level B: Ambient temperature inside the airport terminal at 24 °C. Wintertemperatures adjusted accordingly. Service Level C: Ambient temperature inside the airport terminal at 25 - 26 °C.Winter temperatures adjusted accordingly. Service Level D: Ambient temperature inside the airport terminal exceeding 26 °C.Winter temperatures adjusted accordingly.8. Seat availability inside the terminal Service Level A: Seat availability inside the terminal corresponding to a 1:1relationship, on comparison with the demand inside the terminal. Service Level B: Seat availability inside the terminal corresponding to a 1:2relationship, on comparison with the demand inside the terminal. Service Level C: Seat availability inside the terminal corresponding to a 1:3 – 1:5relationship, on comparison with the demand inside the terminal. Service Level D: Seat availability inside the terminal corresponding to more than a1:5 relationship, on comparison with the demand inside the terminal.9. Visual Impact of the terminal (cleanliness and design) Service Level A: Visual Impact of the terminal corresponding to a star rating of 4and above, as approved by Skytrax. Service Level A: Visual Impact of the terminal corresponding to a star rating of 3, asapproved by Skytrax. Service Level A: Visual Impact of the terminal corresponding to a star rating of 2, asapproved by Skytrax. Service Level D: Visual Impact of the terminal corresponding to a star rating of 1, asapproved by Skytrax.
  • 6410. Availability of choices in food and retail Service Level A: Availability of choices in food and retail – with more three or morealternatives. Service Level B: Availability of choices in food and retail – with more twoalternatives. Service Level C: Availability of choices in food and retail – with more onealternative. Service Level D: Availability of choices in food and retail – with no alternatives.11. Availability of trolleys Service Level A: Availability of trolleys on a 1:1 basis, on comparison with demand. Service Level A: Availability of trolleys on a 1:2 basis, on comparison with demand. Service Level A: Availability of trolleys on a 1:3 basis, on comparison with demand. Service Level A: Availability of trolleys on a basis which is greater than or equal to1:5, on comparison with demand.12. Accessibility to retail and concessions Service Level A: Accessibility to retail and concessions at a walking distance of 200metres or less. Service Level B: Accessibility to retail and concessions at a walking distance notexceeding 400 metres. Service Level A: Accessibility to retail and concessions at a walking distance notexceeding 500 metres. Service Level A: Accessibility to retail and concessions at a walking distance notexceeding 600 metres.5.7 HARMONIZATION OF SERVICE ATTRIBUTESThe previous section involved defining minimum performance thresholds for each serviceattribute. Service Level A was adopted as the best in terms of delivering service quality andService Level D was the least preferred scenario.An effort has been done through this study to understand the satisfaction gap in terms ofquality, which is prevalent in an airport terminal. This required a clear definition of the variousterms involved in this process. The definitions adopted for the course of this study are as givenbelow:In the study of service quality, the Expected Quality and Perceived Quality have been definedas the following:Expected Quality: This is the level of quality required by the customer, implicitly or explicitly.Perceived Quality: This is the level of quality perceived by the user – customer.
  • 65Note that there is a difference between Expected Quality & Importance (in the Importance –Performance Analysis) and between Perceived Quality & Performance. The study had earliermapped the mean scores obtained against Importance straight ahead to the term ExpectedQuality (QE) and repeated the procedure for the Performance and Perceived Quality (QP). It waslater realized that there is a variation and thus, the need to harmonize the mean scoresobtained for each service attribute was realized.This is a situation of multi – criteria decision making where it is required to evaluate eachattribute based on the criterions established. This is done by constructing a value function foreach descriptor, where in, a value score is associated to each one of the levels of impact /performance of the descriptor. Typically, a value function converts impacts into scores. And thevalue score assigned, takes into consideration the attractiveness of the impact with the twoadopted reference levels.By the two adopted reference levels, it is meant that level of reference, the highest of which isassigned a value score of 100, and the lowest of which is assigned a value score of 0. Thevalue scores of the other parameters are established relatively, based on the two adoptedreference levels. This process, when done correctly, harmonizes the mean scores into a singlehomogenous scale between 0 and 100, which is quantifiable. This method to harmonize thescales is done in view of the fact that the mean score ranges obtained during the course of thisstudy have been in different scale ranges for Importance and Performance. It is felt that, there isthus a need to homogenize this scale before assessing the satisfaction gap for each serviceattribute.Thus, the Expected Quality (QE) is defined here as the value score obtained for the Importancecriterion and the Perceived Quality (QP) is defined as the value score obtained for thePerformance criterion. This is done because it is not appropriate to map the mean scores ofImportance and Performance straight away as Expected Quality (QE) and Perceived Quality(QP). Thus, the study assumes that the customer expectations and perceptions are in line withthe value scores.5.8 ASSESSMENT OF CUSTOMER SATISFACTIONThe next step in the process of establishment of quality criteria is the assessment of thecustomer satisfaction. From the quality criteria perspective, this aims to address the PerceivedQuality (QP). Once the accurate estimation of the perceived quality is done about, it will aid ingiving the estimate of the quality gap, namely the Satisfaction gap in this case, that prevails.The basis for this information is again the Importance Performance Analysis (IPA), morespecifically, the performance criterion in that.Given below are the value scores obtained as part of the study conducted for the study thattranslate into being the Perceived quality (QP). The higher the perceived quality, the better it is
  • 66for that particular service attribute. One another aspect worth noting here will be the apparentdifference between Expected Quality and Perceived Quality. This, called the satisfaction gap,can be positive or negative depending on the scores obtained for both the expected andperceived qualities. The main objective in configuring quality criteria is to reduce the qualitygaps to as much minimum as it can possibly be. Thus, a negative satisfaction gap is said to bemuch more beneficial than a positive satisfaction gap.In order to study the satisfaction gap, each of the service attributes shall be taken separately toanalyze the possible reasons for the deficiencies or surpluses, as is applicable in each case.Table 5-2 – Perceived Quality scoresThe satisfaction gaps that exist in each service attribute and the observations are explored toand are as given under -1. Availability of transport modes for commute from the terminalExpected Quality Value Score: 100.0Perceived Quality Value Score: 69.2Satisfaction Gap: 30.8PerformancePerceivedQuality (QP)2,99100,02,99100,02,9082,72,8675,02,8471,22,8369,22,8063,52,7961,52,7961,52,6025,02,5719,22,470,0Level of congestion (crowding)Visual impact of the terminal (cleanliness and design)Thermal Comfort (Temperature control)Accessibility to food and beveragesAvailability of trolleysAccessibility to retail and concessionsSeat Availability inside the terminalAvailability of transport modes for commute from the terminalNumber of working check - in countersTime taken to do check - inWalking distances inside the terminalAvailability of choices in food or retailService Attribute
  • 67Analysis: It is observed that the satisfaction gap for this service attribute is 30.8. Thismeans that the customers expect the service attribute to be 30.8 % better than what itis now. Possible reasons for the existence of the quality gap include the following:I. Dissatisfaction of the customer over the choices of transport modes available.II. Dissatisfaction of the customer over the costs of the commute.III. Dissatisfaction of the customer over the frequencies of the transport modes.2. Time to do check – inExpected Quality Score: 94.5Perceived Quality Score: 61.5Satisfaction Gap: 33.0Analysis: It is observed that the satisfaction gap for this service attribute is 33. Thismeans that the customers expect the service attribute to be 33 % better than what it isnow. Possible reasons for the existence of the quality gap include the following:I. Dissatisfaction of the customer over the efficiency of the terminal staff doingthe check – in processes.II. Dissatisfaction of the customer over the number of working check – in countersat a particular moment.III. Dissatisfaction of the customer over the queue management system.3. Level of Congestion (crowding)Expected Quality Score: 75.5Perceived Quality Score: 0.0Satisfaction Gap: 75.5Analysis: It is observed that the satisfaction gap for this service attribute is 75.5. Thismeans that the customers expect the service attribute to be 75.5 % better than what it isnow. This is the highest positive gap in quality that is observed during the course of thisstudy. Possible reasons for the existence of the quality gap include the following:I. Dissatisfaction of the customer over the amount of space available in theterminal.
