Service Quality and Customer Loyalty in
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Service Qualityand Customer Loyalty in the
Commercial Airline Industry
PETER L. OSTROWSKI, TERRENCE V. O’BRIEN, AND GEOFFREY L. GORDON
The study examines issues related to service quality and customer loyalty in the com-
mercial airline industry. The results of an empirical study, using data collected on two
air carriers, indicate that current levels of perceived service quality are below potential
and that customer loyalty to airlines is low. A significant relationship was found to
exist between service quality (carrier image) and retained preference, a measure of
customer loyalty.
Over the course of recent history, the service sector has provided concerning the use of service quality as a strategic
grown at a phenomenal rate, now accounting for over 71 % tool in the commercial airline industry.
of the nation’s GNP and 75 % of its employment (Batson 1989;
Quinn 1988). Coinciding with the explosive growth of this
economic sector, increasing emphasis has been placed on the
continued development of knowledge related to service GROWING COMPETITIVENESS IN THE
COMMERCIAL AIRLINE INDUSTRY
organizations, particularly the role service quality plays in
creating a satisfied and continuing customer.
Despite a growing abundance of service quality literature, The Current State of Affairs
little applied work has been performed in specific industry Deregulation came to the U.S. commercial airline indus-
settings. The empirical work being performed, most nota- try in 1978. Since that time, the amount of change affecting
bly related to the development and testing of the SERVQUAL the industry has been profound. From a customer viewpoint,
scale (Parasuraman, Zeithaml, and Berry 1988; Carman whether the change has been for the better is still a hotly
1990; Babakus and Boller 1992; Cronin and Taylor 1992), debated question. Critics argue that, since deregulation, the
places major emphasis on generalizing findings across serv- industry has deteriorated. They cite degenerating labor-
ice industries, relying on samples of generic services cus- management relations, the large and growing number of car-
tomers and/or measures which supposedly apply to all serv- rier failures, industry concentration, erosion of margins of
ice industries. Although services such as dry cleaning, safety, pricing discrimination, and false and misleading adver-
banking, legal aid, transportation, and health care possess tising as evidence of their claims (Dempsey 1991). Propo-
some underlying commonalities, significant differences do nents maintain that, even in this era of hubs-and-spokes travel,
exist between these entities. Yet, in study after study, such service has never been better (Barnett et al. 1992). The num-
generalized assumptions are commonly made. This may ber of flights has increased, additional airports have opened,
degrade the explanatory power and potential management tickets are more affordable, and airline traffic continues to
recommendations in any particular industry. grow. Regardless of the perspective taken, one fact stands
The purpose of this study is to examine, in the commer- clear: competition is ever increasing, or as Bob Crandall,
cial airline industry, whether high levels of service quality CEO of American Airlines, aptly stated, &dquo;This business is
exist and how service quality can potentially lead to customer intensely, vigorously, bitterly, savagely competitive&dquo; (Zell-
loyalty. The study consists of four parts. First, a brief review ner 1992).
of the current competitive situation facing commercial air
carriers will be given. Second, past research findings on Airline Response to Increased Competition
service quality will be summarized and applied to the com-
mercial airline industry. Third, the results of an empirical To a large degree, the competitive battle has been fought
study of commercial airlines, which examines issues related using price as the primary weapon. For example, in the first
to service quality and customer loyalty, will be presented. half of 1992, American Airlines’ attempt to simplify and stabi-
lize fares backfired when several competitors made or
Last, managerial implications and recommendations will be
matched price reductions. The situation further deteriorated
Peter L. Ostrowski is Vice-President of Plog Research when Northwest introduced a buy-one-get-one free offer
in Reseda, California. Terrence V. O’Brien is a Professor which all other airlines matched, resulting in little or no profit
and Geoffrey L. Gordon is an Assistant Professor both in margins during the critical summer travel months. The win-
the Department of Marketing at Northern Illinois University ners in such battles will ultimately be organizations with the
in DeKalb.
lowest costs or the deepest financial pockets. In the case of
16the airlines, Southwest stands dominant as the airline gain- the customer and differing employees. On a typical flight,
ing the most in the current fare war owing to a cost advan- a passenger may interact with (or be exposed to) baggage han-
tage over its leading competitors. Several other carriers, dlers, employees at the ticket counter, flight attendants, gate
including American, United, and Delta, continue to compete attendants, cockpit crew, and others. A poor performance by
effectively because of their deep financial reserves. For the any of these may lead to perceptions of poor service. Because
rest, however, a battle based on price alone represents a no- a service cannot be put into inventory, consistency of perfor-
win situation. Given a long-term continuance of a price war, mance is difficult to attain and sustain.
