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An investigation on the factors inuencing passengers loyalty in the North Cyprus national airline
Halil Nadiri
Department of Business Administration, Eastern Mediterranean University, Famagusta, North Cyprus

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Kashif Hussain
Department of Educational Sciences, Eastern Mediterranean University, Famagusta, North Cyprus

an Haktan Ekiz Erdog

School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Kowloon, Hong Kong, and

an S amil Erdog
Eastern Mediterranean University, Famagusta, North Cyprus

Abstract
Purpose The aim of this study is twofold: rst to diagnose service quality perceptions of airline passengers and then links these perceptions to their satisfaction and repurchase intentions, specically in a new emerging market in the Mediterranean region, North Cyprus. Airline transportation is a major and the most extensively used way to reach North Cyprus, as it is an island state; thus it is important to know passengers quality perception regarding any quality improvement. Design/methodology/approach A recently developed, industry-specic, 43-item scale (AIRQUAL) based on eight distinct dimensions: airline tangibles, terminal tangibles, personnel, empathy, image, customer satisfaction, repurchase intention, and word-of-mouth communication t well in this study, maintaining its reliability, validity and dimensionality issues. The sample of the study consisted of customers using the national airline company of North Cyprus, who were selected through the non-probability judgmental sampling technique. A total of 583 questionnaires were found to be useful and data from these questionnaires were tested through SPSS and LISREL statistical software. Findings A rigorous statistical test indicates a reasonable t of the eight-factor model to the data on the basis of a number of t statistics. Results revealed that, among the quality dimensions, airline tangibles was found to be the most signicant to affect both customer satisfaction and repurchase intention. Findings also showed that customer satisfaction is positively related to repurchase and word-of-mouth intensions. Originality/value Since airline transportation is a major and the most important way of reaching North Cyprus, the results of this study provide important insights to practitioners and the tourism ministry about how marketing strategies can be designed to manage service quality perceptions and how the airline industry can use the service quality concept to formulate marketing strategies effectively. Keywords Customer services quality, Customer satisfaction, Critical path analysis, Cyprus Paper type Case study

The TQM Journal Vol. 20 No. 3, 2008 pp. 265-280 q Emerald Group Publishing Limited 1754-2731 DOI 10.1108/17542730810867272

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Introduction Dening and measuring quality service is of importance to providers of airline services. This study diagnoses service quality perceptions of customers using national airline company, called Cyprus Turkish Airlines, in North Cyprus. The company was established in 1974. Turkish Airlines operates as a sister airline company with Cyprus Turkish Airlines but actually is not a national airline for North Cyprus. Besides, there are few private airline companies such as Pegasus and Atlas Jet in the North Cyprus market but still the dominance of the two main carriers continues, Cyprus Turkish Airlines and Turkish Airlines. Tourist arrivals in North Cyprus have been signicantly inuenced due to the 24 April 2004 referendum for a peace solution between North and South Cyprus. Tourism activity of the island has a special consequence that, although it has 13,755 bed capacity for tourist accommodation of which 40 percent is occupied, it produces three times larger volume of economic activity then Islands total exports revenue. According to Tourism and Planning Ofce (2006) 893,984 tourists visited North Cyprus in 2006. A more recent report of the Tourism and Planning Ofce (July 2007, in process) showed that there has been a 25 percent increase in tourist arrivals between July 2006 and 2007, and that the bed capacity increased to 16,755 beds. These arrivals generate US$258.3 million (compared to US$178.8 million in 2003) of revenue for the North Cyprus economy. Thus, it is clear that airline industry of North Cyprus has a fundamental effect on travel and tourism industry. In the wake of increasing competition and the dramatic changes occurring in the tourist arrivals in North Cyprus, there is a need for national airline managers to recognize the importance of service improvements in establishing a competitive advantage. Service quality promotes customer satisfaction, stimulates intention to return, and encourages recommendations (Nadiri and Hussain, 2005). Customer satisfaction increases protability, market share, and return on investment (Barsky and Labagh, 1992; Stevens et al., 1995; Legoherel, 1998; Fornell, 1992; Halstead and Page, 1992). In a highly competitive airline industry, managers must nd ways to make their services stand out amongst the others. To achieve this, managers must understand their customers needs-and then set out to meet (or exceed) these needs. If service quality is to be improved, it must be reliably assessed and measured. According to the SERVQUAL model (Parasuraman et al., 1988), service quality can be measured by identifying the gaps between customers expectations of the service to be rendered and their perceptions of the actual performance of the service. SERVQUAL is based on ve dimensions of service quality (Parasuraman et al., 1988): (1) Tangibles-the physical surroundings represented by objects (for example, interior design) and subjects (for example, the appearance of employees). (2) Reliability-the service providers ability to provide accurate and dependable services. (3) Responsiveness-a rms willingness to assist its customers by providing fast and efcient service performances. (4) Assurance-diverse features that provide condence to customers (such as the rms specic service knowledge, polite and trustworthy behavior of employees). (5) Empathy-the service rms readiness to provide each customer with personal service.

