An Estimation of Satisfaction Level of Airline Passengers and Their Service Quality Expectations On Domestic Sector of Ethiopian Airlines
An Estimation of Satisfaction Level of Airline Passengers and Their Service Quality Expectations On Domestic Sector of Ethiopian Airlines
An Estimation of Satisfaction Level of Airline Passengers and Their Service Quality Expectations On Domestic Sector of Ethiopian Airlines
Abstract
Ethiopian Airlines made more profit than all other African carriers combined and has been the most
profitable Airline in Africa for two consecutive years. By clicking the link here you can find the news
details. The researchers of this paper have put in an effort to study the underlying dimensions of
service quality for Ethiopian Airlines and subsequently to determine the relationships between the
dimensions of service quality and passengers’ satisfaction on the airline services. We have taken a
total of one hundred passengers were involved and the results revealed that “caring and tangible”
was the most important dimension of service quality for low cost carriers, followed by “reliability”,
“responsiveness”, “affordability” and “visual attractiveness”. However, only “caring and tangible”
dimension contribute significantly to the prediction of satisfaction on the services of Ethiopian
Airlines. The findings from this study are considered to be conclusive in nature in that they can be
used as suitable input for effective decision-making by the Mangers.
Originality: This research paper entitled “An Estimation of Satisfaction level of Airline Passengers
and their Service Quality Expectations on Domestic Sector of Ethiopian Airlines” was a result of
limited survey conducted at Adis Ababa International Airport, Ethiopia.
Introduction
As per the available literature airlines have became simple contract mail carriers into more
sophisticated businesses since past seventy years. The authors (Smith, Barlow and Vinod, 1998) have
proposed that the present airlines environment is very volatile and dynamic in the present globalized
economic scenario. Some authors like (Appiah-Adu, Fyall and Singh, 2000) have opined that there is a
high level interaction between the customers and the service provider as part of their marketing
strategies in this competitive environment. Some recent experts like (Witt and Clark, 1990) in this field
have propounded the service standardization is part of their marketing strategies and the final outcome
cannot be predicted as per the standards and creating a reasonable differentiation between the
competitors. According to some other researchers, It has been suggested that delivering superior
service quality is a prerequisite for success and survival in today’s competitive business environment.
However, some may feel price is an important aspect of demand. As Collis (1998), Another
authenticated researchers like ( Gro¨nroos, 1994; Parasuraman, Zeithaml, & Berry, 1985, 1988)
have advocated that it takes expectations to be the pre-consumption beliefs that consumers draw upon
as the probabilities of the occurrence of positive and negative events. There-fore, they form an
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important part of the decision process for an airline. These kind of expectations construct has been
viewed as playing a key role in consumer evaluation of service quality in the airline industry.
Literature Review
Any airline company with a good brand image is more likely to stand out in the marketplace because it
draws both repeat customers and trial users (Connor & Davidson, 1997) and the more favorable a
company’s image, the more likely consumers will assume that the services tendered by that company
are better, of higher quality and worth more in actual price (Dowling, 1994) as per this researcher. It is
difficult to understand the role and the effect of corporate image in the customer retention decision is a
key issue that has received little attention in the service marketing area by the airline service providers
and as per these authors the effect of corporate image in the airline industry have been fully not yet
investigated (Nguyen & LeBlanc, 1998). The airline Companies are required to focus on customer
equity rather than brand equity. As per some researchers, the brands are only a means to an end, which
is to create and cultivate profitable, long-term relationships with customers (Rust et al., 2004).
According to Blattberg and Deighton (1996), that optimal balance should be kept between acquisition
and retention of customers, which is only possible when customer equity is at its maximum amount.
Another researcher has presented a model to estimate customer’s lifetime and adjust for the bias
towards customer acquisition in customer management decisions. He has showed the financial impact
of not accounting for the effect of acquisition on customer retention (Thomas (2001). However, at the
end of the day, the Customer satisfaction in airline operations has become critically important and
(Dennett, Ineson, Stone, and Colgate, 2000) suggest that as competition created by deregulation has
become more in-tense, service quality in the airline industry has also received more importance as per
this study. It was construe that the delivery of a high level of service quality by airline companies
became a marketing requisite in the early 1990s, as competitive pressures continued to increase in this
present globalized economic scenario. With the advent of these modern marketing practices, most
airlines began to offer various incentives, such as the frequent flyer programs, in an effort to build and
maintain the loyalty of many regular customers (Miller, 1993). We need to understand that the Service
Quality differentiation by many airline companies through the use of computerized reservation
systems which were also designed to create customer loyalty in the distribution channels among many
sectors across the world (Lee and Cunningham, 1996).
