Customer Perception Effects of Retention Programs: Budget Airlines vs. National Carrier

This research study delves into the customer perception of retention programs implemented by airline companies, comparing budget airlines to the national carrier. It examines the impact of these programs on customer satisfaction, loyalty, and overall travel experience. The study utilizes both quantitative and qualitative research methodologies, including surveys and literature reviews, to analyze the perceptions of frequent travelers. The findings reveal key insights into the effectiveness of retention programs in attracting and retaining customers, highlighting the importance of addressing customer needs and expectations in a competitive airline industry.

The Customer Perception Effects of Retention Programs: Comparison of Budget Airlines to the
National Carrier

ABSTRACT
The purpose of this study is to effectively analyze the perception of customers regarding the
retention programs conducted by the airline companies. It has been evaluated by the
International Air Transport Association that the global passenger traffic is increasing every year.
In addition to this, the demands of the customers regarding the airline industry have been
growing rapidly. The major objective of this research to effective analyzes the perception and
reaction of the customers regarding the customer retention strategies that are used by the
national carrier. The sales of the company increase due to the customer retention program
such that it helps in enhancing the consumer base. The customer retention programs have
different impacts on the customers which are discussed in the study effectively.
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Table of Contents
ABSTRACT........................................................................................................................................1
INTRODUCTION................................................................................................................................3
LITERATURE REVIEW........................................................................................................................4
METHOD........................................................................................................................................13
RESULTS.........................................................................................................................................19
DISCUSSION...................................................................................................................................39
CONCLUSION.................................................................................................................................41
REFERENCES...................................................................................................................................42
APPENDICES...................................................................................................................................46
QUESTIONNAIRE........................................................................................................................46
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INTRODUCTION
The growing globalization possesses a rapid influence on the economy of the world along with
the huge development in the field of technology that is utilized in the airline industry. The
business environment of the airline industry has been attaining huge development and growth
at the substantial level. There are different services that are offered by the airline industry to
their several kinds of customers such as small distance travel, long-distance travel, or frequent
travel. In addition to this, there are various offers and discounts are provided by the airline
companies to the customers. The International Air Transport Association (IATA) has analyzed
that the number of travellers has been increasing with time. According to the statistics of the
IATA, the global passenger traffic results in 2016 have been raised by 6.3% which has been
growing with time (Jiang and Zhang, 2016). The major reason due to which the airline industry
has been observing the huge amount of growth due to the attractive strategies and techniques
of the airline companies regarding the customers.
It is also observed that the requirements of the customer have been changing with time which
influences the strategies and techniques of the airline industry. It is necessary for the airline
industry that they effectively analyze and evaluate the needs and requirement of the customer
in order to develop suitable strategies and techniques for the substantial growth and
development in the business. This research study is conducted in order to effectively analyze
the influence of retention programs on the perception and opinion of the customers that are
conducted by the airline companies along with the comparison of the budget airlines to the
national carrier. There are different aspects which will be effectively evaluated through the
research. For conducting the research study different research methodologies are utilized so
that effective understanding could be developed (Koklic, et al. 2017). The primary and
secondary research has a potential influence on the collection of data regarding the topic. In
addition to this, the collected data is critically scrutinized for acquiring the required outcomes
effectively. At last, suitable recommendations are made for the effectiveness of the airline
industry.
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LITERATURE REVIEW
There are several journals and documents that have been scrutinized effectively in order to gain
the required knowledge and adequate understanding of the influence on the customers
regarding the programs that are conducted by the airline companies. The data which would be
acquired from the journals and documents could be used in the research for attaining required
outcomes.
David Mc A (2013) has conducted a study in order to analyze the customer satisfaction and
service quality among the top 14 airlines of the US in the five year period of 2007-2011 by
utilizing the data from the Department of Transportation Air Travel Reports. The customer
satisfaction and service quality have been analyzed effectively in terms of the quality
dimensions of the airline by considering several aspects. In addition to this, there is a
substantial relationship observed between the passenger’s satisfaction and service quality
regarding the airline services.
It is also evaluated that the airline industry has been facing several challenges which influence
their business operations at the great level. The challenges are cost-cutting, managing the
fluctuating demands and requirements, maintaining the quality by providing adequate services
to the customers, and fulfilling the needs and requirements of the customers. These challenges
are still observed in the business functioning of the airline companies (Hussain, et al. 2015).
According to the data of Department of Transportation Air Travel Reports available in the study,
it is evaluated that percentage of on-time arrival, passengers denied boarding, customer's
complaint, and mishandled baggage are the major aspects which influences the customer in
using the services from the same airline company. There are two kinds of airlines such as low-
cost airline and high-cost airlines such that the report states the traditional carriers are
providing high quality to their customers by utilizing different measures. Further, the low-cost
carriers in the industry are found to be huge profit gainer than the tradition carriers as they
provide quality services to the customers under a nominal budget. The implications of the
