impacts of low-cost airlines on customer satisfaction of traditional airlines · 2020-05-27 · 2...

Impacts of low-cost airlines on customer

satisfaction of traditional airlines

Amanda Cristina Nascimento

Proposal for Project Work report presented as a partial

requirement for obtaining the Master’s degree in Statistics

and Information Management, with a specialization in

Marketing Research and CRM.

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NOVA Information Management School

Instituto Superior de Estatística e Gestão de Informação

Universidade Nova de Lisboa

IMPACT OF LOW-COST AIRLINES ON CUSTOMER SATISFACTION OF TRADITIONAL

AIRLINES

by

Amanda Cristina Nascimento

Proposal for Project Work report presented as a partial requirement for obtaining the

Master’s degree in Statistics and Information Management, with a specialization in

Information Analysis and Management.

Advisor: Professor Pedro Coelho, PhD

November, 2018

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ABSTRACT

Purpose: With the increasing of low-cost companies on the Portuguese market, This project

work wants to study some aspects of customer satisfaction in the field of aircraft, most

precisely in the sense of the impacts that low-cost airlines can do to the satisfaction of

traditional airlines customers.

Design/methodology/approach: This project will be developed using the Market Research

techniques for the data collection and the analysis. For data collection will be used, a two-

step technique combining a Probabilistic method with a Non-Probabilistic Method, using web

survey and airport survey. For the analysis will be used statistical analysis with factor

analysis for highlight the factors of satisfaction and a model using PLS to test a model based

on the European Customer Satisfaction Index framework to understand better the customer

Satisfaction.

Findings: The Customer satisfaction is more affected by the services and the quality

perceived than the competition.

Research limitations/implications: Customer Satisfaction and loyalty is something that

depends of several factors, while this study focus only in the impact of the low-cost

companies, a future research could access some more detail about the impacts regarding

the type of customer.

Practical implications: The impacts of a low-cost company can bring to a traditional

company need to be acknowledging to do more focused marketing and better the products

to keep their customer satisfaction or even new ways or marketing strategies to regain the

market share.

Originality/value: While some studies focus on customer satisfaction of low-cost companies

only, competition between the two types of carries and the general impact on the market.

This study focused on the impacts on the customer satisfaction when a low-cost company

join in the airlines market.

KEYWORDS: low-cost airlines; market research; traditional airlines; Portugal; customer

satisfaction

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INDEX

1. INTRODUCTION ........................................................................................................... 4

1.1. BACKGROUND AND PROBLEM IDENTIFICATION .......................................... 4

1.2. STUDY RELEVANCE AND IMPORTANCE ......................................................... 5

1.3. PROJECT GOALS ................................................................................................ 6

2. METHODOLOGY .......................................................................................................... 8

2.1. TARGET POPULATION ....................................................................................... 8

2.2. SAMPLE PLAN ..................................................................................................... 8

2.3. SURVEY INSTRUMENTS ..................................................................................... 9

2.4. DATA COLLECTION PROCESS .......................................................................... 9

2.5. QUALITY CONTROL ............................................................................................ 9

2.5.1. Pilot Test ......................................................................................................... 10

2.5.1. Data Collection ............................................................................................... 11

2.6. STATISTICAL ANALYSIS .................................................................................. 20

3. RESULTS AND DISCUSSION .................................................................................... 21

3.1. FACTOR ANALYSIS ........................................................................................... 21

3.2. PLS-SEM ............................................................................................................. 23

4. CONCLUSION ............................................................................................................. 27

5. APPENDIX I ................................................................................................................ 29

6. APPENDIX II ............................................................................................................... 32

7. APPENDIX III .............................................................................................................. 43

8. APPENDIX IV .............................................................................................................. 44

9. APPENDIX V ............................................................................................................... 50

10. BIBLIOGRAPHY ...................................................................................................... 53

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1. INTRODUCTION

Since the Low-Cost Airlines has been created in the US, a new possibility of low prices to

flight encourage the customers to pay less and do not have some services rather than pay

more for a regular company. Nowadays, some of these companies are having a big growing

reaching more airports in Europe, especially in Portugal. With this growth, some traditional

airlines companies are facing a change in the customer's needs and satisfaction since they

can have the basics transportation with a lower rate. This research has as goal discover the

impact that low-cost airlines bring to customers satisfaction of traditional airlines.

The paper delivers an important contribution to understand and highlight the impacts that

low-cost company bring to a traditional airline regarding the customer satisfaction. The

marketing and product design of the traditional companies can understand better the

customer needs with basic kind of service and create better solutions to the expectation of

the client’s needs.

The paper is organized as follows, The Introduction that explain the background and

problem identification, the relevance of the study and the project goals. The following section

describes the methodology used for the data collection and the statistical analysis. The

results and the discussion on the main finding are presented on the third section. And the

conclusion provides the discussion of the results and a motivation for further research and

the limitations of the current research.

1.1. BACKGROUND AND PROBLEM IDENTIFICATION

The first low-cost airline appears in the US at 70’s with the goal of offering low fares for the

customers. In Europe, these companies only show up in the 90’s after a deregulation of the

market, in the UK and past some years those companies spread all over Europe. In

Portugal, the low-cost airlines have an operation in Faro, Funchal (Madeira), Lisbon, Ponta

Delgada (Azores) and Oporto. (Miranda, 2016)

Recently the low-cost airlines have been getting more attention and more success over

regular companies, because of their fast growth. For example, in the first trimmest of 2017,

in the Oporto Airport, Ryanair had 40% of the market share between January and March and

the EasyJet increase from 8% to 14% in the same period, in the other hand TAP decrease in

8% compare with the past year (ANAC, 2017).

Also, the passengers have more options of airports available for them thanks to two kinds of

carrier’s models: hub-and-spoke and point-to-point. Hub-and-spoke carriers is a model

where networks traffic is concentrated in large airports named as hubs that connect with

small airports named as spokes. The Point-to-point model is network airports that work as

nodes where the airlines can go straight to the destination without going to a central hub, this

model it’s mostly used for Low-Cost Carriers (LCC). In this case, the point-to-point model

happens to be cheaper than the hub-and-spoke model. (Thelle, 2017)

According to with Skeels (2005), there are some specific characteristics of the concept of

low-cost airlines, such as: focus on the minimal costs and prices and maximal efficiency,

short-haul flights, using secondary and regional airports, single fare class, point to point

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service, direct service between regions, no service onboard aircraft, one type of aircraft in

the fleet, younger and environmentally-friendly fleet, low operative costs.

To be able to decrease the fares, the low-cost model aims to minimize the services at the

flight (Wittmer, 2011) so they exclude services as food and drink. In addition, other

guidelines for business use, as use a specific kind of airplanes, high utilization of the crew

and sales made directly the passengers during the flight. On the other hand, the passengers

really accept this condition of minimal services offer in this (Han, 2013) rather pay a regular

flight to a short distance and have all those services included.

For Habib (2017), quality has related expectations of the customer, if the customer has low

expectations and find a good service, the quality for them is great. If the customer has big

expectations and the service is just ok, or in other words, they expected more, the quality is

just ok. In this sense, when the customer goes by Ryanair for example, they do not expect

much quality, because all the communications of the company are a focus on this simple

service, and then the customer flow by Ryanair thinks that the service was not that bad, and

have quality. On the other hand, when the customer goes by TAP, they expect much

services, comfort, food and find with upper expectations, putting the quality down when

compared with Ryanair.

