Importance Of On-time Performance In The Airline Industry

Background of the research

Airline industry leaves significant role on the global economy contributing around 5 percent towards gross domestic product along with generating around 10 million job opportunity in the international business employability scenario. Passengers while making international travel choose airline as per service attributers and professionalisms of the service providers. Punctuality is one of the most significant “key performance indicators” for airline industry specially to grab the attention of high-yield customers. While evaluating data from last five years of airline industry, it is observed that around 20% flights of Malaysia airlines were found delayed more than 15 minutes, which ultimately increased their operating cost. This kind of in-coherent and mismanaged service quality has left significant negative impact on the overall profitability of airline business. Global economic growth is being hampered consequently and the airline industry is unable to give enough employability opportunity.  

This very specific study has provided detailed understanding about the importance of on-time performances on passenger satisfaction of airline industry. After identifying the research issue, the study would like to make comparative analysis based on the case studies of Malaysian Airlines, AirAsia and Lion Air. With the help of appropriate data collection procedure, the study would like to evaluate the identified research issue from different perspectives.      

In past five years of airline industry scenario, it is however observed that Malaysian Airlines is facing innumerable challenges in maintaining business image and reputation due to the lack of effective customer services. Among all those issues, lack of on-time performances was one of the most significant challenges that the business experts have faced in last few years (Dewan, 2016). This is similar for the other two companies named Lion air and Air Asia and they have also faced issues with their on-time performance. In majority of the instances, the low-cost carriers cause a delay of generally 15 mins and consumers are not at all happy with these issues. Lion Air has received highest number of complaints regarding their tardiness having an OTP of around 88%, while Air Asia has a on time performance of 78% and Malaysia airlines is the worst having an OTP of 65% (Worldwide, 2018). This shows that these companies are unable to provide quality services to the consumers which is affecting their revenue generation streams. The companies have aimed to revamp their performance management system to increase the on-time performance but the current study will examine the issues faced by these organizations and significance of on-time performance in the research.

Problem statement

On time performance is a key component of customer satisfaction in the Airline industry and with the increase in competition in the airline industry market. Companies with high on time performance receive less complaints and empirical shows that on time performance is a key aspect of customer satisfaction in the airline industry. However, the study will evaluate the different reasons of delay and significance of on-time performance by checking out the market share and revenue generation of each of the organizations in the past five years. The study will also examine the extent to which on time performance is hampering the organizational performances and provide suitable recommendations to improve it.

• To critically analyse the importance of on-time performances on passenger satisfaction of airline industry
• To evaluate the factors that affect in maintaining superior quality of services in airline industry
• To provide major recommendations on how to improve on-time performances for fulfilling passenger’s satisfaction in the airline industry

• What is the importance of on-time performances on passenger satisfaction of airline industry?
• What are the factors that affect in maintaining superior quality of services in airline industry?
• What should be the major recommendations in improving on-time performances for fulfilling passengers’ satisfaction in the airline industry?

Importance of on-time performances and quality services in airline industry

The on-time performances and quality of services in airlines industry are important because it can lead to customer satisfaction and at the same time, facilitate the behaviours of consumers and influence their buying behaviours too. According to David Mc (2013), it is not only essential for making the passengers reach their destination from the source on time, but also can assist in improving the brand image and reputation, thereby has resulted in strengthening the airlines industry performance and efficiency too. The airlines often suffer due to poor on time performance, which is basically the scheduling of shorter block times (David Mc, 2013). This has further resulted in lowering down the operational costs for multiple flights and thus the flights become congested with more passengers and lesser amounts are paid in the flight crew costs. Thus, risks are created leading to poor on-time performance and increasing the likelihood for delay of flights and unable to make passengers reach the destination on time as well. Chen & Hu (2013) also stated that the importance of on-time flights also means that the airlines company has cared more about getting the passengers reach their destinations on time rather than focusing only on making money as much as possible (Chen & Hu, 2013).

