(Luận văn) the impact of service quality and air fare on customer satisfaction using low cost airlines in vietnam

t to MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY - ng hi ep w n lo HUYNH THI THU HUONG ad ju y th yi pl ua al THE IMPACT OF SERVICE QUALITY AND AIR n FARE ON CUSTOMER SATISFACTION USING n va ll fu LOW COST AIRLINES IN VIETNAM oi m at nh z THESIS OF MASTER OF BUSINESS ADMINISTRATION z k jm ht vb om l.c gm an Lu Ho Chi Minh City – 2012 n va ey t re t to MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY - ng hi ep w Huynh Thi Thu Huong n lo ad y th ju THE IMPACT OF SERVICE QUALITY AND AIR yi pl ua al FARE ON CUSTOMER SATISFACTION USING n LOW COST AIRLINES IN VIETNAM n va ll fu Subject: Master of Business Administration oi m at nh z THESIS OF MASTER OF BUSINESS ADMINISTRATION z k jm ht vb SUPERVISOR: om l.c gm Dr TRAN HA MINH QUAN an Lu Ho Chi Minh City – 2012 n va ey t re I ACKNOWLEDGEMENTS t to ng hi I would sincerely like to thank the Professors in the University of Economics ep Ho Chi Minh City, who taught and trained me in the MBA course I also would like to thank the Board of Management of Economics University who gave me the w n opportunity to learn new things in the business administration I am very honored to lo ad be a member of this course ju y th yi In particular, I would like to express deep gratitude to Dr Tran Ha Minh Quan who pl has guided me enthusiastically, offered opinions and supported me through this al n ua thesis va n My warmest thanks to all the Instructors for providing and sharing invaluable fu ll knowledge on measurement and evaluation in education for me as well as other oi m students at nh z Finally, I like to thank my parents who gave me love, care and tolerance from z k jm encouraging me constantly to complete this thesis ht vb childhood to adulthood My thanks too, to my friends and classmates for om l.c Ho Chi Minh City, November 22nd 2012 gm Huynh Thi Thu Huong an Lu n va ey t re II COMMITMENT t to ng hi My name is Huynh Thi Thu Huong I would like to commit that this thesis, “The ep impact of service quality and air fare on customer satisfaction using low cost w n airlines in Vietnam”, was conducted based on my real and independent research lo ad ju y th The enclosed data was collected from passengers waiting in the departure yi lounge of Tan Son Nhat domestic airport, Vietnam by the author The data was pl n ua al handled and conducted by the author n va Huynh Thi Thu Huong ll fu Ho Chi Minh City, November 22nd 2012 oi m at nh z z k jm ht vb om l.c gm an Lu n va ey t re TABLE OF CONTENTS t to ng hi ACKNOWLEDGEMENT I ep COMMITMENT II w TABLE OF CONTENTS III n lo LIST OF TABLES V ad LIST OF FIGURES V y th ABSTRACT ju yi Chapter INTRODUCTION pl 1.1 Vietnam’s low cost airlines background al n ua 1.2 Vietnam’s low cost airlines product and service n va 1.3 Research Motivation 10 ll fu 1.4 Research Objectives 11 oi m 1.5 Research Scopes 11 1.6 Structure of Research 11 nh at Chapter LITERATURE REVIEW, THEORETICAL FRAMEWORK z AND HYPOTHESES 13 z vb 2.1 Service Quality 13 ht jm 2.1.1 The SERVQUAL Instrument 15 k 2.1.2 Applying SERVQUAL in the Low cost airlines in Vietnam 17 gm l.c 2.2 Customer Satisfaction 22 om 2.3 Theoretical Framework and Hypotheses 25 2.3.1 Theoretical Framework 25 an Lu 2.3.2Research Hypotheses 27 3.4 Data Analyze Procedure 31 ey 3.3 Data Collection Procedures 29 t re 3.2 Sampling Design 28 n 3.1 Research Methodology 28 va Chapter RESEARCH METHODOLOGY 28 3.4.1 Reliability Analysis 31 t to 3.4.2 Descriptive Statistics 32 ng 3.4.3 Factor Analysis (FA) 32 hi ep 3.4.4Multiple Linear Regression Analysis 33 Chapter ANALYSIS RESULT 34 w n 4.1 Respondents Demographics 34 lo ad 4.2 Reliability and Validity of SERQUAL Scales 35 y th 4.3 Dimensions of Service Quality in Low Cost Airlines in Vietnam 37 ju 4.4 Correlation testing 42 yi pl 4.5 Hypothesis Testing and Discussions 47 ua al 4.6 Summary 51 n Chapter CONCLUSIONS AND RECOMMENDATIONS 52 va n 5.1 Summary of Findings 52 fu ll 5.2 Practical Implications 52 m oi 5.3 Contributions of the Study 56 at nh 5.4 Limitations and Future Research 56 REFERENCES 57 z z APPENDIX 60 vb jm ht APPENDIX 62 APPENDIX 67 k om l.c gm APPENDIX 70 an Lu n va ey t re LIST OF TABLES t to ng Table Product features of low-cost carrier and full service carrier in Vietnam.08 hi Table 2.1 Theoretical Framework 26 ep Table 2.2: The Summary of Research Hypotheses 27 w Table 3.1: The Sources of Measurement Scale 30 n lo Table 3.2: Rules of Thumb about Cranach’s Alpha Coefficient Size 32 ad Table 4.1: Demographic Characteristics of the Study 35 y th Table 4.2: Cranach’s Alpha Measures of Variables in the Study 37 ju yi Table 4.3 KMO and Bartlett's Test of Five Independent Variables 39 pl Table 4.4: Rotated Component Matrix of Independent Variables 40 al n ua Table 4.5 KMO and Bartlett's Test and Component Matrix 42 va Table 4.6 Correlation of Variables 43 n Table 4.7 ANOVAs for Construct 44 ll fu oi m Table 4.8 Model Summary of the Construct 45 Table 4.9a Coefficients of the Construct 46 nh at Table 4.9b Coefficients of the Construct 46 z Table 4.10 Overall Perceived Service Quality 48 z k jm ht vb om l.c gm an Lu n va ey t re ABSTRACT t to ng hi In the any market, competition is an inevitable factor Similarly it happens ep with the airline industry, especially in Vietnam’s low cost airlines market Low airfare ticket is not a unique factor to compare but customer service is also very w n important Low cost airlines are also trying to understand their customers, to lo ad