The traditional model of airlines usually states companies, which means that the state does

the management of the company also, they do another kind of transports such as mail

couriers, bus, and rail lines. Some traditional airlines with this flag are TAP, British Airways,

Iberia and Air France. Those companies offer the full service that includes food, a bigger

space between the seats, long-distance flights, and so on.

Some others studies were made to check the impacts of the low-cost companies in several

fields, as the local market (Lourenço, 2007/2008), development of the airports (Macário,

Viegas, & Reis, 2007) , competition and European aircraft (Thelle, Airport competition in

Europe, 2017). The study of Lourenço reveals an impact in the fares and demand when the

low-cost company brings a new route, the ANA, that translates as Airports and Air

Navigation, decided low the fare as an incentive which brings an advantage for the low-cost

company that works with a point-to-point logistics. Also shows that TAP suffers from the

entrance of low-cost companies in the market and to try to do something about it, TAP

decided to have a new model of more competitive fares with the loss of some benefits as

newspaper, food and checked baggage. The study about the development of the airports

(Macário, Viegas, & Reis, 2007) reveals that the EU has no control about the expectations

which has a risk of abuse of market power from the Low-cost companies. The study about

competition (Thelle, Airport competition in Europe, 2017) compares the behavior of two

types of logistic: point to point carriers, usually low cost, and hub-and-spoke carriers,

concluding that low-cost companies increases the share of traffic at airports of varied sizes

while traditional airlines try to cut costs in other ways such as switching routes, cutting jobs

or using temporary crews.

1.2. STUDY RELEVANCE AND IMPORTANCE

The impacts that the low-cost model can bring are many, including the customer satisfaction

of traditional airlines after trying the low-cost model. The low-cost model can use the point-

to-point way to work instead of the traditional airlines which use-to-use hub-and-spoke

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(strategic airports that allow a set of indirect flights to do a route). For this reason, sometimes

the customer had to do scales on the route of travel when with traditional airlines.

Since the traditional model States companies, the profit can be reinvested in the country.

When the customer satisfaction of traditional airlines are low, some impacts can be caused i.

e. profitability of the company that could cause some problems for the State and the local

companies. Keeping this in mind, it is important to know how much the impacts of this low-

cost model can bring to the country since the tourism in Portugal already represents 7% of

the PIB (Sic Noticias, 2017).

1.3. PROJECT GOALS

The main goal of this Project Work is described and understand the impacts that low-cost

airlines can cause to the satisfaction of traditional airlines customers, focused in Portugal.

For the traditional or legacy airline we are going to consider TAP, we are not going to use a

specific low-cost airline for this research. In order to achieving this goal, we will apply a

market research approach that is described in Methodology.

To achieve the main goal of this Project, the following specific objectives are defined:

Identify the factors for flight with TAP after try a low-cost company

Highlight characteristic that made the client choose TAP over a Low-cost company

Check the impacts of the TAP customer satisfaction after flying with the Low-cost

company

Some of the hypothesis that could be brought up with the goals of the project are:

H1. Trust makes a client prefer a traditional airline rather than a low-cost airline

In addition, because they are traditional companies, their employees also receive good

benefits. Low-cost airlines, for example, have fallen into the category of trust since there are

huge service strikes and flight cancellations because of dissatisfaction with the crew's

working conditions. The lack of confidence in whether the flight is going to stay or not, ends

up bringing insecurity to customers who end up opting for something more reliable, even that

is more expensive. (Jacobs, 2018)

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Image 1:Rynair strikes ( McGuire,2018)

Since December of 2017, Ryanair had more than 600 flights cancelled because of the strike

of the crew. The dates for the strike also were on holiday seasons for Europeans. Notice that

before that, Ryanair doesn’t have records about the strikes of the crew. (Feldman, 2018).

The profits of the company dropped because of the strikes and the negotiation about the

Brexit which would implies changes on the actual model. (McGuire, 2018)

H2. Quality a client prefers a traditional airline rather than a low-cost airline

As traditional airlines are better equipped, with reclining seats and more interior finishes,

making comfort an important item for quality of service.

The low-cost companies look for Standardized fleet to save in the entire process to be able

to have profits and still have low prices for the consumers. Normally to reach these

economies, the companies operate with single fleet type which generates savings in the

purchase of aircraft and facilitate and make cheaper the trainings of the crew. (Manuell,

2017).

H3. Comfort makes a client prefer a traditional airline rather than a low-cost airline

Low cost companies are cheap because they save money in a several stages of the

company, including when they customize the interior of the aircraft. They purchase the same

type of airplane with one aisle, to save money on the training of the crew also. The seats are

not reclining, and the legroom is short. (Manuell, 2017)

H4. Price makes a client prefer a low-cost airline than a traditional airline.

The passengers that look for low-cost carriers are interested on low fare and direct flights to

their destination. (Barrett, 2004). Cutting off the non-essential services, or what is called

"unbundling," makes possible to fly with low prices, and makes possible for passengers that

want or need specific services pay more for them specifically. This approach makes the

price be a plus of the low-cost companies once every passenger can customize their

experience paying more and having a low “base price”. (Ros, 2016)

Meanwhile, legacy carriers found it increasingly difficult to change their cost and operational structures fast enough to face such formidable cost-killers.

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H5. The Customer Satisfaction of TAP it’s affected on the quality of the service.

Since that for Habib (2017) the quality it’s related with the customer’s expectations and is

well know that the expectations regarding low-cost aircrafts are of basic transportation, it’s

would be easy to the customers have a higher expectation about TAP. If this service quality

is not meet, the customer satisfaction is going to prefer a low-cost company than a company

that sells a customer experience of flight and doesn’t deliver it.

2. METHODOLOGY

The proposed methodology is based on Market Research approach (Vilares & Coelho,

2005)), that includes data collection and data analysis. We first need to define our target

population of the research, sampling frame, sampling method, then apply the market

research and analyses the data collected in a way that some insights can show up and some

conclusions can be made.

2.1. TARGET POPULATION

The target population of this project is people between 16 and 60 years old that flow by low-

cost airlines and traditional airlines in the last year. The age was chosen because of the

legal minimum age to join in a survey. The participants need to have experience with both

types of flights because we want to compare the services to identify the impacts on the

customer satisfaction of the traditional airlines.

2.2. SAMPLE PLAN

The sample plan starts with the sampling frame, which is a list of all units that belong to the

target population; this way is possible to know how to reach them. In the case of this study,

do not exist a sampling frame, because we do not have access to all the people who flow

with both companies.

Since we do not have a sampling frame, is not possible to use a probabilistic method, but we

do have a list of all airports in Portugal that have a low-cost operation. Besides this, the

business of the airports remains some peculiarity, as the Oporto Airport incentive the low-

cost companies instead of the local company TAP with more competitive fares, helping the

power of the competitiveness with the traditional airline. Since we face this problem, and we

just want to study Continental Portugal, we will conduct the interview with flights from Lisbon

Airport.

To select the interviewees refers to passengers, a non-probabilistic method will be used, that

each individual unit does not have the same probability to be selected. There are some

approaches that can be used in this kind of method, as convenience sampling, judgmental

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sampling, quota sampling, itineraries sampling, snowball sampling and places of

consumption sampling - were the interviewee is chosen by the convenience. The approach

chosen in this project will be an online survey, which means that the selection will be by

convenience sampling.

2.3. SURVEY INSTRUMENTS

Once we have all the sample plan defined, we draw the questionnaire based on some

market research approaches, as use qualification questions to filter information only of our

target population, questions that evaluate decisions, and qualities control. In these phases,

all the minimal things should be analyzed and considered to better reach our goal, for

example, the scales of the questions, the order of the questions. The sections that our

questionnaire will use are:

1. Introduction - brief presentation for the interviewer about the goals, qualification

question to ensure that the interviewee has the minimum legal age to participate in

the survey.

