Comparing Online Reviews for Low-Cost and Mainline

COMPARING ONLINE REVIEWS FOR LOW-COST AND MAINLINE

AIRLINES: AN EXPLORATORY STUDY OF PASSENGER SATISFACTION

A Project

Presented to the

Faculty of

California State Polytechnic University, Pomona

In Partial Fulfillment

Of the Requirements for the Degree

Master of Science

Hospitality Management

Jocelyn Harper

2019

SIGNATURE PAGE

PROJECT: COMPARING ONLINE REVIEWS FOR LOW-COST AND MAINLINE CARRIERS: AN EXPLORATORY STUDY OF PASSENGER SATISFACTION

AUTHOR: Jocelyn Harper

DATE SUBMITTED: Fall 2019

The Collins College of Hospitality Management

Dr. Ben Dewald ______Project Committee Chair Professor of Hospitality Management

Dr. Hyounae (Kelly) Min ______Assistant Professor of Hospitality Management

Dr. Zhenxing (Eddie) Mao ______Department Chair of Hospitality Management

ABSTRACT

The purpose of this study was to identify significant factors in customer satisfaction for airlines based in the United States. In order to achieve this, two low-cost carriers and two mainline carriers were selected. The online reviews from each airline were analyzed for major themes. The objective was to see if passenger type (mainline or low-cost) impacts the type of negative reviews left online. The secondary objective was to discover if passengers of the low-cost carriers have lower expectations when it comes value for money and customer service.

Key words: passenger satisfaction, content analysis, United States, low-cost airline, mainline carrier

iii

TABLE OF CONTENTS

SIGNATURE PAGE ...... ii ABSTRACT ...... iii LIST OF TABLES ...... v LIST OF FIGURES ...... vi CHAPTER 1: INTRODUCTION ...... 1 CHAPTER 2: LITERATURE REVIEW ...... 3 Customer Satisfaction in Airlines ...... 3 Online Reviews ...... 4 Low-Cost Airlines ...... 5 CHAPTER 3: RESEARCH QUESTIONS ...... 7 CHAPTER 4: METHODOLOGY ...... 8 Content Analysis ...... 8 Selection of Data ...... 8 Analyzing the Reviews ...... 9 CHAPTER 5: RESULTS ...... 11 CHAPTER 6: DISCUSSION ...... 16 CHAPTER 7: IMPLICATIONS ...... 19 Recruiters and Trainers for Mainline Airlines ...... 19 Airline Hospitality for All Airlines ...... 20 CHAPTER 8: LIMITATIONS ...... 21 REFERENCES ...... 22

LIST OF TABLES

Table 1 Southwest Airline Reviews ...... 10

Table 2 Delta Airline Reviews ...... 10

Table 3 Airline Review Counts Per Category ...... 11

Table 4 Example of “Other” Reviews ...... 17

LIST OF FIGURES

Figure 1 Mainline vs Low-Cost Reviews ...... 12

Figure 2 Delta Airlines Reviews Breakdown ...... 13

Figure 3 American Airlines Review Breakdown ...... 13

Figure 4 Southwest Airlines Review Breakdown ...... 14

Figure 5 JetBlue Airlines Review Breakdown ...... 15

CHAPTER 1

INTRODUCTION

Over 56 million Americans traveled out of the country by air in 2018 (National

Travel & Tourism Office, 2018). Air travel is very a popular industry, and even though

Americans do not take as much vacation time as their European counterparts, the number of air travelers are growing. In 2018, 87 percent of Americans reported having flown in their lifetime, compared to 81 percent in 1997 (Airlines for America, 2019). The

International Air Transport Association says the demand of air travel and number of airline passengers is progressively increasing (Kalemba, Campa-Planas, Hernández-Lara

& Sanchez-Rebull, 2018). As the number of passengers increase over time, there are only so many US airlines to choose from. Airlines must fight for the attention of potential customers.

According to Namakusa (2013), the competition between airlines is fierce. The airline industry is characterized by heavy regulations which limits its ability to access global markets compared to other industries (Namakusa, 2013, p. 520). Airlines must take special care in hiring new employees who are highly professional, because customer satisfaction is key in this highly competitive market. “The delivery of high-quality service becomes a marketing requirement among air carriers, as a result of competitive pressure” (Ostrowski, O’Brien & Gordon, 1993, p. 19). Airline marketers and recruiters need to pay attention to customer feedback in order to win new customers and retain current customers.

