ABSTRACT
This study was conducted to examine the influence of service quality on customer satisfaction in the airline industry: The case of Lagos International Airport. The specific objectives were to identify the airline service quality dimensions toward satisfy the customer, to determine the airport facilities quality as observed by customers, to determine the pricing as observed by customers, and lastly to determine the importance of customer satisfaction passengers transportation industry at Lagos Airport. This study employed a simple correlation research design targeting 100 respondents, were by a clustering sampling was drawn from the airlines namely Qatar Airways, Nigerian Airlines, Kenya Airways, KLM and Precision Air customers. The primary data was collected using close ended structured questionnaires. The data was analyzed using SPSS V22, where by descriptive results were presented as frequencies and percentages. The results show that more than 70% of customers at Lagos International Airport were satisfied with the intangible service provided by airlines in terms of service dimensions, they trust the airlines and are ready to recommend others to use that airlines but they requested improvement of airport facilities and decreasing of airline. It is recommended that the more focus be on improving airport facilities for customer conveniences and airline to reduce prices. This will help to attract more customers to travel through Lagos International Airport and build strong airline market industry in Nigeria particularly. This will result in developing our capital and boosting Nigeria economy.
CHAPTER ONE
INTRODUCTION
• Background to the Problem
The delivery of best services to every passenger is the main competitive benefit for any airline in order to get profit and sustainability for growth (Chen, 2008). Of recent days, the airline industry operations have increase challenging and airlines have turned to focus on service quality to increase service satisfaction. An organization been uluenced by service quality environments for competitive advantage in order to retaining customers and market share as whole (Park, 2004).
Provision of optimum quality service to airline passengers is of utmost importance for the existence of the industry, so carrier officials should be aware of what passengers expect from their services. In other sectors, studies suggest that customer satisfaction and service quality judgment entails customers comparing their prior expectations to actual service performances. Air haulage has grown tremendously in the last couple of decades due to the expansion of the world economy, technological advancement, globalization and deregulation.
The International Air Transport Association (IATA, 2012) forecasted the total global traffic demand in air transport to increase from 2.8 billion passengers in 2011 to 3.8 billion in 2016 at an average annual growth rate of 5.3 percent for both domestic and international services. International markets are expected to grow from 1.11 billion to 1.45 billion passengers. Despite the impressive growth, the business of air transport is described as fragile, characterized by low profit margins, high uncertainty, a sensitivity to economic conditions, and is very competitive and capital intensive (Doganis, 2006).
For the meantime, critical observation by Graham (1995) claimed that the absence of market opportunities, heavy indebtedness, competition, and restrictive bilateral agreements all combine to impede the development of Africa’s air transport industry, which may well be detrimental to wider concerns of economic development, particularly tourism, trade and other benefits stemming from air transport. This has motivated the need to scrutinize the arguments put forward by conducting an in- depth study of one African country.
Park, et al (2008) posits that, paying attention to service quality should be the practice of today if airlines aspire to improve market share and further enhance financial performance in both domestic and international markets. A compulsory procedure should be followed by airlines in order to have valid and reliable measures to better recognize the variables likely to have a bearing on the service quality offered by their organizational most perceptions and expectations of airline passengers. Indeed, air travel is driven by globalization and liberalization and become the fastest-growing market in the world.
In case of Lagos International Airport, airport is operated by Lagos Airports Development Company (Kadco), a development company owned by the government of Nigeria. The government has emphasize on service quality to increase passengers’ satisfaction and the firm’s market share for years in order make the airport more effective and competitive. The number of airlines operating internationally into and out of Nigeria has not been constant over recent years. Tourism Intelligence and Commonwealth Development Corporation (2008) and World Bank Report (2010) had it that, the British Airways which was operating between Nigeria and United Kingdom route withdrew due to limited demand, a favored incumbent state-owned Air Nigeria and high operating costs for example landing fees and aviation fuel. Nevertheless, the report indicates that 80% (World Bank Report, 2010) of government officials did not use Lagos Airport citing among other reasons, minimum services offered and unpredictable time schedules.
On a lighter note, with a vision to develop the airport into a regional and international hub, Kadco has spent in the past 15 years a significant amount of its revenues for the growth of airport’s operation performance which included all areas like surfacing the runway, setting up of automatic information system, weather sites, developing cargo handling services and also upgrading the fire rescue services and security systems to meet International Civil Aviation Organization standards. Ostrowski, O’Brien and Gordon, (1993) in a study on customer retention discovered that airline customers could be retained by being provided with high quality services. Providing a superior service quality should, therefore, be the main agenda for all airlines in order to remain competitive in the market.
Conversely, many factors affecting customer’s satisfaction with services provided by companies. Service provided to customers can always be tangible or intangible. The service-related equipment, tickets, airport facilities, in-flightmagazines, staff uniforms are considered as tangible factors which can boost customer’s satisfaction in airline services. The value of tangible factors is easy to improve and measure since they are physical material. However, it is challenging to measurethe quality service when considered and taking into account as intangible factors (Heesawat, 2005). These are considered as personal needs and expectations one cannot touch or patented. Expectations are differ from one person to another. Word of mouth can influence consumer’s expectations thus thegreatest way is always to deliver the excellent service.
