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Service Quality, Passenger Expectations and Profitability in the Chinese Airline Industry

In: Airline Economics in Asia

Author

Listed:
  • Clement Kong Wing Chow
  • Michael Ka Yiu Fung

Abstract

Service quality has become an important area for competition among Chinese carriers. This paper focuses on studying the relationship between customer satisfaction measured by customer complaints and their expectation of the on-time performance of Chinese carriers and how the customer complaints affect the financial performance of carriers. By using a quarterly balanced panel data set covering six large listed carriers, the empirical results show that an increase in actual on-time performance reduces customer complaints. However, an increase in expected on-time performance significantly raises customer complaints. An increase in customer complaint reduces the yield measured as revenue per revenue ton kilometer (RTK) of carriers.

Suggested Citation

  • Clement Kong Wing Chow & Michael Ka Yiu Fung, 2018. "Service Quality, Passenger Expectations and Profitability in the Chinese Airline Industry," Advances in Airline Economics, in: Airline Economics in Asia, volume 7, pages 169-194, Emerald Group Publishing Limited.
    • Handle: RePEc:eme:aiaezz:s2212-160920180000007010
    DOI: 10.1108/S2212-160920180000007010
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    More about this item

    Keywords

    customer expectation of service quality; customer complaints; on-time performance of scheduled flights; L25; L90; L93;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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