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SERVICE QUALITY AS A DRIVER FOR CUSTOMER RETENTION IN THE NIGERIAN AIRLINE INDUSTRY

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SERVICE QUALITY AS A DRIVER FOR CUSTOMER RETENTION IN THE NIGERIAN AIRLINE INDUSTRY(A CASE STUDY OF ARIK, AERO CONTRACTORS AND BRITISH AIRWAYS)

CHAPTER ONE

INTRODUCTION
 
1.1     BACKGROUND OF THE STUDY
The purpose of this paper is to identify selected service quality elements related to airlines that may contribute to the satisfaction of passengers when making use of air transportation facilities. This research shall address expectations, perceptions, satisfaction level and result in some suggestions that could be applied to ensure loyalty and satisfaction of passengers on board airlines. Description statistics such as percentage, average and frequency distribution as well as servqualmodel will be used to express the responses of passengers of the surveyed airlines respectively in the initial presentation of the data while the hypothesis of the study will be tested. The servqual model is a service quality measurement model or a customer perception tool developed by Parasuraman et al, which is used for measuring service quality by comparing customers’ expectations before a service encounter and their perceptions of the actual service delivered (Gronroos, 1982; Lewis and Booms, 1983; Parasuraman et al., 1985). The servqual instrument has been the predominant method used to measure consumers’ perceptions of service quality.
 
1.2     STATEMENT OF THE PROBLEM
Over the years, it has been discovered that providers of services in developing countries may not be concerned with the view of the consumers about the service they provide as long as their profit keeps rolling in and the demand is moderately stable. This is a problem arising from inadequate feedback systems to examine the gap between the customers’ expectation and actual performance of the service providers. Therefore, providing the service alone is not enough, one needs to also know the view of the consumers of the services to ensure their needs are actually met and to bring about constant growth. Travel experience as a service process can be described as: Check-in counter → Lounge → Gate → In-flight → Baggage claim
A service is an act rather than a specific item, and its quality will be judged not only on the outcome (technical quality) but also on the process by which the service is delivered (functional quality) (Gronroos 1982, Dowen and Schneider 1988). There are certain characteristics that services portray which makes them a little bit difficult to measure in terms of quality and also distinguishes them from products. These characteristics are:

  1. Intangibility: This is a characteristic that makes it impossible to assess precisely, the value gained from the service.
  2. Variability: Since services are heterogeneous, their performance changes with time, location and customer.
  3. Inseparability: This attribute makes it impossible to separate the supply or production of the service from its consumption.
  4. Perishability: Services cannot be kept or stored likewise; lost airline seats cannot be reclaimed by passengers.

This unique characteristic of service makes it difficult to assess the quality of service and reduces the ability of the providers to control them with standard measures. Most services involve direct contact between the customer and the service provider. This means that in addition to task proficiency; interpersonal skills like courtesy, friendliness, tolerance, and pleasantness are important dimensions of quality, particularly in high contact services where front line employees have a major influence on customer satisfaction (Hobson et al. 1984, Hostage 1975, Wehrenbeer 1987). It has been said that for every complaint a business receives, there are twenty-six other customers who feel the same way, but do not air their feelings to the company (Headley and Choi 1992). One satisfied customer usually tells few people, while the dissatisfied customer tells ten or more people. Therefore, to improve service quality, one must listen to the customer, since quality is ultimately defined by customer perceptions. Also, airlines must listen to and motivate the front-line service employees to be sensitive to customer issues in order for them to understand what the passengers see as important and how they perceive the services rendered. The success of an airline also depends on its knowledge of its customers and its ability to devise marketing campaigns to suit the preferences of those market segments it chooses to target. This needs a careful identification of the most important attributes (dimensions) of their services that can satisfy passenger needs and an understanding of how to provide them in the best way to achieve passenger loyalty.
It is assumed that air transportation management plans their business with sufficient knowledge and information about the expectations of passengers with regard to the services rendered to them. Arik Air, Aero contractor and British airlines are leading airlines that experiences a considerable amount of growth and faces a high level of competition from other local and international airlines.
 
Since customers have a propensity to switch their loyalty from brand to brand, depending on various reasonsand this is particularly worrisome in some industries i.e. the Telecos, while in some it is less worrisome. The airline industry is one where customer satisfaction can be very subjective, which thus consequently has a ripple effect on their loyalty to the airline brand. There is a need to research and analyze various factors that can contribute to customer loyalty and/or their dissatisfaction; bearing in mind that a dissatisfied customer today is a potential churn customer tomorrow.
The problem under investigation in this paper is to examine to what extent the selected services provided on air transportation is being regarded as important to the passengers. The investigation aims to provide some direction in order to satisfy the customers’ need with the view of making profit and increasing their market share. Gilbert and Wong (2003) stated that in the air transportation industry context, the problem is whether management can correctly perceive what the passengers’ want and expect.
 
1.4     RESEARCH QUESTIONS
The main focus of the research will be concentrated on finding answers to the following questions:

  1. What are the services rendered by airlines to airline passengers?
  2. What are the factors that can be used to measure airline service quality?
  3. What is the importance level of these services to the consumers and how does it affect their loyalty to the airline brand?
  4. What contribution does the quality of airline services have on passenger satisfaction and the Nigeria aviation industry?

 
1.3     OBJECTIVES OF THE STUDY
The main aim of this study is to assess the quality of service available in air transportation that contributes to the satisfaction and loyalty of passengers.
Objectives of the study includes

  1. Access quality of services deployed by airlines for customer retention/satisfaction
  2. To evaluate customer satisfaction arising from service quality
  3. To examine factors influencing customer behavioral patterns
  4. To determine the effect of service quality on customer satisfaction

 
1.5     SIGNIFICANCE OF THE STUDY
The significance of this paper is to identify selected service quality elements related to airlines that may contribute to the satisfaction of passengers when making use of air transportation facilities. This research aims to bring about better management of service quality to customers and elements associated with the air transportation industry with specific reference to airline passengers by addressing the expectations, perceptions and levels of satisfaction of Arik Air, Aero Contractors and British Airways customers/passengers.
 
1.6     SCOPE OF STUDY
This research work will be limited to assessment of the quality of customer service in Nigeria Air Transportation with emphasis on Arik, Aero Contractors and British Airways. The reason for choosing Arik is because it is the leading airline in Nigeria having international flights to New York, Dubai and other countries. Aero Contractors is its major domestic flight competitor while British airways is the largest airline based on fleet size, international flights and international destinations.

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