Trading customer service for lower airfares-A study to determine the degree to which Irish airline customers are willing to trade the curtailment of service for lower airfares

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Madigan, Daire Liam
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MA of Business Studies
Dublin Business School
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The objectives in this dissertation are to determine a) the degree to which Irish airline customers are willing to sacrifice elements of service in order to benefit from lower airfares, b) whether there is a basic level of service that will not be relinquished by customers at any price, and c) to determine if there is a different expectation of the minimum level of service provided between airlines, even if the price paid for tickets is similar. Chapter one provides a brief historical context of the airline industry and an industry analysis. The analysis consists of a definition of the categories of airline within the industry today, examining the main points of difference between these categories and using Porters Five Forces model to identify the factors that influence service and price. Chapter two examines service in a theoretical context, providing definitions, identifying the attributes associated with services, how they are categorised and differentiated, an explanation of service quality and how they are priced. The third chapter contains the methodology of this dissertation. This took the form of an administered questionnaire, a focus group and three in-depth interviews. Ninety respondents completed the questionnaires in Dublin, Cork and Shannon airports during July and August. The results of the primary research are contained in the fourth chapter with the questionnaire results shown and analysed, and the main findings of the focus group and the in-depth interviews outlined. Results show the respondents to identify a minimum amount of legroom on board aircraft, the provision of free wheelchairs for elderly or disabled passengers and cabin crew as the minimum levels of service tolerated by Irish airline customers. There was proved to be a direct link between price and service with respondents attributing little value to some aspects of airline service while valuing others. It was also shown that the services they valued would be reappraised when offered a higher discount. Finally while there were shown to be different expectations in the level of service provided by airline categories, the minimum requirement was similar, unless travel was in business class. A summary of the primary research results and the recommendations are provided in chapter five. It was recommended that airlines avoid reducing service in areas identified in chapter four and recommendations were made which would attempt to turn these threats into opportunities. Opportunities were also found for both categories of airlines in terms of reducing costs and/or increasing revenue while it was also recommended that full-service airlines promote aspects of their service that are not offered by low-fares airlines.