As stated by Singh & Sushil (2013), the airlines are associated with the responsibilities of managing their on-time performance according to the 15 minutes of the arrival time that has been scheduled. The threshold time of 15 minutes are considered as vital factors, which are not in the control of the airlines such as airport congestion, weather conditions, gate availability and check in issues (Singh & Sushil, 2013). The passengers must understand there could be delays and this could often create difficult situations and affect the o-time experience of flights largely too. It is a normal thing or air travel nature that has been almost experienced by many who frequently travel by air (Greenfield, 2014). The airlines do not have enough credit about how difficult it can get to provide the right air transportation services and make people reach from the source to destination (Wittman, 2014). The airlines that have exceptional on time performance are the most reputed and popular among clients because they have done a great job in spite of anything that might have worked against the company.

Research aims and objectives

The promotions of on-time performance to the travellers could also strengthen the relationships with corporations and create positive mind sets among the business travellers. Based on Merkert & Pearson (2015), the quality of the services is managed by determining what the priorities are and most importantly scheduling block times and making sure that the destination is reached on time along with best quality hospitality services are provided to them in the flight (Merkert & Pearson, 2015). The passengers’ choice of airlines is dependent on the on time experience provided by the airlines companies. In public transportation, the on time performance is actually the success the airlines services being o the allocated time schedule. The on time performance also refers to the flights running on time and has been expressed in percentage, which when increased, show that the flights are running on time. The on time performance level for the airlines services is an important factor that measures the efficiency of the airlines company too. With the flights transporting the passengers from the source to the destination on time, the passengers have become more inclined and this has also created a sense of trust and loyalty among them about the company (Choi, Lee & Olson, 2015). This has brought huge benefits for the companies, as the customers have come back to make more purchases, which has also impacted the sales and revenue generation capability of the airlines company largely.

With the flights running on time, the passengers have managed to reach their destinations on time, which has not only created a positive mind set among them, but also has helped in attracting new clients as well as draw the existing clients. Not only does this strengthen the relationship between the business and its clients, but also it has led to higher level of customer satisfaction and their buying behaviours are influenced, thus leading to purchases more from the airlines company rather than from any other companies within the airlines industry (Wang et al., 2015). There are many reasons due to which, poor on time performance is experienced such as traffic congestion, unrealistic scheduling and weather conditions often affect the time maintenance of flights and due to this, the passengers also have suffered and become incapable of reaching their destination on time.

The theoretical framework has been established, which showed that other than the price factor, the on-time performance also has been considered as a major factor impacting the performance of business and also creating satisfaction among the clients. The on-time performance of flights have influenced the behavioural intentions of clients and also has resulted in the creation of perceived value, thereby resulting in improved service quality and presenting a positive airlines brand image too (Merkert & Pearson, 2015). These are considered as essential factors included in the framework directly related to the customer satisfaction level and revenue generation capability of the business too within the airlines industry.

Research question

The literature gaps are found after assessing the secondary sources, which showed that other than the on-time performance, there were other essential factors impacting the level of customer satisfaction within the airlines industry, which has not been addressed. The on-time performance has been the major focus here though there have been other areas like price, quality of services, etc., which were not been addressed and this resulted in neglecting certain areas that remained hidden. Few of the literature sources also did not contain enough information about the on-time performance, which was the main aim of the research and how it has influenced higher customer satisfaction level and increased business performance (Singh & Sushil, 2013). Thus, there have been considered as major gaps that might sometimes hinder the successful accomplishment of research and create complexities in the assessment of literature section properly and with accuracy.

The research methodology is the plan of action for conducting the overall research and will describe the different methods used to collect data and analyse it. The study will use the Saunder’s research onion to develop the different methods to be used for unfolding each stage of the research onion. The study will describe the research philosophy, approaches, design, data collection and analysis methods, reliability, validity and ethical consideration.  In this study, the main purpose of the research is exploration of data so it is a fundamental research so observational method will be used. The observation method aims to provide description of behaviours and will provide relevant facts and theories to propose a relevant theory.

