How Customer Experience Promotes Customer Loyalty through Passenger Satisfaction: Does Brand Reputation Matter?

Abstract

This study aimed to determine the factors of customer experience that influence passenger loyalty through the lens of passenger satisfaction. In addition, the moderating role of brand reputation on passenger loyalty was also considered. Data was collected from a survey of 997 Vietnamese passengers who used flight services on low-cost airlines in Vietnam. The research results from the partial least squares structural equation modelling (PLS-SEM), showed that six customer experience factors have positive impact on passenger satisfaction. In descending order, these are Flight attendant quality, Check-in/luggage service, Online Booking Service, Convenient Flight Schedule, Lounge and Service Reliability. These relationships were also shown to be fully mediated by customer satisfaction. Moreover, brand reputation strengthens the positive association between passenger satisfaction and loyalty. The study has also suggested some implications for building a better service experience for low-cost airlines in Vietnam to increase customer loyalty.

Introduction

Vietnam's aviation industry has been developing strongly in the past ten years, and has evidenced a steady doubledigit growth rate. It is widely considered to be in the group of countries with the fastest growing aviation market in the world (Vietnamairlines, 2021). There has been a parallel increase in the number of airlines in recent times, including Vietnam Airlines, Vietjet Air, Jetstar Pacific, VASCO and Viet Bamboo Airways, and in 2018, these companies dominated the country's air passenger transport sector (Vietstock, 2021). It has been reported that the sector is split into two classes of transportation, these being traditional and low-cost airlines, and these are partitioned between state-owned and private management models. Vietnam Airlines and Vietjet Air currently hold the majority of the market share, but the entry of Bamboo Airways into the market has partially filled the "gap" between the two models. This has caused rivalry within the industry to rise, and has sparked an increase in the general market share. Although Bamboo Airways has only been in business for three years, in the current epidemic conditions its competitive power has been stimulated. This strong increase in competition within the local airlines has made Vietnam's aviation market expand rapidly. This increase in competition has also forced companies into improving their service quality, as well as adjusting their prices to strengthen their brand power and increase their market share.