measure their passengers’ satisfaction because passengers’ satisfaction may ju y th guarantee good customer loyalty for their future business This study will provide a better understanding of how passenger satisfies yi pl with Vietnam’ low cost airlines about customer service and air fare Based on the al n improve it ua result of this study, airline managers may understand their level of service and va n During this study, the author measures service quality dimensions and air fu ll fare impact on customer satisfaction via SEVRQUAL tool of (Parasuraman et al., m oi 1988) nh With a sample of 150 passengers who had travelled on Vietnam’s low cost at z airlines flights within month is surveyed at Tan Son Nhat airport included Jetstar z vb Pacific Airlines and Vietjet Airlines passengers to test six hypothesized k customer satisfaction jm ht relationships among the construct of impacted of service quality and air fare on gm The study also finds that the important dimensions of service quality tested l.c here is: tangibles”, “reliability”, “responsiveness”, “assurance”, “empathy” and “air om fare” The study used Statistic Package for Social Science (SPSS) to analyze data an Lu through Exploratory Factor Analysis (EFA) and regression analysis tools The results indicated that all dimensions have strong positive effect on customer ey Airlines, Vietnam t re Keywords: SERQUAL, Service Quality, Customer Satisfaction, Low Cost n va satisfaction CHAPTER t to INTRODUCTION ng hi ep w 1.1 Vietnam’s low cost airline background: n lo This study examines in the context of low cost carrier (LCC) operating in ad Vietnam There are two LCC operating in Vietnam, ( Jetstar Pacific Airlines since y th 2005 and Vietjet Air since 2011) ju yi Vietnam’s airline market is a market with a population of 88 million, shared pl by airlines (included Vietnam Airlines, Jetstar Pacific, Vietjet Air, Air Mekong, al n ua Vasco) almost operating domestic and short-haul routes but Vietnam Airlines is a n va flag carrier of Vietnam with both domestic and international routes In the situation fu of Vietnam changing from agriculture to a service market, we are opening the door ll to welcome foreign investments from all over the world, standard of living higher, m oi moreover indoor and outdoor tourist market developing… as a result, the demand of nh at air transportation increasing significantly It creates a potential airline market in z Vietnam z ht vb Nevertheless, airline industry has been continuous operating on extremely jm thin margins (IATA, 2011; Tiernan et al., 2008/1) with high operational costs k (Airline Trends and Ancillary Revenue Report, 2010) Thus, the volume is crucial gm l.c for the industry to stay profitable; the differences in prices for one flight can be huge Furthermore, the actual product of the airline industry (airline seat) is om extremely perishable Once the aircraft takes off, the opportunity to sell a seat is an Lu lost Also the Vietnam’s Government control in the air fare via fare cap can cause on right way and development.” ey to trade off between the passenger’s demand and airline profit to keep the business t re solution for Vietnam’s airlines The solution must solve the current problem: “How n There are many difficulties that airlines face so it is necessary to find a va the situation more problems Following the world trend, Vietnam applied the low cost airline model in t to Vietnam market since May 2005, the first was Jetstar Pacific Airline which came ng from the full service airlines- Pacific Airlines Jetstar Pacific Airlines is a joint hi ep venture company between Vietnam Airlines, Qantas group from Australia and some individuals w n LCC model in Vietnam have the similar pricing and cost structures to the lo ad European and North American LCC (Goh, 2005) including some specifications: the y th same aircraft type, fast turn-around times, point - to - point services from main base, ju offering low fare in exchange for no extra services as compared to traditional airline yi pl offering free in-flight meals, beverages and in-flight entertainment but passengers ua al can purchase these items separately if they choose to Passengers are encouraged to n use online ticket booking and electronic ticket, no more paper ticket being used in va n cutting cost Innovative marketing strategies such as direct selling, call centers, e- fu ll ticketing, e-payments and bank and supermarket networks… oi m and Vietjet Air: at nh Currently, there are two low cost airlines in Vietnam, Jetstar Pacific Airlines z z Jetstar Pacific Airlines had a big start, becoming Vietnam’s first LCC in vb jm ht 2005, when the carrier (formerly known as Pacific Airlines) was rebranded and adopted the low-cost model following investment from Qantas, operating four k l.c gm domestic routes and 15 daily round trip frequencies, based on schedules from Jetstar’s website Jestar Pacific has been focusing on fleet renewal rather than om expansion but is planning to resume expansion in 2013, ending a hiatus of four an Lu years in which growth was paused due partially to internal uncertainty The carrier began a more promising new period earlier this year after a 70% stake was ey this year (both of which will take effect in latter half of Oct-2012), giving the LCC t re Jetstar Pacific for now is only planning to add two frequencies for the remainder of n own LCC subsidiary); Qantas owns the remaining 30% stake in Jetstar Pacific va transferred to Vietnam Airlines, (which previously had been looking at launching its