abhinav a study of the consumer behavior concerning

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International Monthly Refereed Journal of Research In Management & Technology

49 www.abhinavjournal.com

ISSN – 2320-0073 Volume I, December’12

A STUDY OF THE CONSUMER BEHAVIOR CONCERNING SERVICE QUALITY AND VARIOUS

DIMENSIONS OF SERVICES PROVIDED BY AIRLINES SERVICES

Prof. Chanduji Thakor1 and Kinjal Mistri2

1Head of the Department, VJKM Institute of Management and Computer Studies,

Vadu (North Gujarat)

Email: [email protected] 2Lecturer, B.B.A College, Kalol, Gandhinagar

INTRODUCTION

What is Service?

A type of economic activity that is intangible, is not stored and does not result in ownership.

A service is consumed at the point of sale. Services are one of the two key components of

economics, the other being goods. Examples of services include the transfer of goods, such

as the postal service delivering mail, and the use of expertise or experience, such as a

customer travel into Airlines.

(Source: http://www.investorwords.com/6664/service.html#ixzz2CXep8b9f)

Characteristics of Services

Intangibility

Simultaneously

Perishability

Inseparability

Labour intensive

Heterogeneity

An airline is a company that provides air transport services for traveling passengers and

freight. Airlines lease or own their aircraft with which to supply these services and may form

partnerships or alliances with other airlines for mutual benefit. Generally, airline companies

are recognized with an air operating certificate or license issued by a governmental aviation

body.

Airlines vary from those with a single aircraft carrying mail or cargo, through full-service

international airlines operating hundreds of aircraft. Airline services can be categorized as

http://www.investorwords.com/1639/economic.html

http://www.investorwords.com/92/activity.html

http://www.investorwords.com/7202/result.html

http://www.investorwords.com/16088/ownership.html

http://www.investorwords.com/3725/point_of_sale.html

http://www.investorguide.com/definition/service.html

http://www.investorwords.com/1648/economics.html

http://www.investorwords.com/2209/goods.html

http://www.investorwords.com/9996/include.html

http://www.investorwords.com/5048/transfer.html

http://www.investorwords.com/13271/experience.html

http://en.wikipedia.org/wiki/Civil_aviation

http://en.wikipedia.org/wiki/Travel

http://en.wikipedia.org/wiki/Passenger

http://en.wikipedia.org/wiki/Freight

http://en.wikipedia.org/wiki/Leasing

http://en.wikipedia.org/wiki/Aircraft

http://en.wikipedia.org/wiki/Partnership

http://en.wikipedia.org/wiki/Airline_alliance

http://en.wikipedia.org/wiki/Air_operator%27s_certificate

http://en.wikipedia.org/wiki/Mail

http://en.wikipedia.org/wiki/Cargo

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being intercontinental, intra-continental, domestic, regional, or international, and may be

operated as scheduled services or charters.

REVIEW OF LITERATURE

Literature review depicted that Scandinavian Airlines System was structured as per the

demands and the recommendations of the customers, instead of those of the company and its

management. “One of the key issues in the paper is the way SAS has chosen to develop the

new services, namely to allow the passengers to define the process as op posed to defining it

from the company perspective.” (Gustafsson, Ekdahl & Edvardsson, 1999) the literature

review also indicated that variations in the services provided to the customers and the high

degree of customization has differentiated effects on the satisfaction level of the customers.

Results of the study depict that “the relationship between process variation and customer

dissatisfaction is contingent upon a company‟s average performance with regard to each

process. Consistency is at least as important as average performance for high performers,

while it has limited impact for low performers.” (Tsikriktsis & Heineke, 2004)

Davidson (1978), discussed in his research the importance of managing customer contacts

specifically in the service industries. The reason that was provided for managing the contacts

was to increase customer loyalty, promote repeat purchase of the services as well as to create

a position for the company in the market specific to the perceptions of the customers about

the company and is service quality standards. Another research by Oyewole in 2002 also

highlighted that moods and quality of life can also greatly influence the satisfaction level of

the customer. The moods of the customer as well as the quality of life “tend to have

significant influence on the level of satisfaction with services in the airline industry.

However, some elementary services tend to be more influenced than others by these affective

states of the consumer.” (Oyewole, 2002) As a result the airlines, specifically Singapore

Airlines tries to improve the mood of the customers with specially designed in fight facilities

and services.

Source: google.com

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RESEARCH OBJECTIVES

The research carried out during the project had many objectives related to the service quality

of the Indian airline industry. Some of the objectives of the research carried out are listed

below:

To study the concept of service quality and dimensions governing service quality.

To study the service quality of different service providers in the Indian aviation

industry.

To measure the service quality with the help of the service quality dimensions for the

service providers.

To compare the service quality of different service providers with Kingfisher airlines

and to find the airline service provider with the best service quality.

To understand the knowledge gap or the gap between the management‟s perception

about the customer expectations and the customer expectations.

To measure the knowledge gap for the service providers of the Indian aviation

industry.

RESEARCH METHODOLOGY

The research methodology gives an idea about the type of research design, the sampling

techniques, the process of data collection and the instrument used for data collection. Let us

try to understand all the portions in detail.

Research Design

The research design in this project was descriptive research design. A descriptive research

design describes marketing characteristics or functions. Also it is qualitative in nature. The

research paper carried out involves measuring service quality with the help of service quality

dimensions which are the attributes for that service provider or the brand.

Data Collection

The data collection in this project was through both the primary and secondary sources. The

primary sources include the customers of the service provider who provided the primary

data. Textbooks, journals, internet websites and other magazines provided the secondary data

for the project. Hence both primary and secondary data were collected during the project.

Questionnaire

The instrument used for the collection of the primary data was a structured questionnaire.

The questionnaire is to be filled up by the customers of an airline service provider. The

questionnaire will have closed ended questions or multiple choice questions.

Sampling Technique and Sample Size

The sampling technique used in this project was a non-probability sampling. A non-

probability sampling relies on the personal judgment of the researcher rather than chance to

select samples. The sampling technique in a non-probability sampling was that of a

convenience sampling. Convenience sampling attempts to obtain a sample of convenient

samples. The selection of the samples is left primarily to the interviewer. Often the

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respondents are selected because they happen to be in the right place at the right time. The

sample size was kept 200 for the research purpose.

