K J SOMAIYA INSTITUTE OF MANAGEMENT STUDIES AND

RESEARCH

Business Research Project Report on

Understanding the critical factors affecting customer satisfaction and in

turn operational excellence of airlines in India

Submitted to
Prof. Shweta Dixit

Group Members:
Piyush Bhanarkar (06)
Shashank Jain (19)
Manish Pandey (41)
Manav Rizwani (49)
Arvind Sarkar (50)
Jimit Thakker (60)
1. Objective.............................................................................................

..........................3

2. Abstract...............................................................................................

..........................3
3. Introduction.........................................................................................

.........................3
4. Literature

Review.................................................................................................

.........4
5. Theoretical

framework...........................................................................................

.......6
6. Research Methodology
6.1 Research

Design.............................................................................................

.........6
6.2 Sampling....................................................................................

..............................6
6.3 Sample

size..................................................................................................

............7
6.4 Data Collection

method...........................................................................................

7
7. Questionnaire......................................................................................

..........................7
8. Statistical data analysis

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 8.1 Charts and

graphs.............................................................................................

.......9
8.2 Factor

analysis...........................................................................................

............14
8.3 Chi Square

Test.................................................................................................

.....14
8.3.1 Chi Square test

Summary..........................................................................15
9. Conclusion...........................................................................................

........................16
10. Limitations.................................................................................

..................................16
11. References.................................................................................

..................................17

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 1. Objective
To investigate critical factors affecting the customer satisfaction and in
turn the operational excellence of Airline Industry in India and to find of
the contribution of each factor in customer satisfaction

2. Abstract
In this study, critical factors affecting customer satisfaction which affects
the operational excellence has been examined. Data was collected from
117 respondents through a structured questionnaire. The model was
analyzed using SPSS software using factor analysis, Chi-Square Test and t-
test.

2.1. Key words

Factor analysis, Chi-Square, operational excellence

3. Introduction

The aviation sector is one of the major economic drivers for prosperity,
development and employment in any country, we know it. The rapidly
expanding aviation sector in India handles near about 2.5 billion
passengers across the world in a year and moves 45 million tonnes (MT)
of cargo through 920 airlines, using 4,200 airports and deploying 27,000
aircrafts in the world. Today, 87 foreign airlines fly to India and from India
five Indian carriers fly to foreign countries and from 40 countries.
In any business satisfying the customer is the ultimate goal or objective of
any marketer. Excellent passenger satisfaction is one of the greatest
assets for air business in todays competitive environment. Passenger
satisfaction service arises when a company can provide passengers with
benefits that exceed passengers expectation and this is considered
value-added. If customers are satisfied with the product or service which
the company is providing then they will buy more, and do so more often.
Passenger gratification is an essential goal for each airline providing
passenger services. The on board experience is still something special for
the customer. The customers have a wide choice to select the suitable
airline product according to their requirements. Therefore, Airlines
Companies are continuously working on the in-flight product development
and innovation to differentiate themselves from their competitors. There
are many factors that can help an Airlines Company to build its customer
base, and passenger service and satisfaction can be a determining factor
in the success of an entire operation.

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 4. Literature Review

The aviation sector is one of the major economic drivers for prosperity,
development and employment in any country, we know it. Passenger
satisfaction service arises when a company can provide passengers with
benefits that exceed passengers

Rana Shehadeh, Ayman Bahjat Abdallah and Mahmoud Maqableh

(2015) have identified the main factors of interest leading to customer
satisfaction as leadership, human resource management practices,
operations strategy, and involvement culture. Thisresearch considered
different service sub-sectors including banks, ICT, insurance, aviation,
hotels and medical care.

zlem Atalik (2007) discusses about the complains of the customers as

availability of free tickets and upgrades of the flight class, the behaviour
of personnel, card ownership issues (e.g. high number of miles needed to
retain membership), level and type of priority services offered within the
program and the lack of alliances with other airlines.
R Archana and Dr. M.V. Subha (2012) discusses about the factors
influencing customer satisfaction as Cuisines provided, seat comfort,
safety these factors have an important role in customer satisfaction. They
have also found that customer satisfaction depends on personal
entertainment, which is an important factor in flying decisions of
passenger. According to their study, online seat booking, call centre
facilities and reservation/cancellation is highest influencing factor in flying
decisions of the passengers.

