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Linkages between customer service, customer satisfaction and performance in the airline industry: Investigation of non-linearities and moderating effects

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  • Steven, Adams B.
  • Dong, Yan
  • Dresner, Martin

Abstract

The paper investigates the linkages between customer service, customer satisfaction, and firm performance in the US airline industry. In particular, the moderating effects of market concentration and firm dominance on the service–satisfaction–performance relationship are examined. Our major finding is that market concentration dampens the relationship between customer satisfaction and airline profitability. Although the same moderating relationship was not found for market power, these results, combined, indicate that airlines can increase profits in concentrated markets without providing for the same, concomitant increases in customer satisfaction as airlines operating in more competitive markets. From a public policy perspective, our results point to the importance of regulators monitoring airline actions, such as mergers and alliances, that serve to increase the concentration of markets, but may result in lower levels of customer satisfaction.

Suggested Citation

  • Steven, Adams B. & Dong, Yan & Dresner, Martin, 2012. "Linkages between customer service, customer satisfaction and performance in the airline industry: Investigation of non-linearities and moderating effects," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 743-754.
    • Handle: RePEc:eee:transe:v:48:y:2012:i:4:p:743-754
    DOI: 10.1016/j.tre.2011.12.006
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    10. Piening, J. & Ehrmann, T. & Meiseberg, B., 2013. "Competing risks for train tickets – An empirical investigation of customer behavior and performance in the railway industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 51(C), pages 1-16.
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    13. Fan, Terence Ping Ching, 2019. "Schedule creep – In search of an uncongested baseline block time by examining scheduled flight block times worldwide 1986–2016," Transportation Research Part A: Policy and Practice, Elsevier, vol. 121(C), pages 192-217.
    14. Wittman, Michael D., 2014. "Are low-cost carrier passengers less likely to complain about service quality?," Journal of Air Transport Management, Elsevier, vol. 35(C), pages 64-71.
    15. Paramonovs Sergejs & Ijevleva Ksenija, 2015. "Factor Analysis of Passengers’ Satisfaction at “RIGA International Airport”," Economics and Business, Sciendo, vol. 27(1), pages 46-52, August.
    16. Ming-Chih Tsai & Rico Merkert & Jiana-Fu Wang, 2021. "What drives freight transportation customer loyalty? Diverging marketing approaches for the air freight express industry," Transportation, Springer, vol. 48(3), pages 1503-1521, June.
    17. Chow, Clement Kong Wing, 2015. "On-time performance, passenger expectations and satisfaction in the Chinese airline industry," Journal of Air Transport Management, Elsevier, vol. 47(C), pages 39-47.
    18. Vlachos, Ilias & Lin, Zhibin, 2014. "Drivers of airline loyalty: Evidence from the business travelers in China," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 71(C), pages 1-17.
    19. Nicole Kalemba & Fernando Campa-Planas, 2018. "The quality effect on the profitability of US airline companies," Tourism Economics, , vol. 24(3), pages 251-269, May.
    20. Guenther, Miriam & Guenther, Peter, 2021. "The complex firm financial effects of customer satisfaction improvements," International Journal of Research in Marketing, Elsevier, vol. 38(3), pages 639-662.
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    22. Xuemei Fu & Zhicai Juan, 2017. "Drivers of transit service loyalty considering heterogeneity between user segments," Transportation Planning and Technology, Taylor & Francis Journals, vol. 40(5), pages 611-623, July.
    23. Nguyen, Minh-Anh Thi & Yu, Ming-Miin & Lirn, Taih-Cherng, 2022. "Revenue efficiency across airline business models: A bootstrap non-convex meta-frontier approach," Transport Policy, Elsevier, vol. 117(C), pages 108-117.

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