LIMITATIONS

The limitations of the research carried out for this paper are as follows:

Only 4 service providers are taken into consideration while studying the service

quality of the service providers and measuring and comparing them. Hence the

whole industry was not covered.

Moreover only domestic airline services are taken into consideration because of the

constraint of time and accessibility.

Sample size was 200. Hence it cannot be generalized to a larger population.

Expanded Marketing Mix New P’s

People

The frontline or service-provider employee plays a key role in the services delivery process

since it is this category of employee that executes the service promise to the customer. The

important points about people are as follows: People are the visible face of the service

provider. They are the only ones who are seen and heard by the service recipient. For

example, the receptionist at the tax office receives the returns at the counters. We are not

allowed to go in any further or meet with the taxation officers.

Hence from this we can say that the service provider employee is the kingpin in the services

delivery. They are also known as internal customers. If a service organization takes good

care of internal customers then only they can ultimately satisfy the external customers.

Hence we need to pay greater importance to their psychological and mental make up rather

than mere qualifications.

Physical Evidence

The physical evidence of a service comes in different forms and guises. These include the

physical aspects of the location of the service delivery such as the design, functionality, and

aesthetics of the place. The air flow, décor, temperature, etc. create the right atmosphere for

the service delivery. The dress, uniform, appearance, and facial expressions of the frontline

employees form a crucial part of this physical evidence.

Process

This means procedures, mechanism and flow of activities by which a service is acquired.

Process decisions radically affect how a service is delivered to customers.

For example, at a restaurant the process involves certain steps as following:

Providing information with the help of a menu

Consulting

Order taking

Delivering the service as per the order

Billing

Payment

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This is a basic and simple process at a restaurant. There can be many such processes for

different services. A process if changed can change the service delivery and hence can also

change the service quality perceived by the customers. Hence process is supposed to be

designed properly. It is also a very important mix of marketing in services.

Classification of Services by Industry

Service Quality

Concept

Quality is defined as "Degree to which a set of inherent characteristic fulfils requirements"

by ISO 9000.Quality is also defined as “Fitness for use” by Joseph M. Juran. Fitness in this

definition is defined by the customer. Quality can also be defined in simple words as

“Conformance to Requirements” as defined by Philip B. Crosby. The difficulty with this is

that the requirements may not fully represent what the customer wants; Crosby treats this as

a separate problem.

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Quality has particular parameters or dimensions of measurement. The quality of a product

can be measured on the basis of certain parameters or dimensions as follows:

1. Performance

2. Features

3. Reliability

4. Conformance

5. Durability

6. Serviceability

7. Aesthetics

8. Perceived Image, reputation, brand name, etc.

The dimensions of service quality are different from that of product quality. The

determinants of service quality are as follows:

1. Reliability

2. Assurance

3. Tangibles

4. Empathy

5. Responsiveness

Initially there were 10 dimensions of service quality which were then reduced to only 5

dimensions later. Assurance is a combination of competence, courtesy, credibility and

security. Empathy is a replacement of access, communication and understanding the

customer. Hence the previous model of 10 dimensions is reduced to model of 5 dimensions.

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Moments of Truth

Each and every point where a customer comes in contact with the service organization is

known as a service encounter. These points of contact create an image or impression in the

customers mind about the service provider. This service encounter is also known as

“moment of truth”. Such points of contact thus form moments of truth for a service provider.

This concept was used and formulated by Jan Carlzon who was the CEO of SAS

(Scandinavian Airline Services) during the period 1981-1993.

For example, among the service encounters a hotel customer experiences are checking in to

the hotel, being taken to a room by a bell person, eating a restaurant meal, requesting a wake-

up call, and checking out. In a hospital context, a study of patients revealed that encounters

with nursing staff were more important in predicting satisfaction than were encounters with

meal service or patient discharge personnel. Side from common key encounters, there are

some momentous encounters that like the proverbial “one bad apple” simply ruin the rest and

drive the customer away no matter how many or what type of encounters have occurred in

the past. The Disney Corporation estimates that each of its amusement park customer

experiences about 74 service encounters and that a negative experience in any one of them

can lead to a negative overall evaluation. Mistakes or problems that occur in early levels of

the service cascade are particularly critical, because a failure at one point results in greater

risk for dissatisfaction at each ensuing level.

Gaps Model of Service Quality

The service quality has five dimensions as explained earlier. Also the service quality has a

gaps model in which we can understand different types of gaps in the service quality which

can be filled or closed so as to provide a zero defect service. Different people have

developed different model for the gaps in service quality. The most extensively used and

accepted gaps model of service quality is known as SERVQUAL.

SERVQUAL model consists of five gaps in the service quality. One of the five gaps is

customer gap and the other four gaps are service provider gaps. The central focus of the gaps

model is the customer gap, the difference between customer expectations and perceptions.

Hence this gap is also known as Expectations Gap. Firms need to close this gap – between

what customers expect and receive – in order to satisfy the customers and build long term

relationships with them.

The four provider gaps are as follows:

1. Gap 1 – Knowledge Gap

2. Gap 2 – Standards or Design Gap

3. Gap 3 – Delivery Gap

4. Gap 4 – Communications Gap

Customer Gap or Expectations Gap

The difference between customer expectations and customer perceptions creates the

customer gap. While customer perceptions are subjective assessments of actual service

experiences, customer expectations are the standards of, or reference points for, performance

against which service experiences are compared. Customers perceive that they get what they

think they will and should. In practice, a customer gap typically exists.

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The Gap 5 shown in the following figure of service quality is customer gap or expectations

gap.

Gaps Model of Service Quality

Airline Industry in India

Airlines vary from those with a single airplane carrying mail or cargo, through full-service

international airlines operating many hundreds of airplanes. Airline services can be

categorized as being intercontinental, intracontinental, regional or domestic and may be

operated as scheduled services or charters.

DELAG, Deutsche Luftschiffahrts-Aktiengesellschaft (German: acronym for "German

Airship Transport Corporation") was the world's first airline. It was founded on November

16, 1909 with government assistance, and operated airships manufactured by Zeppelin

Corporation. Its headquarters were in Frankfurt.