  • 68II. Dissatisfaction of the customer over the design and visual aspects of theterminal.4. Number of working check – in countersExpected Quality Score: 55.5Perceived Quality Score: 61.5Satisfaction Gap: -6.1Analysis: It is observed that the satisfaction gap for this service attribute is -6.1. Thismeans that despite seeing the satisfaction gap to be positive, in comparison with theother service attributes, the customers felt that the service attribute was 6.1 % betterthan what they had expected it to be. Possible reasons for the existence of the qualitygap include the following:I. Dissatisfaction of the customer over the efficiency of the terminal staff doing thecheck – in process.5. Walking distances inside the terminalExpected Quality Score: 52.7Perceived Quality Score: 25.0Satisfaction Gap: 27.7Analysis: It is observed that the satisfaction gap for this service attribute is 27.7. Thismeans that the customers expect the service attribute to be 27.7 % better than what itis now. Possible reasons for the existence of the quality gap include the following:I. Dissatisfaction of the customer over the design and visual aspects of theterminal.II. Dissatisfaction of the customer over the space allocation for various activitiesinside the airport terminal.6. Accessibility to food and beveragesExpected Quality Score: 50.9Perceived Quality Score: 82.7Satisfaction Gap: - 31.8
  • 69Analysis: It is observed that the satisfaction gap for this service attribute is -31.8. Thismeans that the customers felt that the service attribute was 31.8 % better than whatthey had expected it to be. Possible reasons for the existence of the quality gap includethe following:I. Satisfaction of the customer over the availability of food and beverage optionsinside the terminal, which is of special significance for passengers flying low –cost since most low – cost airlines are no frills in character.7. Thermal ComfortExpected Quality Score: 50.0Perceived Quality Score: 100.0Satisfaction Gap: - 50.0Analysis: It is observed that the satisfaction gap for this service attribute is -50.0. Thismeans that the customers felt that the service attribute was 50.0 % better than whatthey had expected it to be. Possible reasons for the existence of the quality gap includethe following:I. Satisfaction of the customer over the thermal comfort experienced in the airportterminal which seems to have played a very limited role in defining the qualityof an airport terminal.8. Seat Availability inside the terminalExpected Quality Score: 50.0Perceived Quality Score: 63.5Satisfaction Gap: - 13.5Analysis: It is observed that the satisfaction gap for this service attribute is -13.5. Thismeans that the customers felt that the service attribute was 13.55 % better than whatthey had expected it to be. Possible reasons for the existence of the quality gap includethe following:I. Satisfaction of the customer over the seat availability due to the large sectionsof travelling class being in the mid age categories.II. Satisfaction of the customer over seat availability because of the existence ofadequate access to retails and concessions, food and beverages which negatethe need to be seated for large amount of times before boarding the aircraft.
  • 709. Visual Impact of the terminal (cleanliness and design)Expected Quality Score: 32.7Perceived Quality Score: 100Satisfaction Gap: - 67.3Analysis It is observed that the satisfaction gap for this service attribute is - 67.3. Thismeans that the customers felt that the service attribute was 67.3 % better than whatthey had expected it to be. Possible reasons for the existence of the quality gapinclude the following:I. Satisfaction of the customer over the visual impact of the terminal which seemsto have played a very limited role in defining the quality of the airport terminal.10. Availability of choices in food and retailExpected Quality Score: 27.3Perceived Quality Score: 19.2Satisfaction Gap: 8.0Analysis: It is observed that the satisfaction gap for this service attribute is 8.0. Thismeans that despite seeing the satisfaction gap to be negative, in comparison with theother service attributes, the customers felt that the service attribute could have been 8% better than what it was right now. Possible reasons for the existence of the qualitygap include the following:I. Satisfaction of the customer over the availability of choices in food and retailbecause the distances flown are less, so the need for choices comes downconsiderably as well.11. Availability of TrolleysExpected Quality Score: 17.3Perceived Quality Score: 75.0Satisfaction Gap: - 57.7Analysis: It is observed that the satisfaction gap for this service attribute is - 57.7. Thismeans that the customers felt that the service attribute was 57.7 % better than whatthey had expected it to be. Possible reasons for the existence of the quality gapinclude the following:
  • 71I. Satisfaction of the customer over the availability of trolleys primarily becausemost of the customers travelling in low cost airlines are either travelling onbusiness or short visits. Vacation travelers are seasonal and most of themwould still prefer to travel by the legacy carriers keeping in mind the baggagerestrictions on the low cost airline. Thus, the need for the trolleys is realized byonly a very few segment of passengers and thus, there are trolleys in surplusfor them.12. Accessibility to retail and concessionsExpected Quality Score: 0Perceived Quality Score: 71.2Satisfaction Gap: -71.2Analysis: It is observed that the satisfaction gap for this service attribute is – 71.2. Thismeans that the customers felt that the service attribute was 71.2 % better than whatthey had expected it to be. This is the highest negative gap in quality that is observedduring the course of this study. Possible reasons for the existence of the quality gapinclude the following:I. Satisfaction of the customer over the accessibility to retail and concessions cozmost passengers flying low cost airlines do not expect a lot of retail andconcession options because of the nuances of the low cost business model.Thus, when there are even minimal services available in airports, it is seen tobe enough to satisfy the customers and thus, there is a huge satisfaction gapthat is being observed.
