How do full-service carriers and low-cost carriers passengers perceived service dimensions, passengers' satisfaction, and loyalty differently? : an empirical study

Purpose: In this study, group differences between full-service carriers (FSC) and low-cost carriers (LCC) in loyalty constructs are investigated, revealing the relationship between service quality and loyalty. This work focuses on five dimensions, including tangibility, empathy, assurance, responsiveness, and reliability, constitute service quality. Design/methodology/approach: 248 questionnaires were collected in the first half of 2019. The antecedents of customer loyalty are explored, and the group differences between FSC and LCC are analyzed. For assessing the path model with the consideration of group variance, the Partial Least Squares Multiple Group Analysis (PLS-MGA) was adopted to analyze the differences of the estimated inter-group coefficient.Findings: Our findings suggest that service assurance, service empathy, and service reliability positively impact the value perceived. The impact of service empathy on customer satisfaction in FSC is significantly diverse from LCC. Several suggestions are provided to FSC and LCC on improving their services in view of passengers' wants and interests.Originality/value: With the data collected at the HKIA, this study examined the relationships among service quality, perceived value, customer satisfaction, and customer loyalty and divided service quality into five dimensions. The findings show that assurance, empathy, and reliability of service quality positively affect the value perceived, and the effects of responsiveness and tangibility of service quality on perceived value are insignificant. Among the five aspects of service quality, assurance, reliability, responsiveness, and tangibility of the service quality are the pre-conditions of customer satisfaction. However, only the reliability of service is the antecedent of customer loyalty. Besides, the value perceived positively affects customers to be satisfactory and loyal. Furthermore, satisfaction degree also significantly influences the degree of customers' loyalty. As to the role of airline types, the sole effect is on customers' satisfaction is service empathy, with a significant difference between FSC and LCC.