the outcome could very well be an industry consisting of few Second, good service may have little to do with what the
survivors. Thus, the question which begs answering by all provider believes; rather, it depends solely on the beliefs of
carriers is, &dquo;What marketing alternatives, other than strictly the individual customer (Davidow and Uttal 1989). Customer
engaging in costly price competition, are available to airline satisfaction can occur when the customer’s perceived expe-
carriers?&dquo; To this issue, attention is now turned. rience either matches or exceeds the customer’s expectations
Several potential reasons can be given for service firms’ (Cina 1989). However, customer loyalty (leading to repeat
past inability to recognize opportunities for creative market- business) occurs only when the perceived experience can be
ing (Peter and Donnelly 1991). These reasons include (1) a considered &dquo;excellent,&dquo; a level far exceeding merely good
limited view of marketing, (2) a lack of competition, and (3) a service (Zemke 1992). This poses severe problems for serv-
lack of creative management. Much blame for these prob- ice providers. Initially, providers may not understand what
lems can be placed on past government regulation of the service features are important to customers. It is difficult
largest service industries, including commercial airlines. enough for the customer (especially first-time purchasers) to
However, deregulation and the advent of foreign and domes- evaluate and discern differences in service quality, especially
tic competition have changed the rules of the game. To suc- before the fact (Fryar 1991; Turley 1990). Toward this end,
ceed, service companies, including air carriers, must embrace organizations must keep close watch on the customer, assess-
the notion that marketing is all important. And success in ing the importance and performance of each contact. It is
marketing necessitates that emphasis be placed on all four essential that service quality measures be customer-driven,
P’s (price, place, promotion, and product). as there could be disparity between managerial thoughts and
With respect to the airlines’ marketing efforts, product- customer expectations. By listening to customers, service
(service-) related issues have been underemphasized, most providers can identify critical areas of service that need
notably those dealing with service quality. In this area, air- managerial action and those that can be promoted on differen-
line carriers’ endeavors have noticeably lagged those in other tiating features (Headley and Choi 1992).
service industries, such as banking and retailing. What airline Recent managerial attention has turned to the importance
carriers have been slow to realize is that the battle for com- of providing high service quality levels, but results are mixed.
petitive advantage cannot be fought on price alone because A study (Berry and Parasuraman 1992) of service providers
price moves are too easily copied. What should be just as found that, although 78 % of the organizations sampled
obvious is that, in such a situation where all companies have indicated that improving quality and service to customers is
comparable fares and matching frequent flyer programs, the the key to competitive success, only 56 % saw it as a clear
one with better perceived service will draw passengers from and accepted priority within their company. Worse still, only
other carriers. 49 % prepare regular reports and only 38 % indicated that
most managers in their firm have attended a learning or
training activity on customer service. In a second study,
SERVICE QUALITY: consumers felt that, of seven industries which emphasized
AIRLINE PANACEA FOR THE 1990s? service quality (including airlines), only one (supermarkets)
has improved the perceived quality of their service in recent
For many firms, the delivery of high service quality years (Daniel 1992). These results indicate much room for
became a marketing priority of the 1980s (Zeithaml, Berry, improvement on the part of service organizations, including
and Parasuraman 1988). Especially for airline carriers, the commercial airlines.
delivery of high service quality becomes a marketing requi- The remainder of this article reports a study which exa-
site in the 1990s, as competitive pressures increase. In other mines (1) current service quality levels in the commercial air-
industries, evidence is mounting that effective investment in line industry, (2) whether these levels differ among carriers,
high service quality results in long-term increases in customer (3) whether service quality can potentially lead to customer
loyalty; this in turn leads to cost savings and improved profita- loyalty, and (4) the resulting implications for marketing
bility and market share (Cina 1990; Daniel 1992; Shycon strategy development.
1992; Zeithaml, Berry, and Parasuraman 1985, 1990). But
what is high service quality and how can it be provided?