Air India was founded as Tata Airlines in 1932, a division of Tata Sons Ltd. (now Tata

Group) by J. R. D. Tata. On October 15, 1932 the founder, J. R. D. Tata flew a single engine

De Havilland Puss Moth registered VT-and carrying air mail (postal mail of Imperial

Airways) from Karachi's Drigh Road Aerodrome to Bombay's Juhu Airstrip via Ahmedabad.

The aircraft continued to Madras via Bellary piloted by Royal Air Force pilot Neville

Vincent.

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Following the end of World War II, regular commercial service was restored in India and

Tata Airlines became a public limited company on 29 July 1946 under the name Air India.

The airline was set up under Air Corporations Act, 1953 with an initial capital of Rs.32

million and started operations on 1 August 1953. It was established after legislation came

into force to nationalize the entire airline industry in India.

At the time of independence, the number of air transport companies, which were operating

within and beyond the frontiers of the company, carrying both air cargo and passengers, was

nine. It was reduced to eight, with Orient Airways shifting to Pakistan. These airlines were:

Tata Airlines, Indian National Airways, Air service of India, Deccan Airways, Ambica

Airways, Bharat Airways and Mistry Airways.

The Open-sky policy came in April 1990. The policy allowed air taxi- operators to operate

flights from any airport, both on a charter and a non charter basis and to decide their own

flight schedules, cargo and passenger fares. The operators were, however, required to use

aircraft with a minimum of 15 seats and conform to the prescribed rules. In 1990, the private

air taxi-operators carried 15,000 passengers. This number increased to 4.1 lakh in 1992, 29.2

lakh in 1993, 36 lakh in 1994 and 48.9 lakh in 1995.

There has been a revolution in air travel in India in the last decade. Ever since the

government launched its open sky policy and allowed private players to enter the arena there

has been a sea change in the airline industry in India. Air travel has become cheaper and

more affordable and the number of people traveling by air has gone up drastically.

Consequently, Indian Airports too have changed for the better. Airports in India have

become more swanky and passenger friendly.

In the recent past Indian civil aviation sector has grown manifold. The rapid growth of

Indian economy has resulted in a spillover effect on the airline industry in India. Several new

players have entered the industry and many more are about to enter the arena. The arrival of

cheap airline carriers in India has spiced up the whole affair. Suddenly the air travel is no

more the monopoly of the rich and the mighty. Now it has become a common man‟s vehicle

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and revolutionized the way a common Indian traveler used to travel. Here is a brief preview

of domestic airlines in India. This includes private airlines as well as low cost airlines in

India.

A low-cost carrier or low-cost airline (also known as a no-frills or discount carrier / airline)

is an airline that offers generally low fares in exchange for eliminating many traditional

passenger services. The first successful low-cost carrier was Pacific Southwest Airlines in

the United States, which pioneered the concept when their first flight took place on May 6,

1949. Often, this credit has been incorrectly given to Southwest Airlines which began service

in 1971 and has been profitable every year since 1973.

Air Deccan, SpiceJet, GoAir, IndiGo airlines and paramount airways are some of the low

cost carriers in India. Jet airways, Kingfisher airlines and Air Sahara, Air India, and Indian

are not considered as the low cost carriers.

Airline Industry (India)-Current Scenario

The airline industry in India today is facing a huge loss. According to an article in

Businessworld Jan‟06, for every passenger flying today in India, airlines are losing on an

average roughly $15 i.e. the gap between the revenue and costs; some airlines are losing than

others. At 32 million passengers expected to fly in 2008-09, that works out to $480 million

or Rs 2,200 crore. In September 2009, a total of 100,000 seats were available per day. By

December that went to 120,000. Since April 2008, the industry has added 120 aircraft.

Airlines are buying planes like they were peanuts and adding capacity at a frenetic pace.

Industry leader Jet Airways has clocked a loss of over Rs 100 crore in the first half.

That Indian industry suffers from the „herd mentality‟ is quite evident by the trends in

telecommunications, information technology, BPO…the list is long. Airline has been no

different. Everyone worth his salt has jumped into it at the same time, so there is too much

capacity. Traffic is growing but capacity is growing faster. So to break even, airlines have to

achieve higher load factors than before. That means severe competition and very low fares.

Making matters a lot worse is the obsession with one or two routes. For example, Delhi-

Mumbai has close to 44 flights operating one way.

Market Share of Major Players (Domestic)

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Overview of Major Players

Indian Airlines

Indian Airline is an airline based in Mumbai, India, and focuses primarily on domestic

routes, along with several international services to neighbouring countries in Asia. Indian

Airlines is state-owned, and is administered by the Ministry of Civil Aviation. It is one of the

two flag carriers of India, the other being Air India.

In 2007, the Government of India announced that Indian Airlines would be merged into Air

India. As part of the merger process, a new company called the National Aviation Company

of India Limited (NACIL) was established, into which both Air India (along with Air India

Express) and Indian Airlines] (along with Alliance Air) will be merged. Once the merger is

complete, the airline - which will be called Air India - will continue to be headquartered in

Mumbai and will have a fleet of over 130 aircraft.

The jet age began for IAC with the introduction of the pure-jet Sud Aviation Caravelle

airliner in 1964, followed by Boeing 737-200s in the early 1970s. April 1976 saw the first

three Airbus A300 wide-body jets being introduced. The regional airline, Vayudoot, which

had been established in 1981, was later reintegrated.

Old orange logo of Indian Airlines until the mid-2000s

By 1990, Airbus A320-200s were introduced. The economic liberalisation process initiated

by the Government of India in the early 1990s ended Indian Airlines' dominance of India's

domestic air transport industry. Indian Airlines faced tough competition from Jet Airways,

Air Sahara (now Jet Lite), East-West Airlines, Skyline NEPC, and ModiLuft. As of 2005,

Indian Airlines was the second largest airline in India after Jet Airways while Air Sahara

controlled 17% of the Indian aviation industry.

