EXPLORATION OF CUSTOMER SATIFICATION ON AIR TRANSPORT SERVICES IN TANZANIA A CASE OF AIR TANZANIA CORPORATION (ATCL) AND PRECISION AIR PLC. By BUNDALA KATE A dissertation Report submitted in Partial/fulfillment of the Requirement for the Degree Master of Science in Marketing Management (MSc – MKT) of Mzumbe University DECEMBER, 2020 CERTIFICATION We, the undersigned, certify that we have ready and hereby recommend for acceptance by the Mzumbe University, a dissertation/thesis entitled Exploration of customer satisfaction on air transport services in Tanzania: The case of ATCL and Precision Air Plc., in partial/fulfillment of the requirement for award of the degree of Master of Science in Marketing Management of Mzumbe University. __________________ Major Supervisor _________________ Internal Examiner __________________ External Examiner Accepted for the Board of MUDCC ___________________________________________________ DEAN/DIRECTOR, FACULTY, / DIRECTORATE BOARD i DECLARATION AND COPYRIHGT I, Bundala Kate, declare that this thesis is my own original work and that it has not been presented and will not be presented to any other University for a similar or any other degree award. Signature -------------------------------------------- Date---------------------------------------------------- ©2020 This dissertation report is a copyright material protected under the Berne convention, the Copyright Act 1999 and other international and national enactments, in that behalf, on intellectual property. It may not be reproduced by any means in full or in part, except for short extracts in fair dealings, for research or private study, critical scholarly review or discourse with an acknowledgement, without the written permission of Mzumbe University, on behalf of the author. ii ACKNOWLEDGEMENT This Report is composed as a prerequisite for Master's assessment to at the Mzumbe University, Dar Es Salaam Campus Collage. Composing this exposition has broadened my insight to lead investigations of this nature. The positive compellation of this errand was conceivable with the help, motivation, help and help from different people who gave their time tremendously to carryout and encourage to greatness of work Subsequently, I might want to offer my genuine thanks first to the Almighty God for the security and quality all through the investigation. My next thankfulness goes to my dear Supervisor Dr. Newa Makawa for her help, direction, tolerance and expert touch with which she guided me through this examination. She gave me consolation, bearing and valuable proposals which contributed massively to the nature of this work. If you don't mind acknowledge my unassuming appreciation. I can't overlook the help from Mr. Faustine Masunga, Mr. Francis Muya and others who in one manner or the other contributed a great deal in my investigation. In conclusion, I compassionately thank the station Administrator and recognized staff of ATCL and Precision Air Plc. for their consideration and backing in a remarkable way. I be obliged you an innumerable conclusion of appreciativeness.. iii ABSTRACT The point of this study is to explore customer satisfaction with Air transport services in Tanzania; a contextual analysis of ATCL and Precision Air Plc. utilizing American Customer Satisfaction Index (ACSI) model which coordinate client saw esteem, desire, client care related item includes methodology, administration quality, customer loyalty and devotion. Utilizing purposive inspecting and accommodation testing strategy, essential information were gathered from a sum of 75 clients from two Airline organizations (ATCL and Precision Air Plc.) at Julius Nyerere International Airport (JNIA). The collected data were broke down through Smart PLS. the discoveries uncovered that consumer loyalty is essentially affected by client seen, service quality administration; client support related item includes procedures, and service quality measurement. For ATCL and Precision Air, customer perceived value found to be a powerful indicator for customer satisfaction, followed by service quality management, then service quality dimensions, and customer service-related product features strategies found to be the least important factor for customer satisfaction. Based on the findings, it was suggested that both ATCL and Precision Air should gain more information about traveller‟s attitudes and develop plans to improve the weak point. As per study findings, managers should try in customer perceive value and technical quality first. Completing a trip accurately, punctuality in departure and cost benefit is what the passengers expect in the first. It is highly desirable that ATCL and Precision reduced delay, technical faults, unrealistic pricing, and security. The study also suggests that Precision Air needs some investment in tangible feature. Providing modern variety and choices of in-flight entertainment facilities are inevitable. It is suggested to use multiple tools and programs to entertain passengers including broadcasting music, showing films, giving puzzle and various magazine and Newspapers. This study adopted ACSI model to measure customer satisfaction with Air Transport Services in Tanzania. It was much interesting if other studies can be conducted by using the same model in other different industries. This study took at Airline iv customer satisfaction by evaluating services generally. It is suggested further studies to be conducted more focused on specific and different parts or areas of Airline services such as check-in services, ticketing, in-flight services, Customer services- related product features, etc. several limitations of the study should be observed. v LIST OF ABBREVIATIONS AND ACRONYMS ACSI American Customer Satisfaction Index model AFRAA Africa Airlines Association ATCL Air Tanzania Company Limited ATR Average True Range Aircraft Manufacturer AVE Average Variance Extracted CLV Customer Perceived Value CPV Customer Perceived Value CSRF Customer Services Related Product Features EDP Expectancy Disconfirmation Paradigm FAQ Frequently Asked Questions IATA International Air Transport Association IPMA Importance Performance Map Analysis JNIA Julius Nyerere International Airport JRO Kilimanjaro Airport KLM KoninklijkeLutchvaartMaatschappij LVC Latent Variable Correlation PLC Public Limited Company PLS Partial Least Square PLS-SEM Partial Least Square – Structural Equation Modelling PW Precision Air Plc. QFD QualityFunction Deployment QM Service Quality SAA South Africa Airways vi SARS Severe Acute Respiratory Syndrome SD Service Dimensions SERVEQUAL Service Quality Modal SPSS Statistical Package for Social Science TQM Total Quality Management US United States VIF Variance Inflation Factor ZNZ Zanzibar vii LIST OF TABLES Table 4. 1:Participant‟s Frequency ................................................................................. 39 Table 4. 2: Marital Status of Respondents ...................................................................... 39 Table 4. 3: Highest Education Qualification ................................................................... 40 Table 4. 4: Type of Customer......................................................................................... 40 Table 4. 5: Length of time of using Air Transport Services ............................................ 41 Table 4. 6: Gender of respondents .................................................................................. 41 Table 4. 7: Age range of respondents ............................................................................. 42 Table 4. 8: Collinearity Statistics (VIF).......................................................................... 44 Table 4. 9: T-Statistics and P Value for convergent validity of constructs ...................... 46 Table 4. 10: Total effects ............................................................................................... 49 viii LIST OF FIGURES Figure 2. 1: Conceptual framework model ..................................................................... 24 ix TABLE OF CONTENTS CERTIFICATION ..........................................................................................................i DECLARATION AND COPYRIHGT ........................................................................ ii ACKNOWLEDGEMENT ........................................................................................... iii ABSTRACT .................................................................................................................. iv LIST OF ABBREVIATIONS AND ACRONYMS ...................................................... vi LIST OF TABLES ..................................................................................................... viii LIST OF FIGURES ...................................................................................................... ix TABLE OF CONTENTS........................................................................................... viii PROBLEM SETTING .................................................................................................. 1 1.0 Introduction ............................................................................................................... 1 1.1 Background of the study ............................................................................................ 1 1.1.2 Air Tanzania Corporation Limited (ATCL) ........................................................... 5 1.1.3 Precision Air PLC ..................................................................................................