  • 72The satisfaction gap scores for all the service attributes are as listed below:Table 5-3 – Satisfaction Gap scoresAs can be seen from the above graphic, the highest satisfaction scores are obtained forAccessibility to retail and concessions, followed by visual impact of the terminal (cleanliness anddesign). The least satisfaction gap score is obtained for Level of Congestion (crowding). A smallinference to be gathered from the above graphic is the fact that most of the service attributeswhich were higher in the priority list; both by means of Importance scores and the subsequentexpected quality (QE) fair only marginally well in the evaluation of the satisfaction gap scores.Service attributes which were below in the pecking order, in terms of their Importance receivedgreater satisfaction gap scores.Expected Quality (QE) Perceived Quality (QP) Satisfaction Gap Score100,0 69,2 30,894,5 61,5 33,075,5 0,0 75,555,5 61,5 -6,152,7 25,0 27,750,9 82,7 -31,850,0 100,0 -50,050,0 63,5 -13,532,7 100,0 -67,327,3 19,2 8,017,3 75,0 -57,70,0 71,2 -71,2Service AttrbuteThermal Comfort(Temperature control)SeatAvailability inside the terminalVisual impactofthe terminal (cleanliness and design)Availability ofchoices infood orretailAvailability oftrolleysAccessibility to retail and concessionsAvailability oftransportmodes forcommute from the terminalTime takento do check -inLevel ofcongestion(crowding)Numberofworking check -incountersWalking distances inside the terminalAccessibility to food and beverages
  • 73The matrix of all possibilities arising from the various service quality levels for the service attributes has been constructed andis as given below:Table 5-4 – Service Quality Level MatrixServiceAttribute /ServiceLevelAvailability of transportmodes for commutefrom the terminalTime takento do check -inLevel ofcongestion(crowding)Number ofworking check- in countersWalkingdistances insidethe terminalAccessibilityto food andbeveragesThermal Comfort(Temperaturecontrol)Seat Availabilityinside theterminalVisual impact of theterminal (cleanlinessand design)Availabilityof choices infood or retailAvailabilityof trolleysAccessibilityto retail andconcessionsA All modes at all times. ≤ 15 minsTerminalcapable oftaking trafficat all timesCheck - incounters goodenough toensure theprocess takes ≤15 mins.Walking distances≤ 300 mAt a walkingdistance of 100m from anypoint inside theterminalTerminal ambienttemperature at 23°c.Seats: Demand : :1:1 ≥ 4 star rating (Skytrax) ≥ 3 alternativesTrolleys:Demand : :1:1At a walkingdistance of ≤200 m from anypoint inside theterminalBAll modes during peak,atleast one (taxi) during theother times. ≤ 25 minsTerminalcapable oftaking trafficat all timesexcept thepeak hours.Check - incounters goodenough toensure theprocess takes ≤25 mins.Walking distances≤ 500 mAt a walkingdistance of 200m from anypoint inside theterminalTerminal ambienttemperature at 24°c.Seats: Demand : :1:2 3 star rating (Skytrax) 2 alternativesTrolleys:Demand : :1:2At a walkingdistance of ≥400 m from anypoint inside theterminalCOne mode apart from taxi atpeak hours, taxi during theother times 30-40 minsTerminal notcapable oftaking trafficat most timesincluding thepeak hours.Long queuesCheck - incounters goodenough to snurethe processtakes onlybetween 30 - 40minsWalking distances≤ 800 mAt a walkingdistance of 300m from anypoint inside theterminalTerminal ambienttemperature at 25 -26 °c.Seats: Demand : :1:3 2 star rating (Skytrax) 1 alternativeTrolleys:Demand : :1:3At a walkingdistance of ≥500 m from anypoint inside theterminalD One mode (taxi) at all times > 40 minsTerminal notcapable oftaking trafficat all timesincluding thepeak hours.ExtremelyLong queuesCheck - incounters notgood enough toensure theprocess takes <40 minsWalking distances≥ 800 mAt a walkingdistanceexceeding 300m from anypoint inside theterminalTerminal ambienttemperatureexceeding 26 °c.Seats: Demand : : ≥1:5 1 star rating (Skytrax) NO alternativesTrolleys:Demand : : ≥1:5At a walkingdistance of ≥600 m from anypoint inside theterminal
  • 74The service attributes in any airport terminal can be represented by a variety of combinations arisingfrom the above given service quality matrix. Thus, towing in line with the recommendations of theHighway Capacity Manual (HCM) in defining level of service (LOS) for the roadways traffic, an attemptis made here to qualitatively define service levels, ranging from A to D. Service Level A: Service Level A allows for free flowing operations inside an airport terminal.All the service attributes are within permissible levels and the passengers (customers) are fullysatisfied with the quality of the service attribute on display. There are no delays even duringpeak hours and even if there are any, they are easily absorbed. Service Level B: Service Level B allows for reasonably free flowing operations inside anairport terminal. All the service attributes are just within the permissible levels and thepassengers (customers) are satisfied with the quality of the service attribute on display. Thereare not many delays and even if there are any, they are absorbed with minimal loss of time. Service Level C: Service Level C is a state of decreasing free flowing operations inside anairport terminal. Most of the service attributes are outside of the permissible levels and thepassengers (customers) are not fully satisfied with the quality of the service attribute ondisplay. There are delays and they are absorbed with loss of time, some of which can be longleading to physical and psychological discomfort for the users. Service Level D: Service Level D is a state of breakdown in free flowing operations inside anairport terminal. All the service attributes are outside of the permissible levels and thepassengers (customers) are not satisfied with the quality of the service attribute on display.There are delays and they are absorbed with loss of time, most of which can be long leadingto physical and psychological discomfort for the users.5.9 SYNERGY CONFLICT ANALYSISThe next step, now that the quality criteria have been defined is to look back on whether the set qualitycriteria perfectly meet the needs of the current study. To reiterate, the purpose of the current studywas to explore on the prospect of operating low cost and legacy carriers out of the same main airportterminal. The quality criteria that play a role in the minds of the passenger have been established. Thenext step in the right direction on this regard is to check if the said propositions meet the requirementsof the research question mooted during the initial stages – a sort of a check back to assess thecorrectness of the work done so far.The Synergy Conflict Analysis involves grading each service attribute against the possible impact thatit creates on the research question. In other words, in order to understand whether the prospect ofoperating low cost and legacy carriers can be realized (Synergy) or not (Conflict) with the influence ofthe said service factor is analyzed.