Several researchers have sought to dene and measure the concept of service quality (Carman, 1990; Cronin and Taylor, 1992; Parasuraman et al., 1985, 1988, 1991; Teas, 1994). It has also been argued that the number of dimensions and the nature of SERVQUAL construct may be industry specic. The t of ve-dimensions of SERVQUAL carried out in different service activities has always been an important question in several studies that these dimensions proposed by SERVQUAL do not replicate. Many times the SERVQUAL scale has been found uni-dimensional (Angur et al., 1999; Babakus and Mangold, 1992; Babakus and Boller, 1992) and sometimes with even ten dimensions (Carman, 1990) and in some cases, it has been found to be two-dimensional (Nadiri and Hussain, 2005; Karatepe and Avci, 2002; Ekinci et al., 2003). It has also been argued that performance-only (SERVPERF) measure explains more of the variance in an overall measure of service quality than SERVQUAL instrument (Cronin and Taylor, 1994). Therefore, the present study sets out to diagnose the service quality perceptions of airline customers through SERVPERF option of SERVQUAL scale in North Cyprus. In his critical review, Yi (1990) dened customer satisfaction as . . . an emotional response to the experiences provided by, associated with particular products and services purchased, retail outlets, or even molar patterns of behavior such as shopping and buyer behavior, as well as the overall market place (Yi, 1990, p. 69). Although, there are a number of customer satisfaction theories in the literature such as contrast theory, dissonance theory, and equity theory, research shows that expectation-disconrmation paradigm has received much empirical attention (Parasuraman et al., 1988). However, other empirical ndings demonstrate that customer satisfaction can also be measured through product or service performance (Anderson and Sullivan, 1993; Churchill and Surprenant, 1982) or an outcome of service quality (Anderson et al., 1994). Investigating all these theories and providing an extensive review of the customer satisfaction is well beyond the scope of this study, instead this study denes customer satisfaction and relates it to repurchase and word-of-mouth (WOM) intentions. Existing literature acknowledges the importance of repurchase and WOM intensions and thus uses these two dimensions as consequence of service quality perceptions (for instance; Anderson, 1998; Anderson et al., 1997; Oliver, 1980; Yi, 1990). The customer satisfaction found to be direct predictor of repurchase and WOM intentions (Cronin and Taylor, 1992). Similarly, research shows that the higher the degree of customer satisfaction, the greater the likelihood of repurchase and spreading positive WOM communication (Davidow, 2003; Ekiz and Arasli, 2007). In the present study, consistent with the recommendations of previous studies (Karatepe and Ekiz, 2004; Yi, 1990; Zeithaml et al., 1996), the behavioral aspects of the customer loyalty were characterized in terms of repurchase intentions, word-of-mouth communication, and recommendations of the organization. In fact, recently Dean (2007, p. 163) dened customer loyalty as the degree to which a customer recommends, and expresses a preference for future use of, a particular company. When customers praise the rm and express preference for the company over others, it means that they are likely to increase the volume of their purchases (Zeithaml et al., 1996). In the present study, repurchase intention refers to the airline passengers plans to y with the national airline company in their next trip. There is overwhelming evidence in both service quality and customer satisfaction literatures that repurchase intension is an outcome of service quality perceptions as well as satisfaction obtained from purchase episode (Carman, 1990; Legoherel, 1998; Singh, 1988; Smith et al., 1999; Zeithaml and Bitner, 2000). On the other hand, WOM also received considerable research attention. Kau and Loh (2006, p. 103) delineated WOM as . . . the informal communication between

