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Delivering Excellent Service Quality in Low Cost Aviation

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Delivering Excellent Service Quality in Low Cost Aviation MASTER THESIS IMM – International Marketing & Management DELIVERING EXCELLENT SERVICE QUALITY IN LOW COST AVIATION A Process Perspective on the Passenger Market in Copenhagen Airport December 2009 Rasmus Lindstrøm Jensen Advisor: Jesper Clement COPENHAGEN BUSINESS SCHOOL Preface The following thesis is composed on the basis of empirical data collected at Norwegian, Cimber Sterling and six individual airline passengers. I would like to thank Lone Koch (Vice President of Product Management, Cimber Sterling ) and Johan Bisgaard Larsen (Marketing Manager, Norwegian - CPH ) for the kindness and dedication. They contributed with precious information in devising the problem statement and further made the execution of the questionnaire survey possible. Further, I would like to thank Adam Høyer ( Co+Hoegh ), Christoffer Casparij ( Væksthus Sjælland ), Lene Susgaard Henriksen ( Novo Nordisk ), Morten Kaaber ( Muuto New Nordic ), Ditte Clément ( CBS ) and Line Lundø ( CBS ) for contributing with valuable information in the focus group interview. Finally, I would like to thank my advisor Jesper Clement for being a committed and pleasant advisor and sparring partner throughout the entire process. Since the number of pages in thesis exceeds 80 pages a calculation of the magnitude has been made to keep the record straight. The calculation are based on the assumption that one normal page corresponds to 2275 characters and one figure corresponds to 800 characters. Thus the actual number of pages is calculated; (169.675 + (800*16)/2275 = 80,2 pages). Consequently, the thesis keeps within the specified boundaries. Copenhagen, December 2009 Rasmus Lindstrøm Jensen Executive Summary This thesis explores the concept of service quality and customer satisfaction with low cost airlines in Copenhagen Airport. By deploying a process perspective to the concept, the assessment will be focused on in-flight service quality and customer satisfaction from a passenger perspective. The objective of the thesis is to identify, conceptualize and evaluate the service dimensions which influence the passengers’ degree of in-flight satisfaction, in order to devise priorities for improvement. This is highly relevant for the management at low cost carriers and will provide valuable input to the future in-flight service strategy. Based on a profound literature review, it has been clarified which dimensions and pertaining attributes academic researchers have drawn on to describe and conceptualize service quality. An integrated model which measures the passenger gap between expected and perceived service is found suitable to evaluate perceived in-flight service quality and overall satisfaction. Furthermore, an importance-performance analysis is applied to identify priorities for improvement, which forms the managerial implications and future in-flight service proposition. The empirical contribution is anchored in a preliminary focus group interview with selected passengers to low cost carriers, as well as a self-administered questionnaire survey which the statistical data analysis relies on. Passengers to Norwegian Air Shuttle comprise the respondents in the questionnaire survey and form the basis of the study at hand. Findings in the thesis have proven that the passengers’ in-flight service perception comprehend 5 overall service dimensions; tangibles, reliability, empathy, assurance and responsiveness, each one encompassing a number of tailored in-flight service attributes. Based on the analysis the dimensions of reliability and assurance are considered important to the overall in-flight experience whereas the tangibles dimensions are perceived rather unimportant. However, the gap analysis shows that low cost carriers generally falls short in matching the expected in-flight service level among passengers, and significant gap differences is found between various passenger segments. Lastly, the importance-performance analysis has proven that the attributes of on-time departure, cleanliness and functionality of cabin facilities and promptness in request/complaint handling should be highly prioritized whereas attributes pertaining to the tangibles dimension are considered low priority elements. Based on the above results, a favorable in-flight service proposition is devised for low cost carriers which emphasize the notions of swiftness , tidiness and perceptiveness. Jointly the notions should guide the future tactical and strategic in-flight initiatives in order to obtain overall passenger satisfaction. Table of Contents 1 INTRODUCTION...................................................................................................................................................................... 5 1.1 Characterization of Low Cost Carriers ........................................................................................................................................6 1.2 Copenhagen Airport and the Present LCC industry ..............................................................................................................8 1.3 Problem Identification........................................................................................................................................................................9 1.4 Problem Statement ...........................................................................................................................................................................11 2 METHODOLOGY ...................................................................................................................................................................13 2.1 Research Approach ...........................................................................................................................................................................13 2.2 Research Design .................................................................................................................................................................................14 2.3 Scientific Approach in Relation to Service and Quality.....................................................................................................16 2.4 Delimitations........................................................................................................................................................................................18 2.5 Visual Structure of the Project .....................................................................................................................................................19 3 THEORETICAL DISCUSSION .............................................................................................................................................21 3.1. Discussion of the Service Quality Construct .........................................................................................................................21 3.1.1 Determinants of the Service Quality Construct ............................................................................................................... 22 3.2 Models for Measuring Service Quality......................................................................................................................................23 3.2.1 The Grönroos Quality Model ................................................................................................................................................... 23 3.2.1.1 Criticism of the Grönroos Quality Model............................................................................................................................................. 25 3.2.2 The SERVQUAL Model ............................................................................................................................................................... 26 3.2.2.1 Criticism of the SERVQUAL Model.......................................................................................................................................................... 28 3.3 Interplay between Service Quality and Customer Satisfaction.....................................................................................29 3.3.1 Determinants and Effects of Customer Satisfaction...................................................................................................... 29 3.4 Framework for Measuring In-flight Service Quality and Customer Satisfaction...................................................30 3.4.1 In-flight Service Quality Dimensions ................................................................................................................................... 31 3.5 Importance-Performance Analysis to Prioritize Improvements..................................................................................33 3.5.1 Scale Approach to Importance-Performance Analysis................................................................................................. 35 3.6 Modified Research Questions.......................................................................................................................................................35 4 ANALYSIS ................................................................................................................................................................................37 4.1 Study Design.........................................................................................................................................................................................37 4.1.1 Explorative Study .......................................................................................................................................................................
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