The Impact of Customer Satisfaction on Loyalty: Singapore Airlines

This report examines customer satisfaction in building customer loyalty within Singapore Airlines (SIA). It explores the aviation industry's growth, the importance of customer satisfaction, and its positive impact on profitability and customer retention. The report delves into SIA's background, its ranking as a world-leading airline, and its customer loyalty programs like KrisFlyer and PPS Club. It investigates the factors influencing customer satisfaction, including service quality, employee training, and service recovery. The research aims to determine the relationship between customer satisfaction and loyalty, identify key factors for improvement, and analyze the impact of trained employees. The literature review covers customer loyalty, customer satisfaction, service quality, and customer retention. The report is structured to provide a comprehensive analysis of customer satisfaction and its role in fostering customer loyalty for Singapore Airlines.

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Running head: Customer satisfaction in building customer royalty on Singapore airline
Customer satisfaction in building customer royalty in Singapore Airline
Name of the student
Name of the university
Author’s note

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Table of Contents
Chapter 1 Introduction...............................................................................................................3
1.1 Introduction......................................................................................................................3
1.2 Background of the company............................................................................................4
1.3 Justification of the research topic:....................................................................................5
1.4 Research aim....................................................................................................................5
1.5 Research objectives..........................................................................................................6
1.6 Research hypothesis.........................................................................................................6
1.7 Significance of the study..................................................................................................6
1.8 Research structure............................................................................................................6
Chapter 2 Literature Review......................................................................................................8
2.0 Introduction......................................................................................................................8
2.1 Customer loyalty is customer royalty..................................................................................8
2.2 Customer satisfaction...........................................................................................................9
2.3 Service quality................................................................................................................11
2.4 Service recovery.............................................................................................................13
2.5 Management and training of employees........................................................................14
2.6 Customer retention.........................................................................................................15
Chapter 3 Research Methodology............................................................................................17
3.1 Research purpose...........................................................................................................17
3.2 Quantitative and qualitative approaches........................................................................17

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3.3 Data collection...............................................................................................................18
3.3.1 Primary data collection...........................................................................................19
3.3.2 Secondary data collection.......................................................................................20
3.4 Data analysis..................................................................................................................20
Reference list............................................................................................................................21

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Chapter 1 Introduction
1.1 Introduction
The aviation sector is known to grow rapidly in the last 25 years. The growth of the
airline industry provides opportunities and challenges to the business entities in this industry.
Customer satisfaction is one of the main objectives in the marketing activity. The customer
satisfaction if very crucial since it is known to have a positive impact on the profitability of
the organization. For this reason, both the customer satisfaction as well as dissatisfaction
needs to be considered properly for optimum productivity. There is also a presence of
positive correlation between royalty, retention as well as customer satisfaction. For this
reason, these following aspects are very important for the organization to be successful.
It is also suggested that good forms of human and technicalaspects of the service
quality can lead to a rise in the customer satisfaction. For this reason, it can be said that the
customer satisfaction will help in enhancing the customer loyalty (Singh, 2015). The human
aspects are known to be much more important than the tangible aspects of the service quality
which is known to impact the satisfaction of the customer that will help in promoting and
enhancing the loyalty of the customers. In order to maximize the satisfaction of the customer,
the firms should be selling ideas after the completion of necessary documents. The
satisfaction of the customers is affected by specific products and perception of quality. It is
also one of the key features for creating a long termrelationship with the customers.Customer
loyalty on the other hand is the result of the organization which creates a benefit for thee
customers so that they can increase their purchase from the company.
The airline industry is highly competitive in nature where the customers are the most
essential factor of the process of travelling along with increasing the quality of the service
and flight safety. For this reason it can be said that the customer satisfaction is one of the

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most essential strategy of the airlines. The complaints of the customers usually serve as one
of the critical dimension of the quality of the service and the customer satisfaction. The
complaint of the customers offers the organization a chance for correcting their mistakes.
There have been huge number of cases which suggest that customer satisfaction is known to
have a direct relation to the response of the company which in the end will be affecting the
future behaviour of the customers (Jung, Han & Oh, 2017). The customer satisfaction is also
termed as CSAT that is used in marketing quite frequently. It is a measure that is known to
measure how the products and services are supplied by an organization meet and also surpass
the expectation of the customers.
1.2 Background of the company
Singapore Airlines Limited (SIA) is known as the flag carrier airline of Singapore
where its main hub is located at Changi airport of Singapore. The Singapore airlines is also
ranked as the world’s best airline since the year 201. It has been nominated as the Best first
class service provider, Best Airline in Asia and the Best first class airline seat. The fleet size
of SIA is 122where more than 14 thousand employees work for it. The Airbus A380 of SIA
had been the world’s largest passenger aircraft. The Singapore Airlines had been named best
for customer service by Australian travellers. It has also won the Roy Morgan July
International Airlines Customer Satisfaction Award where its customer satisfaction rating
had been more tan 88 percent. It have also been found out that Singapore Airlines will be
using blockchain based digital wallet for its loyalty program.
As customer loyalty program, there have been special deals, exclusive partner offers
and flying perks for the loyal customers. Singapore Airlines known to have found its business
on world class service quality in the industry of airlines. For converting a new potential
customer to a loyal customer, Singapore Airlines are paying for customization flexibility. The