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consumers about the characteristics of a business or a product. Schiffman and Kanuk (2004) argued that WOM communications tend to be highly persuasive and extremely effective in nature; thus companies need to understand factors creating WOM intention and to invest heavily in creating a positive one. This study is necessary, useful, and relevant because: it focuses on service quality perceptions of a national airline company in an island economy (which has received little attention in the past); and North Cyprus is a virgin tourist market in the Mediterranean region where quality of airlines is a signicant strategic issue for increasing the competitiveness among the Mediterranean islands. Following the introduction, the paper presents background of the study of the relevant subject matter. The paper then presents the methodology of the study. The ndings and nal conclusions are discussed in detail. Background of the study The debate regarding the differences between the concepts of the quality of service and satisfaction has been vigorous and not entirely conclusive (Parasuraman et al., 1994; Oliver, 1994). According to Zeithaml and Bitner (2000) the main difference is that quality is considered to be a cause of satisfaction. Satisfaction is the umbrella concept and service quality refers to the specic attributes of the service. The service attributes relevant to the service quality are reliability, responsiveness, assurance, empathy and tangibles (SERVQUAL). The distinctiveness of the constructs of the perceived service quality and satisfaction is based on the antecedent factors. Parasuraman et al. (1985) suggest that quality can be measured as the gap (the degree and the direction of the differences) between the customers service perceptions and their expectations. The SERVQUAL instrument with the various amendments and renements (1991 and 1994) has been criticized because of the inclusion of expectations, suggesting that the disconrmation approach is neither supported theoretically nor empirically (Babakus and Mangold, 1992; Cronin and Taylor, 1992). Spreng and Mackoy (1996) found that perceived service quality is not signicantly inuenced by the failure to meet customer expectations and that satisfaction is dependent on the similarity of desires. Cronin and Taylor (1992) developed a new service quality instrument the SERVPERF, based on the performance outcomes of the service experience. Avrikan (1999) developed the BANKSERV instrument that deals with perceptions and expectations of service quality at the same time. The relationship between the relative importance of the service quality and the actual performance has been attempted by Ennew et al. (1993), which was subsequently amended and adapted by Hemmasi et al. (1994). Newman (2001) identied a number of weaknesses, with the application of SERVQUAL in the nancial sector, in terms of its appropriateness in organizational quality improvement. According to Newman (2001) SERVQUAL is rather unclear in measuring service quality and does not provide an assessment of the consumers priorities with different service attributes. In the case of North Cyprus, Kozak et al. (2003) and Johns et al. (2004) both reported that dimensions of SERVQUAL scale: tangibles; reliability; responsiveness; assurance; and empathy, were not validating in measuring service quality and customer satisfaction. Authors also reported that SERVQUAL happen to be found a uni-dimensional scale in North Cyprus. Meanwhile, Ekiz et al. (2006) developed an AIRQUAL scale to overcome the psychometrical application problems of the existing quality scales, in the guidance of Churchill (1979) and Parasuraman et al. (1985, 1988). The results of AIRQUAL revealed that the scale had ve distinct dimensions (airline