According to (Kameswara Rao Poranki, 2015) the concept of Customer satisfaction is an ambiguous
and abstract concept and the actual manifestation of the state of satisfaction will vary from person to
person and product/service to product/service. Kameswara Rao Poranki also opined that the state of
satisfaction depends on a number of both psychological and physical variables which correlate with
satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary
depending on other options the customer may have and other products against which the customer can
compare the organization's products.
Then it was felt that the Customer satisfaction are more likely to go elsewhere (Heskett et al., 1994;
Strauss et al., 2001; Zairi, 2000) customer satisfaction is strongly couch satisfaction as a fulfillment
response. influenced by the interaction between customers and satisfactory fulfillment implies that a
consumption goal is employees (Boshoff & Tait, 1996), examining known, as in basic motives of
hunger, thirst, and employee behavior is critical. Employee behavior, safety is strongly influenced by
the operating understand that these and other goals can be and organizational culture (Chow et al.,
2002; Ferris et) frequently are modified and updated in various ways according to ( al., 1998; Pratt &
Beaulieu, 1992).
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Source: http://www.ethiopianairlines.com
As per the latest studies, the Ethiopian Airlines is the most consistently profitable full-service African
carrier, however, in an increasingly competitive market it faces stiff competition from Gulf and
nascent African operators at this moment. "Africa is rising, and the 21st century is an African century,"
The power shift away from mature economies in the US and Europe towards the BRICS nations is
well documented, but equally compelling is the reconfiguration of the cultural and economic map of
Africa. Home to 20% of global oil reserves, Africa's vast, largely untapped natural resources continue
to attract significant foreign direct investment (FDI) from India and China, and this is being matched
by domestic investment in critical urban infrastructure. By 2030, 50% of Africans will live in cities. In
Africa's aviation sector, the most salient challenges are continuing to build a route structure that best
serves this new urban class and the continent's growing tourism sector; maintaining significant levels
of FDI to fund fleet and infrastructure projects; and dealing with increased competition from Middle
East airlines in general and Gulf operators in particular.
The past decade has been one of unprecedented growth for Ethiopia. As the third-fastest-expanding
economy in the world, the nation on the horn of Africa has enjoyed double-digit GDP growth and
visitor numbers are growing by 10% each year, according to the Ethiopian Ministry of Culture and
Tourism. Ethiopian Airlines, established in 1948, constitutes a notable chapter in this ongoing success
story, and recently cemented its status as the largest African carrier by revenue and profit, according to
IATA. The Ethiopian Airlines carries 5.6 million passengers annually," and possesses a fleet of 63
aircraft with an average age of seven years. Our main hub is in Addis Ababa, the second in Togo, West
Africa, and a third in Malawi, where we are starting a new airline. Recently, the airline began a new
partnership with the Malawi Government in support of Malawian Airlines, which has started flying
with Bombardier Q400 aircraft. It was interesting to note that the aircraft are managed by Ethiopian.
"Ethiopian Airlines has a 49% stake in the airline, which was set up after the liquidation of Air
Malawi. It is based in Lilongwe with its hub at Lilongwe International Airport. The fourth hub will be
formed in the Democratic Republic of Congo for Central Africa with 8,000 employees as per latest
data. Also, in the corporate governance structure, management and ownership is completely different
and that is one reason for success. The airline also believes in investing in adequate human resources
and infrastructure development investment. We have 1,030 weekly flights, we are a full Star Alliance
member and our annual turnover is about $2.2 billion. As per our secondary research, it was found that
the Ethiopian’s domestic route network is spread all over the country bringing provincial and
administrative cities within easy reach of the capital and the region’s commercial centers. In addition,
there is a daily "Historic Route Service" for tourists to the country’s world famous ancient historic
sites of Axum, Bahr Dar, Gondar and Lalibela which showcase obelisks and rock-hewn churches.
Special tour programs are designed to allow visitors to choose the activities and locations that interest
them most, ensuring that everyone makes the most of the time they spend there. World famous
obelisks and rock hewn churches are the main attractions of the Northern travel sites of Bahr Dar,
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Gonder, Lalibela and Axum. And for trekking enthusiasts, the Simien escarpments which are often
compared to the Grand Canyon in the United States of America and named by UNESCO as a world
heritage site is ideal. To the east, Dire Dawa and Harar offer a blend of natural beauty and history. The
Afro-alpine habitat of the south provides unlimited opportunities for mountain walks, horse trekking,
scenic drives and bird watching.