The research study is a comparative analysis between three firms, Malaysian Airlines, AirAsia and Lion Air. This study will use a single research design to explore data on the three airlines company.  There are mainly two types of approaches, one is inductive approach and other is deductive approach. The deductive approach proves that the existing theories discussed in the literature review section by testing of hypothesis (Taylor, Bogdan & DeVault, 2015). On the contrary, the inductive approach is used to develop new paradigms and generalizations. In this current study, the inductive approach will be used as it is the most appropriate research method in conducting subjective data analysis. Inductive approach will facilitate in conducting in depth analysis of the collected data and form tentative hypothesis for developing the new theory.

There are two types of research designs used in the study, one is conclusive and other is exploratory. The conclusive research design is used for description of behaviours, relationship between one variable to another and causal and effect relationship (Flick, 2015). Causal relationship can be further divided into descriptive study and causal research. In this current study, exploration is the major aim of the research so exploratory study will be used which will only explore data and will not aim to provide any definitive conclusions. The study will conduct comparative analysis to explore the available data but the study may change direction based on the data available in the research.

Literature review

The study will conduct secondary data from different website journals, articles and peer reviewed articles.  The data for the literature review will be collected from 15 peer reviewed journals from authentic websites (Quinlan et al., 2019).  The data for analysis will be collected from company websites, web articles and statistical websites that will provide data about the consumer information and sales data. The consumers review will also be used to develop a comparative analysis among all the three companies.

The data will be analysed using thematic analysis where coding will be used.  The study will develop themes based on the objectives in the research and data will be collected to develop themes. These themes will be analysed by identifying the patterns in the data and open coding will be used to convert raw data into meaningful information (Gibbs, 2018). Axial coding is used to relate the available data with existing theories or formation of new theories based on the pattern of the data (Humphries, 2017). Coding is one of the key aspects of explorative as it facilitates in developing the tentative hypothesis and forms the background for conducting conclusive research in future research. the study will also use inferential statistics to compare quantitative secondary data to examine the importance of on time performance on the performance of the business and market share of the organizations. The relationship will be identified using descriptive statistics and cross tabulation where chi square test will be conducted to analyse the association between variables.

Sampling is the method of reducing the sample size of a research when the overall sample population is huge in the research. Sampling is used to ease the calculation and reduce time and cost of the study. Sampling is of two types, one is probabilistic sampling and other is non-probabilistic sampling. Probabilistic sampling is based on randomization and different methods of probabilistic sampling are cluster sampling, stratified sampling, systematic sampling and simple random sampling (Etikan, Musa & Alkassim, 2016). On the contrary, non-probabilistic sampling consist of methods such as convenience sampling, quota sampling, purposive sampling and snowball sampling. Sampling commences with identification of the target sample population; the next phase is selecting the sampling frames and the last part is selecting the sample size. In the research, the target population consist of secondary data collected from various websites and annual reports of the airline companies and the sampling frame will narrow down the data to the data of companies such as Malaysian Airlines, AirAsia and Lion Air and the sample size will be 5.  The data will be chosen based on convenience sampling and the websites articles providing relevant data regarding will be chosen.  

Falsification, fabrication and plagiarism are the three cardinal sins of research ethics. The study will make sure that none of the collected data is plagiarised and the authors have been credited for by citing them at appropriate instances. Similarly, none of the data will be falsified which means that no false claims or over exaggeration will be used while fulfilling the objective of the research (Tikly & Bond, 2018). Fabrication will also be avoided where none of the data has been altered to support the claims of the research and objective of the research. The collected data will be taken from authentic sources and data will be clarified and cross checked for better authenticity. The study will aim to keep the reliability and validity of the data high but it is difficult to maintain reliability and validity of secondary data. The internal consistency of the data will be measured to check whether the collected data is appropriate or not and the variables that should be eliminated.  