tangibles, terminal tangibles, personnel, empathy, and image) that successfully managed to measure the quality perceptions of airline customers in North Cyprus. Although, they successfully developed the AIRQUAL scale but failed to link it to repurchase and WOM intentions which are proven to be very signicant in customer loyalty (Dean, 2007; Kau and Loh, 2006; Schiffman and Kanuk, 2004; Yi, 1990). Considering their limitation and echoing the importance of these dimensions, present study takes Ekiz et al.s (2006) one step further to explain the behavioral intentions of airline customers in North Cyprus. In doing so, this study borrowed six dimensions (customer satisfaction and ve quality dimensions mentioned above), composed of 38 items, from using Ekiz et al. (2006) and 6 items for measuring repurchase and WOM intensions from Karatepe and Ekiz (2004). Out of this 6 items one repurchase intention item is omitted after the pilot study data analyzed accordance with the recommendations of Nunnally (1978). The nal form of instrument contains 43-items, please see Table I. The dimensions measuring service quality are operationalized as independent variables where customer satisfaction, repurchase and WOM intensions are used as dependent variables of the study. A synthesis of the literature shows that these dimensions are also used in prior empirical studies (Dean, 2007; Kozak et al., 2003; Parasuraman et al., 1988; Sultan and Simpson, 2000). Considering Ekiz et al.s (2006) study as a benchmark of predicting perceived service quality and customer satisfaction for North Cyprus national airline company, following hypotheses are developed: H1a. A high level of perceived airline tangibles related quality will have a signicant positive effect on customer satisfaction. H1b. A high level of perceived airline tangibles related quality will have a signicant positive effect on repurchase intention. H2a. A high level of perceived terminal tangibles related quality will have a signicant positive effect on customer satisfaction. H2b. A high level of perceived terminal tangibles related quality will have a signicant positive effect on repurchase intention. H3a. A high level of perceived personnel related quality will have a signicant positive effect on customer satisfaction. H3b. A high level of perceived personnel related quality will have a signicant positive effect on repurchase intention. H4a. A high level of perceived empathy will have a signicant positive effect on customer satisfaction. H4b. A high level of perceived empathy will have a signicant positive effect on repurchase intention. H5a. A high level of perceived airline image will have a signicant positive effect on customer satisfaction. H5b. A high level of perceived airline image will have a signicant positive effect on repurchase intention. H6. A high level of customer satisfaction will have a signicant positive effect on repurchase intention.

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Scale items Airline tangibles (ATANG) (a 0:86) * Aircraft are clean and modern-looking Quality of catering served in plane Cleanliness of the plane toilets Cleanliness of the plane seats Comfort of the plane seats Quality of air-conditioning in the planes Terminal tangibles (TTANG) (a 0:88) Cleanliness of the airport toilets Number of shops in airport Parking space availability in airport Size of the airport in holding passengers Effective air-conditioning in airport Effective air-conditioned areas for smokers Effective sign system in airport Availability of trolleys in airport Reliability of security control system Employees uniforms are visually appealing Comfort of waiting hall of the airport Personnel (PER) (a 0:84) Employees general attitude Whether airline personnel give exact answers to my questions Employees experience and education level are adequate Whether personnel show personnel care equally to everyone Employees have the knowledge to answer your questions Empathy of the airline personnel Awareness of airline personnel of their duties Error-free reservations and ticketing transactions Empathy (EMP) (a 0:89) Punctuality of the departures and arrivals Transportation between city and airport Compensation schemes in case of loss or hazard Care paid to passengers luggage Availability of health personnel during the ights Locations of the airline company ofces Number of ights to satisfy passengers demands Image (IMG) (a 0:91) Availability of low price ticket offerings Consistency of ticket prices with given service Image of the airline company Table I. Scale items, reliabilities, corrected item-total correlations and conrmatory factor analysis results Customer satisfaction (CSAT) (a 0.90) My satisfaction with the airline has increased My impression of this airline has improved I now have a more positive attitude towards the airline company