East-West Airlines, Skyline NEPC and ModiLuft discontinued flight operations but the entry

of several low-cost airlines in India, such as Air Deccan, SpiceJet, IndiGo (Interglobe

Enterprise) and others like Kingfisher Airlines continue to give competition in its market,

forcing Indian to cut down air-fares. However, as of 2006, Indian Airlines was still a profit

making airline.

http://en.wikipedia.org/wiki/Ministry_of_Civil_Aviation_(India)

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Air_India



http://en.wikipedia.org/wiki/National_Aviation_Company_of_India_Limited

http://en.wikipedia.org/wiki/National_Aviation_Company_of_India_Limited

http://en.wikipedia.org/wiki/Air_India_Express

http://en.wikipedia.org/wiki/Air_India_Express

http://en.wikipedia.org/wiki/Alliance_Air

http://en.wikipedia.org/wiki/Sud_Aviation_Caravelle

http://en.wikipedia.org/wiki/Boeing_737

http://en.wikipedia.org/wiki/Airbus_A300

http://en.wikipedia.org/wiki/Vayudoot

http://en.wikipedia.org/wiki/File:Indian_Airlines_Old_Logo.svg

http://en.wikipedia.org/wiki/Airbus_A320_family

http://en.wikipedia.org/wiki/Liberalization

http://en.wikipedia.org/wiki/Jet_Airways

http://en.wikipedia.org/wiki/Jet_Lite

http://en.wikipedia.org/wiki/Jet_Lite

http://en.wikipedia.org/wiki/East-West_Airlines_(India)

http://en.wikipedia.org/w/index.php?title=Skyline_NEPC&action=edit&redlink=1

http://en.wikipedia.org/wiki/ModiLuft

http://en.wikipedia.org/wiki/Low-cost_carrier

http://en.wikipedia.org/wiki/Air_Deccan

http://en.wikipedia.org/wiki/SpiceJet

http://en.wikipedia.org/w/index.php?title=IndiGo_(Interglobe_Enterprise)&action=edit&redlink=1

http://en.wikipedia.org/w/index.php?title=IndiGo_(Interglobe_Enterprise)&action=edit&redlink=1

http://en.wikipedia.org/wiki/Kingfisher_Airlines

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Indian Airlines Limited is wholly owned by the Government of India through a holding

company and has 19,300 employees as of March 2007 Its annual turn-over, together with

that of its subsidiary Alliance Air, is well over Rs.4000 crores (around US$ 1 billion).

Together with its subsidiary, Alliance Air, Indian Airlines carries a total of over 7.5 million

passengers annually.

In December 2007, Air India was invited to join the Star Alliance. Since Indian Airlines is in

the midst of merging with Air India, it too will effectively be a member.

IndiGo

IndiGo is a private domestic low-cost airline based in Gurgaon, Haryana, India. It operates

domestic services linking 20 destinations. Its main base is Delhi's Indira Gandhi International

Airport. It was awarded the title of „Best Domestic Low Cost Carrier‟ in India for 2008.

Jet Airways

Jet Airways is an airline based in Mumbai, India. It is India's second largest airline after Air

India and the market leader in domestic sector. It operates over 400 daily flights to 80

destinations worldwide.

In July 2008, Which? magazine ranked Jet Airways as the world's best long-haul airline after

Singapore Airlines .in a poll conducted by SmartTravelAsia.com in September 2008,it was

voted as the world's seventh best airline overall. Jet Airways has also won a survey award for

the quality of its catering from Which? magazine. Jet Airways also operates two low-cost

airlines, namely JetLite (formerly Air Sahara) and Jet Airways Konnect.

Spice Jet

SpiceJet is a low-cost airline based in Delhi, India. It began service in May 2005 and by

2008, it was India's second-largest low-cost airline in terms of market share.

SpiceJet was voted as the best low-cost airline in South Asia and Central Asia region by

Skytrax in 2007. Rising fuel costs and increasing competition resulted in SpiceJet posting a

loss in the first quarter of 2008-09. In August 2008, SpiceJet announced plans to raise

US$100 million through foreign investment.

Kingfisher Airlines

Kingfisher Airlines Limited is a major Indian airline. Kingfisher operates more than 400

flights a day and has a network of 80 destinations, with regional and long-haul international

services.[1]. Kingfisher Airlines, through one of its holding companies United Breweries

Group, has a 50 percent stake in low-cost carrier Kingfisher Red.

Kingfisher Airlines is one of six airlines in the world to have a five-star rating from Skytrax,

along with Asiana Airlines, Malaysia Airlines, Qatar Airways, Singapore Airlines and

Cathay Pacific Airways. In May 2009, Kingfisher Airlines carried more than a million

passengers, giving it the highest market share among airlines in India.

Kingfisher has its registered office in the UB Tower in Bangalore and its head office in the

Kingfisher House in Mumbai.

http://en.wikipedia.org/wiki/Crore

http://en.wikipedia.org/wiki/Star_Alliance


http://en.wikipedia.org/wiki/Gurgaon

http://en.wikipedia.org/wiki/Haryana


http://en.wikipedia.org/wiki/Delhi

http://en.wikipedia.org/wiki/Indira_Gandhi_International_Airport

http://en.wikipedia.org/wiki/Indira_Gandhi_International_Airport

http://en.wikipedia.org/wiki/Airline

http://en.wikipedia.org/wiki/Mumbai




http://en.wikipedia.org/wiki/Which%3F

http://en.wikipedia.org/wiki/Singapore_Airlines

http://en.wikipedia.org/wiki/Which%3F

http://en.wikipedia.org/wiki/JetLite

http://en.wikipedia.org/wiki/Jet_Airways_Konnect

http://en.wikipedia.org/wiki/Low-cost_airline

http://en.wikipedia.org/wiki/Delhi


http://en.wikipedia.org/wiki/South_Asia

http://en.wikipedia.org/wiki/Central_Asia

http://en.wikipedia.org/wiki/Skytrax

http://en.wikipedia.org/wiki/US$


http://en.wikipedia.org/wiki/Kingfisher_Airlines#cite_note-0

http://en.wikipedia.org/wiki/United_Breweries_Group

http://en.wikipedia.org/wiki/United_Breweries_Group


http://en.wikipedia.org/wiki/Kingfisher_Red

http://en.wikipedia.org/wiki/Skytrax

http://en.wikipedia.org/wiki/Asiana_Airlines

http://en.wikipedia.org/wiki/Malaysia_Airlines

http://en.wikipedia.org/wiki/Qatar_Airways

http://en.wikipedia.org/wiki/Singapore_Airlines

http://en.wikipedia.org/wiki/Cathay_Pacific_Airways

http://en.wikipedia.org/wiki/UB_Tower

http://en.wikipedia.org/wiki/Bangalore

http://en.wikipedia.org/wiki/Mumbai

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Fiscal Issues in Aviation Industry

Airlines are an important part of the Indian economy. Apart from contributing considerably

to the national exchequer and providing significant employment opportunities, a whole host

of industry sectors from tourism to hospitality.