2. Customer Profile - qualification questions about the kind of companies they use to

flow with, frequency that flight and motive that flight.

3. Low-cost satisfaction - questions about the overall services of low-cost companies,

and reasons why and when choosing this company.

4. Traditional Airlines Satisfaction - questions about the overall services of traditional

airlines, and reasons why and when choosing this company

5. Sociodemographic characterization -gender, education level, income.

Most of the questions will be closed but might have some semi-opened questions, filters will

also be used and for providing that and online tools will be customized to create a better

experience.

2.4. DATA COLLECTION PROCESS

The questionnaire was applied by the convenience method in the airports to reach the

passengers that have flown with both companies in the last year. The main option that can

be done is apply the questionnaire online and go to the airport with tablets or fliers with the

link to the questionnaire. The questionnaire should not be last more than 10 minutes and

could be done with or without interviewers, according to the approach.

Before the data collection, a pilot test will be made to ensure that the questionnaire is fittable

to this goal, and to our target population. Questions hard to answers, wrong scales, wrong

order, and unnecessary questions will be modified and better analyzed to ensure the quality

of our study.

2.5. QUALITY CONTROL

Following the empirical evidence available, it’s shown it’s important to ensure that the quality

of the data is preserved to have an acceptable model. (Vilares & Coelho, 2005). To ensure

this, some steps were taken, such as the following;

Pilot testing the questionnaire on several interviewees prior to the final questionnaire,

reducing the non-response error as well as partial non-response errors. The ordering

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of questions, its formulation, and/or in its explanation, making it more understandable

and sufficiently detailed.

Sampling Errors and Non-Sampling Errors

Assurance of the anonymity of the answers, along with contact information for any

questions that can arise and taking considerations over the size and duration of the

questionnaire. The average duration of the questionnaire was given.

2.5.1. Pilot Test

After the questionnaire has been designed we apply the survey in a pilot test to identify the

problems to answer it that might arise. The full questionnaire can be consulted at Appendix

II.

The pilot test was applied with 5 individuals belonging to the target population, via the

internet and takes about 10 minutes to answer. No individual asked about the questions, but

some of the options were changed to better fit to the understanding of the sample.

Subsequent to the interview process, in the end, a total of 10 responses were collected

between 10 of March of 2018 and 17 of March of 2018. From this data, after the treatment

and cleaning of the data, it was possible to acquire a total of 7 respondents that were

considered valid.

Since all questions were marked as mandatory, it was possible to fully eliminate partial non-

response errors. 3 other respondents that were removed, pertained to the filters, as

qualification questions that selected only the elements who belonged to our target

population.

Following these brief considerations, we now present the results collected from the

questionnaire:

70% of the respondents were between 20-30 years old, which might indicate that

young people travel more with both companies.

55,6% of the respondents’ flow with TAP between 2-4 times last year, most for

tourism purposes.

77,8% of the respondents that flow with TAP also flow with a low-cost company last

year. The 22,2% that didn’t flow didn’t answer the rest of the questionnaire.

85% of the people that flow with a low-cost company about 2-4 times last year. Being

14,3% for study purposes.

14,3% of the respondents had a delay with a low-cost company, the same

percentage of respondents that had a delay with TAP.

57% of the respondents don’t purchase at the flight of low-cost company, and when

they do, they purchase food or water.

In the questions “Q.18. On a scale of 1 to 10 how satisfied with the flight are you?”,

“Q.19. On a scale of 1 to 10 how satisfied with the attendants are you?” e “Q.20. On

a scale of 1 to 10, how satisfied are you with the included services?” related to TAP

received the score 10, and the low-cost company does not.

57,1% of the respondents have the master’s level of education and 42,9% have a

bachelor level of education

71% have an income of 1000-2000 euros.

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The pilot test indicated that was necessary to modify the questionnaire to fit better with the

research. A question related to the type of flight people usually purchase at TAP, which

makes the distinction between a low fare of a traditional airline and a premium fare.

A new section was created to make the interviewee choose between TAP and low-cost

airlines based on some affirmations. The questions where created based on the ECSI

(European Customer Satisfaction Index) and the customer satisfaction research of

companies. The original ECSI model is a well-established framework for measuring and

explaining customer satisfaction and its antecedents and related constructs. (Vilares &

Coelho, 2005). The original framework has six variables:

1. Image

2. Expectations

3. Perceived quality

4. Perceived value

5. Customer Satisfaction

6. Loyalty

It’s possible to notice that complains is a variable on the (Vinzi, 2010) model, however in this

study the complains are not added because of the comparison vision that the study aims. If

the study had get separated data for each kind of company and then do a comparison,

maybe this aspect would be important to consider on the customer satisfaction. To better fit

in the study situation, the groups Expectations and Perceived Value were put aside, as the

questions were made to compare the inclination of the customer to choose TAP over a Low-

cost company or vice versa. Some questions were created related to each group of the

latent variables of the ESCI model. However,

Also, a new qualification question was additional to the questionnaire to better filtered the

population. These additions are available on Appendix III.

2.5.1. Data Collection

The data collection used for this research was online form and interview at the airport, were

collected 135 answers of people between 16 and 60 years old, that have flown with low-cost

airline and TAP in the last year. The selection of the respondents was randomly and

determined by availability to answer the questionnaire.

For the questionnaires results we have the following distribution of results for the

sociodemographic questions:

69,2% of the respondents are female

11,5% of the respondents are between 16-20 years old; 42,3% of them are between

20-30 years old; 34,6% of them are between 31-40 years old; 11,5% of them are

above 41-50 years old.

88,5% of the respondents have flight with TAP last year, being 48% of them just one

time, and 52% between 2 and 4 times. From them, 87% were to tourism purposes,

which indicates people look for TAP for vacations at least one time a year.

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74% of the respondents purchased the basic type of flight, 9% were with the classic

fare and 17% of them were with the discount fare. If we considered the discount fare

a hybrid of a low-cost type of flight, we can understand what these clients prefer

rather than just price (considering the both fares are low price and low services

included).

87% of the respondents also had a flight with a low-cost company. This indicates that

at least 13% of the answers were discarded to not follows the simple plan as be valid

to the study

From the respondents that had a flight with a low-cost airline, 55% of them had one

flight and 45% of them had two or four flights. 70% of the flights were about tourism,

but 20% of them were to study, which might indicate that Erasmus Students or

another kind of Study Exchange has a good share of the business.

The education level of the respondents have 55% of bachelor degree, 35% of master

degree and 10% of high school, which indicates students or people who has a high

level of study.

About the income, 90% of the respondents have between 1000 euros and 2000

euros per month, and 10% have between 2000 and 4000 euros per month. Indicating

people that could spend money with tourism more often.

The sociodemographic questions show the main reason as tourism and it is done at least

once a year. Besides, we have a lot of students and young people flighting more than 1 time

per year. The student’s portion is not so representative on TAP share but is around 5%.

However on in an attempt to validate the population and if the demographic information

about the TAP and low-cost airlines is consistent, the population wasn’t found on the ESCI

Portugal. (ECSI, 2018)

The results related to the low-cost companies Satisfaction we have:

90% of the respondents did not had a flight delay.

About the shopping during the flight, 80% answered they don’t purchased anything

during the flight, another 20% said they bought water and 10% of them bought duty

free products.