  • 751. Availability of transport modes for commute from the terminalTable 5-5 – Availability of transport modes for commute from the terminalIt is usual in the case of a main airport to be connected to the city with more than one mode oftransport, sometimes even three modes as is the case with most major airports across Europe(Paris CDG, London Heathrow, and Frankfurt et al). A common pattern observed at low costterminals (secondary airports) which are far apart from the main airport in the city is the lack ofoptions for commute.Some of the secondary airports are far enough to just have one mode of transport, namely thetaxi operating for onward commute from the terminal. Even when there is a bus connection, asis the case in Europe, the timings are such that they are available only with a very strict timetable which does not suit most passengers who have tight schedules. So, the low costpassenger gets a 20 – 30 € discount on the flight tickets for flying into the secondary airport,only to spend that amount (and in most cases more) on the taxi service to their finaldestinations. Whereas, in a main airport, this can be fulfilled by the buses or trains thatconnect to the city. So, the cost advantage is lost here.Thus it can be seen that the availability of transport modes for commute from the terminal isbound to have a synergy effect when low cost and legacy carriers operate from the same mainterminal.2. Time taken to do check - inTable 5-6 – Time taken to do check – inThis can be explained in two ways. Most often in a main airport, there are many more numberof check – in counters in operation owing to the size of the terminal. And therefore, the timetaken to do check – in in the main airport terminal is usually less than the time taken in a lowcost terminal (European and American LCCs, the majority of share in low cost aviation patronsare exceptions). Another way of seeing it is the school of thought which preaches that legacycarrier passengers take more time despite having more counters in operators as they have toget their luggage checked – in, which is more or less negligible in the case of low cost carriers.Service Attribute / Service Level A B C DAvailability of transport modes forcommute from the terminal All modes atall times.All modes duringpeak,atleastone(taxi) during the othertimes.One mode apartfrom taxi atpeakhours,taxi during theother times One mode (taxi) atall timesService Attribute / Service Level A B C DTime taken to do check - in ≤15mins ≤25mins 30-40mins >40mins
  • 76It can always be argued that the time taken to do check – in should be commensurate with theinvestment on the ticket by the passenger. In saying so, it is meant that there is always atendency to believe that low cost passengers could afford with a bit more of time on thequeues considering the fact that they are paying less for the tickets, in comparison with thepassenger on the legacy carrier. This still does not take away the fact that operating low costand legacy carriers from the same terminal might make it a better experience. Operations fromthe same terminal might be better off or worse depending on whether there is common use ofthe facilities or whether even inside the same terminal, there are separate enclosures for thelow cost terminal.Thus it can be seen that the time taken to check – in is bound to have a conflicting or synergyeffect in the event where low cost and legacy carriers operate from the same main airportterminal.3. Level of Congestion (crowding)Table 5-7 – Level of Congestion (Crowding)The level of congestion always has a negative effect on the service quality delivered in anairport terminal. Congestion is commonplace in main terminals which have a service level of Bor less, regardless of whether it is a main airport terminal or a secondary airport with lesserinfrastructure. Main airports are able to combat such congestion situations by having theadvantage of space, which may not be available in case of secondary airports or low costterminals, in particular.Thus, the level of congestion (crowding) is bound to have a conflicting effect in an event wherelow cost and legacy carriers operate from the same main airport terminal.4. Number of working check – in countersTable 5-8 – Number of working check – in countersSecondary airports or low cost terminals in particular, are always embattled with an issue ofspace. Therefore, many of these airports might only have upto two check – in countersfunctioning even during peak hours, which might sometimes lead to delays in the time taken toService Attribute / Service Level A B C DLevel of congestion (crowding)Terminal capable oftaking traffic at all timesTerminal capable oftaking traffic at alltimes except thepeak hours.Terminal notcapable of takingtraffic at most timesincluding the peakhours. Long queuesTerminal not capable of takingtraffic at all times including thepeak hours. Extremely LongqueuesService Attribute / Service Level A B C DNumber of working check - incountersCheck - in counters goodenough to ensure theprocess takes ≤ 15 mins.Check - in countersgood enough toensure the processtakes ≤ 25 mins.Check - in countersgood enough tosnure the processtakes only between30 - 40 minsCheck - in counters not goodenough to ensure the processtakes < 40 mins
  • 77check – in. It should also be said that since most of the passengers flying in low cost carriersdo not carry a lot of luggage (except the vacation travelers category); there are not manychances of the airport experiencing congestion on this regard as well.Compare this to a condition in most main airport terminals and there are always bound to betime delays especially if the terminal is delivering a service level of B or less. Thus, it isimperative to have more number of check – in counters operating to ensure there are less ofdelays. When the aspect of operating aircrafts from the same main airport terminal is explored,it is seen that whether there is any advantage or not will be governed by the fact of whetherthe airport terminal will promote using common - use terminal equipment or whether there willbe separate enclosures for the low cost and legacy carriers respectively.Thus, the number of working check – in counters is said to have either a conflicting or asynergy effect based on the policy of the main airport terminal.5. Walking distances inside the terminalTable 5-9 – Walking distances inside the terminalThe walking distances inside the terminal is a service attribute where quality levels cannot begeneralized in the easiest of manners. This is due to the reason that the satisfaction that acustomer achieves by walking inside the terminal could vary depending on the situation athand. An easy way to understand this is to take the case of a typical main airport terminal inEurope like London Heathrow or Frankfurt – the walking distances in these terminals are quitehigh. But that is compensated by the presence of enough retailing, food & beveragesconcessions that are spaced along the terminal which generally induces a lesser effect ofdistaste in the minds of the passenger.This certainly does not discount the fact that longer walking distances can be especially hardfor people who are older or specially abled or even in case of passengers who do not have alot of time in transiting through a main airport. This situation is certainly negated in case of asecondary airport, more specifically a low cost terminal. Whereas, for the question ofoperations from the same terminal, this study concludes that the passengers despite thelonger walking distances are still set to gain from this move.Thus, the walking distances inside the terminal is said to have a synergy effect in an eventwhere low cost and legacy carriers operate from the same main airport terminal.Service Attribute / Service Level A B C DWalking distances inside theterminal Walking distances ≤ 300 mWalking distances ≤500 mWalking distances ≤800 m Walking distances ≥ 800 m