Service quality is a total experience that can only be evalu-
SAMPLE AND METHODOLOGY
ated by the customer (Zeithaml, Berry, and Parasuraman
1988). Unlike its product counterpart, service quality can- Selection
not be controlled by scientific means or objectively meas- Sample
ured by set standards. This is due to two circumstances. First, The data for this study come from a continuous survey
owing to their very nature, services are performances rather of U.S. airline passengers conducted by a nationwide market
than objects (Berry and Parasuraman 1992). These perfor- research company in 35 of the largest U.S. airports. A self-
mances are carried out by humans supported by technology. administered questionnaire was distributed to enplaning and
Because of the large emphasis placed on employees, perfor- deplaning passengers (of several major airlines); they were
mance levels can differ across employees as well as occa- asked to complete the survey and mail it back. Approximately
sions. Services often encompass multiple interactions between 71 % of offered passengers accepted the survey instrument.
17Of those accepting, about 12 % returned the survey in usable toward those who travel frequently, as they have a greater
form. Data used in this study were collected during 1992. chance to respond. Indeed, it was found that frequent fliers
On average, about 105,000 usable surveys are collected (eight-plus trips in the last 12 months) accounted for over
each year. 40% of the total sample. This was not thought to negatively
A two-stage sampling procedure was used in developing influence the strategic value of the results; if anything, air-
the specific sample population. First, for comparison pur- line carriers would be more interested in the evaluations of
poses, two specific airlines with extensive route systems were frequent fliers owing to their increased profit implications.
chosen for study. Carrier A is one of the three largest U.S. Male travelers constituted approximately 60 % of the sam-
air carriers in terms of market share and financial well-being. ple, while female travelers accounted for the remaining 40%.
Carrier A can be considered a &dquo;benchmark carrier,&dquo; one The sample was biased toward business professionals with
whose performance is considered among the best and which managers and other executives constituting approximately
competitors try to match (Cina 1990). For the most part, Car- 70 % of the selected sample. Average income of the sample
rier A is a price follower (not leading the way in either fare population was high, with more than 40% earning over
increases or decreases) and, because of its perceived high $60,000 annually. In addition, over 80 % of the sample parti-
image, charges somewhat premium prices. Carrier A is not cipated in at least one frequent flyer program, with many par-
hesitant to respond to competitive pricing actions and has con- ticipating in several.
sistently let it be known that price cuts will be correspond-
ingly matched. Carrier B, on the other hand, is a carrier Questionnairg Development
which can be characterized as being &dquo;stuck in the middle.&dquo;
While still one of the largest carriers, it possesses neither Variables used in the present analysis were based on
the market share, route system, nor the financial resources responses to several questions contained within the overall
of the big three carriers, nor does it possess the cost econo- survey instrument. These questions were designed to collect
mies of some leaner, smaller airlines. This carrier uses dis- information on each respondent’s (1) reasons for choosing the
count pricing as its main competitive weapon, is currently specific carrier and flight; (2) evaluation of the service quality
undergoing financial difficulties, and is striving to develop encountered on the particular flight; (3) overall image per-
a unique image. ceptions of the airline chosen for the particular flight; and
Second, of the total number of respondents evaluating the (4) retained preference, a measure of self-expressed customer
two carriers(over 25,000), a subsample was randomly gener- loyalty to the airline the respondent had flown on. Exhibit 1
ated, composed of 6,000 respondents (3,000 each evaluating contains a listing of the questions asked, variables included,
Carriers A and B). It should be noted that the sample is biased and measures utilized in the present study.
EXHIBIT1
QUESTIONS AND VARIABLES UTILIZED IN THE STUDY
18SERVICE QUALITY EVALUATION AND food quality, amount of food, baggage delivery promptness,
COMPARISON craft interior attractiveness, and on-time performance), over
20 % of the sample assigned ratings of not very good or poor.
Existing Levels of Service Quality In fact, the service element receiving the highest rating (reser-
Initial analyses were undertaken to determine the status vations service) is commonly performed by outside travel
(on an absolute basis) of current levels of service quality agents and not internal airline employees.
offered by and customer satisfaction with commercial air Ratings assigned to the overall evaluation of the flight indi-
travel. Passengers were asked to evaluate 15 specific indi- cate that while both carriers earned mean scores exceeding
vidual elements associated with the service encounter (the 3.0 (very good), a vast majority (approximately 82 % ) of the
flight itself) and to provide two global evaluations, one on sample rated the entire service process as less than excel-
overall quality and one on overall value of the flight. The indi- lent. When the cost of the flight is factored into the evalua-
vidual service elements that respondents were asked to evalu- tion process, the results are poor. Asked to rate the value of
ate comprise the total service experience, encompassing the the flight (quality gained for the price paid), over 75 %
five dimensions of service quality (tangibles, reliability, assigned ratings of less than excellent to the carriers.