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aspects could be observed in several areas such as market share, customer service, operation
costs, and infrastructure.
According to Dolnicar, et al. (2011) the loyalty of the airline company is dependent on various
drivers. The study helps in gaining required understanding and knowledge about the loyalty and
the methods and strategies of the airline industry for maintaining their loyalty towards the
customer. There are different strategies which are incorporated by the airline industry in order
to attain the huge number of customers such that providing different offers and discounts. In
addition to this, the airline industry effectively analyzes their services and implements suitable
technique for enhancing the weak areas effectively. The loyalty of the airline could be evaluated
on the basis of their services that are delivered to the customers. Further, the airline choice of
the travellers could be analyzed on the different basis such as the price of the tickets, status of
the national carrier, and airline reputation in the market. These aspects help the traveller in
choosing appropriate airline as per their need and requirement.
In the airline industry, behavioural loyalty among the customers could be understood on
different aspects such as price, frequent traveller of the airline, and airline possess the
reputation in the market. It is observed that the behavioural airline loyalty drivers are different
for every market segment such that the airline company should rely on appropriate
segmentation methods for building loyalty among the customers. Moreover, the loyalty
programs are effective for the airline company when they are associated with the behavioural
loyalty for frequent travellers and business travellers but it could not be count on the leisure
and casual travellers (Mellat Parast and Fini, 2010). The price aspect of the airline company
heavily influenced the leisure traveller to great extent. The satisfaction factor could not be
involved in the drivers of behavioural loyalty but the reputation factor is involved in the in the
drivers. In addition, the factors of the airline industry generally focus on the higher passenger
loyalty such that the company should focus on these factors for increasing loyalty among the
customers. Overall, the study helps in understanding the importance of loyalty programs by the
airline industry.
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Leong, et al. (2015) has conducted the study in order to analyze the influence of SERVPERF on
the customer satisfaction and the customer loyalty regarding the full service and low-cost
airlines. SERVPERF is known as the model which is utilized by the company in order to measure
and define the service quality effectively. Generally, the companies used GAP-5 model along
with SERVQUAL for measuring and defining the service quality. These models are helpful for the
company in analyzing the quality of their services such that identifying the weak areas and
utilize the appropriate strategies for overcoming them. This study helps in understanding the
new perspective that has been attained by utilizing SERVPERF along with an SEM-artificial-
neutral-networks predictive analytic approach. It is evaluated that this study is different from
other studies which are conducted regarding the application of advanced systems and
algorithms in terms of the full service and low-cost airline. This tool is helpful for the airline
company in analyzing the perception of the customers regarding their provided services
(Khuong, 2014). The data which have been attained from the tool states that SERVPERF
dimension has a significant influence on the customer loyalty and customer satisfaction by
55.6% and 63.1%. The collected data from the research could be utilized by the management
team of the air travel and tourism industry for developing better decisions and strategies in
order to enhance the customer satisfaction and loyalty. The business of the airline company will
attain substantial growth and development when their consumer base is satisfied and loyal to
them.
According to Han, (2013) the customers made the travelling decision regarding the airline
company depends on the in-flight ambience and functioning of the airline. In addition to this,
there are various aspects which are considered by the customers regarding the airline company
for their travelling. A study was conducted in order to analyze the perception of the customers
towards the low-cost airline company for their travelling. There are different areas which are
analyzed in the study and suitable relationship is formed between them such as ambient
conditions, cognitive and affective evaluations, behavioural intentions, function, and
satisfaction. It is evaluated that the ambience and function have a great importance in the
forming of intentions and also have a mediating influence on the passenger satisfaction and the
cognitive and affective evaluations. Moreover, the suitable survey was conducted in the study
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by several customers regarding the international low-cost airlines in order to evaluate the
required outcomes effectively (Baker, 2014). The survey helps in depicting the areas where the
customer focuses majorly like temperature, equipment or amenities, air quality, etc. which
leads to developing suitable cognitive and effective evaluation and satisfaction that further
influence the passenger's positive behavioural intentions.
Moreover, there are several variables which have mediating impact on these aspects. The
variables are inefficient customer care, ineffective services by the airline etc. Further, the
findings from the research are helpful for the market practitioner in building effective strategies
for the low-cost airline industry (Suki, 2014). It is also essential for the low-cost airline industry
to build an attractive ambience along with the quality services which will attract more number
of customers than usual.
Han, et al. (2012) had conducted the study for analyzing the perception of the passengers
regarding the airline lounges which are done by measuring the essential attributes that are
helpful in evaluating the usage and service quality in different areas. The facility and services
which are provided to the passengers at the airline lounges should be effective so that their
travel experience should be excellent. For evaluating the attributes that are necessary for the
passengers at the airline lounge suitable survey have been conducted which comprised of the
passengers travelling for international airlines. It has been evaluated from the survey that the
major attributes which should be considered in the airline lounges are the healthy atmosphere,
image and accessibility, food and beverage (F&B) service, and service dimensions. The major
things which are observed by the passenger at the airline lounge are the atmosphere and the
food and beverage (F&B) services. These attributes are majorly considered by the passengers
while their visit to the airline lounges. The passengers use airline lounge in order to attain
certain services such as relaxation, food and beverages, etc. In addition to this, there are service
quality variables which should be considered for analyzing the perception of the customers
regarding the airline lounge such as food and beverage (F&B) service, service dimensions,
atmosphere, and employee service.
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In service quality variables, the food and beverage (F&B) services are considered as the
essential aspect that leads to overall satisfaction and lounge revisit intention among the
passengers (Keiningham, et al. 2014). It is essential for the airline companies to effectively