The high operating-cost environment in India, coupled with the competitive nature of the

Airline business, has resulted in a continued strain on the health of the airlines in India.

Fiscal Issues:

Rationalizing ATF Prices to International Benchmarks

Withholding tax on leased aircraft

Fringe Benefit Tax

Service Tax

Sales Tax

Cenvat Credit on ATF

Hedging of Aviation Turbine Fuel (ATF)

Q. How Often Do You Fly?

This question gave an idea about the frequency of traveling through airlines for a particular

respondent. This question gives an idea whether the respondents have a past experience or

are new to the services or are frequent users of airline services. 20% of the respondents used

the airline service once a year which is the lowest in the category. 12.5% of the respondents

used the airlines for traveling once in every 6 months. 15% of the respondents used the

airlines for traveling once in a month. 52.5% of the respondents used the airline services

frequently.

Frequency of Traveling Through Airlines

Demographics of the Respondents

The questions related to the demographics of the respondents are explained in this section.

The questions were related to the age, gender, occupation and income. All the important

factors of demographics are covered in these characteristics. The demographics of the

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respondents are shown in the following charts which give us an idea about the customer

profile or the respondents‟ profile.

Age Group of Respondents

14% of respondents fall between the age group of 0-18 years, 26% of respondent‟s falls

between the age of 18-23 years, 30% of respondent‟s falls between the age group of 31-45

years, 20% of respondents falls between the age group of 45-60 years, 10% of respondents

falls between the age group above 60 years.

GENDER

INCOME

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Income level of people varies from 0-2 lakhs to 10 lakhs and above where maximum

respondents falls between the income level of 2-5 lakhs where as there are almost equal

number of respondents from 0-2 lakhs , 5-10 lakhs and 10 lakhs and above.

The remaining questions in the questionnaire were related to the service quality dimensions

which are taken together for a single service provider. Then the total service quality of all the

Service providers is compared. Also the service quality dimensions are found for individual

service providers.

As there were certain constraints in carrying out the project only 4 service providers were

taken into consideration for calculating the service quality. The service providers taken into

consideration during the project are as follows:

1. SpiceJet

2. Jet Airways

3. Indian Airlines

4. Kingfisher Airlines

For all the service providers mentioned above every service dimension was calculated and a

total score for service quality is measured. This total score of all the service providers is

compared and then the service provider with the best service quality is found.

Now the data for the service providers for the service quality dimensions are analyzed and

the results are given in the next section. The section gives the details about the service

quality dimensions in individual service provider. Then a comparison of the total score of

service quality is carried out for all the service providers which are explained in the later

portion of the analysis.

Knowledge Gap

This was the only gap which could have been calculated in the project as far as the gaps in

service quality are concerned. The knowledge gap is the gap between the management‟s

perceptions about the customers‟ expectations and the customers‟ expectations. Given below

is a chart which gives an idea about the knowledge gap existing in all the service providers

taken into consideration.

Knowledge Gap for All Service Providers

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From this chart we can conclude the following:

Kingfisher has the least gap and hence it understands the customers‟ expectations very well.

It is the best service provider in terms of understanding the customers‟ expectations.

Indian Airlines has the highest gap and hence it does not understand the customers‟

expectations as compared to other service providers. Jet airways are the next best to Spice Jet

in terms of knowledge gap.

Service Quality Dimensions

To measure the Service Quality dimensions we have kept several parameters in the

Questionnaire in which the respondents have to tick on likert scale ranging from excellent to

bad. Then by measuring the mean of all parameters we found out the score of the Service

Quality Dimension.

For Tangibility the parameters are Seat comfort, Cleanliness of cabin, Cleanliness of toilets,

Newspapers/magazines, pillows/blankets, Quality of entertainment, Quality of beverages,

handling of luggage, appearance and clothing of cabin crew.

For Responsiveness the parameters are punctuality of timing, politeness/courtesy,

friendliness and language skills of cabin crew

For Reliability parameters are Staff provides service without making fumbles, responds

quickly to problems, response happens at promised time.

For Assurance parameters are Cabin crew‟s safety drill, courtesy of staff, efficiency of

check-in staff, and service efficiency of cabin crew.

For Empathy parameters are individual attention to customers, flight timings convenient to

customers, long term relationship with customers.

Service Quality Dimensions

Tangibility

Analyzing the tangibility factor of each of the airlines it is very clear from the above graph

that tangibility of kingfisher airlines compared to rest of the airlines is definitely high.

Kingfisher airlines is having such a significant increase in response towards tangibility

compared with the other flights is due to many factors that are playing important role for

such a shift in the above graph.

Comparing Tangibles such as seat comfort, Cleanliness of cabin, Cleanliness of toilets and

many other factors such as availability of newspapers and magazines, Pillows and blankets

T ang iblity

0

0.5

1

1.5

2

2.5

3

3.5

S picejet J et Indian A ilines K ingfis her

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etc. plays an most important role in shifting peoples response more towards kingfisher

compared with other airlines.

Though Indian airlines is public sector undertaking airlines but then also as far as the

question of tangibility is concern it was rated as second most preferable after kingfisher.

Only the difference in response of kingfisher and Indian airlines was that there was

comparatively less seat comfort in Indian airlines compared to kingfisher airlines.

Now talking about jet and spice jet they both were rated at lowest level by the respondents

and comparing these two airlines there was almost equal grading to both of the airlines as far

as tangibility is concern. So from above graph it is clear that kingfisher has got more

preference and positive response of people on tangibility criteria.

Responsiveness

R es pons ivenes s

0

0.5

1

1.5

2

2.5

3


Now comparing Responsiveness of the above airlines, it was remarkable that kingfisher has

majority of people rating it highest also in the factor of responsiveness followed by Indian

airlines. As kingfisher is five star rated airlines it is obvious thing that staff of kingfisher will

be more responsive towards the facilities to be provided on time and also problems to be

solve at time. But position of Indian airlines in minds of people holds second place in

responsiveness criteria is remarkable. Factors included in Responsiveness, such as

friendliness, language skills, waiting time to check in and courtesy of check in staff played

very important role for shifting the above graph in favor of kingfisher. Now talking about jet

and spice jet they both were rated at lowest level by the respondents and comparing these

two airlines there was almost equal grading to both of the airlines as far as responsiveness is

concern.