When asked about how satisfied with the flight the respondents were, between 1 and

10, being 1 not satisfied and 10 very satisfied, The respondents chose the grades of

between 7 and 8 having the distribution of 40% and 60% respectively, meaning they

were satisfied with the flight.

When asked specifically about the flight attendants, between 1 and 10, being 1 not

satisfied and 10 very satisfied. The grades of satisfaction were between 6 and 9,

being 85% between 7 and 8. Meaning they were satisfied in general about the flight

attendants. However the 6 grade might indicates they were neutral about them, and it

represents 10% of the answers.

When asked about the included services, The distribution had more variety, being

5% of 3 grade, which mean not satisfied, and 5% of satisfied with a grade of 8, the

rest of it is between 5 and 7

About the extra services, between 1 and 10, being 1 not satisfied and 10 very

satisfied. The responses were 70% with the grade 5, the most satisfied grade was

9(5%) and the most low grade were 3 (5%)

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We can see that we have a satisfaction with the service of the low-cost companies, but when

asked about some specific topics, people seems to be more neutral or even unsatisfied

about included services. People that purchase something during the flight usually goes with

water, and duty free items, which might indicates that they didn’t had time before the flight to

buy things. No respondent showed an overall dissatisfaction with this kind of airline.

About the TAP Satisfaction we had the following results proportions:

When asked if the company delay the flights, 90% of the respondents answered that

no. this an important criteria because could indicate sort type of complain or

dissatisfaction.

The respondents also revel didn’t purchase anything during the flight.

When asked to indicate in a scale of 1 to 10 how satisfied they were with the flight,

55% answered with 8, 30% answered with 7 and 15% answered with 9. These

answers indicates they were satisfied with the overall flight.

When asked to indicate in a scale of 1 to 10 how satisfied with the flight attendants,

the respondents answered between 7 and 9, being 50% answered with 8, 40%

answered with 7 and 10% answered with 9. This indicates a satisfaction with the

flight attendants.

When asked to indicate in a scale 1 to 10 how satisfied the respondents were with

the included services, the answers were between 5 and 9, being 45% answered with

7, 35% answered with 8, 10% answered with 6 and 5% answered with. 5 or 9. This

indicates some of the interviewed were neutral, but most of them were satisfied with

the services.

When asked to indicate in a scale of 1 to 10 how satisfied with the extra services the

respondents were, 55% answered with 5 and 35% answered with 7, indicating also a

neutral position of the respondents, or even a satisfaction with that.

Most of the clients of TAP did not showed a position of dissatisfaction with the company nor

their services. TAP got some higher satisfaction grades, if compared with low-cost

companies (TAP reached a 9, while the low-cost company does not). Also is important to

highlight that maybe the respondents were not aware of the extra services of TAP, because

of the high indicators on a neutral or they filled the response without doing the purchase,

because all the respondents answered that they did not purchased anything during the flight.

The next section of analysis, we asked for the respondents use a scale between 1 to 10,

being 1 TAP and 10 low-cost company, to compare between the types of airlines. This kind d

of questions was important to measure the inclination of chose between the two options of

companies. We get 119 valid answers and the responses were discussed below:

It is a reliable company:

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As we can see, most of the respondents tends to a TAP as a reliable company. The low-cost

company is not considerate as a reliable company and got a tendency not higher than 7,

which indicates low inclination to low-cost company.

It is stable and firmly established

When asked about the company which are stable and firmly established, most of the

respondents think that TAP is more stable than low-cost companies.

It is concerned with customers

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When asked about which company seems to be concerned with customers, most of the

respondents answered TAP. Also, almost 13/5 of the respondents were neutral about it.

It is innovative and forward looking

When asked about which company is innovative and forward looking, again, most of the

respondents think TAP is more innovative and forward.

Quality of products and services

When asked about which company has a better quality of products and services, most of the

respondents also are inclined to TAP. About 1,69% of them have a total inclination to TAP.

Almost 14% of the respondents are neutral about the answer.

Customer service and personal advice offered

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When asked about which company a good customer service and personal advice has

offered, 10% of the respondents were neutral and more than 50% were inclined to TAP.

Availability of contact channels

When asked about which company has better availability of contact channels, about 11%

are neutral and almost 50% of them have an inclination to TAP.

Reliability of services and products offered

When asked about which company has reliability of services and products that are offered,

most of the respondents also are inclined to TAP and about 12% are neutral.

Availability of contact channels

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When asked about which company has availability of contact channels, almost 13% are

neutral and almost 50 % had an inclination to TAP.

Reliability of services and products offered

When asked about which company has reliability of services and products has offered a bit

more than 50% have an inclination to TAP.

Diversity of services and products

When asked about which company has diversity of services and products, almost 19% of the

respondents were neutral.

Clarity and transparency of information provided

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When asked about which company has clarity and transparency of information has provided,

more than 50% of the respondents are inclined to TAP.

Accessibility

When asked about which company has a better accessibility, almost of 18% of the

respondents has neutral inclination. Even so, the rest of the respondents has more

inclination to TAP than low-cost companies.

I'm most likely to flight next time with:

19

When asked about which company has likely to flight next time with, most of the

respondents answered TAP, and just 6% were neutral. This might indicate that the

respondents are TAP clients.

It's fits with my lifestyle

When asked about which company fits better with the respondent’s lifestyle, the answers

were mostly on the 3 (inclination to TAP) and 7 (inclination to low-cost company). However,

some respondents answered other distributions of weighs as 9 (a strong inclination to low-

cost, almost 2% of the respondents).

Overall satisfaction

When asked about with which company the respondent has a better overall satisfaction,

most of the respondents had the inclination to be TAP, and about 14,5% of them had a

neutral inclination.

Fulfilment of expectations

20

When asked about which company has fulfilment of expectations, most of the respondents

have an inclination for TAP, and almost 12% of the respondents has a neutral inclination.

It's can be trustable

When asked about which company can be trustable, most of the respondents have an

inclination for TAP more than for low-cost companies.

2.6. STATISTICAL ANALYSIS

After the data collection has been done, we need to analyze and interpret the data and the

goal of the study. In this step, some methodologies can be used according to the type of

data that has been collected: quantitative methods and/or qualitative methods.

We plan to use descriptive statistics methods to reach our goal and answer the specific

objectives, some of the approaches are:

Factor Analysis to identify the factors for a flight that impacts with TAP after try a low-

cost company.

Apply the adapted European Customer Satisfaction Index (ECSI) model to check the

impacts for the estimation of a customer satisfaction model (Vinzi, 2010), that will

answer the goal of the impacts of TAP customer satisfaction after flying with a Low-

cost company. This model has seven latent variables that are: Image, Perceived

Quality, Satisfaction, and Loyalty.

21

Image 2: Model of (Vinzi, 2010)

3. RESULTS AND DISCUSSION

This chapter aims to show the results after applying the survey as the results of the data

collection and the data analysis.

3.1. FACTOR ANALYSIS

The collected answers were prepared for the analysis on Sas Enterprise Guide 7.4., for this

treatment, the null results and the partial responses were deleted. The partial responses

were caused by the control questions Q3 and Q7, that asked about flighting with TAP and

Low-Cost airlines in last year. For this research were collected 135 answers between 1 of

May of 2018 and 30 of June of 2018, being 119 valid answers for the software.

Factor analysis is based on the Principal component is defined as a linear combination of the

variables. This technique can be used to extract and create factors that reflects the values of

the variables. (Norm O'Rourke, 2013).