provide the adequate services to the customers regarding their stay at the lounge. The airline
company should focus on utilizing appropriate methods for enhancing the services at the airline
lounges.
According to Fan and Ku, (2010) the airline companies should focus on the requirement of the
customer and also deliver efficient services and build customer relationship management in
order to attain high profitability. The major objective of the study was to analyze the influence
of knowledge sharing among the staff members and officials of the airline company on the
customer relationship management profitability. The collaboration among the staff members of
the airline company should possess effective knowledge regarding the customers, methods and
processes, markets, products and services, employee skills, competitors, and the regulatory
environment of the information systems. A suitable customer relationship management model
should be developed in the airline company in order to effectively maintain the healthy
relationship between the airline company and the customers. The staff members of the airline
company should be provided with the adequate knowledge and skills in order to manage
healthy relationships with the customers. In addition to this, they should fulfil the major needs
and requirement of the customers effectively (Gures, et al. 2014). The collaboration at the
airline company will play a substantial role in the business growth and development at the
great level.
There are different practices which could be followed by the airline company in order to
maintain the effective flow of knowledge among the staff members. The collaboration
approaches could be utilized in order to develop required knowledge and learning among the
members so that they could attain the required skills and abilities which helps in delivering
adequate service to the customers along with maximum satisfaction in them.
Namukasa, (2013) has conducted the study for analyzing the influence of airline service quality
on the passenger loyalty and satisfaction. The business of the airline company is dependent on
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the satisfaction level and loyalty of the customers towards the company such that the high level
of satisfaction will result in planning their travel with the airline company. For effectively
conducting the study, data has been collected from different sources and a survey is also
conducted by considering the respondents that are frequent international travellers. It has
been analyzed from the responses of the respondent that the airline company should focus on
several areas in order to deliver quality services such as the effective environment in the airline,
delivering required services to the customers, the flight arrive and depart on time, etc. The
customer loyalty and satisfaction has a huge influence on the business functioning of the airline
industry.
The survey which was conducted helps in understanding factors influencing the passenger
satisfaction. The major factors are the quality of post-flight, in-flight, and pre-flight services
which have a substantial influence on the satisfaction of the customers. Further, the passenger
satisfaction possesses a mediating influence on the loyalty of the passengers. In addition to this,
the passenger satisfaction level regarding the airline company is different in every person such
that some person is interested in the off-board facilities, other focus on the onboard facilities
while other people focus on the quality of food. In addition, there are some people who focus
on getting extra luggage in the airline. It is recommended for the airline company to effectively
consider suitable strategies in order to enhance the business operations and functioning along
with the quality of services (Min and Min, 2015). The airline company should enhance services
on the basis of demographic aspects of the customers like occupation, gender, age, and
education level.
According to Han, et al. (2014) the passenger loyalty towards the low-cost carrier is dependent
on several aspects. The study is conducted regarding the passenger loyalty and the in-flight
service performance by considering several travellers. There are various studies which have
been conducted regarding the airline industry in different aspects but there are no studies
regarding the encounter-service performance and in-flight core, satisfaction, cultural
influences, perceived value, and trust regarding the passenger loyalty. The major objective of
the airline companies in the industry is that they fulfil the requirements of the customer and
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provide them with the high-quality services. When the airline company fulfils this objective it
further leads to develop satisfaction among the customer such that building customer
satisfaction and loyalty effectively towards the airline company.
It has been evaluated from the study that the theoretical relationships among different aspects
are important and the in-flight encounter-service performance was prominent while the
satisfaction, trust, and value possess a mediating influence (Curras-Perez and Sanchez-Garcia,
2016). A suitable structured model should be followed by the airline company in order to
deliver high-quality services to the customers and managing several aspects. Moreover, the
data from the study states that relationship between the service performance, satisfaction, and
value in the proposed model is effective.
Akamavi, et al. (2015) has conducted a study in order to analyze the key determinants
regarding the passenger loyalty towards the low-cost airline business. The rivalry in the
transport industry has been huge as the passenger relationship management is the major
concern for the low-cost airline (LCA) segment. It is necessary for the low-cost airline that they
effectively identified the determinants which are necessary for the customer loyalty and further
take necessary steps to enhance those determinants for building satisfaction and loyalty among
the passengers. The major determinants of the passenger loyalty in the low-cost airline are
service employee self-efficacy, service recovery, price, passenger satisfaction and trust, should
be considered. It has been evaluated from the study that the passengers of the low-cost airline
are provided with the high-quality services such that the employees effectively deliver the
quality services which positively influence the service recovery and price but also influences the
trust of the passenger. Due to the service employee self-efficacy, the chances of bad service
experience for the passenger is effectively diminished and it further boosts up the satisfaction
among the passengers (Nesset and Helgesen, 2014). The passenger satisfaction and loyalty
possess a substantial relationship between each other which is effectively developed in the
airline company through service employee self-efficacy, passenger trust, and service recovery.
The major driver in the enhancement of the passenger loyalty is known as the passenger
satisfaction instead of price. In addition to this, the study helps in understanding the behaviour
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of the passengers in the low-cost airline which will be helpful in forming strategies and
decisions for delivering quality services. Moreover, it also helps in maintaining effective
passenger relationship management which leads to desired outcomes in the company.
According to Chou, (2015) the low-cost carrier travellers faced several issues in the low-cost
airline. A relationship has been understood in the study of the service recovery, service failure,