Assurance

As s uranc e

0

0.5

1

1.5

2

2.5

3

S pic ejet J et Indian A ilines K ingfis her

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Analyzing the assurance factor, of each of the airlines it is very clear from the above graph

that assurance of kingfisher airlines compared to rest of the airlines is definitely high.

Kingfisher airlines is having such a significant increase in response towards assurance

compared with the other flights is due to many factors that are playing important role for

such a shift in the above graph.

Comparing assurance factors such as seat politeness/courteous, service efficiency, efficiency

of check in staff and safety of cabin crew drill plays an most important role in shifting

peoples response more towards kingfisher compared with other airlines.

In case of assurance Indian airlines was rated as second most preferable after kingfisher.

Only the difference in response of kingfisher and Indian airlines was that there was

comparatively less service efficiency and efficiency of check in staff in Indian airlines

compared to kingfisher airlines.

Now talking about jet and spice jet they both were rated at lowest level by the respondents

and comparing these two airlines there was almost equal grading to both of the airlines as far

as assurance is concern.

So from above graph it is clear that kingfisher has got more preference and positive response

of people on assurance criteria.

Reliability

0

0.5

1

1.5

2

2.5

3


R eliablity

While comparing reliability of all the above mentioned airlines the result was same as it was

in the case of tangibility, assurance and responsiveness. It was kingfisher which was as most

reliable airlines by most of the people from the sample.

Reliability of kingfisher compared with other three airlines is very high and comparing the

other three airlines that is Spice jet, Jet airways and Indian Airlines its almost same in all the

three airlines.

Reliability factors such as Service without fumbles, Quick response towards problem and

Response towards problem in promised time plays very important role in gauging reliability

factor of any of the airlines and kingfisher is able to provide the above mention services to

the expectation of people this the reason of highest Reliability level of kingfisher by the

respondents.

From the above graph it can be clearly interpreted that kingfisher compared with other three

airlines is more reliable.

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Empathy

E mpathy

0

0.5

1

1.5

2

2.5

3


Empathy also seems to be in the favor of kingfisher, from the above graph it can be clearly

interpreted that Empathy of kingfisher airlines compared to other airlines is defiantly very

high followed by spice jet. Empathy factors such as Individual attention, Convenience of

flight timings and Long term relations affects response of the people up to an extent.

Kingfisher is having highest level of empathy level in the minds of the people.

This time instead of Indian Airlines, Spice jet is following Kingfisher in this criteria so it can

be interpreted that Empathy of spice jet is more then tangibility, reliability, assurance and

responsiveness of itself.

An Indian airline is having lowest Empathy after Jet airway which is having second lowest

Empathy level

Service providers

Spice Jet

The scores of the service quality dimensions of spice jet are given in the chart below. Here

we have kept 1 as excellent and 5 as poor , Service quality dimension which shows lower

rating in graph means its better than one showing higher rating in graph.

Graph for SERVQUAL Dimensions for Spice Jet

The scores in the above chart conclude the following.

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Empathy has the lowest score in all the service quality dimensions so its better than rest of

service quality dimensions. This shows that employees i.e. people are contributing more in

the service quality.

Tangibility and responsiveness are having the high scores and hence the physical evidence is

not good. Moreover they are not much reliable in services and lack assurance as well.

This shows that the service provider is not able to provide reliable services or not able to

inspire trust and confidence for the service.

Jet Airways

The scores of the service quality dimensions for Jet Airways are given below in the form of a

chart. Here we have kept 1 as excellent and 5 as poor , Service quality dimension which

shows lower rating in graph means its better than one showing higher rating in graph. The

chart can easily give idea about the conclusions.

Graph for SERVQUAL Dimensions for Jet Airways

The scores in the above chart conclude the following:

The service quality dimension of Tangibility has the highest contribution in the overall

service quality. Reliability and Empathy dimensions are close to each other in terms of the

score. Hence these 2 service quality dimensions are contributing equally in the overall

service quality in case of Jet Airways. This shows that physical evidence and other tangibles

and intangibles are all contributing in an equal manner to achieve the overall service quality.

Responsiveness of the people is not up to the mark which staff must be given more training

to serve to customers efficiently.

Indian Airlines

The scores of the service quality dimensions for Indian Airlines are given below in the form

of a chart. Here we have kept 1 as excellent and 5 as poor , Service quality dimension which

shows lower rating in graph means its better than one showing higher rating in graph. The

chart can easily give idea about the conclusions.

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Graph for SERVQUAL Dimensions for Indian Airlines

The scores in the above chart conclude the following:

Empathy as a service quality dimension is the Poor. Hence it means that the staff does not

provide individual attention to customers. Also the dimensions assurance and reliability are

good are almost equal and they contribute equally to the overall service quality. As the

tangibility is poor so the physical evidence of the service provider is not up to mark.

Kingfisher Airlines

The scores of the service quality dimensions for Kingfisher Airlines are given below in the

form of a chart. . Here we have kept 1 as excellent and 5 as poor , Service quality dimension

which shows lower rating in graph means its better than one showing higher rating in graph.

The chart can easily give idea about the conclusions.

Graph for SERVQUAL Dimensions for Kingfisher Airlines

The scores in the chart above conclude the following:

Responsibility scores the poor in all the other dimensions of service quality. The tangibility

is excellent which means the physical evidence of the service provider is also good. Quality

of entertainment provided by kingfisher is the best. Empathy score is also not too good as

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compared to other service quality dimensions. Assurance and Reliability are good which

means staff assures customers about their safety and service provider is very reliable

Punctuality of Flights

Now talking about punctuality of flight timings it can be clearly interpreted from graph that

Kingfisher is highest number of rating from the respondents towards excellent side, it is

Indian airlines and the Spice jet who are having minimum number of responses in their

favor.

Considering the fair side of performance is concern it is Jet airways which tops the chart

from its responses being maximum on fair side.