For the analysis we are going to use the variables related to the questions related to the

satisfaction of the flights: Q12, Q13, Q14, Q15, Q18, Q19, Q20 e Q21. The questions are all

in a scale from 1 to 10, being 1 not satisfied and 10 very satisfied. The questions are related

to specific things about the satisfaction as Overall satisfaction, satisfaction with the crew,

satisfaction with the included and the extra services. The goal is to find the common factors

of satisfaction of the clients of both kinds of flights - low-cost and traditional airlines, with

some comparison background.

Analyzing the Kaisers Measurement Overall, the factors of the solution explain 70% of the

variance of the original variables which means a good overall adequacy of the sample to

factor analysis. The Bartlett's sphericity test, showed the variables are correlated, so a factor

analysis is possible with this dataset. (Vilares & Coelho, 2005)

22

In this analysis the most used criteria for solving the number of components is the

eigenvalue-one criterion. This approach is used because on the reduction of the variables in

smaller number of factors, has a loss and to retain the variance of the original variables we

need to understand how many factors are going to retain it. The results of the eigenvalues

showed that the correlation matrix (Appendix IV) had to be above the average which is 1,

pointing us to a solution of three factors.

In the scree plot test we look for a break in the graphics plotted on the screen, we assume

the factors that point before the break. The scree plot points to a solution with two or three

factors, both solutions were tested to assure we have a better analysis. (Norm O'Rourke,

2013)

After extracting the factors, we need to analyze the non-rotated pattern matrix and try to

interpret the factor loadings on each factor. On this matrix we can analyze the correlation

between the variables. To bring an interpretability to the model, usually rotation of the model

can be done. A rotation is a linear transformation that works to make the solution be easier

to interpret. (Norm O'Rourke, 2013) On this study we used the varimax rotation, is an

orthogonal rotation, meaning that it results uncorrelated components, this rotation tends to

produce factors composed of high and low loadings and this goes in the direction of the goal

of this study.

In the table” Rotated Factor Pattern” Appendix, it’s possible to try to name the factors

thought the characteristics that the loadings are higher or even low than the others. In the

case of this solution we have:

Factor 1: highly related to the questions Q15, Q21, Q14 and Q20, and negative

related to the variable Q18.

Factor 2: highly related to the questions Q12 and Q13, and negative related to the

variable Q18.

Factor 3: highly related to the questions Q18, Q19 and Q20, and negative related to

the variable Q15, Q12, and Q14.

After knowing that, we can name the factors related to the questions subjects. For the factor

1: Services, Factor 2: TAP flight and crew and Factor 3: low-cost services.

The impacts of the TAP customer satisfaction after flying with a Low-cost company, are

related to the quality of the service. The characteristics highlighted on the other topic shows

which one are specific aspects of quality in the case of this research. The image of the

company has impacts also in this kind of analysis but wasn’t so expressive as the quality.

The solutions were analyzed to identify the factors for flight with TAP after try a low-cost

company, the result are three factors: Services, TAP flight and crew and low-cost services.

About the factor of TAP flight and crew, we can observe that how higher satisfaction the

respondents have with TAP crew and flight, less satisfaction they have with the flight of low-

cost companies. About the factor of low-cost, we can observe the respondents relate the

triad: flight, crew and included services as aspects of flight with the company, which can be

the opposite for TAP.

Highlight characteristic that made the client choose TAP over a Low-cost company. This

study cannot highlight specifics reasons, but the ones related to the services and quality of

the service that the companies do. Some of the items that are related to quality are quality of

products and services, customer service, availability of contact channels, the reliability of

23

services and products offered, diversity of services and products, clarity and transparency of

information provided, and Accessibility.

3.2. PLS-SEM

The collected answers were prepared for the analysis on Smart PLS Version: 2.0.M3., we

took the file prepared for the previous step and, leaving the questions regarding Customer

Satisfaction, then a CSV file was generated. The selected variables were: Q22A, Q22B,

Q22C, Q22D, Q22E, Q22F, Q22G, Q22H, Q22I, Q22J, Q22K, Q22L, Q22M, Q22N, Q22O e

Q22P

Before applying the analysis, we are going to analyses the statically values. Means and

standard deviations of original variables can be found in Table I. In the research dataset the

mean variety between 4,3898 for Q22P (Clarity and transparency of information provided)

and 4,7203 for Q22M (If the company fits in the respondent lifestyle). The lowers values

show that the respondents were more inclined to TAP than low-cost companies, however it’s

almost a neutral value, which might indicate that the customer does not have some

preference regarding the discussed topics. On the Image constructor, we have an average

mean of 4,56 which might indicate that a neutral inclination with a silly inclination to TAP.

The constructor Quality, that comprises the variables Q22E, Q22F, Q22G, Q22H, Q22I,

Q22J and Q22K has also a neutral inclination but a silly inclination to TAP, with an average

around 4,49. The constructor Loyalty just has one variable with the mean of 4,5339, which

also puts a silly inclination to TAP. The constructor Satisfaction has an average mean of

4,54, even being the constructor with a maximum of 9 for one of the variables, this might

indicate a neutral feeling about the two options of companies, with a silly inclination to TAP.

Constructor Variable Mean Std Dev Minimum Maximum

Image Q22A 4,5678 1,8696 2 7

Q22B 4,5169 1,8935 2 7

Q22C 4,5847 1,8085 2 7

Q22D 4,5763 1,8041 2 7

Quality Q22E 4,5254 1,8477 1 7

Q22F 4,4322 1,8696 2 7

Q22G 4,4237 1,8920 2 7

Q22H 4,4322 1,8878 2 7

Q22I 4,5508 1,8656 2 7

Q22J 4,4576 1,8427 2 7

Q22K 4,6356 1,7815 2 7

Loyalty Q22L 4,5339 1,8932 2 7

Satisfaction Q22M 4,7203 1,9650 2 9

Q22N 4,5424 1,8241 2 7

Q22O 4,5169 1,8385 2 7

Q22P 4,3898 1,8721 2 7

Table I: Means and standard deviations

All constructs in the proposed model are based on reflective multi-item scales. Indicators of

image, perceived quality, customer satisfaction and customer loyalty are the ones used in

24

the ECSI model. (Vilares & Coelho, 2005). All indicators are between 1 to 10 scales, being 1

the TAP and 10 the low-cost companies. The table in the Appendix presents a detailed list

Using the ESCI model as an example and adapting the variables that are different to the

model. Also, it’s important to highlight that the scales are between 0-10 to represent the

strength of the agreement between the two options of companies: TAP and Low-cost. The

scheme of the model is below:

Image 3: Flow of analysis on Smart PLS

It was decided to remove some latent variables and create a simpler model with 4 latent

variables as Image, Perceived Quality, satisfaction, and Loyalty. The three removed latent

variables of the original model ESCI were Perceived Value, Expectations and complains.

This decision was based on the content of the indicators, which have scales regarding the

agreement between the two options of companies, which could bring bias because we know

that regarding the variable “Perceiving value” is related to pricing, and a low-cost company is

going to be cheaper than a traditional airline. For the variables Expectations and Complains,

wouldn’t be adequate to the scale adopted. The created model has the measurement model

type of reflexive.