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manager of SIA states that this particular Airline wants to create the “wow effect” which the
customers will not be able to enjoy until they come to experience it.
KrisFlyer is the frequent flyer programme introduced by Singapore Airlines which is
mainly designed for rewarding the loyal customers. With the KrisFlyer membership
programme, the customers can enjoy various privileges according to the memberships. They
can get free bonus miles, priority check-in, lounge access, boarding as well as baggage
handling and a lot more. There are three tiers of the membership which are krisFlyer,
KrisFlyer Elite Silver and KrisFlyer Elite Gold. In case of The PPS Club membership,
customers are provided with extra privileges and personalized service which makes most of
the journey convenient.
1.3 Justification of the research topic:
By taking into account the global business development, customer awareness including
their happiness is the main factor affecting the passengers travelling by SIA and the primary
strategy of the airline industry is to maintain growth by providing superior customer service
and maintaining global standards when it comes to service quality. Therefore, it is essential to
enforce innovative measures for retaining existing passengers and attracting new customers.
This makes it necessary for the management of SIA to evaluate and understand the wants and
expectations of the customers from the organisation and whether it is able to match the
passenger expectations and importance of service quality, its determinants and dimensions
along with a tool to gauge customer satisfaction in the service sector.
1.4 Research aim
This particular study is known to investigate the customer satisfaction in building
customer loyalty in case of Singapore Airlines. The research also aims to find out the factors

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which leads to customer satisfaction in the airline industry. The paper also states about the
various loyalty programme offered by Singapore Airlines in the first chapter.
1.5 Research objectives
The research objectives of the paper are:
 To find out the responses on customer satisfaction towards the service quality offered
by Singapore Airlines.
 To determine the relationship between customer satisfaction and customer loyalty.
 To identify the main factors which will help in improving customer satisfaction in the
airline industry.
 To identify how trained employees positively affects customer satisfaction.
1.6 Research hypothesis
After taking into considerations the above research objective’s and aims, the study
needs to form research hypothesis in order to form a clear proposition of the outcomes.
H0: Customer satisfaction has a huge impact on customer loyalty.
H1: Customer satisfaction does not affect customer loyalty
1.7 Significance of the study
This particular research work is quite important for SIA, to the researcher as well as it
can also be used as guidance for future work. The reason behind this is that this
particularstudy will help those who implement the factors hat can affect the customer
satisfaction and the company image.
1.8 Research structure
The following paper is organized in this particular framework:

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The first chapter provides the introduction of the paper customer satisfaction in
building customer loyalty in Singapore Airlines. The first chapter also provides the
background of the Singapore Airlines and states about the various loyal;;ty programmes
offered by them. The second chapter provides the literature review. This part of the paper
provides previous studies related to the customer satisfaction in Singapore Airlines. It
statesabout the customer loyalty, customer service, customer loyalty, training of employees
and customer retention. The third chapter is about the research methodology. The fourth
chapter includes data analysis and lastly chapter five states about the conclusion and
recommendation of the paper.

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Chapter 2 Literature Review
2.0 Introduction
The literature review had been conducted about the customer loyalty, customer
satisfaction, service quality, customer retention and educating employees. The researcher had
identified and highlighted the essential variables from the previous research that will help in
providing proper theoretical framework for the study.
2.1 Customer loyalty is customer royalty
The customer loyalty includes the loyalty behaviour, which is the act of customers
making repetitive purchase of the current brands rather than choosing from the competitor
brand. Therefore, it can be said customer loyalty mostly takes place as a result of the positive
emotional experience, physical attribute basedsatisfaction with a perceived value of the
experience. The loyalty of a customer typically relies on the customer interest for maintaining
a relationship with one organization (Chen, 2016). For making the customers loyal, the
company should be focussing in some of the most significant things. Many of the researchers
have agreed to the fact that customer loyalty is a very important aspect for any organization,
which is providing a service.
According to Hussain, Al Nasser and Hussain (2015), the attachment of the customers
to a certain brand or products over quite a long period of time is termed as loyalty. The
customers can express their loyalty by continuously purchasing their products and also
providing positive word of moth referrals. Some of the studies have also stated the fact that
there is a presence of positive relationship be tween the customer loyalty and the brand image
of the organization. The customer satisfaction is known to be considered as one of the
important part who affects customer loyalty (Farooq et al., 2018). Customers are also known