and loyalty regarding the low-cost carrier travellers. In addition to this, it is also analyzed that
the service recovery has a mediating effect on the loyalty and service failure towards the
satisfaction of the travellers. Moreover, the study states that the service recovery possesses a
positive influence on the behaviour and attitude loyalty of the passengers while the service
failure possesses the positive influence on the service recovery (Mayr and Zins, 2012). Still, the
influence of apology and compensation between the attitude loyalty and behaviour loyalty and
the delivery failure is partially mediating. It is also depicted that the low-cost carrier services
need enhancement at the substantial level so that the passenger loyalty and satisfaction could
be attained.
Rizan, (2010) has conducted the analysis regarding the service quality and customer satisfaction
and its influence on the customer loyalty. The passengers of the airline companies are not
satisfied due to issues regarding several aspects. There are several complaints which have been
observed regarding the low time performance of airline, the service delivery is not effective,
unsatisfactory services, staff members are not cooperative, food and beverages are not
qualitative and the baggage lost issue is also observed. The domestic airlines are facing huge
loss in their business as the passengers are avoiding travelling with them due to ineffective
services. The customer satisfaction level regarding the domestic airline is low due to these
aspects such that it also influences their loyalty toward the airline (Al-Jabaly and Khraim, 2014).
The increase in the competition among the airline companies also affects the consumer base to
great extent. It is essential for the airline companies to develop values among their customers
and deliver the required services for gaining effectiveness.
Ringle, et al. (2011) has conducted the study regarding customer satisfaction in the commercial
airlines. The major purpose of the study is to analyze customer satisfaction along with
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introducing perceived safety in terms of satisfaction element. The study helps in understanding
that the passengers consider different aspects which help in attaining satisfaction regarding the
airline such as quality service, food and beverage service, baggage handling, etc. In addition to
this, there is one other aspect which is also important for the passengers during their travel
from the airline which is safety. Safety is known as one of the major element that helps in
explaining the customer satisfaction at the great level. It is also observed that the perceived
safety has a great influence on the customer satisfaction of the person regarding the travel
pleasure. It is evaluated that the airline company needs enhancement in their operation in
order to attain effectiveness (Štimac, et al. 2012). The services of the airline company should be
enhanced by utilizing appropriate strategies and using suitable measures. The quality services
will further provide satisfaction to the customers regarding the airline company which also
build loyalty among them. Overall, the airline company requires suitable strategies for gaining
effectiveness in their business functioning.
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METHOD
It is also known as the research methodologies or methodological representations. There are
different methods through which could be utilized in order to conduct the analysis. It could be
stated that the research methodologies are known as the theoretical approach which is utilized
in order to study required practices and areas effectively. It is essential that suitable research
methodologies should be utilized in the research for attaining the required outcomes.
Generally, a research is conducted for attaining required information and knowledge about the
study for developing adequate understanding. There are different kinds of research
methodologies that could be used in the research study for collecting and analyzing the data
effectively. The prime research methodologies which could be used in the research are
fundamental, descriptive, qualitative, analytical, empirical, applied, quantitative, etc. In the
current research study, the most appropriate research methodologies are quantitative and
qualitative research methodology which will be helpful in collecting the data.
The qualitative research methodology could be expressed as the qualitative approach in which
the understanding is developed by considering the opinions, perceptions, motivation, and views
available through different platforms. In addition to this, there is suitable hypothesis which is
made in the qualitative methodology for conducting the research effectively. This method is
also helpful for the collection of primary data effectively (Miller, 2011). There are different
methods through which the qualitative research methodology could be conducted such as
group discussions, interviews, observation, and participation. It is also observed that the sample
size taken for the qualitative research methodology is small and there are certain respondents
which are quoted for the research.
The observation method is the most common method which is used to identify and evaluate
the data effectively. The collected data is critically observed under this method by the
researchers so that the adequate information and knowledge could be gathered. There are two
ways through which the observation method could be utilized such as structured or
unstructured manner. There is certain variable along with the pre-defined schedule which is
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used in the structured observation (Rese, et al. 2013). The unstructured observation is
conducted openly without any pre-determined variable. The major advantage of the
observation method is that it helps in attain direct access to the research phenomena, high
level of flexibility, and attaining required results. Still, the method has several disadvantages
such as the process takes huge time, different barriers during the process and influence of
observer on the primary data. In addition, the interview method is also used in the qualitative
research methodology so that the required data could be collected. There are different
methods through which the interview method could be conducted such as depth interview,
focus group interview, and projective techniques.
Further, the quantitative research methodology is conducted by utilizing the available statistics
in order to develop the appropriate numerical data for the research. This research methodology
is known as secondary research method which is used for collecting the data. In this research
methodology, the sample population which is considered for the research is large and their
opinion, attitude, and behaviour are analyzed effectively (Jeng, 2016). The quantitative data for
the research could be evaluated through different collection methods like mobile surveys,
paper surveys, personal interview, telephone interview, kiosk surveys, website interceptors,
online polls, systematic observations, and longitudinal studies. The personal interview is
conducted in a structured manner such that it possesses five stages like rapport building,
introduction, probing, recording, and closing. In addition, the telephone interview is highly
considered in this modern time and it is conducted through the combination of computer and
telephone.
In this research study, the mix research methodology will be used so that the effective research
for the study could be conducted. The mix research methodology is comprised of both
quantitative and qualitative research methodology which will be used for collection and
