Elliott 1993- Service Quality In The Airline Industry.pdf

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Service Quality in the Airline Industry Kevin M. Elliott & David W. Roach

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Assistant Professor, School of Business, Arkansas Tech University, Russellville, AR, 72801 Published online: 05 Nov 2010.

To cite this article: Kevin M. Elliott & David W. Roach (1993) Service Quality in the Airline Industry, Journal of Professional Services Marketing, 9:2, 71-82, DOI: 10.1300/J090v09n02_06 To link to this article: http://dx.doi.org/10.1300/J090v09n02_06

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Service Quality in the Airline Industry: Are Carriers Getting an Unbiased Evaluation from Consumers?

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Kevin M. Elliott, PhD David W. Roach, PhD

ABSTRACT. This article identifies a phenomenon that may be influencing passengers' evaluation of airline carriers. The results of this study suggest that consumers may systematically distort their evaluation of airlines. Perceptions about service quality attributes are seemingly influenced more by factors internal to the individual than by the actual attributes available for observation. Implications are also identXed that may aid airline executives to address the complex, yet critical issue of "systematic distortion."

INTRODUCTION Human perception may be guided by preexisting cognitive structures known as schema (Fisk and Taylor 1984). Schematic processing, however, may lead to systematic bias and perceptual errors (Kozlowski and Hirsch 1987). One type of error occurs when an individual distorts hisher evaluation of another person due to limited or erroneous information. For example, a person may bias hisher evaluation of another individual by distorting interrelationships among various behavioral characteristics. A person who is Kevin M. Elliott is Associate Rofessor in the Department of Marketing, Mankato State University, Mankato, MN 56002-8400. David W. Roach is Assistant Professor, Department of Business & Economics, Arkansas Tech University, Russellville, AR 72801. Journal of Professional Services Marketing, Vol. 9(2) 1993 O 1993 by The Haworth Press, Inc. All rights reserved

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viewed as considerate may also be viewed as honest, simply because of a preexisting belief that consideration and honesty go together. Thus, humans are not perfect in their evaluation of individual characteristics or behavior. They do make errors, and these errors are not random but systematic. Moreover, these systematic errors appear to be caused by conceptually misguided inferences (Shweder 1980; Kozlowski and Hirsch 1986).

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PURPOSE OF STUDY If people bias or distort their evaluation of human characteristics and behaviors, then it seems logical that consumers may bias or distort their evaluation of service quality attributes. It is reasonable to assume that many of the processes that affect person perception may also affect service quality perception. Elliott and Roach (1991) concluded that consumers may distort their evaluation of automobiles on the basis of beliefs about how certain automobile attributes should go together. This study seeks to evaluate the extent to which a consumer's evaluation of various service attributes is affected by that consumer's schematic representation of the service attributes. Specifically, this study investigates airline carriers in an attempt to determine if and to what extent consumers tend to bias their evaluation of airline carriers by distorting interrelationships among service attributes.

THE AIRLINE INDUSTRY The high price of fuel and the competitive nature of the airline industry have caused many airlines to search for ways to cut overhead costs. One strategy has been for some airlines to eliminate or at least stream-line services delivered (Gourdin 1988). However, this has seemingly resulted in an increase in consumers voicing their irritation, frustration, and general dissatisfaction with the quality of service currently being provided by the airline industry. A

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Gallup poll conducted for the American Society for Quality Control surveyed 1,005 consumers and found that the percentage of passengers who experienced poor airline service almost doubled from 1985 to 1988 (Fried 1989). As a result of deregulation in 1978, airlines had to begin to differentiate themselves from their competitors through service and price. However, it became apparent very quickly that price was the primary criterion many customers used to select an airline. In order io rem& competitivein air fares, airlines sought to lower operating costs. Initial strategies used to control costs were: (1) the establishment of self-feeding hub-and-spoke systems served by smaller, fuel-efficient aircraft, (2) reduction in the overall work force, and (3) labor agreements incorporating lower, nonunion wage scales (Gourdin 1988). Additional measures to cut costs were also needed by most airlines. As fuel costs began to rise, a further burden was placed on an already financially weak industry. Airlines then turned io the reduction or elimination of a number of customer services that had been expected by the flying public in the past. Services such as checked baggage, in-flight meals, movies, and frm drinks'were either eliminated or reduced. This resulted in a gradual reduction in service quality as airlines continued to emphasize low fares at the expense of services delivered. Common complaints directed at airlines today revolve around baggage handling, delayed flights, missed connections, reservation handling, oversales, problems with refunds, and endless lines at airport ticket counters and gate areas (Bolton and Chapman 1989). Much of the complaints concerning baggage handling and delayed flights are related to the hub-and-spoke method of operation which concentrates most aircraft activity into a limited time period during the day (Gourdin 1988). Most of the delayed flights at major hubs result from scheduling too many flights during the same time period in an attempt to meet customer demand. In addition, the hub-andspoke system means that baggage must be transferred from one plane to another, which tends to increase the likelihood of loss or damage. Bolton et al. (1989) identified three dimensions of customer complaint behavior in the airline industry. The three complaint