Rajat K. Baisya and R. Sarkar (2004) talks about variables such as

network of destinations, safety records of airline and the economical air
fares as the base to help domestic airlines understand the consumer
buying behaviour. Author has also emphasized upon customer satisfaction
with a focus on customer segmentation, future usage of the airline
services and the importance of influencer on the choice of airline made by
the customer.
Dr. Maharani Upadhyaya (2012) discusses about the customer
complaints and their quick resolution, dividing the complaints in to two
types: Controlled Complaints and Uncontrolled complaints. Under
controlled complaints, Dr. Makarand focuses on complaints such as flight
delays, fare problems, staff misbehaviour, baggage mishandling, refunds,
advertising, airline security etc. And under the uncontrolled complaints
received by airlines, the author lists complaints due to weather problems,
technical fault, etc. resulting in customer dissatisfaction and leaving a gap
the actual and the expected service delivery quality.

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Usman Khan1 and Noreen Khan (2014) stresses upon the importance
of customer satisfaction in the success of an aviation company, stating
that airlines with satisfied customers will have more passengers. The
satisfied customers not only turned into repeat customers but also
engaged in word of mouth publicity increasing customer traffic and
goodwill of the company.

Dipa Mitra (2013) focuses on the link between internal and external
customer satisfaction among the public, private full cost and private low
cost airlines to retain their existing customers as well as attract new
customers. The quality parameters discussed external parameters for
customer satisfaction are ease of ticketing, punctuality, arrival &
departure assistance, handling delays and cancellation, luggage handling,
seat comfort, cleanliness, safety, catering service, customer complaint
handling, attitude and behaviour of the staff. While the internal factors,
which the author lists down are General working conditions, Pay benefits,
Management style, Promotion potential, Work activities and relationships,
Performance appraisal, Training and development, Teamwork,
Communication, Feedback, Work/life balance, Stress, Personal expression/
idea generation.
Hokey Min and Hyesung Min (2015) tries to gain an understanding of
passengers service concerns, identify opportunities for continuous service
improvement. Author confirms that airline safety is considered most
important to customers impressions of service quality whereas proper
baggage handling, competitive airfare, and on-time arrival/departure were
next most important service attributes.

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 5. Theoretical framework

6. Research Methodology:

6.1. Research Design

In order to achieve the above study objectives, we have used the Simple
Random Sampling technique, randomly intercepted and administered fully
structured questionnaires to target respondents.

6.2. Sample

We have targeted the age group of 17 years and above who often use
flight services. The area of survey was not limited but mainly focused on
the customer base from Metros and Tier 2 cities of India. The targeted
customer included both male and female genders

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6.3. Sample Size

117

6.4. Data Collection Method

We have collected data through survey method by asking respondents to

fill a questionnaire form

7. Questionnaire

Q1. Name
Q2. Gender
1. Male
2. Female
Q3. Age Group
1. 17-21
2. 22-26
3. 27-31
4. 32 and above

Q4. How often do you travel by air in a year?

1. Zero
2. Once
3. Twice
4. Thrice
5. More than thrice

Q5. What is the main Purpose of travelling?