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2. Additional Revenue opportunities from Training and MRO Facilities
3. Leverage mentorship of Lufthansa
1. Increasing Aviation fuel cost
2. The lucrative African aviation market is attracting strong global players thus
challenging its strong position in the domestic market
3. Improvement in road and railway infrastructure could lead to a reduction in
Threats demand for air transport
Competition
1. Kenya Airways
2. Emirates
Competitors 3. Qatar Airways
Source: www.mbaskool.com/brandguide/airlines/5078-ethiopian-airlines.html
Methodology
The researchers of this paper have qualified the passengers as respondents of this research on the basis
of their domestic travel within three hours flight time. The sampling technique has been used as
convenience sampling. Many Structured questionnaires were distributed among passengers waiting in
the departure lounges of Low Cost Carrier Terminal (LCCT) at Adis Ababa International Airport. We
have distributed 150 questionnaires had but only 100 completed questionnaires were usable for further
analysis. As per the experienced researchers we have take the sample size should be considered
adequate for exploratory analysis in discovering travelling behavior and a larger sample would be
needed to validate the study (Bejou et al. 1998). A total of 27 questions were used to measure
passengers’ expectations of service quality in this research. According to the another researcher, Buttle
(1996) who criticized on the measurement of service quality that totally ignored the aspect of
operation, this present study has been designed to include 17 items related to the expectation on
airlines service operation. In this research an initial pool of items were generated from extensive
literature search supported by in-depth interviews with a few airline passengers of both types of
airlines as well as operational staffs working with airline companies in Ethiopia. The initial items were
then refined using panel of experts in the services marketing research stream. The next seven questions
were adopted from the original SERVQUAL instrument while the remaining three questions were
developed to capture the specific service quality in the airline industry. We have measured the
passenger satisfaction three items based on Caruana (2002). The most suitable variables like
“repetitive purchase intention”, “service loyalty” and “benefit-cost judgment”. Interestingly, the
principal component factor analysis was conducted on the 27 items of service expectation of service
quality to identify their underlying dimensions of service quality. In order to derive appropriate factors,
only those with Eigenvalue of at least 1 were accepted. All factor loadings less than 0.5 were also
discarded from further analyses. A multiple regression analyses were also performed to simultaneously
investigate the influence of the various dimensions of passengers’ expectations on satisfaction in this
research.
Findings
In Table-001 and Table-002, the factor loadings for 20 items were between 0.54 and 0.85 is significant
compared to the first seven factors. Also, the most important factor as Caring and Tangible and
explained 27.66 percent from the total variances. Then the Eigenvalue and Cronbach’s alpha for this
factor were 5.53 and 0.90 respectively as the results showed that low cost carriers’ passengers also
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displayed high levels of expectations for tangible elements of the airline service offerings as well as
the caring services. The second most important measurement for the low cost carriers was Reliability.
Interestingly, this factor explained 17.10 percent of the total variance with Eigenvalue and Cronbach’s
alpha of 3.42 and 0.76 respectively. The last factor as Responsiveness is 10.05% from total variances
and affordability 51 (7.07%), and Visual Attractiveness (5.28%).
As per this research, the independent variables in the regression model were the five factors of service
expectations are:
We have summarized the final results of the stepwise multiple regression analysis in Table-003.
However, the overall, the regression equation was significant at 0.05 level indicating 95 percent
confidence in explaining passengers’ level of satisfaction. The resulting multi-co -linearity diagnostics
was not a problem in this regression model. The regression analysis showed that only the dimension of
“Caring and Tangible” (beta coefficient of 0.215 and p value equal to .032) contributes significantly to
the prediction of passengers’ satisfaction level for low cost airlines. Finally, this result showed that low
cost airlines must also pay attention to their tangible aspects as well as passengers’ care to enhance the
satisfaction level of their passengers.