responsiveness, assurance, empathy) utilized by customers Most damaging were the respondents’ attitudes toward
to judge an organization’s service (Berry, Zeithaml, and using the same carrier again for a future trip. When asked
Parasuraman 1990). which airline they would choose for their next trip (through
The results, as shown in Table 1, are not encouraging for use of the retained preference question), over half the total
commercial air carriers. Of the 30 evaluations made (15 ele- sample (53.35 %) would choose an airline other than the one
ments each for Carriers A and B), in only one case (evalua- they were currently on; 37.3 % of the passengers who trav-
tion) did the mean exceed a 3.5 level (signifying the half-way eled on Carrier A and 69.4 % of those on Carrier B indicated
point between very good and excellent service ratings). Fur- that they would not use the same carrier on the next trip.
thermore, in only slightly over half the 30 evaluations (16) In summary, initial results provide strong evidence of
did the mean exceed the 3.0 (very good) level. In the remain- customer displeasure with current levels of service quality
ing evaluations (14), the mean fell below the very good rating. provided by commercial air carriers, including those consid-
Frequency analysis, performed on the total sample, yields ered to be among the &dquo;benchmark carriers.&dquo; If achieving
similar, discouraging results. As shown in Table 1, for three service excellence is the primary factor in building customer
of the 15 specific service elements evaluated (personal space, loyalty, the airline carriers are faring poorly; only a small
arm and shoulder room, and legroom), over half of the total percentage of flyers perceived their service encounter as being
sample assigned ratings of not very good or poor. For nine &dquo;excellent.&dquo; The results also indicate that large gains (as evi-
of the 15 elements evaluated (the above plus seating comfort, denced by the large percentage of potential brand switchers)
TABLE 1
SERVICE QUALITY RATINGS FOR CARRIERS A AND B
aFor individual elements of the service process, percent refers to the percentage of total respondents assigning a rating of not very good or
poor (2 or less) to the service element evaluation. For overall evaluation of the service process, percent refers to the percentage of total respondents
rating the flight or value of the flight as less than excellent (rating of 3 or less).
bDenotes statistical significance at themay be reaped by carriers taking actions toward higher cus- elements, although only one (legroom) was found to be
tomer satisfaction levels. statistically significant.
Apparently, the superior service provided by Carrier A
Differing Levels of Service Quality Between Carriers paid off, for it received a significantly higher rating than Car-
rier B for the overall flight evaluation. However, the higher
Having ascertained that significant room for improvement fares on Carrier A apparently prevented the perceived serv-
exists in absolute levels of service quality provided by com-
ice quality advantage from extending to evaluation of the value
mercial air carriers, we undertook a second set of analyses
for the money measure, as the mean scores assigned the two
to determine whether significant differences existed between
carriers were almost identical.
the service quality levels provided by the two specific car-
Results of this section provide preliminary evidence that
riers examined in the current study. Prior to undertaking such
a positive relationship exists between perceived levels of serv-
an analysis, an investigation was conducted to assess respon-
ice quality and levels of customer brand loyalty. Carrier A,
dents’ reasons for choosing the particular airline for their
in composite, received higher service quality ratings than did
travel plans.
Carrier B. Carrier As customers also placed more emphasis
Respondents were asked to divide 10 points among four on airline preference as a factor in their decision as to which
factors (schedule convenience, price of the ticket, participa-
tion in frequent flyer programs, and airline preference) flight to choose. Carrier B’s customers, on the other hand,
tended to emphasize cost as their primary determinant of
thought to influence choice of specific flights and carriers. airline choice. However, choice based on low cost did not
T-tests were used to determine whether significant differences
lead to significant levels of airline preference, nor did it
existed between the scores assigned to the individual factors
lead to high levels of intentions to travel on Carrier B for
by those passengers on Carrier A versus those on Carrier future flights.
B. As seen in Table 2, cost was the major factor considered
by those on Carrier B, while schedule convenience was the Passengers tended to assign equal ratings to the two car-
riers on the value for the money measure. It appears that these
primary factor influencing customer choice of Carrier A. ratings, while equal, hold differing strategic implications.
Value can be considered a function of both price and quality.