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to get divided according to their loyalty degree. There are many groups of customer loyalty
which can be termed as the completely loyal or somewhat loyal.
According to Li, Ma and Zhou (2017), loyalty is the deep help commitment for
rebuilding and re-patronizing a preferred product or the service in the future despite of the
situational influences that can have the potential that will be causing the switching
behaviours. The loyalty building requires the company for focussing the value of its product
as well as services. The organization also needs to show that it is very much interested for
fulfilling the desire of building healthy relationship with the customers. The loyal customers
will also be encouraging other people to use their services and will think twice before
changing their mind for moving to other services (Hapsari, Clemes & Dean 2017).
The customer loyalty is known to be constructed through the design decisions and
through sourcing. The designing for the loyal customers needs customer centred approaches
that is known to recognize the want as well as interest of the service recover. Maintaining a
healthy relationship with the customers is very important for customer loyalty and for this the
organization needs to work a lot in that context which will extend beyond itself as no other
company can be world class at everything (Akamavi et al., 2015). Designing for customer
loyalty also needs approaches which are customer centred and will be recognizing the want
and interest of the service receiver.
2.2 Customer satisfaction
Every organization in the business is dependent on the customer satisfaction.
Whenever the business will come “first”, customers will always be coming first and then
comes profit. The customer satisfaction had been always one of the top tools for a business to
succeed. It can also be stated that it is one of the most essential component of the business
strategy and for customer retention (Hwang & Hyun, 2017). In order to maximize the

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satisfaction of the customer, the firms should be selling ideas after the completion of
necessary documents. The satisfaction of the customers are affected by specific products and
perception of quality. It is also one of the key features for creating a long-termrelationship
with the customers. It has been found out that more than 80 percent of the satisfied customers
will be doing business again when they will be having a positive experience. According to
Ali, Dey and Filieri (2015), customer satisfaction is known to be one of the objectives of the
marketing activity which are linked to the process of purchasing as well as consumption with
the post purchase phenomena. Satisfying the customers is an essential element in the
marketing concept. The customer satisfaction can be categorised into two categories where
the first category is known to measure the level of guest satisfaction. It can be stated that he
quality of service provided and the perceived value are the essential factors for satisfaction of
customers.
A customer satisfaction is important since a loyal customer is a treasure for any
company as it is one of the factors which will be helping the consumers in standing out of the
competition. The satisfied customers will be sharing the content more across the social
media; therefore it will be taking the brand places (Hussain, Al Nasser & Hussain, 2015).
Both customer loyalty as well as customer royalty is crucial for the business in the modern
day mainly because customers satisfaction can be easily obtained from the old customers than
the new ones. The other reason is that both the customer royalty as well as satisfaction of
consumers will be having positive impact on the profitability reneges of the firms (Prentice &
Loureiro, 2017). Jiang and Zhang (2016) stated that customers who are usually satisfied with
the service tend to be quite faithful in nature and will repeat its purchase which will help in
increasing the company profitability.
In many industries, it have been found out that the satisfied customers means that the
company will be receiving comparatively fewer complaints and therefore it will reduce the

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cost of handling failures. The researchers have also found out that the satisfied customers are
more willing to pay for the benefits they receive and will also be more tolerant of the
increased price. By satisfying the customers, the organizations can improve the profitability
when their business will expand which will also help the in gaining a higher market share
(Jung, Han & Oh, 2017). The satisfaction of the consumers is also known to serve as an exit
barrier that will be helping the firms for retaining its customers.
2.3 Service quality
There is a presence of great relationship between the customer satisfaction and service
quality. The service quality is known to be an achievement in terms of customer service. It is
known to reflect the service encounter (Kim, Kim & Hyun, 2016). The service industries are
known to contribute highly to the gross domestic product as well as employment in most of
the countries. Although it can be said that delivering high service quality is known to
become a marketing priority for the service-based firms for achieving success.
In terms of service quality, one of the important models of service quality is the
SERVQUAL model, which stresses on the following attributes:
 Reliability
 Responsiveness
 Competence
 Courtesy
 Access
 Credibility
 Security
 Communication
 Tangibles