1. Business Trip
2. Vacation
3. Short Break
4. Visit friends and relatives
5. NA
6. OTHER

Q7. Please state your importance of the following elements which leads to your
satisfaction and loyalty for an airline (1 being least important and 5 being most
important)-mark only one at a time

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Parameter 1 2 3 4 5
Reliability and consistent service
Staff Knowledge and courtesy.
Individualized attention to customers.
Provide promptly services to passengers.
Quality of in-flight services
Quality of food and beverage
Punctuality of flights and ground services.
Ticket flexibility
Location of airline offices and authorized agents.
Airfares price
Interior design of an aircraft
Onboard entertainment services.
Loyalty programmed VIP card, frequent flyer programmed
Flight safety
Booking Discounts and Advertisements

Q8. Please select your favourite domestic airline

1. Air India
2. Indigo
3. Spice Jet
4. Go air
5. Vistara
6. Jet Airways
7. NA

8. Statistical Data Analysis

8.1. Charts and graphs

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1. Gender Distribution

Gender Distribution

28% Female
Male
72%

2. Age Group Distribution

Age Group

17-21
2% 4%
22-26
10%
27-31
32 and above
84%

3. Frequency of Air Travel

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 Frequency of air travel

Zero Once
9% Twice Thrice
35% 13%
More than 3
11% 32% Times

4. Purpose of Travel Distribution

Purpose of Travelling

Business Trip Vacation

Short Break Visit Friends and
3% relatives
11% 14%
9% NA Others
34% 29%

5. Favourite Airlines Distribution

Favourite Airlines
Air India
Indigo
3%11% Spicejet
37% Goair
4% 37% Vistara
2% 5% Jet Airways
NA

Graphical Interpretation of factors which leads to customer satisfaction. There

are total 15 factors that have been rated on Likerts scale.

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1= least important
2= Less Important
3 = Neutral
4 = Important
5 = Most important)

Reliability and consistent service Staff

Knowledge and courtesy

60 60
50
50
40
40
30
30
20
20
10
0 10
1 2 0
3 4 5 1 2 3 4 5

Indivualized attention to customers Promptly

Service

40 50
35
40
30
25 30
20
15 20
10
10
5
0 0
1 2 3 4 5 1 2 3 4 5

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Quality of in-flight and ground service Quality of Food

50 50

40 40

30 30

20 20

10 10

0 0
1 2 3 4 5 1 2 3 4 5

Punctuality of flight and ground Service Ticket Flexibility

80 50
70
40
60
50 30
40
30 20
20
10
10
0 0
1 2 3 4 5 1 2 3 4 5

Location of Airlines offices Airfare price

40 80
35 70
30 60
25 50
20 40
15 30
10 20
5 10
0 0
1 2 3 4 5 1 2 3 4 5

Aircraft Design Onboard

Entertainment

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40 50
35
40
30
25 30
20
15 20
10
10
5
0 0
1 2 3 4 5 1 2 3 4 5

Loyalty Programmes Flight Safety

40 80
35 70
30 60
25 50
20 40
15 30
10 20
5 10
0 0
1 2 3 4 5 1 2 3 4 5

Booking Discounts

60
50
40
30
20
10
0
1 2 3 4 5

8.2. Factor analysis

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 1. KMO value is 0.918 which is greater than 0.5 hence the given data is
sufficient to run factor analysis
2. Cumulative explained variance is 67% which is more than 60% therefore
the given data is good enough to run factor analysis
3. The studied variables affecting customer satisfaction in airline industry
can be summarized and categorized in two components mainly hygiene
and hospitality factors.
4. We will use rotated component matrix components as given variables fit
properly under hygiene and hospitality factors.
5. Hygiene factor explains 41.45% of variance in customer satisfaction in
airline industry
6. Hospitality factor explains 25.5% of variance in customer satisfaction in
airline industry
7. Total 67% of variance in customer satisfaction is explained by hygiene and
hospitality factors

8.3. Chi square test

1. Purpose of travel vs. Airfare

H0: There is no relationship between purpose of travel and airfare

H1: There is relationship between purpose of travel and airfare

As Pearson p value is 0.777 which is greater than at 0.05 so there is no

relationship between purpose of travel and airfare

2. Frequency of air travel vs. Airfare

H0: There is no relationship between frequency of travel and airfare

H1: There is relationship between frequency of travel and airfare

As Pearson p value is 0.935 which is greater than at 0.05 so there is no

relationship between frequency of travel and airfare

3. Onboard entertainment vs. Frequency of Air Travel

H0: There is no relationship between frequency of travel and onboard
entertainment services provided
H1: There is relationship between frequency of travel and onboard
entertainment services provided