Discussion
The three most important dimensions that emerged from the factors analysis namely, caring and
Tangible, Reliability and Responsiveness are considered as standard or “must-have” dimensions for
service quality in the airline industry. They are the “point-of- parity” dimensions that each of every
airline company must offers in order to be relevant in the marketplace. Those airlines that failed to
satisfactorily provide these dimensions would not be able to survive in the long run. The results of
factor analysis revealed that the remaining factors (the third and fourth dimensions in particulars) were
actually the one that determined the “point-of-difference” or the distinctive dimension for Ethiopian
Airlines. The other two dimensions found to be unique only to the Ethiopian Airlines were
Affordability and Visual Attractiveness. On the other hand the former can be seen as the “point-of-
difference” that clearly differentiated the service of Ethiopian Airlines with those of full service
airlines. Affordability was found to be the dimension unique to the Ethiopian Airlines. The
affordability is the most important positioning attribute for Ethiopian airlines, their pricing strategies
and techniques must be innovative to provide more value for money to their customers. Hence, at the
same time, visual attractiveness of their operation materials such the exterior and interior design of the
aircrafts, the seats design and patterns, ticketing counters as well as other in-flight materials was also
found to be important for the passengers of low cost carriers. Visual attractiveness of materials was
also the attribute that can act as competitive advantage for a particular airline within the Ethiopian
Airline domestic sector itself. There is a significant influence of Passengers’ Expectations on
Satisfaction for Ethiopian Airlines as it was revealed that Caring and Tangible was the only dimension
that help explained passengers’ satisfaction for Ethiopian Airlines. Although airlines need to focus on
the attributes that create competitive advantage such as affordability for Ethiopian Airlines, at the same
time they must also ensure that their tangible, physical evidences or service environments of their
offerings are being taken care of as perfectly as possible. They must be visually appealing and neat in
appearance at all time. Another, important aspect of the layout and design of the aircraft’s cabin,
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employee’s appearance, in-flight meals and refreshments, and even the air tickets should be developed
in accordance to the expectations, wants or requirement specified by the target market of a particular
airline. In addition to that, the tangible offerings must also be supported with professional and caring
services which were basically characterized as being a responsive and empathetic kind of service.
Finally, to gain all the above competitive advantages, the employees must be knowledgeable and
equipped with the relevant communication and interpersonal skills to effectively interact with the
passengers.
Conclusion
The researchers of this paper have interpreted in the light of several limitations. The most critical
limitation of this study pertains to its sampling frame. As the samples of this study were considered
small, the results should be generalized with some caution to the entire Ethiopian Airlines in domestic
sector. This research also considered only domestic flights as well as short-haul trips and therefore the
resulted underlying dimensions of service quality might not be applicable to the long-haul trips or
international flights. By covering both short-haul and long-haul flights will allow stronger
generalizations of the results. This reseaarch also has not definitively established causality among the
dimensions of service quality, and satisfaction level. Future research should examine the causality
among these constructs to better understand the relationship between the two constructs. This study
allows the airline companies to see the expectancy level of customers for the Ethiopian Airlines
service attributes, and to prioritize different service attributes based on customer expectations. It was
found out that the order of importance of the service quality measurements for Ethiopian Airlines were
tangible, reliability, responsiveness, affordability and visual attractiveness. However, tangible and
caring standard dimension was shown to be very important in explaining passengers’ satisfaction for
low cost carriers such as Ethiopian Airlines.
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ANNEXURE
TABLE-001: Domestic Respondents Profile of Ethiopian Airlines
S.No Variables Type of Passenger Number of
Respondents Passengers(100)
1. Passenger Gender Male 55
Female 45
2. Passenger Nationality Indian 13
Chinese 10
Ethiopian 49
Malaysian 5
Others 23
3. Passenger Occupation Professional 25
Admin/Management 25
Students 44
Others 6
4. Passenger Purpose of Travel Education 34
Holidays 49
Business 14
Others 3
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TABLE-002: Factor Analysis for Service Quality Dimensions as per Passenger Expectations
Service Quality Dimensions as per Factor Eigenvalue Percentage Cumulative Cronbach’s
Passenger Expectations Loading of Variance alphas
Variance
Caring and Tangible 0.85 5.53 27.66 27.66 0.90
Employees response to passenger’s
questions
Behavior of fellow travelers 0.58
Employee’s overall appearance 0.60
The level of trust transmitted to the 0.62
passengers
The Professionalism in handling the 0.67
luggage
The Flexibility of the tickets 0.77
purchased
The level of kindness of employees 0.78
News regarding unusual 0.78
circumstances
The comfort of the airline’s seat 0.84
Reliability 0.62 3.42 17.10 44.76 0.76
Queuing to passengers until seated in
the plane
Waiting time to claim luggage 0.65
Delay to arrive 0.85
Delay to depart 0.84
Responsiveness 0.72 2.01 10.05 54.81 0.74
Tickets Booking at the counters
Booking ticket through websites 0.60
Response of the cabin crews to 0.79
passenger’s requests
Booking ticket through call centers 0.78
Affordability 0.77 1.42 7.07 61.88 0.69
Ticket price from KL to Kota
Kinabalu
Ticket price from KL to Jakarta/Bali 0.84
Visual Attractiveness 0.54 1.06 5.28 67.16 0.54
Visual attractiveness of the
materials
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