analyzes of data regarding the research study. It could also be stated that the primary and
secondary research will be conducted in the research study. The primary research will be
conducted in the research study in order to collect the required data from several sources like
interviews, observations, surveys, and detailed studies. The most appropriate primary research
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method is the survey in which the questionnaire application could be used for collecting the
data. The questionnaire will comprise of several questions that help in understanding the
perception and opinion of the respondents regarding the research topic effectively. In this
research study, around 500 people will be contacted and it is assumed that around 100 people
will respond back. These 500 people are the frequent travellers of the airline so that they could
share the realistic opinion and perception regarding their travel experience (Khraim, 2013). It
will be helpful in acquiring the required information and knowledge regarding the research
topic which is the customer perception towards the retention programs of the airline
companies.
Moreover, the secondary research process is conducted with help of literature review which
has been conducted by scrutinizing different journals, papers, documents, and articles so that
the adequate knowledge and information about the topic could be gathered. In addition, the
literature review helps in understanding the methodologies used in the literature that could be
utilized in this research study for attaining the required outcomes (Nikbin, et al. 2014). There
are various documents, journals and papers are critically reviewed in this research study which
provides a deep understanding regarding the topic of research.
ETHICAL CONSIDERATION
It is necessary for the researcher to effectively fulfil their responsibility and obligations towards
the respondents that are participating in the research such that their identity should not be
shared with anybody. Moreover, the responses which are made by the respondents regarding
the research study should not be provided to anybody without their consent and it should not
be used in any other study.
QUESTIONNAIRE
Question 1) What is your age group?
a) 20-25 years
b) 25-30 years
c) 30-35 years
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d) 35-40 years
Question 2) What are the major expectations from the airline company?
a) Food and Beverage Services
b) Quality services
c) Effective baggage handling
d) All of the above
Question 3) How many times do you travel from the low-cost carrier?
a) 0 to 10 time
b) 10 to 15 time
c) 15 to 20 time
d) More than 20 time
Question 4) How many times do you travel from the high-cost carrier?
a) 0 to 10 time
b) 10 to 15 time
c) 15 to 20 time
d) More than 20 time
Question 5) What are the issues which are faced while travelling from the low-cost carrier?
a) Inefficient customer services
b) Ineffective support staff
c) Improper baggage management
d) Low-quality food and beverages
Question 6) What are the issues which are faced while travelling from the high-cost carrier?
a) Inefficient customer services
b) Ineffective support staff
c) Improper baggage management
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d) Low-quality food and beverages
Question 7) What are the areas of enhancement in the airline company?
a) Customer Service
b) Development of Support staff
c) Enhancing the quality of food and beverage
d) All of the above
Question 8) Which carrier is appropriate for travelling?
a) Low-cost carrier
b) High-cost carrier
c) Both
d) None of the above
Question 9) How much you are aware of customer retention program of airline company?
a) Low
b) Moderate
c) High
d) Very High
Question 10) Does airline company needs customer retention programs?
a) Yes
b) No
c) To some extent
Question 11) To what extent the customer retention programs are helpful for the airline
company?
a) Low
b) Moderate
c) High
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d) Very High
Question 12) The customer retention program of the airline company fulfil their purpose?
a) Yes
b) No
c) To some extent
Question 13) At what level you are satisfied with the questionnaire?
a) Low
b) Moderate
c) High
d) Very High
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RESULTS
Question 1) What is your age group?
a) 20-25 years
b) 25-30 years
c) 30-35 years
d) 35-40 years
Response Table
Total 20-25 years 25-30 years 30-35 years 35-40 years
100 15 35 30 20
Age Group
20-25 years
25-30 years
30-35 years
35-40 years
The aforementioned graph is helpful in effectively understanding the age group of the travellers
that are travelling in different kind of air carriers. Most of the travellers belong to the age group
of 25 to 30 years and this age group comprise of travellers that are employees, students,
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entrepreneurs, etc. The age group helps in understanding the level of opinion and perception of
the travellers regarding the required areas.
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Question 2) What are the major expectations from the airline company?
a) Food and Beverage Services
b) Quality services
c) Effective baggage handling
d) All of the above
Response Table
Total Food and
Beverage
Services
Quality services Effective
baggage
handling
All of the above
100 25 20 20 35
Major Expectations
Food and Beverage Services
Quality services
Effective baggage handling
All of the above
There are different expectations of each traveller regarding the airline carrier. It has been
evaluated that there are three major expectations of the travellers such as food and beverage
services, quality services, and effective baggage handling. The analysis states that some want
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food and beverage services while other traveller focus on quality services and few travellers
needs effective baggage handling. Moreover, the majority of the traveller wants all three
aspects to be fulfilled by the airline carrier.
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Question 3) How many times do you travel from the low-cost carrier?
a) 0 to 10 time
b) 10 to 15 time
c) 15 to 20 time
d) More than 20 time
Response Table
Total 0 to 10 time 10 to 15 time 15 to 20 time More than 20
time
100 20 35 30 15
Travel by Low Cost Carrier
0 to 10 time
10 to 15 time
15 to 20 time
More than 20 time
The above analysis provides information regarding the travel count of the travellers through the
low-cost carrier. It will help in understanding the perception and opinion of the travellers who
travel through the low-cost carrier and it is also depicted that majority of the travellers through
the low-cost carrier travel around 10 to 15 times. This number is appropriate as per the
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research study such that the information from these travellers will help in building the research
strongly.
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Question 4) How many times do you travel from the high-cost carrier?
a) 0 to 10 time
b) 10 to 15 time
c) 15 to 20 time
d) More than 20 time
Response Table
Total 0 to 10 time 10 to 15 time 15 to 20 time More than 20
time
100 30 15 20 35
Travel by High Cost Carrier
0 to 10 time
10 to 15 time
15 to 20 time
More than 20 time
There are various kinds of travellers who travel through the suitable type of carrier. The high-
cost carrier is majorly used by the traveller for their travel as per the above statistics. In
addition to this, it is also analyzed that the major travellers under the survey visit low and huge
number of times the high-cost carrier. It could also be understood that the services of the high-
25