There has been a rise in passengers choosing to fly with low-cost airlines (Trainer,

2017). Passengers occasionally choose to forgo the monoliths like United or Delta, and

choose low-cost carriers. Graham, (2013) confirms that airline passengers will travel a further distance in order to depart from an airport that offers lower rates. However, beyond price point, customer satisfaction is consistently a distinguishing factor between various airlines. To determine which factors are most significant to customer satisfaction, this study will focus on perceived customer service and value for money. These two factors were chosen because they reflect a passenger’s attitude towards an airline and can reveal the purchasing intention. Additionally, most airline review sites collect information for these categories, therefore there will be hundreds of reviews available that contain views on customer service and value for money.

Word of mouth (WOM), especially electronic worth of mouth (eWOM) is a major way that airlines receive positive or negative marketing (Beneke, Mill, Naidoo &

Wickham, 2015). WOM is crucial in the service industry, because a service failure could be the next viral story on social media. The airline industry is susceptible to losing customers when a service failure is reported to an online review website.

This study will compare negative online reviews for low-cost airlines and mainline airlines and answer two research questions. Research on airline customer satisfaction has been conducted before, but not specifically regarding US low-cost airlines. This study intends to uncover whether passengers who seek out low-cost airlines believe that cabin staff service and value for money matter when they leave a negative review online.

CHAPTER 2

LITERATURE REVIEW

Customer Satisfaction in Airlines

This study will focus on customer satisfaction between low-cost carriers and mainline carriers. “Customer satisfaction is a comprehensive concept representing the overall evaluation of experience to the performance of products or services after purchase and consumption” (Yang, Shih, Nha, & Wang, 2017, p 102). There are many different factors involved in a customer’s overall satisfaction, therefore this study focused on perceived customer service and value for money.

All airlines are expected to provide a seat on the plane and safe travel to the desired destination. Many low-cost airlines have a reputation for creating a negative passenger experience, but people continue to choose them for the low prices. Even when customers do not expect high quality service, service failures occur and can impact brand reputation.

The customer impression of an airline is synonymous with the brand name.

Customers shop more than price alone when selecting an airline. According to Gibbs,

Slevitch and Washburn (2017, p. 55), “The most important principle for competitiveness, and survival among airlines, is delivering high-quality service along with safety.” Having a reputation for safety is a vital piece of the marketing puzzle in air travel.

Additionally, passengers expect to arrive to their intended destination on time and without too many delays. Sherali, Bae & Haouari (2013) said that the profit an airline earns is highly dependent on their core function – crew scheduling, fleet assignment and flight scheduling. These are the basics of air travel.

However, customers will not spread positive word of mouth if they do not feel satisfied with the service through their journey. “If the passenger is not satisfied with the quality of service, they will reconsider the buying decision for further flights and will probably switch to another airline” (Archana & Subha, 2012, p. 51). Losing a customer is costly to a company, so customer satisfaction must be a priority.

Employees who engage in customer contact are some of the most important employees in the hospitality industry. When it comes to the airline experience, passengers make major decisions about an airline when interacting with gate agents and flight attendants (Namukasa, 2013).

In a study of students who routinely flew a Chinese airline, Chen, Peng and

Hackley found that inflight service mattered. They reported that “from the passengers’ perspective, they cared very much about the service they received from the cabin attendants” (Chen, Peng & Hackley, 2008, p. 149). All customer service agents, like flight attendants and gate agents, create a critical impression of the airline with their behavior and attitude. The way a passenger feels about the crew can impact customer opinions of the airline and have an impact on that customer’s amount of satisfaction.

Online Reviews

Online customer reviews are an excellent method for companies to receive and process feedback. The internet has provided a platform for airline passengers to openly share their thoughts towards their purchase. Word of mouth is a method of marketing for companies. Positive word of mouth is money in the bank, and negative word of mouth is hard to reverse. It can be shared over the phone, in person, or online. When it is shared online it is known as electronic word of mouth or eWOM (Beneke, et al., 2015).

This study will be focusing on passenger generated reviews that are negative in recommendation. The purpose of analyzing only negative reviews is to pinpoint the issues that are big enough to bring customers to leave a poor review online. Positive reviews are excellent in showing an airlines strong points, but negative reviews can reveal the weaknesses. Content created by passengers can be analyzed to gather vital information about the passenger experience (Li, Yi & Law, 2013). Online reviews are a glimpse at the true feelings of the customer, without the bias they might feel while filling out a comment card in front of airline staff. “Online customer reviews (also known as e-

WOM) can be defined as peer-generated product evaluations posted on company or third- party websites” (Mudambi & Schuff, 2010, p. 186).