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As Pearson p value is 0.537 which is greater than at 0.05 so there is no
relationship between frequency of travel and onboard entertainment
services provided

4. Discounts vs. Favourite domestic airline

H0: There is no relationship between favourite domestic airline and

discounts provided
H1: There is relationship between favourite domestic airline and discounts
provided

As Pearson p value is 0.313 which is greater than at 0.05 so there is no

relationship between favourite domestic airline and discounts provided

5. Frequency of air travel vs. discounts

H0: There is no relationship between frequency of air travel and discounts

provided
H1: There is relationship between frequency of air travel and discounts
provided

As Pearson p value is 0.609 which is greater than at 0.05 so there is no

relationship between Frequency of air travel and discounts

8.3.1 Chi square test summary

Factor 1 Factor 2 Pearson chi result Concl

square value
Purpose of travel Airfare 0.777 Retain Hull No relatio
hypothesis between f
Frequency of travel Airfare 0.935 Retain Hull No relatio
hypothesis between f
Frequency of travel Onboard services 0.537 Retain Hull No relatio
hypothesis between f
Favorite airline Discounts 0.313 Retain Hull No relatio
hypothesis between f
Frequency of travel Discounts 0.609 Retain Hull No relatio
hypothesis between f

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9. Conclusion

The factor analysis shows that the data obtained is significant to run the
test. All the factors have been clubbed in into two components namely
hygiene and hospitality. The customer satisfaction is highly related to
hygiene factors compared to hospitality factors

The chi-square test shows that there is no significant relationship between

the two factors tested. This may be due to the fact while filling out the
survey the respondents didnt linked the questions to the preceding and
the succeeding questions and hence they didnt saw any relationship
between the factors

10. Limitation
1. We have restricted the study to the specific age groups

2. The sample size is true representation of the population and the

survey has been restricted to specific coverage

3. All the data has been collected from the tier 1 city

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11. References
1. Rana Shehadeh, Ayman Bahjat Abdallah and Mahmoud Maqableh
(2015), Investigating Critical Factors Affecting the Operational
Excellence of Service Firms, Journal of Management Research ISSN
1941-899X 2016, Vol. 8, No. 1

2. zlem Atalik, (2007),"Customer complaints about airline service: a

preliminary study of Turkish frequent flyers", Management Research
News, Vol. 30 Iss 6 pp. 409 419

3. R Archana and Dr. M.V. Subha (2012) STUDY ON SERVICE QUALITY

AND PASSENGER SATISFACTION ON INDIAN AIRLINES, International
Journal of Multidisciplinary Research Vol.2 Issue 2, February 2012, ISSN
2231 5780

4. Rajat K. Baisya R. Sarkar, (2004),"Customer satisfaction in the service

sector: a case study of the airline industry", Journal of Advances in
Management Research, Vol. 1 Iss 2 pp. 73 79
5. Dr.Makarand Upadhyaya (2012), CUSTOMER SATISFACTION
MEASUREMENT IN AIRLINE SERVICES: AN EMPIRICAL STUDY OF NEED
GAP ANALYSIS, International Journal of Management and Strategy
(IJMS) 2012, Vol. No.3, Issue 5

6. Usman Khan1 and Noreen Khan (2014), Customer Satisfaction in

Airline Industry, IPEDR. 2014. V76. 12

7. Dipa Mitra (2013) Passenger Service Quality Dimensions with Respect

Toindian Air Travel, Global Journal of Management and Business
Studies. ISSN 2248-9878 Volume 3, Number 2 (2013), pp. 159-162

8. Hokey Min , Hyesung Min , (2015) "Benchmarking the service quality of

airlines in the United States: an exploratory analysis", Benchmarking:
An International Journal, Vol. 22 Iss: 5, pp.734 751

Google form link to the Questionnaire

http://bit.ly/2jrqpc3

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