  • 786. Accessibility to food and beveragesTable 5-10 – Accessibility to food and beveragesSecondary Airports are often far-fetched for space. This has adverse effects on the servicesthat are available on the airport. Although it is part of the business model for LCCs to go withno frills on their airlines, most often what happens is that this same no frills phenomenonspreads into their airport terminals as well. This is seen as a deliberate move to cut costs.Majority of the low cost terminals suffer from a lack of accessibility to food and beverages.Most often you have one license granted for the terminal and the possibility of variety in choicefor the passenger is denied. This leaves most passengers with no choice, but to limit theiroptions to the ones that prevail inside the terminal. On the aspect of operating low cost andlegacy carriers from the same terminal, it is seen that this move will benefit the passengerssince the main terminals always have more accessibility to food and beverages, leaving thepassenger with variety.Thus, the accessibility to food and beverages is said to have a synergy effect in an eventwhere low cost and legacy carriers operate from the same main airport terminal.7. Thermal Comfort (Temperature Control)Table 5-11 – thermal comfort (Temperature Control)Thermal Comfort is a service attribute which is largely a function of the ambient temperaturethat is maintained inside the airport terminal. Normally, the most ideal condition is the ambienttemperature of 23 °c. It should be adjusted to suit the needs depending on the weathercondition outside and also the passenger throughput experienced by the terminal. When thereis an event of operating low cost and legacy carriers from the same main airport terminal,there is more passenger throughput through the terminal which in no way should affect any ofthe existing entities.Thus, the thermal comfort (temperature control) is said to have a synergy effect in an eventwhere low cost and legacy carriers operate from the same main airport terminal.Service Attribute / Service Level A B C DAccessibility to food andbeveragesAta walking distance of100 m from any pointinside the terminalAta walkingdistance of200 mfrom any pointinsidethe terminalAta walkingdistance of300 mfrom any pointinside the terminalAta walking distance exceeding300 m from any pointinside theterminalService Attribute / Service Level A B C DThermal Comfort (Temperaturecontrol)Terminal ambienttemperature at 23 °c.Terminal ambienttemperature at 24 °c.Terminal ambienttemperature at 25 -26 °c.Terminal ambient temperatureexceeding 26 °c.
  • 798. Seat Availability inside the terminalTable 5-12 – Seat Availability inside the terminalMost low cost terminals and secondary airports have minimal seating arrangements in them.From experience, it is seen that the seats: demand ratio often exceeds 1: 25 during the peakhours. This affects the category of people who are old aged or who require seating assistanceby default.It can always be argued that the time spent by a low cost passenger waiting for the aircraft isless than that spent by a legacy carrier passenger after the security, but having a seats:demand ratio of 1: 1 is always much more desirable than having to wait for your aircraft,standing. Most main airport terminals are able to provide this seating standard for theirpassengers. Therefore, when the proposal to operate low cost and legacy carriers comes intoconsideration, whether this is seen as a positive or a negative move based on seat availabilitywill depend on if there will be common seating enclosures or separate enclosures for theadded traffic.Thus, the seating availability inside the terminal is said to have a conflicting effect in an eventwhere low cost and legacy carriers operate from the same main airport terminal.9. Visual impact of the terminal (cleanliness and design)Table 5-13 – Visual impact of the terminal (cleanliness and design)Most low cost terminals and secondary airports are minimal in their designs and are thuscatering to service levels B and less from an objective point of view whereas, most of the mainairport terminals are grandiose in character - with visually pleasing terminal designs and otherarchitectural aspects. From a service quality point of view, the prospect of operating low costand legacy carriers from the same main airport terminal should augur well for the partiesinvolved, especially the customers of the low cost carriers who are set to welcome the move.Thus, the visual impact of the terminal (cleanliness and design) is said to have a synergyeffect in an event where low cost and legacy carriers operate from the same main airportterminal.Service Attribute / Service Level A B C DSeat Availability inside theterminal Seats:Demand ::1:1Seats:Demand ::1:2Seats:Demand ::1:3 Seats:Demand ::≥1:5Service Attribute / Service Level A B C DVisual impact of the terminal(cleanliness and design) ≥4 starrating (Skytrax) 3 starrating (Skytrax) 2 starrating (Skytrax) 1 starrating (Skytrax)
  • 8010. Availability of choices in food or retailTable 5-14 – Availability of choices in food or retailSecondary Airports are often far-fetched for space. This has adverse effects on the servicesthat are available on the airport. Although it is part of the business model for LCCs to go withno frills on their airlines, most often what happens is that this same no frills phenomenonspreads into their airport terminals as well. This is seen as a deliberate move to cut costs.Majority of the low cost terminals suffer from a lack of accessibility to food and beverages.Most often you have one license granted for the terminal and the possibility of variety in choicefor the passenger is denied. This leaves most passengers with no choice, but to limit theiroptions to the ones that prevail inside the terminal. On the aspect of operating low cost andlegacy carriers from the same terminal, it is seen that this move will benefit the passengerssince the main terminals always have more availability of choices in food and retail, leavingthe passenger with increased accessibility.Thus, the availability of choices in food and retail is said to have a synergy effect in an eventwhere low cost and legacy carriers operate from the same main airport terminal.11. Availability of trolleysTable 5-15 – Availability of trolleysMost passengers flying low cost airlines have minimal baggage with them, except for thecategory of vacation travellers who might have more baggage than what is the norm.Therefore, the requirement of trolleys is not as much as it is, in the case of legacy carriers.From the prospect of moving into the same main airport for terminal, it is felt that this serviceattribute shall not have a negative impact.Thus, the availability of trolleys is said to have a synergy effect in an event where the low costand legacy carriers operate from the same main airport terminal.Service Attribute / Service Level A B C DAvailability of choices in food orretail ≥3 alternatives 2 alternatives 1 alternative NO alternativesService Attribute / Service Level A B C DAvailability of trolleys Trolleys:Demand ::1:1Trolleys:Demand ::1:2Trolleys:Demand ::1:3 Trolleys:Demand ::≥1:5