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dimensions appear to reflect distinct ways in which the customer interacts with the airline service providers. One dimension involves "operational problems" such as flight cancellations and delays, oversales, and problems with reservations, boarding, baggage, and customer service. These problems atise during the standard service contact (flight). A second dimension reflects "marketing problems" such as information on fares and other advertising. These problems concern facilitating services and generally occur prior to &e flight. The third dimension reflects "special situation uroblems" such as denial of credit and availabilitymoftour packages. The special situations concern services in nonstandard service contacts.

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SYSTEMATIC DISTORTION HYPOTHESIS The "systematic distortion" hypothesis states that under difficult memory conditions (i.e., situations where limited information is known), respondents on interpersonal checklists, personality inventories, and behavior rating questio~airessystematically distort their evaluations of other people. This distortion is due to: (a) preexisting ideas of "what goes with what," (b) retrieving conceptually affiliated memory items which are easier to remember than individual memory items, or (c) both. (Shweder and D'Andrade 1979). Figure 1illustrates the b&c assumption of systematic distortion. An individual rating/recalling the behavior of another is influenced by two types of informationr(1) the actual behavior of the person, and (2) the observer's own implicitly held theories or conceptualizations concerning what types of behaviors "go together." The systematic distortion hypothesis predicts that the latter will have the greater influence on human perception. As Figure 1depicts, the systematic distortion hypothesis predicts a high correlation between rated behavior and conceptual similarity of behavior. By contrast, a low correlation is hypothesized between actual behavior and rated behavior. Moreover, a low correlation is also hypothesized to exist between actual behavior and conceptual similarity of behavior. The systematic distortion hypothesis suggests that perceptions

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PIQURe 1 SYSTEMATIC DIQTORTION Conceptional S i m i l a r i t y o f Behavioral Characteristics

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Lou C o r r e l a t i o n

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are influenced more by factors internal to the observer than by the actual data available for observation. Rated behavior is almost entirely under the influence of preexisting conceptual schemas. Moreover, rated behavior corresponds to actual behavior only to the extent that preexisting conceptual schemas happen to coincide with actual behavior. Hence, to the extent that the correlations among variables derived from memory-based ratings are highly correlated to the pattern of conceptual similarity judgments, but not highly correlated to the pattern of correlations derived from actual data, the systematic distortion hypothesis is supported (Shweder 1975).

METHODOLOGY In order to test the systematic distortion hypothesis with respect to consumer evaluation of service quality of airlines, the ten largest U.S. airline carriers were selected to be evaluated. The ten carriers selected were Delta, Southwest, American, United, Northwest, USAir, TWA,Continental, Pan Am, and Eastern. Since the systematic distortion hypothesis states that individuals

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bias their evaluations in situations where limited information is known, respondents who have flown on a limited basis would appear to be ideal. Given these sampling requirement, college students were deemed appropriate respondents. Two different questionnaires were administered to 176 undergraduate business administration students at an upper midwest miversity. Both questionnaires used a seven-point scale. In the first questionnaire (See Appendix A), respondents were asked to rate the ten airline carriers with regard to six service attributes. Attribute selection was based upon previous research by BoLton et al. (1989) and Consumer Reports, (July 1991). The six attributes selected are identified below: 1.On-time performance-(arriving at final destination within 15 minutes of schedule). 2. Baggage handling-(experiences with waiting for luggage and lost or damaged bags). 3. Food quality-(taste and variety of food provided). 4. Seat and leg room-(roominess of seats and isles). 5. Check-in service-(experiences with waits at the check-in counter, obtaining flight information, and being bumped). 6. In-flight sewice-(friendliness and competence of flight attendants and pilots). The second questio~airewas used to measure the perceived conceptual similarity of the six service attributes of airlines (see Appendix B). Each question concerning pairs of attributes was asked twice, with the order of the attributes alternating. For example, one set of questions consisted of: (1) "If an airline carrier has excellent on-time performance, how likely is it also to have excellent check-in service?" and (2) "If an airline carrier has excellent check-in service, how likely is it also to have excellent on-time performance?" The mean conceptual similarity rating for each of the 15 possible combinations for the six service attributes was then calculated to determine an average response rating of the two questions. Actual assessment of the six service attributes for the ten airline carriers was obtained from Consumer Reports, (July 1991). More than 140,000 respondents provided data to Consumer Reports on