AVE Composite Reliability R Square

Cronbachs Alpha Communality Redundancy

Image 0,9505 0,9871 0 0,9826 0,9505 0

Loyalty 1,000 1,000 0,8761 1,000 1,000 0,5194

Quality 0,944 0,9916 0,9248 0,9901 0,944 0,8723

Satisfaction 0,9484 0,9866 0,9548 0,9817 0,9484 0,3337

Table II: Overview Output

We first examine the reliability and validity measures for the model constructs (Table II). All

Cronbach’s Alphas exceed the 0.7 threshold (Nunnally, 1978) and are usually higher than

0.9. Without exception, latent variable composite reliabilities (Fornell, 1981) are higher than

0.80, and in general near 0.90, showing a high internal consistency of indicators measuring

each construct and thus confirming construct reliability. The average variance extracted

25

(Fornell, 1981) is also always higher than 0.90, indicating that, on average, the construct

explains more than half of the variance of its indicators.

Image Loyalty Quality Satisfaction

Image 1 0 0 0

Loyalty 0,9186 1 0 0

Quality 0,9617 0,9338 1 0

Satisfaction 0,9537 0,9301 0,9755 1 Table III: Latent variables correlations

The Discriminant validity can be checked by the outer loadings also are above 0.900 which

helps to indicate the goodness of the model. The discriminant validity works for measure

each latent variable shares more variance with its own variables or with other constructs.

(Fornell, 1981)

Original Sample (O)

Sample Mean (M)

Standard Deviation (STDEV)

Standard Error (STERR)

T Statistics (|O/STERR|)

Image -> Loyalty 0,3543 0,2972 0,3315 0,3315 1,0689

Image -> Quality 0,9601 0,9609 0,0121 0,0121 79,3991

Image -> Satisfaction 0,2025 0,1807 0,1786 0,1786 1,1339

Quality -> Satisfaction 0,7799 0,8018 0,1736 0,1736 4,4916

Satisfaction -> Loyalty 0,593 0,6521 0,337 0,337 1,7596 Table IV: Path Coefficients (Mean, STDEV, T-Values)

After the bootstrapping, we can check the T-Statisctics to discover if the inner coefficient are

significant or not, to do that we are going to use the two-tailed t-test with a significance level

of 5%, the path coefficient will be significant if the T-statistics32 is larger than 1.96. As we

can validate on the table IV, the “Image -> Loyalty” and “Image -> Satisfaction” it’s lower

than 1.65. All other path coefficients in the inner model are statistically significant. The outer

Loadings (see Appendix V) are higher than 25,3194 for all the paths. (Vinzi, 2010)

26

Image 4: Model PLS, path weighting results

The Image construct is the one that showed less impact on the other constructors, specially

satisfaction and loyalty indicating that the Image does not affect these two things. However,

the Image affects the Quality Perceived. This makes the hypothesis H1 be half true for this

study, because it affects the quality perceived of the company, but not enough to affect the

satisfaction or loyalty. On the Image 4, we can notice that the construct Image have the path

weighting in 0,000, which impacts in 0,349 on the loyalty variable, and impacts 0,207 on the

Customer Satisfaction.

Perceived Quality is the construct with more variables of the model, they have seven

indicators, and as we already discuss before, it’s the construct with more significance with

the Image path. The Perceived Quality has the pat weighting path of 0,925 which represents

0,776 on the Customer Satisfaction. This indicates that the Image of the company affects the

Quality Perceived which in turn affects the Satisfaction and the Loyalty. The two hypothesis

H2 and H3 are confirmed by this study, because the Quality perceived of the client impacts

on the satisfaction and the Comfort, one of the items of the Quality perceived its also

impacted by the satisfaction.

On the image 4 we can see that the Satisfaction impacts in 0,597 on the Loyalty. Satisfaction

constructor has four indicators, and as we already discuss before. Analyzing the mean of the

indicators, we notice the silly inclination for TAP, so we can deduce that the satisfaction of

the costumer is affected by the quality of the service, concluding that the H5 it’s true. One of

the questions/ indicator related to this question was if the respondent trust the company,

which is related to the also with the H1 and indicates that the hypothesis is true when

analyzed related with quality perceived.

Loyalty just have one indicator to analyze, the question was if the respondent would I'm most

likely to flight next time with the company. By the results of the data we can understand that

loyalty is affected by all the other variables, being not directly affected by the Image of the

company as the path coefficient showed.

27

4. CONCLUSION

After this research, we can conclude that the quality is a major subject regarding airlines

companies and impacts on Customer Satisfaction as Customer Loyalty. The defined goals

can are discussed below.

This research was important to identify that quality perceived is an important aspect of a

company that can leads to the customer satisfaction and the loyalty to a company. The

image of the company also affects the quality perceived.

The factor analysis brought more clarification regarding the common factors comparing the

two companies. About the factor of TAP flight and crew, we can observe that how higher

satisfaction the respondents have with TAP crew and flight, less satisfaction they have with

the flight of low-cost companies. This also helps to assert that Quality perceived is an

important decisive factor between the two kinds of services.

The PLS-SEM also indicated how important the Quality Perceived is, and how the image not

directly affects the Customer Satisfaction, but by the Quality Perceived. The respondents

showed silly inclined to choose TAP over low-cost companies, but the results were almost

neutral.

Some limitations about this study is regarding on how the companies are more similar as

time goes by and the market develop. The competition in this industry makes a new kind of

airline emerge: the hybrid airline. This kind of airplane combines options of having low cost

type of fares while it's possible have full service Carrier type of service. (Lawton, 2005).

Nowadays the distinction between company types are even more low, because the

companies having low fare on traditional airlines - as the TAP fare discount which the

customer bring a handbag and other services. Also, the low-cost companies are bringing the

possibility of distinction of the type of client, which implies different fares and services

options available on the package.

Another limitation or important fact to discuss is that the industry it\s changing and for

example this year, Ryanair started to apply a new luggage policy that change the include

luggage on the flights, putting a small suitcase transportation as an extra service. (Topham,

2018) This might change the competition between companies legacy and low-cost, also and

the market on bringing the idea for another low-cost companies, as Wizzair. (Godfrey, 2018)

The strikes of Ryanair also brought a limitation for this is study and it was add as something

related with the trust of the low-cost company. But as this study never used a specific low-

cost company, the influence on the answers could not be bias. The strikes on Ryanair could

decrease the trust with the company and therefore the satisfaction of the client, as pointed

out in the hypothesis H1.

As a possibility of a following study it could be do a comparison of the type of fare and other

factors about the flight as: time of flight, connections, baggage included, time of waiting and

other factors that could help to adjust the current products of the company. Focus on this

new type of hybrid airlines and how the customers are Satisfied with the services.

Another more directional study would be apply the European Customer Satisfaction Index on

TAP, without comparing with the low-cost companies once the company is starting to use a

low-cost fare, called Discount fare. The application of this research on the company would

provide the Customer Satisfaction of the clients and would help the company to understand

28

the influence of their services on the satisfaction and the loyalty of the clients. This kind of

research could help the marketing of the company design better products and improve the

quality. Maybe a good way to understand better the clients was divide groups according with

the type of fare, since the company is becoming more hybrid type.

This study was an entrance door to other studies that instead of compare the impacts

between the two types of companies, start to understand that they already are alike and

focus on types of clients (the low-cost client and the comfort client). The marketing of the

company can use this information to improve the products, because the client is usually

focused on the perceived quality to be satisfied.

29

5. APPENDIX I

Questionnaire – TAP

The questionnaire was designed within the course of Market Research, with the objective of

collecting the data to develop the course project. The questionnaire will take about 10

minutes.

Every question is respecting the fact of keeping the identity of the respondents anonymous.

The primary objective of the questionnaire is to characterize and obtain current information

about the consumer profiles on air transportation, in order to better understand their needs.