TABLE 2 The higher the quality offered for the price paid, the higher
SELECTION CRITERIA RATINGS will be the value as perceived by customers. Likewise, the
FOR CARRIERS A AND B lower the price charged to obtain a specific level of quality,
the higher will be the value as perceived by the customer.
It appears Carrier A offers higher quality for a higher price,
while Carrier B offers lower quality for a lower price. In sum,
while the overall value is equal for the two carriers, inten-
tions to continue using the same carrier appear to depend
more on quality perceptions than on price perceptions.
THE RELATIONSHIP BETWEEN SERVICE QUALITY
aDenotes statistical significance at theComparison of results from the two procedures showed little the two carriers evaluated. Helpful check-in personnel, seat-
variation. In only one of the six analyses performed (Model ing comfort, baggage delivery, craft interior, and overall value
3, Carrier A) did the variables (comprising the developed were significant at the .05 level for Carrier A. Flight atten-
model) differ between the two procedures. Therefore, rele- dants, food quality, on-time performance, and overall value
vant interpretations of the results from both procedures will were significant at the .05 level for Carrier B. For both car-
be discussed. riers, the independent variables accounted for a low percent
Several sets of
regression models were used in the cur- of the total variation (9 % and 15 % , respectively).
rentstudy, consisting of separate models for each of the two Logistic regression results indicate that the models devel-
major carriers (A and B) evaluated in three configurations oped were able to correctly classify approximately 70 %
(Models 1-3) of independent variables as follows: (69.5 % and 71.6 % , respectively, for A and B) of the overall
retained preference outcomes. Of strategic importance is the
. Individual flight service quality evaluation using the 15 indi- fact that the model developed for Carrier A correctly classi-
vidual elements of service quality and the overall value fied a large percentage of customers (93.8 % ) choosing to use
measure (designed to capture respondent perceptions of the Carrier A again. On the other hand, the model developed
for Carrier B was better able to classify customers who chose
quality/price relationship) contained in Table 1.
. Carrier image items, consisting of respondent perceptions not to fly on Carrier B again (85.6%). This suggests that flyers
of whether the carrier they flew on was the best carrier on Carrier A allow positive experiences on a single flight
in terms of convenient schedules, low fares, on-time per- to reinforce their preference for A, and consider a negative
formance, frequent flyer programs, quality of customer experience as an isolated incident. Carrier B’s customers seem
to take opposite actions; a negative experience reinforces less
service, and airline reputation. In addition, frequent flyer
favorable perceptions of the carrier, while isolated positive
membership was also included. The six image items
(best/not best) and frequent flyer membership (yes/no) were experiences are discounted. These results support evidence
coded as binary variables. presented earlier concerning the higher degree of loyalty for
Carrier As customers than for those of Carrier B.
. Individual flight service quality evaluation (15 items) and
Somewhat perplexing initially were the negative values
overall perception of value, plus carrier image items and
frequent flyer membership (seven items). assigned to the value and baggage delivery variables. These
negative values would seem to suggest that the better the bag-
Results of the gage delivery and the better the value, the more prone pas-
Regression Analyses sengers were to switch air carriers. Further analysis of the
In Model 1, the respondent’s perceptions and evaluation data suggests another, more meaningful reason for this result.
of the most recent flight were input for analysis. As shown First, a high percentage of respondents assigned low ratings
in Table 3, differing variables comprised the solution set for to baggage delivery and value. However, many respondents
TABLE 3
REGRESSION ANALYSIS OF RETAINED PREFERENCE
ON INDIVIDUAL SERVICE QUALITY ELEMENTS AND VAWE
21who tended to evaluate these criteria negatively may also hold respondent’s image of the carrier is more important to his
perceptions that baggage delivery and service are no better or her expressed loyalty than is any single flight experience.
on other airlines. This would hold true particularly for fre- However, the value variable remains an important compo-
quent flyers who possess broader experience from which rele- nent of the model, suggesting that this overall evaluation of
vant perceptions can be formed. As a result, for these flyers, the single flight is the information added to overall carrier
regardless of the baggage delivery and the perceived value, perceptions.