Corrected item-total Standardized correlations loadings 0.44 0.47 0.53 0.61 0.55 0.39 0.46 0.49 0.51 0.45 0.47 0.52 0.50 0.44 0.40 0.48 0.41 0.44 0.47 0.50 0.43 0.49 0.41 0.39 0.48 0.53 0.48 0.46 0.50 0.41 0.38 0.47 0.64 0.59 0.58 0.51 0.59 0.68 0.72 0.70 0.74 0.71 0.75 0.73 0.74 0.71 0.75 0.72 0.78 0.80 0.83 0.81 0.77 0.79 0.82 0.71 0.74 0.80 0.75 0.79 0.77 0.70 0.72 0.78 0.74 0.73 0.81 0.79 0.80 0.82 0.84 0.83 0.79 0.79 0.82 0.80

t-values 7.41 7.36 6.70 7.78 6.08 5.99 5.72 6.91 7.11 7.11 8.76 8.72 7.26 8.34 8.63 8.29 7.84 8.54 8.19 8.12 8.19 9.19 7.82 8.69 8.64 7.26 5.89 7.38 6.11 5.12 6.88 6.85 6.37 6.63 6.19 6.63 5.17 5.37 (continued )

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Scale items Repurchase intention (RI) (a 0:91) I consider this airline company my rst choice for air transportation I will consider this airline company more for air transportation in the next few years Word-of-mouth (WOM) (a 0:86) I say positive things about this airline company to other people I recommend this airline company to someone who seeks my advice I encourage my friends and relatives to y with this airline company Fit indices: Chi-square/df GFI (Goodness of t index) AGFI (Adjusted goodness of t index) NNFI (Non-normed t index) CFI (Comparative t index) RMR (Root mean square residual)

Corrected item-total Standardized correlations loadings

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t-values

0.62 0.52

0.79 0.84

4.54 3.95

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0.49 0.66 0.73 3:89 0:94 0:92 0:95 0:91 0:037

0.76 0.80 0.84

3.19 2.94 3.31

Notes: Each item is measured on a ve-point Likert scale; All correlations are above 0.32; All loadings are signicant at 0.001 level or better; *Coefcient alphas for all dimensions exceed 0.70

Table I.

H7. A high level of customer satisfaction will have a signicant positive effect on word-of-mouth communication. H8. A high level of repurchase intention will have a signicant positive effect on word-of-mouth communication. Methodology The sample of the study consists of customers using national airline company of North Cyprus with non-probability judgmental sampling technique. Judd et al. (1991, p. 136) dene judgmental sampling or purposive sampling as picking cases that are judged to be typical of the population in which we are interested, assuming that errors of judgment in the selection will tend to counterbalance one another. The survey instrument was adopted from Ekiz et al. (2006) and Karatepe and Ekiz (2004). A total of 700 questionnaires were distributed to national airline company passengers and respondents were requested to ll out these questionnaires in a self-administered manner. Of these, 610 questionnaires were returned. In all, 583 questionnaires were found to be useful, which represents an 83 per cent response rate from the original sample of 700. The questionnaire was based on only service quality perceptions. There were 43-items in all for measuring service quality perceptions: six-items for airline tangibles (ATANG), 11-items for terminal tangibles (TTANG), eight-items for personnel (PER), seven-items for empathy (EMP), and three-items for image (IMG). The remaining dimensions include three-items each for customer satisfaction (CSAT), two-items for repurchase intention (RI) and three-items for word-of-mouth