Customer satisfaction can be gathered from an online review by determining a customer’s overall emotional reaction to the service (Li, Yi & Law, 2013). Online complaints will be analyzed for their content in this study, to pin point what areas are causing passengers to leave bad reviews and potentially switch to another carrier.

Low-cost Airlines

Low-cost airlines are also known as low-cost carriers. They began in 1971 with

Southwest Airlines in Texas (Graham, A., 2013). After this airline began, other airlines like JetBlue, WestJet and Ryanair followed suit (Graham & Vowles, 2006 p. 106).

Graham notes that the defining characteristics of a low-cost carrier are “low fares, increased aircraft and crew utilization, single aircraft types, lower salaries, high seating density and single class of service.” This is in addition to not offering any free food, beverages, or Wi-Fi. In contrast, mainline carriers include snacks, drinks and other amenities in their ticket prices. Low-cost carriers had fares that were up to 50 percent

lower than those set by the CAB, the Civil Aeronautics Board and they were profitable

(Bitzan & Peoples, 2016).

The US airlines that will be included in this study are two low-cost carriers -

Southwest Airlines, JetBlue Airways, and two mainline carriers - Delta Airlines and

American Airlines. In 2018, for every 100,000 complaints filed to the Department of

Transportation, only one was a JetBlue customer (Statista, 2018). When ticket prices are lower, are customer expectations lower too? Due to the seemingly low expectations for a low-cost flight, some might assert that even if the service was not great, the lower price avoids any negative WOM or eWOM.

According to Whitman (2014, p. 64), “passengers of low-cost carriers … are less likely to complain about service quality than passengers of network [mainline] carriers like United Airlines, given the same levels of service quality.” In the competitive airline industry, knowing what is important to each passenger type information can be the difference between increased profits or losing customers.

CHAPTER 3

RESEARCH QUESTIONS

“Service quality and passenger satisfaction is increasingly recognized as a critical determinant of business performance and as a strategic tool for gaining competitive advantage” (Tsafarakis, Kokotas & Pantouvakis, 2018, p. 61). American low-cost airlines cater to passengers from around the globe. In a survey of Western Europeans, it was found that 77 per cent reported that they would accept lower quality customer service in exchange for a cheaper seat (Manama: SyndiGate Media Inc, 2014). As a reflection of these findings, this study has a similar question for US airlines.

Q1: Does customer service matter less to low-cost passengers than mainline passengers?

At a glance, the biggest different between low-cost airlines and mainline airlines are the ticket prices. Do passengers care about the value for their money when they fly a low-cost airline? By using online reviews from Airline Equality, this study will investigate how important value is to low-cost passengers compared to mainline passengers.

Q2: Does value for money matter less to low-cost passengers than to mainline passengers.

CHAPTER 4

METHODOLOGY

Content Analysis

Qualitative content analysis is comprised of three main parts. Preparation, organization and reporting of results (Elo, S., Kaariainen M., Kanste, O, Polkki, T.,

Utriainen, K., & Kyngas, H., 2014). For this exploratory study, preparation included identifying a source of reviews that would provide enough information on the selected airlines and verified that the reviewers were actually passengers on each flight.

According to Elo, et al., (2014) there are several criteria in qualitative content analysis that must be measured. These include validity, trustworthiness and transferability.

Trustworthy data should be at minimum both suitable for the type of study being done and relevant and appropriate to sufficiently answer the research questions.

The data should then be organized into categories based upon the concepts each review represented. Finally, results should be reported accurately, turning the data into something that can be read and interpreted with accuracy. “The problem of writing is that one must bring into presence this phenomenon that can be represented only in words— and yet escapes all representation” (van Manen, 2006, p. 718).

Selection of Data

The data was collected from a reputable online review website, Airline Equality

(https://www.airlinequality.com), which is an independent customer forum for traveler reviews. This site provided a trustworthy database of customer reviews regarding the relevant airlines. A large set of data was collected from the site by data extraction, and included thousands of reviews from Delta, American, JetBlue and Southwest. In order to

ensure the reviews selected were a random sample, but relevant to current day trends, the most recent 100 reviews per airline were selected and numbered 1-100 in Excel. This resulted in 4 lists of reviews with travel dates between August 2018 and May 2019.