Study and development projects should be more regularly carried out in a service organization to maintain peace with how customers feel concerning the service (Anichkul, 2010). The SERVQUAL instrument (Parasuraman, et al., 1985) has been considered one of the effective tools used to assess a company’s service quality as to see if organization needs to deliver excellent service to customers and see which service areas need to be improved. It is against this background that this research seeks to evaluate the service quality, value and satisfaction of Lagos International Airport.
• Statement of the Research Problem
Air transportation in Nigeria faces multiple challenges including service delivery which resulted to financial restraints and many customers considered flying by air
only for international travels. In Africa many carriers drop as compared to other airlines in Africa, for example South Africa Airways, Kenya Airways and Nigerian Airlines keep growing in the airline industry market. Although it is common with developing countries in Africa, particularly Nigeria has relatively small air transport market.
According to Lagos International Airport website (2016), the company has direct flight connections to Europe, the Middle East and several destinations on the African Continent using different airlines. In July2013, Lagos Airport was the proud overall winner of the Routes Africa Airport Marketing Award voted for and judged by the airline industry. Winning the award was a great achievement that the company was proud of but also an incentive to keep improving its service by working together with all partners. Despite the touted significant strides, air transportation in Nigeria faces multiple challenges including service delivery which resulted to financial constraints. Today, the ATC is limping with only very few operational aircraft. Private airline companies have dominated the entire domestic market share. From 1977 to 2000, domestic passenger traffic for both scheduled airlines and charters grew substantially from 86,000 in 1977 to 562,785 passengers in 1999. The number of operators increased significantly from 22 in 1996 to 29 in 1999 (TCAA, 2011).
There are 66 government run airports and airstrips in Nigeria with scheduled flight to some of the state capitals. Following this backdrop, not only experienced by Lagos International Airport but also other smaller airlines in Africa, the Lagos International Airport needs also to turn into its service as area of focus to pull more customers and remain competitive in the market. In the same vein, what appears critical also is to ensure that the airline has regular service to the relevant hubs and create more code shares and join one of the alliances although participation fees could be another challenge for smaller airstrips like Lagos International Airport.
• Objective of the Study
The objective of this research study is to examine the result of services quality on customer satisfaction passengers transportation industry and directed by the following objectives;
• General Objective
The research general objective for this study is to explore the relationship between service quality and its effects to customer satisfaction in passengers transportation industry.
• Specific Objectives
• To identify the airline service quality dimensions toward satisfy the customer at Lagos Airport
• To determine the airport facilities quality as observed by customers at Lagos Airport.
• To determine the pricing as observed by customers at Lagos Airport
• To determine the importance of customer satisfaction passengers transportation industry at Lagos Airport
• Research Questions
The problem measured in this research study is to examine services quality on customer satisfaction passengers transportation industry. Both general and specific research questions will be addressed.
• Specific Research Questions
• How do customers perceive airline service quality dimension toward satisfy customers passengers transportation industry at Lagos Airport?
• How do customers perceive airport facilities quality at Lagos Airport?
• How do customers perceive airline pricing at Lagos Airport?
• What are the importance of customer satisfaction passengers transportation industry at Lagos Airport
• Significance of the Study
This study will help all stakeholders and airline management at Lagos International Airport to creating awareness and implementing the corrective measures for better performance. Also the results will help in creating strategic decisions plan to resolve all challenges this study would disclose hence increase customers loyalty and airline profits. This study will also help other researcher to gain skills and make proper judgments in practical field in verifying the knowledge alongside establishing research principles in terms of service quality and customer satisfaction in this competitive industry or any other business organization. The study results will help policy makers withpassengers transportation industry in making decisions during policy formulation and implementing that will improve service quality in line with customer expectations. The findings will also help in creating competitive environment for targeting profits passengers transportation industry.
• Scope of the Study
This research study was conducted at Lagos International Airport in Lagos Region, the second largest airport in Nigeria,where the researcher is set to examine how customers perceive services in Qatar Airways, Kenya Airways, KLM, Nigerian Airline and Precision Air.This area was selected to represent customer’s satisfaction from service quality passengers transportation industry.
• Organization of the Study
This area gives summary of each chapter for the dissertation work. Chapter one consists of introduction of the study, background of the research, statement of the research problem and in additional to these are main objective, specific objectives, research questions. Also significance and scope of the study have been determined. Chapter two includes of the work of literature review in related to service quality and customer satisfaction. All the terms and conceptual definition related into the two components presented. After analyzing various study, research gaps identified also conceptual framework and theoretical framework described.
Chapter three describes research methodology and data collection to be used in the research. The research study is quantitative by nature hence the research design was survey hence method of data collection was done using questionnaires in order to meet the study objective. Chapter four dealt with data gathering, data analysis, findings and discussions. This included data collection through personal interviews. Chapter five is the last in this dissertation, which consists of the summary, conclusion and recommendations and provides answers to the research questions.
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