In case of doubt about any question, we would appreciate if you would contact us through

the emails below: [email protected]

Q1. Please specify your gender *

Male

Female

Q2. Please indicate your age group *

Under 16 years old

16-20 years old

20 -30 years old

31-40 years old

41-50 years old

51-60 years old

Above 60 years old

Q.3. Did you flight with TAP in the last year?

Yes

No

Q.4. How often did you flight with TAP last year?

1 time

2-4 times

More than 4 times

Q.5. What was the reason of the flight?

Business

Travel

Study

Q.6. Did you flight with a low-cost company in the last year?

30

Yes

No

Q.7. How often did you fly with a Low cost companies last year?

1 time

2-4 times

More than 4 times

Q.8. What was the reason for the flight?

Business

Travel

Study

About Low Cost:

Q.10. Did the company delay the flights?

Yes

No

Q.11. Did you purchase which of the following products they sell?

Parfum

Food

Water

Lottery ticket

Duty-Free Products

Other

None

Q.12. On a scale of 1 to 10 how satisfied with the flight are you?

Q.13. On a scale of 1 to 10 how satisfied with the attendants are you?

Q.14. On a scale of 1 to 10, how satisfied are you with the included services?

Q.15. On a scale of 1 to 10 how satisfied with the extra services are you?

About TAP:

Q.16. Did the company delay the flights?

Yes

No

Q.17. Did you purchase which of the following products they sell?

Parfum

31

Food

Water

Lottery ticket

Duty-Free Products

Other

None

Q.18. On a scale of 1 to 10 how satisfied with the flight are you?

Q.19. On a scale of 1 to 10 how satisfied with the attendants are you?

Q.20. On a scale of 1 to 10, how satisfied are you with the included services?

Q.21. On a scale of 1 to 10 how satisfied with the extra services are you?

Sociodemographics

Q.22. What is your education level?

No academic qualification

First or second cycles of basic teaching (4th or 6th years)

Third cycle of basic teaching (9th year)

High School

Bachelor

Masters

Doctorate

Q.23. What is your income?

Less than 1000 euros

1000-2000 euros

2000-4000 euros

Up to 4000 euros

32

6. APPENDIX II

43

7. APPENDIX III

Q.6. Which type of flight do you usually purchase?

Discount

Basic

Classic

Plus

Comparison between the types of airlines

Choose between TAP or Low-cost company in each following affirmative on a scale of 1 to 10.

Q22B.It is stable and firmly established

Q22C.It is concerned with customers

Q22D.It is innovative and forward-looking

Q22E.Quality of products and services

Q22F.Customer service and personal advice offered

Q22G.Availability of contact channels

Q22H.Reliability of services and products offered

Q22I.Diversity of services and products

Q22J.Clarity and transparency of information provided

44

Q22K.Accessibility

Q22L.I'm most likely to flight next time with:

Q22M.It's fits with my lifestyle

Q22N.Overall satisfaction

Q22O.Fulfillment of expectations

Q22P.It's can be trustable

8. APPENDIX IV

Factor Analysis Results

The FACTOR Procedure

Input Data Type Raw Data

Number of Records Read 118

Number of Records Used 118

N for Significance Tests 118

Means and Standard Deviations from 118 Observations

Variable Mean Std Dev

Q12 7.5338983 0.8541723

Q13 7.5084746 1.0356530

Q14 6.1610169 1.3896463

Q15 6.2033898 1.3685061

Q18 7.6864407 1.6981597

Q19 7.9745763 0.9648689

Q20 7.6355932 1.2585791

Q21 6.9406780 1.6028413


The FACTOR Procedure Initial Factor Method: Principal Components

Partial Correlations Controlling all other Variables

Q12 Q13 Q14 Q15 Q18 Q19 Q20 Q21

Q12 1.00000 0.64469 0.30932 -0.15424 -0.32304 0.02478 -0.00231 -0.03003

Q13 0.64469 1.00000 -0.02984 0.08486 0.12302 0.35182 -0.14279 0.11505

45

Q14 0.30932 -0.02984 1.00000 0.49125 0.24384 0.02315 -0.01790 -0.01455

Q15 -0.15424 0.08486 0.49125 1.00000 -0.39012 -0.01103 0.17421 0.21567

Q18 -0.32304 0.12302 0.24384 -0.39012 1.00000 0.14072 0.20802 -0.03633

Q19 0.02478 0.35182 0.02315 -0.01103 0.14072 1.00000 0.61075 -0.03590

Q20 -0.00231 -0.14279 -0.01790 0.17421 0.20802 0.61075 1.00000 0.41422

Q21 -0.03003 0.11505 -0.01455 0.21567 -0.03633 -0.03590 0.41422 1.00000

Kaiser's Measure of Sampling Adequacy: Overall MSA = 0.69169756

Q12 Q13 Q14 Q15 Q18 Q19 Q20 Q21

0.61738014 0.69362947 0.71010908 0.64974502 0.42047293 0.75565555 0.70185958 0.82663123

Prior Communality Estimates: ONE

Eigenvalues of the Correlation Matrix: Total = 8 Average = 1

Eigenvalue Difference Proportion Cumulative

1 3.53150834 2.03721102 0.4414 0.4414

2 1.49429732 0.40555508 0.1868 0.6282

3 1.08874225 0.34723691 0.1361 0.7643

4 0.74150533 0.31296457 0.0927 0.8570

5 0.42854076 0.09974547 0.0536 0.9106

6 0.32879529 0.10579693 0.0411 0.9517

7 0.22299837 0.05938603 0.0279 0.9795

8 0.16361234 0.0205 1.0000

3 factors will be retained by the MINEIGEN criterion.

Eigenvectors

1 2 3

Q12 0.32595 -0.45688 0.42492

Q13 0.39480 -0.23753 0.44673

Q14 0.35047 -0.21741 -0.15141

Q15 0.32920 -0.21840 -0.58654

Q18 0.09394 0.63421 0.31663

Q19 0.43451 0.25168 0.17289

Q20 0.41120 0.37775 -0.12393

Q21 0.37412 0.17782 -0.32775

Factor Pattern

46

Factor1 Factor2 Factor3

Q12 0.61253 -0.55849 0.44337

Q13 0.74193 -0.29036 0.46613

Q14 0.65862 -0.26576 -0.15799

Q15 0.61865 -0.26697 -0.61201

Q18 0.17653 0.77527 0.33038

Q19 0.81655 0.30765 0.18040

Q20 0.77275 0.46176 -0.12931

Q21 0.70306 0.21737 -0.34199

Variance Explained by Each Factor


3.5315083 1.4942973 1.0887422

Final Communality Estimates: Total = 6.114548

Q12 Q13 Q14 Q15 Q18 Q19 Q20 Q21

0.88368435 0.85204221 0.52937184 0.82855975 0.74135677 0.79394904 0.82708770 0.65849623

Residual Correlations With Uniqueness on the Diagonal

Q12 Q13 Q14 Q15 Q18 Q19 Q20 Q21

Q12 0.11632 -0.08932 -0.04361 -0.01404 0.01194 -0.03912 0.03236 0.05299

Q13 -0.08932 0.14796 -0.09227 0.03700 -0.01217 -0.03157 -0.02577 0.04361

Q14 -0.04361 -0.09227 0.47063 -0.03068 0.20701 -0.07386 -0.08450 -0.15184

Q15 -0.01404 0.03700 -0.03068 0.17144 0.11433 0.00204 -0.04316 -0.13257

Q18 0.01194 -0.01217 0.20701 0.11433 0.25864 -0.12897 -0.12169 -0.07349

Q19 -0.03912 -0.03157 -0.07386 0.00204 -0.12897 0.20605 0.00975 -0.08285

Q20 0.03236 -0.02577 -0.08450 -0.04316 -0.12169 0.00975 0.17291 -0.05469

Q21 0.05299 0.04361 -0.15184 -0.13257 -0.07349 -0.08285 -0.05469 0.34150

Root Mean Square Off-Diagonal Residuals: Overall = 0.08192992

Q12 Q13 Q14 Q15 Q18 Q19 Q20 Q21

0.04721678 0.05551190 0.11330167 0.07073028 0.11529901 0.06716629 0.06393035 0.09304192