  • 8112. Accessibility to retail and concessionsTable 5-16 – Accessibility to retail and concessionsSecondary Airports are often far-fetched for space. This has adverse effects on the servicesthat are available on the airport. Although it is part of the business model for LCCs to go withno frills on their airlines, most often what happens is that this same no frills phenomenonspreads into their airport terminals as well. This is seen as a deliberate move to cut costs.Majority of the low cost terminals suffer from a lack of accessibility to retail and concessions.This leaves most passengers with no choice, but to limit their options of accessing retail andconcessions that prevail inside the terminal. On the aspect of operating low cost and legacycarriers from the same terminal, it is seen that this move will benefit the passengers since themain terminals always have more accessibility to retails and concessions, leaving thepassenger with variety to choose.Thus, the accessibility to retail and concessions is said to have a synergy effect in an eventwhere low cost and legacy carriers operate from the same main airport terminal.5.9.1 SYNOPSISThe graphic below describes the synergy conflict analysis in a more illustrative manner. Onestriking aspect to be noted from the graphic below is the pattern in which the service attributeshave had a conflicting or synergy effect on the proposed move for operating low cost andlegacy carriers from the same main airport terminal.From our study, it can be concluded that 10 of the service attributes can create a synergyeffect at some point in lieu with the policies of the airport and 4 of the service attributes cancreate a conflicting effect when the proposal to operate low cost and legacy carriers from thesame terminal is mooted. 2 of the service attributes produce an overlap between showcasinga conflicting effect and a synergy effect. This is because they are heavily dependent on theprospect of the airport granting separate enclosures for the operation of the low cost carrierand the legacy carrier or not.Service Attribute / Service Level A B C DAccessibility to retail andconcessionsAt a walking distance of ≤200 m from any pointinside the terminalAt a walkingdistance of ≥ 400 mfrom any point insidethe terminalAt a walkingdistance of ≥ 500 mfrom any pointinside the terminalAt a walking distance of ≥ 600 mfrom any point inside the terminal
  • 82Table 5-17 – Synergy Conflict AnalysisIf the airport grants separate enclosures for the operation of the low cost and legacy carriers,then the service attributes Time taken to do check – in and Number of working check – incounters shall have a synergy effect, otherwise they will bring a conflicting effect into theservice quality jargon.Service Attribute Conflict SynergyAvailability of transportmodes for commute fromthe terminalT ime taken to do check - inLevel of congestion(crowding)Number of working check -in countersWalking distances insidethe terminalAccessibility to food andbeveragesT hermal Comfort(T emperature control)Seat Availability inside theterminalVisual impact of theterminal (cleanliness anddesign)Availability of choices infood or retailAvailability of trolleysAccessibility to retail andconcessions
  • 836. CONCLUSION AND DIRECTIONS FOR FURTHER RESEARCH6.1 CONCLUSIONThe main objective of this dissertation was to explore the prospect of operating low cost carriers(LCCs) and legacy carriers (LCs) out of the same main airport terminal, looking from a service qualityperspective.On this regard, a first attempt was made in Section 2 in order to demystify the low cost phenomenonand to understand the differences in the business models between LCCs and LCs. Later, the impact ofLCCs on the aviation industry has also been explored.Section 3 was devoted to airport terminals. Study on the various configurations, terminal activities,costs and revenues led us to understand the growing importance of non – aeronautical revenues in anairport terminal. Process Analysis concluded on the importance of turnaround times in the decision asto whether the main airport can or should accommodate LCCs along with LCs.Section 4 was the introduction of the service quality paradigm into the dissertation. 12 serviceattributes were selected based on peer reviews and extensive literature and their impacts in definingthe quality of an airport terminal were surveyed through a global passenger survey, in order to theImportance and Performance of the service attributes. This served as the precursor to Section 5,where the service quality criteria were established.Section 5 dealt with the establishment of quality criteria for airport terminals. The aim of this sectionwas to define a framework for setting up a service quality level matrix. Approaches that look into theestablishment of quality criteria were studied and a methodology was chosen which involvedindigenous work on introduction into the airport/ airlines theme, from the conventional applications inurban mobility systems. The minimum performance thresholds were set up and the customersatisfaction gap scores were determined, which helped in setting up the service quality level matrix.To conclude, this is then modelled into a synergy conflict analysis to analyze whether there is asynergy effect or a conflicting effect on the prospect of operating low cost carriers (LCCs) and legacycarriers (LCs) from the same main airport terminal, on the basis of each service attribute. It is seenthat 10 of the 12 service attributes have a synergy effect and 4 of the 12 seem to have a conflictingeffect on the objective of the dissertation. There is an overlap in two instances, where it is strongly feltthat the policies of the airport might play a great role in determining the possibility or not of operatingthe low cost carriers and legacy carriers from the same main airport terminal.From all the work done from Sections 2 to 5, especially from the sections 4 and 5, it is understood thatthe research objective of exploring the prospect of operating low cost and legacy carriers from thesame main airport terminal could be achieved as a majority of the service attributes are creating asynergy effect and only 4 of them (2 in the most ideal case) would create a conflict. Thus, keeping in
  • 84mind, only the service quality aspect, it is of the opinion that if the air passengers, especially the lowcost customers require or expect better service quality than that is present in the current airports whichservice low cost airlines, it is needed to switch the operations of the low cost airline from thesecondary airports. Terminals into the main airport terminal and then operate both categories ofairlines from the same main airport terminal. How easy or how difficult this transition could be is solelybased on the directives and policies of the specific airport terminal in question.6.2 DIRECTIONS FOR FURTHER RESEARCHAs for further research, it is felt that with more time and resources the study could be extended tocover the customer perspective in the establishment of quality criteria (The 4 Q’s method). All roundemphasis of quality levels (QE, QT, QD, QP) will give a more clear understanding of the deficienciesexisting and thus, also leading to a more well-rounded approach in the study field. Another aspect ofimprovement could be on the Importance Performance Analysis, involving more service attributes andmuch more detailed surveying methods like conducting stakeholder (passenger surveys) at a personallevel which might increase the accuracy of the results obtained and also eliminate non – response to agood extent. Another common critique could be that this dissertation takes a very broad approach anddoes not focus on any specific case studies for deeper reference. This dissertation is talking on lowcost airlines and low cost airports from the aspect of the most generally observed patterns and thushas a possibility of needing modifications on a case by case basis when the work is to be done onspecific airports.