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communication (WOM) (see Table I). Figure 1 shows the study dimensions and their hypothesized relationships. Dimensions are shown in circles (dark color ones are quality perceptions independent variables, where light colored ones are intensions dependent variables). The number on arrow from these dimensions represent the t-values which are used in hypotheses testing (explained in the following section). A pilot test study was conducted with 100 customers. According to the results of the pilot study; three questions did not load to their underlying variables, specically question seven from airport tangibles dimension about the availability of wide range of newspaper selection, question eight from terminal tangibles dimension about the design of the airport (cleanliness modernity) and nally question 36 from image dimension about the price acceptability of the airline ticket prices. These questions were omitted from the instrument and not shown in the analysis. Moreover, pilot study results recommended minor rewording on few items. A ve-point Likert scale (Likert, 1932) was used for data collection with 1 being strongly disagree and 5 being strongly agree. The survey instrument was back-translated (Aulakh and Kotabe, 1993) for Turkish national customers. The survey instrument was applied in English to nationalities other than Turkish. SPSS 10.0 and LISREL 8.54 statistical software were employed for the scale measurements. Descriptive analysis such as means, standard deviation and frequencies are calculated. Psychometric properties of the instrument such as issues of reliability, dimensionality, convergent and discriminant validity are tested. Causal analyses are implied. Findings The sample The target respondents of the present study are composed of the customers of the studied airline company. Research did not aim to differentiate any specic group in terms of their demographic characteristics. Demographic breakdown of the sample in Table II shows that 53.5 per cent of the respondents were females. As for the age distribution, the majority of respondents fall between the age group of 18-27 (40.1 per cent), which proves that respondents in the sample are young in age. With respect to

Figure 1. Theoretical model of the study with the t-test results

Frequency (F) Gender Female Male Total Age 18-27 28-37 38-47 48-57 58 and above Total Education Primary school Secondary school High school Undergraduate Graduate/PhD Total Nationality Turkish British European Total 312 271 583 234 143 102 56 48 583 11 42 74 371 85 583 421 135 27 583

Percentage (%) 53.5 46.5 100.0

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40.1 24.5 17.5 9.6 8.3 100.0 1.9 7.2 12.7 63.6 14.6 100.0 72.2 23.2 4.6 100.0

Table II. Demographic breakdown of the sample (n 583)

education, 63.6 per cent of the respondents had formal tertiary education, dened as a minimum of an undergraduate degree. In terms of nationality 72.2 per cent were Turkish, 23.2 per cent were British and 4.6 per cent were from various European countries (including Germany, Sweden, Finland, Scotland and Italy). To see whether any of these demographic characteristics have effect on the quality perceptions, satisfaction, repurchase and WOM intensions, one-way ANOVA, Kruskal-Wallis test (for one independent variable) and factorial ANOVA (for multiple independent variable) analyses were carried out (Nunnally, 1978; Hair et al., 2007). However, analyses did not produce any statistically signicant result. Measures Service quality dimensions: airline tangibles (ATANG), terminal tangibles (TTANG), personnel (PER), empathy (EMP), and image (IMG), are used as the independent variables where customer satisfaction (CSAT), repurchase intention (RI) and word-of-mouth communication (WOM) were the dependent variables of the study. Psychometric properties In assessing the psychometric properties of the instrument, issues of reliability, dimensionality, convergent and discriminant validity are considered. In order to provide support for the issue of convergent validity, corrected item-total correlations were computed. The inter-item correlations being equal to or exceeding 0.32 provide support for the convergent validity of the scale. Table I shows that the results of the