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approximately 250,000 domestic flights between January 1989 and May 1990. Consumer Reporis then compiled ratings of airlines across various service attributes. The ratings, therefore, were not based on actual testing of the various service attributes by Consumer Reports, but rather on experiences as reported by 140,000 passengers. In order to determine the amount of systematic distortion that resulted from the evaluation of the airline carriers, correlation analyses were used. One correlation coefficient measured the extent to which the array of actual service attributes co-varies with the array of rated service attributes. Another correlation coefficient measured the extent to which the array of actual service attributes co-varies with the array of conceptual similarity of service attributes. The third coefficient measured the extent to which the array of conceptual similarity of service attributes co-varies with the array of rated service attributes.

RESULTS The resulting correlation coefficients of the three variables (actual, rated, and conceptual similarity) are shown in Figure 2. The results show a very strong positive correlation (.704)between consumer rating of a&butes-&d the perceived ~ o n & ~ t " asimilarity l of those attributes. Bv contrast. the two remaining correlations are low and nonsignificak The corkation between &ual and conceptual similarity ratings was - .008. A similar negative and nonsignificant correlation ( - .031) was found to exist between actual and rated similarity of attributes. The fmdings indicate that a respondent's evaluation of airline service attributes may be biased by preexisting ideas as to what attributes tend to go together. A respondent's rating of the six service attributes has a much higher correlation to the conceptual similarity of the attributes than to the actual attributes. Therefore, a respondent's evaluation of an airline carrier appears to have been influenced more by conceptually misguided inferences than by the actual data available for observation. As hypothesized, respondents systematically distorted their evaluations of airlines.

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SYBTEMATIC DIBTORTION MODEL: AIRLINE BEWICE PERCEPTION ~

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Conceptual Bimilarity Of sentice Attributes Time Bag Plight Check Room

3.22 3.56 4.68 3.27 3.58

4.95 4.32 5.32 3.26

4.30 5.02 3.28

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Food Time Bag

Rated Attribute Bimilarity Time Bag Plight Cheok Room

4.67 4.11

Flight

3.21

Cheok

Actual Attribute Bimilarity

Time .579 Bag .667 - 7 2 5 Blight .444-.089 .a29 Cheek .373 . 5 9 8 ,639 , 0 0 1 -569 Room .250 a535 ,286-.167 .559 Food Time Bag Plight Cheok Pond Time Bag Plight Chenk .461 -405 -499 .458 ~51

.779 .547 .555 , 6 4 9 .698 .a55 6- 5 3 2 .SO6 .522

'significant at the .O1 level

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Kevin M . Elliott and David W.Roach

MAGNITUDE OF DISTORTION OF ATTRIBUTE RELATIONSHIPS Further data analysis was conducted in order to determine the level of distortion among interrelationships of the six service attributes for the ten airline carriers. Table 1 identifies the absolute differences between rated and actual similarity of the six service attributes. Correlation coefficients are compared to examine which attribute xelationships appear to be distorted the most. The results indicate that relationships between some airline services m severely distotted. As shown in Table 1, the relationship between on-time performance and in-flight service was distorted by respondents. The rated similarity was a positive and moderately strong correlation (-547). However, the actual similarity indicates a weak and negative correlation (- .089). The resulting absolute difference in correlation coefficients was .636, which represents a fairly high magnitude of distortion. Respondents felt that airlines which provided good ontime performance also provided good in-flight service. The actual ratings from Consumer Reports indicate a different relationship may exist between this two service attributes. Airlines that provide good on-time performance do not generally also provide good inflight service and vice versa. TABLE 1 LEVEL OF DISTORTION OF AIRLINE SERVICE ATTRIBUTES eervioe Attributes

Rated similarity

Actual similarity

Absolute Differenaee

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A similar distorted perception was found to exist between in flight service and roominess of the seats and isles. The absolute magnitude of difference in rated and actual correlation coefficients was .689. Likewise, a .854 difference was found to exist between the rated and actual correlation coefficients of check-in service and in-flight service This relationship was found to be the most distorted. There is v b a l l y no relationship between quality of check-in service and quality of in-flight service (.001). Respondents, however, perceived a very strong relationship (355) between this two attributes.