From each of the 100 reviews per airline, reviews that selected they would recommend the airline to a friend were removed. Only reviews that were negative in recommendation were used, to help in point areas of improvement for each airline. The remaining reviews which were still numbered 1-100 were put into a randomizer using

NumberGenerator.org. The first 50 numbers were the reviews selected. This was done four times, for each set of airline reviews.

Analyzing the Reviews

Each review was individually analyzed and categorized. This was depending on whether the overall sentiment of the review was related to customer service, value for money, both or other. After a category was assigned, a few key words were pulled out into a new column, to sum up each review. This process was repeated for 50 reviews per airline, for a total of 200 reviews analyzed. Following this procedure several tables were created to view the data, making it easier to interpret the findings.

Table 1

Southwest Airlines Reviews

Table 2

Delta Airlines Reviews

CHAPTER 5

RESULTS

The data that was captured has some interesting findings when looking at the various related figures. First and foremost, Delta and American had the highest complaint counts for customer service. Table 3 is an overview on the counts per category for each airline. Second, the Other category which has highest count of complaints, and this will be addressed in the Discussion section. The Other category was used to collect all reviews that were not directly related to themes of value for money or customer service.

Table 3

Airline Review Counts Per Category

Overall, American Airlines has the highest count for complaints regarding

Customer service. Southwest has the highest count of complaints regarding value for money. JetBlue has the highest amount of complaints in the Other category.

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Figure 1. Mainline vs Low-cost Reviews.

Figure 1 demonstrates that when American Airlines and Delta’s complaints are combined and compared to Southwest and JetBlue combined, they have more complaints about customer service. This same figure also shows that low-cost carries and mainline carriers have a similar count for complaints about value for money. Customer service seems to be a lot more important to mainline customers.

The following figures are pie charts for each airline, representing their percentage of complaints for each category.

30% 46%

14% 10%

Figure 2. Delta Airlines Reviews Breakdown.

38% 46%

6% 10%

Figure 3. American Airlines Review Breakdown.

Figures 2 and 3 show the breakdown of complaints for both Delta and American airlines. Customer service complaints made up 30% of the total negative reviews for

Delta and 38% for American. This implies that American Airlines has a lot more customer service issues than the other 3 airlines. Value for money represented 10% of complaints for American, and 14% for Delta. This means that amongst American Airlines passengers, value for money was the least of their concerns they felt needed to be reported.

Figures 4 and 5 demonstrate how Southwest and JetBlue customers complained about customer service 20% and 26% respectively.

20%

58% 16% 6%

Figure 4. Southwest Airlines Review Breakdown.

26%

60% 6% 8%

Figure 5. JetBlue Airlines Review Breakdown.

Southwest and JetBlue passengers voiced complaints about value for money 16% and 6% respectively. In this case, JetBlue passengers were the lease concerned with value for money.

CHAPTER 6

DISCUSSION

After a look at the results of the content analysis, the answer to Research Question

1 is (yes) positive. Customer service matters less to passengers of low-cost airlines, as seen in Figure 2. This is true because when the reviews are combined into passenger type, mainline airlines have more complaints about customer service than low-cost carriers. As stated in the literature review, Whitman (2014) said low-cost passengers are less likely to complain about poor service. This supports the findings of this study, as the low-cost passengers complained less about customer service than mainline passengers.

Concluding for Research Question 2 was not straight forward, as the complaint counts for value for money were similar between the passenger types. Mainline airlines had 12 complaints about money, and low-cost airlines had 11. When looking at the airlines individually, the counts regarding value for money were JetBlue 3, American 5,

Delta 7 and Southwest 8 with no clear delineation between passenger type. Initially, comparing the 12 mainline complaints to 11 low-cost complaints, it was concluded that mainline passengers care more about value for money than low-cost passengers. That is not a solid conclusion to make based on the various counts. This data can be interpreted to conclude that both passenger types are aware of their money. Passengers who purposefully seek out cheaper tickets may be more sensitive to additional fees they were not prepared to pay. Passengers who flight mainline for business may be on budgets or per diems for their flights and are also aware of how their money is being spent.

Any reviews that were not related to customer service or value for money were categorized as Other. The category in which all “Other” types of complaints fall is quite

large, especially for the low-cost carriers Southwest and JetBlue. A large majority of the

“Other” negative reviews across the airlines were related to delays, missed connections and flight cancellations.