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corrected item-total correlations exceed 0.32. Overall, the results of this assessment support the issue of convergent validity of the scale. After employing corrected item-total correlations, reliability coefcients were computed for each study variable and at the aggregate level. Alpha coefcient was found to be 0.92 at the aggregate level and, as shown in Table I, all reliability coefcients were deemed acceptable. Specically, reliability coefcients ranged from 0.70 to 0.85 for study variables, except three items that are omitted from the further analysis (Diamantopoulos and Siguaw, 2000). Overall, these ndings show that each coefcient exceeds the cut-off value of 0.70 and all t-values were signicant (. 2.00) as recommended by Nunnally (1978), as were the cases with those of Ekiz et al. (2006). Moreover, the conrmatory factor analysis demonstrated a reasonable t of the data to the seven-factor measurement model on several criteria (x 2 803:52, df 216, GFI 0:96, AGFI 0:97, NFI 0:95, NNFI 0:97, CFI 0:94, RMR 0:031) as recommended by Anderson and Gerbing (1988) and Yilmaz (2004). A rigorous test was undertaken for the issues of convergent and discriminant validity, and dimensionality. Specically, conrmatory factor analysis was employed to provide support for the issues of dimensionality, convergent and discriminant validity of the instrument. Table I indicates a reasonable t of the seven-factor model to the data on the basis of a number of t statistics. As also demonstrated in Table I, the majority of the factor loadings are above 0.75, and all t-values are signicant. Overall, these results provide support for the dimensionality, convergent and discriminant validity of the scale (Anderson and Gerbing, 1988). Additional assessment was undertaken using composite scores. Specically, composite scores for each study variable were calculated by averaging scores across items representing that dimension. As demonstrated in Table III, all correlations among the study variables are signicant at the 0.01 level. The correlations among the study variables range from 0.31 (image and terminal tangibles) to 0.67 (customer satisfaction and repurchase intention). Means and standard deviations of composite scores of the study are also given in Table III. Overall, these results provide additional support for the discriminant validity of the scale.

Variables Airline tangibles (ATANG) Terminal tangibles (TTANG) Personnel (PER) Empathy (EMP) Image (IMG) Customer satisfaction (CSAT) Repurchase intention (RI) Word-of-mouth (WOM) Means Standard deviations

1 1.00 0.39 0.35 0.35 0.38 0.62 0.58 0.51 3.11 0.60

2 1.00 0.53 0.39 0.31 0.38 0.51 0.42 3.22 0.49

Table III. Means, standard deviations and correlations of the study variables

1.00 0.36 0.36 0.46 0.42 0.55 3.15 0.59

1.00 0.37 0.49 0.53 0.40 3.17 0.60

1.00 0.38 0.45 0.48 3.10 0.57

1.00 0.67 0.60 3.49 0.41

1.00 0.61 3.64 0.53

1.00 3.72 0.47

Notes: Composite scores for each measure were obtained by averaging scores across items representing that measure; The scores range from 1 to 5; A higher score indicates a more favourable response; All correlations are signicant at the 0.01 level

Tests of research hypotheses The thirteen hypothesized relationships were tested using LISREL 8.54 through path analysis (Joreskog and Sorbom, 1996). To be more specic, the rst group hypotheses refer to the effects of service quality dimensions on customer satisfaction. Specically, the rst group hypotheses refer to the effects of airline tangibles, terminal tangibles, personnel, empathy, and image on customer satisfaction. The second group hypotheses refer to the effects of service quality dimensions; airline tangibles, terminal tangibles, personnel, empathy, and image as well as customer satisfaction on repurchase intention. The third group hypotheses show the possible relationships among customer satisfaction, repurchase intention and word-of-mouth. Table IV and Figure 2 show that all of the hypothesized relationships were supported. A careful examination of Table IV reveals that airline tangibles (ATANG) have a signicant positive effect on both customer satisfaction and repurchase intention. Thus, hypotheses 1a and 1b are supported. Table IV also shows that terminal tangibles (TTANG) exert a signicant positive effect on both customer satisfaction and repurchase intention, meaning that H2a and H2b are supported. Additionally, ndings demonstrate that personnel (PER) depicts signicant positive relationships with customer satisfaction and repurchase intention. Thus, H3a and H3b are supported. Since the effect of empathy (EMP) on both customer satisfaction and repurchase intention is signicant and positive, H4a and H4b are supported. Results also show that image has a signicant positive impact on both customer satisfaction and repurchase intention. Therefore, H5a and H5b are supported by the empirical data. Path analysis results indicate that customer satisfaction (CSAT) has signicant positive relationships with repurchase intention (RI) and word-of-mouth communication (WOM). Hence, H6 and H7 are supported. Finally, results indicate that repurchase intention has a signicant positive relationship with word-of-mouth communication. Hence, hypothesis 8 is supported. Service quality dimensions jointly
Standard parameter estimates (ML) Impact on customer satisfaction H1a. Airline tangibles (ATANG) H2a. Terminal tangibles (TTANG) H3a. Personnel (PER) H4a. Empathy (EMP) H5a. Image (IMG) Impact on repurchase intention H1b. Airline tangibles (ATANG) H2b. Terminal tangibles (TTANG) H3b. Personnel (PER) H4b. Empathy (EMP) H5b. Image (IMG) H6. Customer satisfaction (CSAT) Explained variance R 2 0:74 Impact on word-of-mouth H7. Customer satisfaction (CSAT) H8. Repurchase intention (RI) Explained variance R 2 0:63 0.56 0.40 0.37 0.33 0.24 0.48 0.27 0.32 0.36 0.29 0.21 t-values 9.87 6.70 6.22 6.13 3.76 8.72 4.62 6.90 6.91 5.72 2.33 Signicance 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001 0.0001