cost carrier are efficient and effective as compared to the low-cost carrier but the major
importance is gained by the low-cost carrier.
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Question 5) What are the issues which are faced while travelling from the low-cost carrier?
a) Inefficient customer services
b) Ineffective support staff
c) Improper baggage management
d) Low-quality food and beverages
Response Table
Total Inefficient
customer
services
Ineffective
support staff
Improper
baggage
management
Low-quality
food and
beverages
100 20 35 25 20
Issues in Low Cost Carrier
Inefficient customer services
Ineffective support staff
Improper baggage management
Low quality food and beverages
The low-cost carrier provides travel services to the traveller under low cost but there are some
areas which possess certain flaws like inefficient customer services, ineffective support staff,
improper baggage management, and low-quality food and beverages. After the analysis, it is
evaluated that the majority of the travellers have the issue regarding the ineffective support
27

staff as they provide inadequate services to the passengers which leads to low passenger
satisfaction and affects their loyalty.
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Question 6) What are the issues which are faced while travelling from the high-cost carrier?
a) Inefficient customer services
b) Ineffective support staff
c) Improper baggage management
d) Low-quality food and beverages
Response Table
Total Inefficient
customer
services
Ineffective
support staff
Improper
baggage
management
Low-quality
food and
beverages
100 30 20 15 35
Issues in High Cost Carrier
Inefficient customer services
Ineffective support staff
Improper baggage management
Low quality food and beverages
The high-cost carrier is considered as most effective and efficient among the travellers as they
provide the required services suitably but there are several issues which are observed among
the travellers. The issues faced by the travellers are inefficient customer services, ineffective
29