Considering poor and bad performance then it is very clear from the graph that punctuality of

Indian Airlines and Spice Jet is not up to the mark as expected of the travelers so they both

have strong point to be think up on regarding its punctuality

Seat comfort

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As far as seat comfort is concern it can be clearly interpreted from graph that Kingfisher is

highest number of rating from the respondents towards excellent side, it is Indian airlines and

the Spice jet that are having minimum number of responses in their favor.

Considering the fair side of performance is concern it is Jet airways which tops the chart

from its responses being maximum on fair side.

Considering poor and bad performance then it is very clear from the graph that seat comfort

of Indian Airlines is not up to the mark as expected of the travelers so Indian Airlines have

strong point to be think up on regarding its seat comfort.

Quality of beverages

Quality of beverages plays most important role in deciding satisfaction level of travelers and

beverages is only important factor that indicates strong tangibility of any of air line service

provider.

It can be clearly interpreted from the above graph that kingfisher is having highest responses

as excellent followed by Spice Jet.

Indian Airline and Jet Airways is having most of the responses as poor and bad so there is

strong point to be think upon for these both airlines.

Quality of Entertainment

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As far as quality of entertainment is concern it can be clearly interpreted from graph that

Kingfisher is highest number of rating from the respondents towards excellent side, it is

Indian airlines and the Spice jet who are having minimum number of responses in their

favor. Considering the fair side of performance is concern it is Jet airways which tops the

chart from its responses being maximum on fair side. Considering poor and bad performance

then it is very clear from the graph that quality of entertainment of Indian Airlines and Spice

Jet is not up to the mark as expected of the travelers so Indian Airlines have strong point to

be think up on regarding its quality of entertainment.

Cross Tabulations

By which airlines do you travel the most Vs If price reduced then ready to switchover Cross

tabulation.

By which airlines do you travel the most * If price reduced then ready to switch over Cross

tabulation count

From the above graph it can be clearly interpreted that people are having strong preference

towards kingfisher but not able to travel in kingfisher due to its high ticket prices compared

to other airlines in domestic as well as in international. In the above graph it is shown that

around 80% of Spice Jet user are ready to switch themselves to Kingfisher, If Kingfisher

reduces its prices in comparison with rest of the players in the industry. Now considering Jet

If price reduced then ready to switchover Total

Yes Probably

Yes

May be Probably

No

No

By which

airlines do

you travel

the most

Spice jet 20 15 8 5 2 50

Jet

airways

15 21 8 2 4 50

Indian

Airlines

18 14 11 5 2 50

Total 53 50 27 12 8 150

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Airways it also has most of the responses towards “yes” and “probably yes” options so it can

be interpreted that Jet also has its target audience loyal to kingfisher but attracted to price

factor of Jet Airways. Now Indian Airlines has around 76% of people who are ready to shift

themselves to Kingfisher if Kingfisher reduces its price up to an extent so its is remarkable

thing that even public sector Airlines is not able to give stiff fight to Kingfisher as far as

preferences of people are concern.

The respondents who are not ready to shift from there Airline service providers are minimum

and can be counted on figures. So it is clear that Kingfisher has strong preference and loyalty

of people.

How often do you fly Vs Service provider maintains long term relationship Cross tabulation

Count

When asked respondents about maintenance of relationships from the side of Airline service

provider it was expected and obvious that most of the respondents who were the frequent

traveler of particular Airline service provider responded positively. Respondents who travel

once in a month also had positive view point towards maintenance of relationship by the

service providers as they can be also counted under the head of frequent traveler.

Service provider maintains long term relationship Total

Strongly

Agree

Agree Neutral Disagree Strongly

Disagree

How

often

do you

fly

Once in a

year

2 10 11 8 9 40

Once in 6

months

0 9 4 7 5 25

Once in a

month

4 16 0 1 9 30

Frequently 39 44 6 7 9 105

Total 45 79 21 23 32 200

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Respondents who were not the frequent flyers that is they travel once in six months or once

in a year they responded negatively towards the question asked to them, from them around

85% of people responded as disagree and strongly disagree. So it can be clearly interpreted

that frequent flayers enjoys more privilege on side of service provider compared no flayer

who is not a frequent flayer.

HYPOTHESIS

H0: There is no association between Age and people ready to shift to Kingfisher airlines if

Kingfisher reduces its rates.

H1: There is association between Age and people ready shift to Kingfisher airlines if


If price reduced then ready to switchover * age group Cross tabulation Count

Chi-Square Tests

Value Df Asymp. Sig. (2-sided)

Pearson Chi-Square 184.281a 16 .000

Likelihood Ratio 178.571 16 .000

Linear-by-Linear

Association

59.309 1 .000

N of Valid Cases 150

From above output of SPSS window we can see that Significance value of pearson

chi-Square is 0.000 which is less than 0.05 ,this means that H0 is rejected and H1 is

accepted because pearsons Chi-square significance value is less than 0.05. It means

shift to kingfisher is dependent on age group

Age group Total

0-18 18-30 31-45 45-60 60 and

above

If price

reduced

then ready

to

switchover

Yes 12 27 10 0 5 54

Probably Yes 0 15 25 5 0 45

Maybe 6 0 10 5 0 21

Probably No 0 0 0 15 0 15

No 0 0 0 5 10 15

Total 18 42 45 30 15 150

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From the above graph we can see that people from age group between 0-18 and 18-

30 have replied yes or probably yes when asked that are they ready to shift to

kingfisher airlines if it reduces its rates.They said they are ready to shift to kingfisher

airlines.

People between age group 31-45 said probably yes or may which means they may or

may not shift to kingfisher airlines.

People between age group 45-60 and 60 & above said NO which means they are not

ready to shift to kingfisher , they are loyal to their respectiver airlines.

HYPOTHESIS

H0: There is no association between Gender and people ready shift to Kingfisher airlines if


H1: There is association between Gender and people ready shift to Kingfisher airlines if


If price reduced then ready to switchover * Gender Cross tabulation Count

Gender Total

Male Female

If price

reduced then

ready to

switchover

Yes 48 6 54

Probably Yes 34 11 45

Maybe 12 9 21

Probably No 0 15 15

No 6 9 15

Total 100 50 150

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Chi-Square Tests




Linear-by-Linear Association 36.627 1 .000


From above output of SPSS window we can see that Significance value of pearson‟s


accepted because pearson‟s Chi-square significance value is less than 0.05. It means

shift to kingfisher is dependent on Gender.