Task Name	Duration	Start	Finish
Research plan	54 days	Thu 13-12-18	Tue 26-02-19
Research topic selection	5 days	Thu 13-12-18	Wed 19-12-18
Confirm with the lecturer	3 days	Thu 20-12-18	Mon 24-12-18
Develop research objectives	1 day	Tue 25-12-18	Tue 25-12-18
Collect Secondary data for annotated bibliography	7 days	Wed 26-12-18	Thu 03-01-19
Identify the research gap and reframe the research objectives	2 days	Fri 04-01-19	Mon 07-01-19
Develop literature by critical evaluation of data	5 days	Tue 08-01-19	Mon 14-01-19
Meeting with the lecturer	2 days	Tue 15-01-19	Wed 16-01-19
Identify suitable research methods and instruments	7 days	Thu 17-01-19	Fri 25-01-19
Collect data for findings and analysis	7 days	Mon 28-01-19	Tue 05-02-19
Critical evaluation of collected data	4 days	Wed 06-02-19	Mon 11-02-19
Develop rough draft	7 days	Tue 12-02-19	Wed 20-02-19
Take feedback from the professor	1 day	Thu 21-02-19	Thu 21-02-19
Develop final paper	3 days	Fri 22-02-19	Tue 26-02-19

Conclusion 

Overall expected findings

The study is expected to identify the importance and significance of the on-time performance on consumer satisfaction. It is expected that there will be significant relationship between on time performance and customer satisfaction where the companies having better on time performance will have more satisfied consumers, higher market share and revenue generation. This means that it is expected that Lion Air will have better performances than the other two as it has better on time performances. Similarly, it is expected that on time performance results in increase in flight occupancy, sales volumes and market share. Moreover, the study will also examine the impact of cost on the satisfaction level and decision making of the consumers. It is expected that cost will have a significant role to play for the consumers and it will be used as a control variable for the research.

References

Chen, P. T., & Hu, H. H. S. (2013). The mediating role of relational benefit between service quality and customer loyalty in airline industry. Total Quality Management & Business Excellence, 24(9-10), 1084-1095.

Choi, K., Lee, D., & Olson, D. L. (2015). Service quality and productivity in the US airline industry: a service quality-adjusted DEA model. Service Business, 9(1), 137-160.

David Mc A, B. (2013). Service quality and customer satisfaction in the airline industry: A comparison between legacy airlines and low-cost airlines. American Journal of Tourism Research, 2(1), 67-77.

Dewan, A. (2016). Malaysia Airlines revamps its performance management system. Retrieved from https://www.humanresourcesonline.net/malaysia-airlines-revamps-performance-management-system/

Etikan, I., Musa, S. A., & Alkassim, R. S. (2016). Comparison of convenience sampling and purposive sampling. American Journal of Theoretical and Applied Statistics, 5(1), 1-4.

Flick, U. (2015). Introducing research methodology: A beginner’s guide to doing a research project. Sage.

Gibbs, G. R. (2018). Analyzing qualitative data (Vol. 6). Sage.

Greenfield, D. (2014). Competition and service quality: New evidence from the airline industry. Economics of transportation, 3(1), 80-89.

Humphries, B. (2017). Re-thinking social research: anti-discriminatory approaches in research methodology. Routledge.

Merkert, R., & Pearson, J. (2015). A non-parametric efficiency measure incorporating perceived airline service levels and profitability. Journal of Transport Economics and Policy (JTEP), 49(2), 261-275.

Quinlan, C., Babin, B., Carr, J., & Griffin, M. (2019). Business research methods. South Western Cengage.

Singh, A. K., & Sushil. (2013). Modeling enablers of TQM to improve airline performance. International Journal of Productivity and Performance Management, 62(3), 250-275.

Taylor, S. J., Bogdan, R., & DeVault, M. (2015). Introduction to qualitative research methods: A guidebook and resource. John Wiley & Sons.

Tikly, L., & Bond, T. (2018). Towards a postcolonial research ethics in comparative and international education. In Researching Ethically across Cultures (pp. 18-38). Routledge.

Wang, Y., Wallace, S. W., Shen, B., & Choi, T. M. (2015). Service supply chain management: A review of operational models. European Journal of Operational Research, 247(3), 685-698.

Wittman, M. D. (2014). Are low-cost carrier passengers less likely to complain about service quality?. Journal of Air Transport Management, 35, 64-71.

Worldwide, O. (2018). On-Time Peformance Star Ratings. Retrieved from https://www.oag.com/on-time-performance-star-ratings-2018?airline_name=malaysia+airlines