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  • 89ANNEXEQUESTIONNAIREDear Passenger,We are conducting a survey to determine the aspects that are perceived by the passengers as relevant for determining thequality of an airport terminal. By doing this survey, we hope to understand the set of factors that are going to be important insetting and defining the levels of service in an airport terminal.The questionnaire is divided into two sections. Section 1 consists of a few questions for which you may have to give someinformation about yourself. Section 2 will be the Importance Performance Analysis. It is a way to understand customers’ needsand expectations so that companies can make good management decisions about how to satisfy them. From the IPA, the seniormanagement does not only identify which attributes require immediate attention, but also why they require immediate attention.To assist you in the successful answering of the questionnaire, we have set up a scale from 1-4 on which you will be respondingto each question given in Section 2 of the survey. Further details on answering are provided in Section 2. The maximum timerequired to complete the survey should be less than 10 minutes.Your answers will be valuable for the course of the study and will reflect in the research study being done in the MIT PortugalProgram.Please press "Prox" to go to the next page.Thank You very much for your cooperation.________________________________________________________Caro passageiro,De forma a determinar a qualidade do Terminal de um Aeroporto, estamos a realizar uma pesquisa de modo a identificar quaisos fatores relevantes para o passageiro. Esta pesquisa ajudará a compreender quais os elementos importantes em definir onível de serviço do Terminal de um Aeroporto.O questionário envolve duas secções. A primeira secção contém perguntas sobre a informação pessoal do passageiro. Aopasso que a segunda secção é cerca Análise de Importância de Desempenho, é um método científico para compreender as
  • 90necessidades e expectativas dos clientes e como as empresas possam realizar decisões de gestão com o fim de satisfaze-los.Através da Análise de Importância de Desempenho, não só o gestor consegue identificar quais os elementos que requeremimediata atenção mas também o porquê dela.De modo a facilitar o preenchimento do questionário, foi definido uma escala de um (1) a quarto (4) para responder a cadapergunta da segunda secção. Informação adicional será fornecida à medida que responde às perguntas.A sua resposta ao questionário é de grande importância para o estudo e servirá de investigação realizada no âmbito doprograma MIT Portugal.Agradeço desde já toda a sua atenção e cooperação nesta pesquisa.PART 1: GENERAL INFORMATION / PARTE 1: INFORMAÇÃO GERALThe first section of the questionnaire consists of a few questions for which you may have to give some information aboutyourself. We assure you that personal information shall not be revealed to anyone.After answering all the questions, please press "Prox" to go to the next page.________________________________________________________A primeira seção do questionário vai envolver algumas perguntas onde você tem que dar alguma informação sobre si mesmo.Nós garantimos que informações pessoais não serão revelados a ninguém durante o curso do estudo.1. Where do you reside? / ResidênciaEurope Asia America (Northand South)Africa Oceania2. Gender / SexoMale / Masculino Female / Feminino3. Age / IdadeLess than 20 /Menos que 2020 - 29 30 - 39 40 - 49 More than 50 /Mais de 504. How often do you fly? / Qual a frequência que viaja?Once everytwo weeks / Umavez cada duassemanasOnce a month/ Uma vez cadamêsOnce everytwo or threemonths / Uma vezcada dois a trêsmesesOnce every sixmonths / Uma vezcada seis mesesOnce a year /Uma vez por ano
  • 915. What is the most common purpose of your trip? / Qual é o motivoprincipal das suas viajens?Leisure / Lazer Work / Trabalho Study / Académico Friends & Family /Familia e AmigosOthers (Please specify) / Outro (especifique)6. Have you flown with a low cost airline? (easyJet, Ryanair, Wizz Air,Air Berlin, Vueling, Spicejet, IndiGO etc) / Já voo numa companiaaerea de "Low-Cost" (easyJet, Ryanair, Wizz Air, Air Berlin, Vueling,etc)Yes / Sim No / NãoPART 2: IMPORTANCE PERFORMANCE ANALYSIS / PARTE 2: ANÁLISE DE DESEMPENHO DE IMPORTÂNCIAPlease read this carefully before proceeding with the questionnaire.If your answer to Q6 was Yes, please answer the questionnaire citing the experience of flying in the low cost airline. If theanswer to Q6 was No, please answer the questionnaire based on your general experience.In the following section, please mark the Importance (Q7) and Performance (Q8) of each service factor inside the airportterminal based on your judgement on a scale of 1 (least important / least performing) to 4( most important / most performing).Q7 In simple words: How would you rate the importance of each of the service factors based on your experience inside anairport terminal?Q8 In simple words: How would you rate the performance of each of the service factors based on your experience inside anairport terminal?After answering the questions, please press "confirmar" to conclude the survey.________________________________________________________Por favor, leia com atenção antes de prosseguir para responder ao questionário.Se respondeu Sim à pergunta Q6, então responda ao questionário segundo a sua experiência em viajar em companias "Low-Cost.Se respondeu Não à pergunta Q6, então responda ao questionário segundo a sua experiência no geral.Na seção seguinte, avalie numa escala de 1 (menos importante / menor desempenho) a 4 (mais importante / maiordesempenho)os vários factores para a qualidade de serviço do terminal de um aeroporto.De uma maneira simples, como avalia o grau de importância de cada factor baseado na sua experiência dentro do Terminal doAeroporto?