From the above graph we can see that most males have replied yes or probably yes

when asked that are they ready to shift to kingfisher airlines if it reduces its

rates.They said they are ready to shift to kingfisher airlines.

There were only few male swho said NO, which means only few are not ready to

shift.

Females have given uniform answers, the graph for females is almost equal for all

categories, which means females may shift or may not shift.

HYPOTHESIS

H0: There is no association between Income and people ready to shift to Kingfisher airlines

if Kingfisher reduces its rates.

H1: There is association between Income and people ready to shifting to Kingfisher airlines

if Kingfisher reduces its rates.

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If price reduced then ready to switchover * Income Cross tabulation Count

Income Total

0-2

Lakhs

2-5

Lakhs

5-10

Lakhs

10 Lakhs

& Above

If price reduced

then ready to

switchover

Yes 18 36 0 0 54

Probably Yes 31 14 0 0 45

Maybe 1 11 6 3 21

Probably No 0 2 5 8 15

No 0 1 4 10 15

Total 50 64 15 21 150

Chi-Square Tests




Linear-by-Linear Association 77.199 1 .000


From above output of SPSS window we can see that Significance value of pearson‟s


accepted because pearson‟s Chi-square significance value is less than 0.05. It means

shift to kingfisher is dependant on Income.

From the above graph we can see that people with income level between 0-2lakhs

and 2-5lalkhs have replied yes or probably yes when asked that are they ready to

shift to kingfisher airlines if it reduces its rates.They said they are ready to shift to

kingfisher airlines.This maybe because they have low salary so they are price

concious.

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People with Income level between 5-10lakhs and 10lakhs & above said NO which

means they are not ready to shift to kingfisher , they are loyal to their respectiver

airlines.The salary of these people is high so they are not price concious ,they need

luxury and comfort.Price doesnot matter much to the affluent class.

CONCLUSIONS

The conclusions of the project are listed below on the basis of the graphs and charts

explained earlier. Following are the conclusions of the research:

The service quality of Kingfisher Airlines is the best, followed by Indian Airlines and

Spicejet.

Kingfisher Airlines has a higher rank on empathy and tangibility. Hence the politeness and

friendliness of the employees which form the people of the service organization is high in

case of Kingfisher Airlines. Also its physical evidence is higher as it scores high on

tangibility.

Jet Airways has the lowest service quality in all the service providers. Though Jet Airways

has a poor score in empathy and tangibility it scores well in assurance and responsiveness.

Indian Airlines is the second best in terms of the service quality.

Spice jet is in the middle of all the service providers. It neither has high quality nor a low

quality in services. It is rated average.

If Kingfisher reduces its price than people between age group 0-45 and income level 0-5

lakhs are ready to shift from their preferred airlines o Kingfisher Airlines.

The knowledge gap which shows how better the service provider knows the customers‟

expectations is the best in Kingfisher. Hence Kingfisher is able to understand customers‟

expectations very well as compared to other service providers.

SUGGESTIONS

From the project under taken it can be recommended to Kingfisher to reduce its price up to

an extent to attract passengers of other airlines in domestic destinations.

In many of the responses it is marked by researchers that kingfisher, though leading in all

parameters of service quality but then also respondents are some what not comparatively

satisfied in Empathy factors so kingfisher has to work on this factor to convert responses into

positive one.

Spice jet should increase its punctuality of flight timings as around 75% of response was

negative towards its punctuality and responses showed very negative attitude of respondents.

Indian Airlines should work on its seat comforts as most of the travelers who are also

frequent flyers of Indian Airlines were having complain about seat comfort and it is also its

drawback for not attracting travelers.

Jet airways service efficiency is low compared to other airlines and also its punctuality of

flight timings is poor comparatively so they have question to be think up on to attract

customers.

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As far as Jet airways is concern they are falling in least satisfied criteria in almost all of the

parameters of service quality, so there is ample of work required to be done by Jet airways to

shift responses from not satisfied to satisfied.

REFERENCES

1. N.K. Malhotra(2007). Marketing research-5th

edition An applied orientation.delhi

Dorling Kindersley (India) pvt. Ltd, licenses of pearson education in south asia

2. Cooper & sehindler (2007). Business research methods 9th

- edition , new delhi: Tata

McGraw-hill publishing company ltd.

3. Levin & Rubin (2008). Statistics for management- 7th

edition New Delhi, Prentice Hall

of India Pvt. ltd

4. Services Marketing: The India Context - Page 1 by R. Srinivasan – 2004

5. Journal of services marketing - Page 183 by Michael La Roche Tsaur, SH, Chang, TY

and Yen, CH (2002), "The evaluation of airline service quality by fuzzy MCDM",

Tourism Management, Vol. 23 No. 2, pp. 107-15

6. Foster, S. Thomas, Managing Quality: An Integrative Approach. Prentice Hall, 2001: pg.

132-134, 231-234.

7. SERVQUAL, an instrument for measuring quality service developed by Zeithaml,

Parasuraman & Berry and described in their book, Delivering Quality Service; Balancing

Customer Perceptions and Expectations, Free Press, 1990.

Websites

1. Aviation Industry of India,(2008) global market for Airlines:star ratings: New

Delhi,2008. www.airlinequality.com/StarRanking/ranking.htm

2. Indian Airlines.(2009) History:Services: New Delhi,2009.

3. www.indianairlines.com

4. Spicejet Airlines.(2009) History: Quality, New Delhi,2009.

5. www.spicejet.com

6. Jet airway,(2009) History:Services: New Delhi,2009.

7. www.jetairways.com

8. Skytrax ratings,(2007) 5-Star rating of Airlines

9. www.skytrax.com

10. Service Quality Dimesnsions.(2009) SERVQUAL of Airlines ,Mumbai,2009.

11. www.service-quality.com

12. Kingfisher Airlines.(2009) Cabin Classes:Quality:Banglore,2009.

13. www.kingfisherairlines.com

http://www.airlinequality.com/StarRanking/ranking.htm

http://www.indianairlines.com/

http://www.spicejet.com/

http://www.jetairways.com/

http://www.skytrax.com/

http://www.service-quality.com/

http://www.kingfisherairlines.com/

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