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DISCUSSION AND IMPLICATIONS

The fiidings of this study suggest that consumers may distort their evaluation of airline carriers on the basis of their beliefs about intemlationships of service attributes. Perceptions about service quality attributes are seemingly influenced more by factors internal to the respondent then by the actual attributes available for observation. If systematic distortion is in fact occurring, it is critical that airline executives seek to understand thii phenomenon. Consumer perceptions may impact future sales, market shares, and profit for airline caniers. Consumer evaluations of airlines ideally should be based upon unbiased information. Airlines may be well advised to stop and consider many consumers, who fly only periodically and have l i i itcd information to draw upon, evaluate carriers with respect to service quality. A logical first step would be to survey passengers to dcte.rmine if systematic distmion exists. If results indicate that passengers may be biasing their evaluations, then carriers should seek to minimize this distortion through informative advertising and other promotional tools. It would be remiss, however, not to suggest that systematic distortion may actually help some airlines. In fact, some airlines may even seek to encourage and enhance distorted perceptions of their service provided. For example, passengers may intuitively associate check-in service and in-flight service as having a strong positive relationship. The results of this study, however, suggest that there is virtually no relationship between these two service attributes. Airl i i may reinforce passengers' misconceptions of the relationship

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between check-in service and in-flight service through omission by not taking action to dispel the distorted perception. This, in turn, may help airlines which emphasize excellent check-in service at the expense of in-flight service. This study has dealt only with airline carriers. Additional research is needed to investigate other professional services with respect to systematic distoflion. It is hoped that this study will provide a framework for additional research and discussion on the topic of systematic distortion. Increased understanding of systematic distortion of service attributes should aid companies in developing strategies that will allow consumers to evaluate and select professional services from a more informed perspective.

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REFERENCES Bolton, Ruth N. and Randall G. Chapman (1989). "The Structure of Customer Complaint Behavior in the Airline Industry," Developments in Marketing Science, 12,546-551. Consumers Reports, July 1991, Mount Vernon, NY: Consumers Union of United States, Inc., 462-469. Elliott, Kevin M. and David W. Roach (1991). "Are Consumers Evaluating Your Products The Way You Think and Hope They Are," Journal of Consumer Marketing, 8, (Spring), 5-14. Fisk, S.T., and S.E. Taylor (1984), Social Cognition. New York: Random House. Fried, Lisa L (1989). "Continental A i r l i i : Shooting For The Ultimate Service," Management Review, (May), 46-52. Gourdin. Kent N. (1988), "Bringing Quality Back to Commerciai Air Travel," Transportation Journal. (Spring), 23-29. Kozlowski, Steve, and Michael H i h (1986), "Job Knowledge, Rate Familiarity, Conceptual Similarity and Halo Error: An Exploration." Journal of Applied Psychology 71: 45-49. and (1987), "The Systematic'Distortion Hypothesis, Halo, and Accuracy: An Individual-Level Analysis." Journal of Applied Psychology 72: 252-261. Shweder, Richard A. (1975), "How Relevant Is An Individual Difference Theory of Personality." Journal of Personality 43: 455-483. and Roy G. D'AnQade (1979), "Accurate Reflection or Systematic Distortion? A Reply to Block, Weiss, and Thome." Journal of Personality and Social Psychology 37: 1075-1084. (1980). "Pacton and Fictions in Person Perception: A Reply to Lamiell, Foss and Cavenee." Journal of Personality 48: 74-81.

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Appendix A AIRLINE CARRIER EVALUATION (Abbrnviated) Please rate UNITED AIRLINEB on each of the following service characteristics by placing an X on the appropriate blank. 2 3 4 5 Excellent On-time 1 - - - - Reliability Poor Baggage Excellent Baggage -- - - - Handling Handling Excellent Seat Poor Seat Leg Room -g Room - - - - - - Poor Quality Excellent Quality -- - - of Food of Food Poor Check-in Excellent Check-in service -----service Poor In-flight Excellent In-flight - - --service service

Poor On-time Reliability

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A total of 10 airline carriers were rated by respondents. Appendix B AIRLINE CARRIER EVALUATION (Abbreviated) Please evaluate how "likely" the following relationships of airline aerviae characteristics are by placing an "X" on the appropriate blank. 1.

If an airline has excellent check-in service, how likely is it also to have excellent baggage handling procedures? 1 2 3 4 5 6 7 very Very Likely Unlikely

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2.

If an airline has excellent in-flight service, how likely is it also to have excellent quality of food? 1 2 3 4 5 6 7 very Very Likely Unlikely

3.

If an airline has excellent on-time performance, how likely is it also to have excellent seat and leg room? 1 2 3 4 5 6 7 Very Very Likely Unlikely

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The complete questionnaire included 3 0 statements (15 paired comparisons asked twice with order of attributes being reversed).