Partial Correlations Controlling Factors

Q12 Q13 Q14 Q15 Q18 Q19 Q20 Q21

Q12 1.00000 -0.68088 -0.18639 -0.09945 0.06884 -0.25267 0.22821 0.26589

Q13 -0.68088 1.00000 -0.34965 0.23232 -0.06220 -0.18082 -0.16111 0.19399

Q14 -0.18639 -0.34965 1.00000 -0.10799 0.59333 -0.23718 -0.29622 -0.37876

Q15 -0.09945 0.23232 -0.10799 1.00000 0.54294 0.01084 -0.25067 -0.54788

Q18 0.06884 -0.06220 0.59333 0.54294 1.00000 -0.55866 -0.57544 -0.24728

Q19 -0.25267 -0.18082 -0.23718 0.01084 -0.55866 1.00000 0.05167 -0.31234

47

Q20 0.22821 -0.16111 -0.29622 -0.25067 -0.57544 0.05167 1.00000 -0.22506

Q21 0.26589 0.19399 -0.37876 -0.54788 -0.24728 -0.31234 -0.22506 1.00000

Root Mean Square Off-Diagonal Partials: Overall = 0.33489314

Q12 Q13 Q14 Q15 Q18 Q19 Q20 Q21

0.31613578 0.32513383 0.33978193 0.32369046 0.44074703 0.28416214 0.29594052 0.32978686


The FACTOR Procedure Rotation Method: Varimax

Orthogonal Transformation Matrix

1 2 3

1 0.66937 0.60093 0.43684

2 -0.08974 -0.51829 0.85048

3 -0.73749 0.60849 0.29300

Rotated Factor Pattern


Q12 0.13314 0.92734 -0.07750

Q13 0.17892 0.87997 0.21373

Q14 0.58122 0.43739 0.01540

Q15 0.88941 0.13773 -0.13613

Q18 -0.19506 -0.09471 0.83327

Q19 0.38592 0.44101 0.67121

Q20 0.57118 0.14635 0.69240

Q21 0.70331 0.10174 0.39179

Variance Explained by Each Factor


2.1864998 2.0798101 1.8482380

Final Communality Estimates: Total = 6.114548

Q12 Q13 Q14 Q15 Q18 Q19 Q20 Q21

0.88368435 0.85204221 0.52937184 0.82855975 0.74135677 0.79394904 0.82708770 0.65849623


48

The FACTOR Procedure Rotation Method: Varimax

50

9. APPENDIX V

Quality Criteria before Bootstrapping:

Outer Loadings


Q22A 0,9744

Q22B 0,9751

Q22C 0,9733

Q22D 0,9769

Q22E 0,9591

Q22F 0,9867

Q22G 0,9727

Q22H 0,9781

Q22I 0,958

Q22J 0,9901

Q22K 0,956

Q22L 1

Q22M 0,941

Q22N 0,9918

Q22O 0,9947

51

Q22P 0,9668

Overview

AVE Composite Reliability R Square

Cronbachs Alpha Communality Redundancy

Image 0,9505 0,9871 0 0,9826 0,9505 0

Loyalty 1,000 1,000 0,8761 1,000 1,000 0,5194

Quality 0,944 0,9916 0,9248 0,9901 0,944 0,8723

Satisfaction 0,9484 0,9866 0,9548 0,9817 0,9484 0,3337

Cross Loadings


Q22A 0,9744 0,8723 0,9009 0,8834

Q22B 0,9751 0,9047 0,9235 0,9068

Q22C 0,9733 0,9066 0,971 0,9689

Q22D 0,9769 0,8976 0,9519 0,9562

Q22E 0,9317 0,8965 0,9591 0,9548

Q22F 0,9226 0,9388 0,9867 0,9616

Q22G 0,9247 0,8764 0,9727 0,9098

Q22H 0,9303 0,8747 0,9781 0,9258

Q22I 0,9389 0,8961 0,958 0,9744

Q22J 0,9291 0,9363 0,9901 0,9733

Q22K 0,9618 0,9299 0,956 0,9322

Q22L 0,9186 1 0,9338 0,9301

Q22M 0,8547 0,8745 0,8883 0,941

Q22N 0,9459 0,9227 0,9713 0,9918

Q22O 0,9532 0,9268 0,9757 0,9947

Q22P 0,9576 0,8981 0,9618 0,9668

Latent variables correlations


Image 1 0 0 0

Loyalty 0,9186 1 0 0

Quality 0,9617 0,9338 1 0

Satisfaction 0,9537 0,9301 0,9755 1

Total Effects


Image 0 0,9186 0,9617 0,9537

Loyalty 0 0 0 0

Quality 0 0,4637 0 0,7764

Satisfaction 0 0,5972 0 0

Quality Criteria after Bootstrapping:

Outer Loadings

52

Original Sample (O)

Sample Mean (M)




Q22A <- Image 1,8169 1,8073 0,0654 0,0654 27,7654

Q22B <- Image 1,8416 1,8326 0,068 0,068 27,0866

Q22C <- Image 1,7498 1,7408 0,0713 0,0713 24,5364

Q22D <- Image 1,7521 1,7433 0,0715 0,0715 24,5102

Q22E <- Quality 1,7643 1,7556 0,0834 0,0834 21,1608

Q22F <- Quality 1,8371 1,8237 0,0739 0,0739 24,8571

Q22G <- Quality 1,8338 1,8204 0,0754 0,0754 24,3051

Q22H <- Quality 1,8396 1,8268 0,0743 0,0743 24,7542

Q22I <- Quality 1,7794 1,77 0,0761 0,0761 23,386

Q22J <- Quality 1,8167 1,8039 0,0735 0,0735 24,7141

Q22K <- Quality 1,6939 1,6843 0,0772 0,0772 21,9541

Q22L <- Loyalty 1,8852 1,8714 0,0624 0,0624 30,2078

Q22M <- Satisfaction 1,8468 1,8359 0,0551 0,0551 33,5258

Q22N <- Satisfaction 1,7999 1,7896 0,0693 0,0693 25,9603

Q22O <- Satisfaction 1,8202 1,8085 0,068 0,068 26,7679

Q22P <- Satisfaction 1,7995 1,7881 0,0839 0,0839 21,4588

Path Coefficients

Original Sample (O)

Sample Mean (M)




Image -> Loyalty 0,3543 0,2972 0,3315 0,3315 1,0689

Image -> Quality 0,9601 0,9609 0,0121 0,0121 79,3991



Satisfaction -> Loyalty 0,593 0,6521 0,337 0,337 1,7596

Total Effects

Original Sample (O)

Sample Mean (M)




Image -> Loyalty 0,9184 0,9192 0,0264 0,0264 34,7514

Image -> Quality 0,9601 0,9609 0,0121 0,0121 79,3991


Quality -> Loyalty 0,4625 0,5047 0,2541 0,2541 1,8199


Satisfaction -> Loyalty 0,593 0,6521 0,337 0,337 1,7596

53

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