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0.28 0.42

5.99 7.82

0.0001 0.0001

Table IV. Path analysis results

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Figure 2. Model with the t-test results of dimensions and items

explain 68 per cent of the variance in customer satisfaction, while service quality dimensions and customer satisfaction jointly explain 74 per cent of the variance in repurchases intention. Finally customer satisfaction and repurchase intention explained the 63 per cent of the variance in word-of-mouth. Discussion and conclusions Service industry is one of the most important sectors in the developing countries (Ekiz et al., 2006). As people always seek quality from what they get, nowadays, rms are more sensitive and trying to give the best service in order to be outstanding and

continue to compete in the challenging environments. Similarly, in the airline industry, if the airline company keeps updating its technology, it can get a bigger share in its market. To be successful, key factor is to keep the service quality at high level and maintain this level. Failures will result in service dissatisfaction. The present study aimed to replicate the measurement scale called AIRQUAL, which was developed by Ekiz et al. (2006) a multiple-item scale measuring perceived service quality for a national airline company. During the eldwork, it was found that respondents are complaining on many issues related to the national airline, about the product and the service of the company and this caused the researchers to replicate such a study. Moreover, the study aimed to probe the current situation of the national airline: after almost four years have the perceptions of customers changed over time. As a result, it can be seen that all of the hypotheses of this study are supported and the current service quality level is more or less the same with the previous level (Ekiz et al., 2006). The present study supports the previous empirical nding, the importance of repurchase and WOM intensions and the use these two dimensions as consequence of service quality perceptions (Anderson, 1998; Anderson et al., 1997; Oliver, 1980; Yi, 1990). Findings of this study reveal that customer satisfaction is the predictor of repurchase and WOM intentions (Cronin and Taylor, 1992; Davidow, 2003; Ekiz and Arasli, 2007; Karatepe and Ekiz, 2004; Yi, 1990; Zeithaml et al., 1996). This study contributes to the customer loyalty literature as the behavioral aspects of the loyalty are characterized in terms of repurchase intentions and word-of-mouth communication. The results of the present study have a number of practical implications for airline managers who are seeking to identify their customer satisfaction and customer loyalty. According to the current results, recommendations can be given to the national airline company. In order to better satisfy their customers, this airline company should give importance to physical equipment such as aircrafts exterior and interior appearance, efcient cargo handling procedures, technical maintenance of the aircrafts at regular intervals, trained and highly qualied personnel in order to better understand and serve the customers. Moreover, they should update their catering service facilities. Especially in the eld of marketing, the company should recruit qualied personnel. The limitation of the study is the sample using only the national airline company and ignoring private airlines. This cannot lead the generalizability of the ndings and the results may not be implied to other airline companies. Additional studies are recommended to ll this gap. This could assist in strengthening the results of this study and the generalizability of the ndings. Including other airline companies would provide chances of making comparisons and hence add further insights. Finally, many of the issues in service quality literature remain to be explored-for example, how marketing strategies can be designed to manage service quality perceptions and how the airline industry can use the service quality concept to formulate marketing strategies effectively.
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