  • 92De uma maneira simples, como avalia o grau de desempenho de cada factor baseado na sua experiência dentro do Terminaldo Aeroporto?7. IMPORTANCE ANALYSIS / ANÁLISE DE IMPORTÂNCIALeastImportant /MenosimportanteSlightlyImportant /PoucoimportanteImportant /ImportanteMostImportant /MuitoImportanteNumber of working check - in counters /Número de balções de check-in emfuncionamentoTime taken to do check - in / Temponecessário para fazer check - inSeat Availability inside the terminal /Disponibilidade de assentos dentro doterminalVisual impact of the terminal (cleanlinessand design) / Impacto visual do terminal(limpeza e design)Thermal Comfort (Temperature control) /Temperatura ambienteAccessibility to retail and concessions /Acessibilidade das lojas (Duty-Free)Accessibility to food and beverages /Acessibilidade a Acessibilidade àrestauraçãoAvailability of choices in food or retail /Disponibilidade de opções de lojas e narestauraçãoLevel of congestion (crowding) / Nível decongestionamento (multidões)
  • 93LeastImportant /MenosimportanteSlightlyImportant /PoucoimportanteImportant /ImportanteMostImportant /MuitoImportanteWalking distances inside the terminal /distâncias a péAvailability of trolleys / Disponibilidade decarrinhos para bagagemAvailability of transport modes for commutefrom the terminal / Disponibilidade de modosde transporte para deslocar a partir doterminal8. PERFORMANCE ANALYSIS / ANÁLISE DE DESEMPENHOBadPerformance /MauDesempenhoLowPerformance /BaixoDesempenhoMediumPerformance /MedioDesempenhoHighPerformance /AltoDesempenhoNumber of working check - incounters / Número de balções decheck-in em funcionamentoTime taken to do check - in / Temponecessário para fazer check - inSeat Availability inside the terminal /Disponibilidade de assentos dentrodo terminalVisual impact of the terminal(cleanliness and design) / Impactovisual do terminal (limpeza e design)Thermal Comfort (Temperaturecontrol) / Temperatura ambienteAccessibility to retail and concessions/ Acessibilidade das lojas (Duty-Free)Accessibility to food and beverages /Acessibilidade a alimentos e bebidasAvailability of choices in food or retail/ Disponibilidade de opções de lojas e
  • 94BadPerformance /MauDesempenhoLowPerformance /BaixoDesempenhoMediumPerformance /MedioDesempenhoHighPerformance /AltoDesempenhona restauraçãoLevel of congestion (crowding) / Nívelde congestionamento (multidões)Walking distances inside the terminal/ distâncias a péAvailability of trolleys /Disponibilidade de carrinhos parabagagemAvailability of transport modes forcommute from the terminal /Disponibilidade de modos detransporte para deslocar a partir doterminal
  • 951ResponsePercentResponse Count48,4% 7526,7% 4117,6% 271,4% 25,9% 92ResponsePercentResponse Count67,4% 10432,6% 503ResponsePercentResponse Count4,1% 644,8% 6926,2% 4010,0% 1514,9% 234ResponsePercentResponse Count8,6% 1311,3% 1729,9% 4627,6% 4322,6% 355ResponsePercentResponse Count35,3% 5433,5% 529,5% 1521,7% 336ResponsePercentResponse Count80,8% 12419,2% 30Have you flown with a low cost airline? (easyJet. Ryanair. Wizz Air. Air Berlin.Answer OptionsYes / SimNo / NãoWhat is the most common purpose of your trip? / Qual é o motivo principalAnswer OptionsLeisure / LazerWork / TrabalhoStudy / AcadémicoFriends & Family / Familia eAnswer OptionsOnce every two weeks / UmaOnce a month / Uma vez cadaOnce every two or three monthsOnce every six months / UmaOnce a year / Uma vez por anoLess than 20 / Menos que 2020 - 2930 - 3940 - 49More than 50 / Mais de 50How often do you fly? / Qual a frequência que viaja?Where do you reside? / ResidênciaAnswer OptionsEuropeAsiaAge / IdadeAnswer OptionsAmerica (North and South)AfricaOceaniaDEMOGRAPHICS (n = 154)Gender / SexoAnswer OptionsMale / MasculinoFemale / Feminino
  • 96LeastImportant /MenosimportanteSlightlyImportant /PoucoimportanteImportant / ImportanteMostImportant /MuitoImportanteRatingAverageResponseCount13 30 79 32 2,84 1548 11 67 68 3,27 15413 40 69 32 2,78 15417 50 66 21 2,59 15413 38 73 30 2,78 15434 65 41 14 2,23 1549 37 85 23 2,79 15416 56 66 16 2,53 1545 26 78 45 3,06 15411 47 57 39 2,81 15442 41 35 36 2,42 1547 17 48 82 3,33 154154Time takento do check-in/Tempo necessário paraAccessibilityto food and beverages/AcessibilidadeIMPORTANCE ANALYSIS / ANÁLISE DE IMPORTÂNCIAAvailabilityoftransportmodesforcommute fromtheVisualimpactofthe terminal(cleanlinessand design)Levelofcongestion(crowding)/NíveldeNumberofworking check-incounters /Número deAccessibilityto retailand concessions/Availabilityoftrolleys/Disponibilidade de carrinhosSeatAvailabilityinside the terminal/DisponibilidadeAvailabilityofchoicesinfood orretail/Answer Optionsanswered questionThermalComfort(Temperature control)/TemperaturaWalking distancesinside the terminal/distânciasaBadPerformance/ MauDesempenhoLowPerformance/ BaixoDesempenhoMediumPerformance /MedioDesempenhoHigh Performance / Alto DesempenhoRatingAverageResponseCount6 43 82 23 2,79 15413 35 78 28 2,79 15412 38 73 31 2,80 1546 27 84 37 2,99 1546 22 94 32 2,99 15410 35 78 31 2,84 1549 30 82 33 2,90 15423 40 71 20 2,57 15419 60 59 16 2,47 15417 47 71 19 2,60 15413 29 79 33 2,86 15414 29 80 31 2,83 154154Accessibility to retailand concessions /Availability oftrolleys / Disponibilidade de carrinhosSeatAvailability inside the terminal/ DisponibilidadeAvailability ofchoices infood orretail/Answer Optionsanswered questionThermalComfort(Temperature control)/ TemperaturaWalking distances inside the terminal/ distâncias aTime takento do check -in/ Tempo necessário paraAccessibility to food and beverages / AcessibilidadePERFORMANCE ANALYSIS / ANÁLISE DE DESEMPENHOAvailability oftransportmodes forcommute fromtheVisualimpactofthe terminal(cleanliness and design)Levelofcongestion(crowding)/ NíveldeNumberofworking check -incounters / Número de