they will continue to fly on the same airline because of other The reputation, service, and value variables were found
factors such as schedule, layovers, etc. to be the three dominant variables for both carriers. For Car-
The second model focused on overall perceptions and rier A, the increase in the R-squared value for Model 3 over
images of the carriers. As Table 4 shows, the same variables Model 2 was minimal (.335 to .340), while for Carrier B
comprised the solution set (reputation, service, schedules, the increase was more significant (.344 to .386). This would
frequent flyer programs, and on-time performance) for both indicate that a single flight evaluation weighed more heavily
carriers. For Carrier A, the reputation variable was domi- on retained preference for Carrier B than for Carrier A. Con-
nant ; for Carrier B, this variable ranked third behind service sistent with the prior two models tested, the model devel-
and frequent flyer program. Both model forms showed oped for Carrier A was able to classify customers choosing
improved R-squared values (approximately 34 % for each) to fly Carrier A again most accurately, while the opposite
when compared to the single flight evaluation model. The held true for Carrier B.
results of the logistic regression also showed greater accuracy
in classifying overall retained preference outcomes (77.6 % Discussion of the Regression Results
and 81.4%, respectively). The same trends found in Model Based on the results of the regression models tested,
1 reappeared in the classification accuracy for the two car- several conclusions can be reached regarding the relation-
riers. The model developed for Carrier A was better able to ship between service quality and customer loyalty, the latter
classify customers choosing the same carrier for their next measured by retained preference. First, a consistent relation-
flight (81.1% accuracy), while the model developed for Car- ship exists between retained preference and the independent
rier B had better success in classifying customers who chose variables of service quality and value for the money of the
not to fly on Carrier B again. current flight. In the two models tested incorporating these
The third model incorporated all of the variables analyzed variables, the same variables were found to be significant
in Models 1 and 2. The results shown in Table 5 indicate (craft condition, baggage delivery, and value for Carrier A
that as the image variables account for more variance, the and flight attendants and value for Carrier B).
individual service ratings drop in relative importance (as seen Second, a passenger’s image of the carrier (based on long-
in their reduced beta and R values). This suggests that the term experiences encompassing many service encounters)
TABLE 4
REGRESSION ANALYSIS OF RETAINED PREFERENCE
ON CARRIER IMAGE VARIABLES AND FREQUENT FLIER MEMBERSHIP
22is more important in explaining customer loyalty than is the time (following several good experiences) will ultimately lead
evaluation of the current, single flight. The most important to positive image and preference.
image items for both airlines were found to be reputation and The developed regression models only account for a
service. The higher relative importance of reputation accorded portion of the total variance found in the retained pref-
to Carrier A suggests that its flyers may consider a particu- erence measure. Other factors that could influence a carrier’s
larly bad flight to be an exception to their impression of the retained preference might include flight frequency, extensive
airline; retained preference will change slowly as a result. experience with a particular carrier, mileage equity in a
On the other hand, Carrier B’s passengers tended to accord specific carrier’s frequent flyer program, and carrier sched-
more importance to their most recent experience, especially ule strength.
in a negative sense. This finding seems to indicate that, for
carriers considered &dquo;second tier,&dquo; every flight experience is
an important one in influencing preference.
Third, once acquired, a positive or negative image may CONCLUSIONS AND IMPLICATIONS
be hard to displace. For Carrier A, the developed models
were able to classify satisfied customers with more accuracy, There seems to be consensus among researchers and
while for Carrier B the converse happened. This finding may practicing managers regarding the strategic importance of
prove to be an obstacle for an airline’s efforts to improve its organizations offering high levels of service quality. A vast
image. For example, Carrier B’s service may be brought up and ever-growing amount of literature on the topic attests to
to par. Yet, it may still lag in acquiring a proportionate share this fact. However, to date, there have been few attempts to
of loyal customers. While a poor experience will have an measure service quality levels in specific industry settings.
immediate negative impact on preference and image, a good A primary objective of the present study was to begin the
experience may not immediately provide positive, long-term process of investigating industry-specific service quality
results. Rather, the positive experience will lessen the per- issues through the use of specially designed scales and
ceived risk of traveling on Carrier B again, which, over targeted sample populations.
TABLE 5
REGRESSION ANALYSIS OF RETAINED PREFERENCE
ON ALL VARIABLES
23The present study focused on service quality issues affect- providing perceived high quality services, and thus the acqui-
ing the commercial airline industry. The results of this study sition and retention of loyal customers. Although it is appar-
suggest several conclusions. First, there is no doubt that ent that positive customer images cannot be built on the basis
perceived service quality differences exist in the commer- of one flight or on short-term actions, continuous endeavors
cial airline industry. However, the determining of mere exis- toward this end will pay high dividends.
tence is of little strategic importance. What matters are the
levels of service quality being offered and whether they meet
or exceed customer expectations. Toward this end, there
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