Table 4

Example of "Other" Reviews

Jet Blue passenger “This is the third time this month 27th July 2018

my flight has been cancelled”

Southwest passenger “They cancelled the flight going 22nd April 2019

home”

American Airlines “Delayed so many times I quit 30th May 2019

passenger counting.”

Delta passenger “Delta knew hours in advance 11th April 2019

that many people on our flight

would miss their flights”

As stated in the introduction, the main purpose of an airline is to get the passenger from point A to point B in a safe, timely manner. The complex process of crew scheduling, flight scheduling, fleet assignment and aircraft routing needs to be solved, otherwise complaints will definitely occur (Sherali, H., Bae, K., & Haouari, M. 2013).

When these core service functions are not met, customer dissatisfaction will occur leading to negative word of mouth. Because delays and maintenance are not directly related to airline hospitality a study of these types of reviews would serve well in a future study, regarding airline scheduling, maintenance and flow.

Nevertheless, airlines may want to create better compensation strategies for passengers left stranded after flights are canceled. They may be able to minimize all types of negative online reviews that occur after weather delays, crew scheduling issues or maintenance that impact passenger travel.

CHAPTER 7

IMPLICATIONS

Recruiters and Trainers for Mainline Airlines

The findings imply that mainline carriers need to focus on recruiting high level customer service providers and supporting them consistently. As Archana and Subha

(2012) stated, passengers look to the quality of service to decide if they will return to that airline for another flight. Delta and American host numerous business travelers and big spenders on their flights and need to make sure the service reflects their clientele.

Airlines can tailor the on-board services, reservation agent and gate agent training to suit their particular customer type. With the mainline passengers putting an emphasis on both value for money and customer service, they may emphasize financial rewards for loyalty or heavy discounts for bad experiences.

Training is vital and was mentioned numerous times throughout the reviews. Gate agents, flight attendants, and even pilots could benefit from how to positively handle service failures. Staying neutral and calm in a high stress situation does not always come naturally, so airlines might consider special training to prepare for disgruntled customers who are primed and ready to leave complaints online. They should focus on high quality customer service training for passengers who care about customer service the most.

Airline Hospitality for All Airlines

When someone leaves a negative review, it is not simply because a service failure occurred, it is because it was not handled with a service recovery method that met the customer’s standards. Airlines have room to minimize the chances a negative review is left online. Airline marketers and customer service strategists should investigate more

comprehensive compensation plans for delays or flight cancellations. Back in 2002, the

Travel Trade Gazette reported that in a poll of 630 customers, 80 percent were not satisfied with their treatment in the event of a delayed flight.

Airline can empower transportation security association (TSA), gate agents and in-flight crew to offer more than snacks in the face of major issues. Most customer service complaints occurred in the wake of a flight related issue that was not handled properly by staff. This would hold especially true during poor weather months when delays occur most. By empowering staff to handle service failures quickly and effectively, they may be less likely to carry their poor experience all the way home and post it online.

Travel can be stressful, and according to these online reviews, they certainly have room to improve when it comes to training staff, handling service failure, and providing more value to customers.

Airlines and Their Core Functions

As seen in the findings, the “Other” category was a huge part of the complaints read and categorized. They were mainly comprised of complaints regarding flight cancellations, delays and missed connections. This is a major issue that airlines need to solve to smooth out the issues with online complaints. Those who oversee flight scheduling, aircraft maintenance and weather delays need to take a good hard look at what’s working and what is not. Passenger reviews in the other section could be of great value to those in charge of fleet assignment and flight scheduling.

CHAPTER 8

LIMITATIONS

There were a few limitations that should be considered regarding this exploratory study. First, the data was analyzed by a single rater. Although the data was collected without bias, determining the true sentiment of each online complaint could be influenced by expecting certain themes to emerge. This was minimized by reading each review and pulling out the points that were emphasized most by the reviewer to ensure testing validity. Future studies would benefit from having at least two raters review the complaints and compare results. This would ensure consistency and absolute agreement.

A second limitation is the category of “both” in which an online complaint mentioned both customer service and value for money. By mentioning both, they were not able to be categorized separately by sentiment, impacting the complaint counts for each.

A third limitation is the “Other” category. If a complaint was comprised of a wide variety of topics, other than customer service or value for money, and no clear theme emerged, reviews were categorized as “Other”. The impact of these reviews could have had a major impact on the study if they all categorized separately by additional themes.

This limits the studies ability to see the bigger picture of what is causing most online complaints in the airline industry.

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