support staff, improper baggage management, and low-quality food and beverages. Here, the
maximum travellers possess issue regarding low quality of food and beverage services and
inefficient customer services. It is necessary for the high-cost carrier to manage these issues for
attaining effectiveness.
30

Question 7) What are the areas of enhancement in the airline company?
a) Customer Service
b) Development of Support staff
c) Enhancing the quality of food and beverage
d) All of the above
Response Table
Total Customer
Service
Development of
Support Staff
Enhancing the
quality of food
and beverage
All of the above
100 30 25 35 10
Areas of Enhancement
Customer Service
Development in Support staff
Enhancing quality of food and
beverage
All of the above
The aforementioned statistics helps in analyzing the areas where the airline company needs
major enhancement. It has been depicted that the issues in the functioning of airline affect the
passenger satisfaction along with their loyalty. The major area which needs enhancement in the
airline company is quality of food and beverage as the traveller require quality food during their
31

travelling. In addition to this, the customer services should also be enhanced as the effective
relationship between the passengers and the staff member will help in building loyalty among
the passenger regarding the airline company.
32

Question 8) Which carrier is appropriate for travelling?
a) Low-cost carrier
b) High-cost carrier
c) Both
d) None of the above
Response Table
Total Low-cost carrier High-cost carrier Both None of the
above
100 35 25 30 10
Appropriate Carrier
Low cost carrier
High cost carrier
Both
None of the above
It has been evaluated that the high-cost carrier and low-cost carrier possess a huge rivalry in
the tourism industry. After considering all the issues and expectations from the travellers, it has
been evaluated that they like to prefer low-cost carrier as they provide the services at the low
cost which helps the traveller in travelling easily. In addition to this, the high-cost carrier is also
preferred by the travellers due to the high-class experience. Still, both the carriers possess
33

different kinds of issues which need to be handled for gaining effectiveness among the
passengers.
34

Question 9) How much you are aware of customer retention program of airline company?
a) Low
b) Moderate
c) High
d) Very High
Response Table
Total Low Moderate High Very High
100 20 45 25 10
Awareness of Customer Retention Program
Low
Moderate
High
Very High
It has been observed that most of the travellers are moderately aware of the customer
retention program conducted by the airline company. The customer retention program of
airline company provides several benefits to the travellers such as discounts, offers, and
coupons, which attract the majority of the travellers. These services from the customer
retention program are beneficial for the travellers who travel frequently like business person,
employees, or traveller.
35

Question 10) Does airline company needs customer retention programs?
a) Yes
b) No
c) To some extent
Response Table
TOTAL Yes No To Some Extent
100 75 20 05
Need of Customer Retention Program
Yes
No
To some extent
The aforementioned statistics are helpful in understanding the importance of customer
retention program conducted by the airline company. It is essential for the airline company to
conduct regular customer retention program as several benefits could be attained by them.
There are various benefits which are attained by the airline company through customer
retention program such as the increase in the consumer base, enhancement in the public
image, brand development, etc. The benefits further influence the profitability and success of
the company positively such that huge growth would be observed in the business.
36

Question 11) To what extent the customer retention programs are helpful for the airline
company?
a) Low
b) Moderate
c) High
d) Very High
Response Table
Total Low Moderate High Very High
100 10 35 30 25
Helpfulness of Customer Retention Program
Low
Moderate
High
Very High
The customer retention program by the airline company has various objectives which need to
be accomplished. According to the aforementioned statistics, it has been evaluated that the
majority of the traveller are moderately and highly helped by the customer retention program.
They are provided with the discounts, coupons, and offers on the air ticket, foods and
beverages, etc. which makes their travel experience exceptional.
37

Question 12) The customer retention program of the airline company fulfil their purpose?
a) Yes
b) No
c) To some extent
Response Table
TOTAL Yes No To Some Extent
100 80 15 05
Effectiveness of Customer Retention
Program
Yes
No
To some extent
The airline company is highly benefitted by the customer retention program in different
aspects. The consumer base of the airline company is highly increased due to the customer
retention programs. Moreover, the traveller and the airline company attained huge benefits
through the customer retention program. It is also evaluated from the statistics that the
traveller is highly convinced that the customer retention program is fulfilling the company’s
purpose effectively. Also, the traveller utilizes these opportunities and plan their travel.
38

Question 13) At what level you are satisfied with the questionnaire?
a) Low
b) Moderate
c) High
d) Very High
Response Table
Total Low Moderate High Very High
100 15 40 25 20
Satisfaction from Questionnaire
Low
Moderate
High
Very High
The above questionnaire is comprised of the all the necessary areas which need to be
considered by the airline company for attaining enhancement and effectiveness. In addition to
this, the travellers have been asked about the questionnaire then the statistics state that most
of the travellers are satisfied with the questionnaire as it comprises of all the essential areas
that need to be considered in the airline company.
39

DISCUSSION
The aforementioned data and statistics are helpful in gaining an effective understanding
regarding the customer retention program conducted by the low-cost carrier for the
passengers. The travel and tourism industry possess two essential air carriers which are the
low-cost carrier and high-cost carrier. The business operations of the travel and tourism
industry are highly dependent on these two carriers are great extent. The people usually travel
with the low-cost carrier due to their budget. In addition to this, the people mostly choose low-
cost carrier over the high-cost carrier due to several benefits. Still, both the air carriers possess
several issues in their business functioning which negatively influence the customers to great
extent. The major issues which are faced by the passengers regarding their travel from the air
carriers are ineffective customer handling, the support staff doesn't possess adequate
knowledge and skills, quality of food and beverage is low, and the management of baggage
handling is poor (Hwang and Hyun, 2017). These issues have a negative effect on the traveller
such that they avoid revisiting from the same air carrier for their travelling. Moreover, these
issues provide low satisfaction to the passengers regarding their travel from the air carrier. The
high-cost carrier and low-cost carrier needs enhancement in their business functioning in order
to effectively manage and handle these issues. The major reason due to which these issues
must be overcome by the airline carrier is that to maintain the strong brand image in the
market for gaining effectiveness.
There are different strategies and methodologies which could be utilized by the air carriers in
order to enhance these issues effectively. There are different training programs which could be
conducted in order to provide the required knowledge and skills to the staff members which
further helps in maintaining the healthy relationship with the passengers. In addition to this,
the food and beverage services could be enhanced by utilizing appropriate strategies. Also, the
baggage mismanagement could be handled by building appropriate system. It is also observed
that these issues affected the satisfaction level among the passengers regarding the air carrier
which also influence their loyalty. For building satisfaction and loyalty among the passengers
regarding the air carrier different customer retention programs are conducted (Wang, et al.
40

2015). The air carrier such as low-cost carrier conducts several customer retention programs in
order to effectively attain their desired objectives and attract the passengers. The customer
retention program provides various benefits to the passenger's such discounts and coupons
regarding their travel by the air carrier that encourage them to travel with them regularly.
It is also evaluated from the secondary data which have been collected in the research study
that the needs and requirement of the passengers should be effectively fulfilled by the airline
carrier through appropriate strategies and methodologies (Hapsari, et al. 2017). The survey that
was conducted in the research study helps in understanding the issues in the airline carrier and
expectations of the travellers. Suitable strategies could be incorporated by the airline carrier in
order to attain effectiveness in the required areas.
41

CONCLUSION
The aforementioned study is helpful in understanding the importance of customer retention
program conducted by the airline carrier. In addition to this, huge knowledge and information
are gathered regarding the major aspects of the airline carrier. It has been depicted that the
airline carrier faces huge competition in the travel and tourism industry such that low quality of
services will affect their business and also influences their image in the market. In addition to
this, there are different issues which are faced by the travellers due to ineffective services of
the airline carrier such as low quality of food and beverages, ineffective baggage management,
inefficiency among the support staff, etc. There are various strategies which could be utilized by
the airline carriers for enhancing these issues and building a strong image in the market.
Moreover, the loyalty and satisfaction of the passengers are affected by the issues which would
further result in customer turnover and low business growth of airline carriers. The major
objective of the customer retention program is to attract the passengers through different
offers and discounts that further enhance the business functioning. In addition, the
enhancements in required areas will provide better travel experience to the passengers.
Overall, the study develops required knowledge of the customer retention program by the
airline carriers for the passengers.
42

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APPENDICES
QUSTIONNAIRE
Question 1) What is your age group?
e) 20-25 years
f) 25-30 years
g) 30-35 years
h) 35-40 years
Question 2) What are the major expectations from the airline company?
e) Food and Beverage Services
f) Quality services
g) Effective baggage handling
h) All of the above
Question 3) How many times do you travel from the low cost carrier?
e) 0 to 10 time
f) 10 to 15 time
g) 15 to 20 time
h) More than 20 time
Question 4) How many times do you travel from the high cost carrier?
e) 0 to 10 time
f) 10 to 15 time
g) 15 to 20 time
h) More than 20 time
Question 5) What are the issues which are faced while travelling from low cost carrier?
e) Inefficient customer services
47

f) Ineffective support staff
g) Improper baggage management
h) Low quality food and beverages
Question 6) What are the issues which are faced while travelling from high cost carrier?
e) Inefficient customer services
f) Ineffective support staff
g) Improper baggage management
h) Low quality food and beverages
Question 7) What are the areas of enhancement in the airline company?
e) Customer Service
f) Development in Support staff
g) Enhancing quality of food and beverage
h) All of the above
Question 8) Which carrier is appropriate for travelling?
e) Low cost carrier
f) High cost carrier
g) Both
h) None of the above
Question 9) How much you are aware of customer retention program of airline company?
e) Low
f) Moderate
g) High
h) Very High
Question 10) Does airline company needs customer retention programs?
d) Yes
48

e) No
f) To some extent
Question 11) To what extent the customer retention programs are helpful for the airline
company?
e) Low
f) Moderate
g) High
h) Very High
Question 12) The customer retention program of the airline company fulfill their purpose?
d) Yes
e) No
f) To some extent
Question 13) At what level you are satisfied with the questionnaire?
e) Low
f) Moderate
g) High
h) Very High
49