Consumer Preferences In Indian Low Fare Domestic Airlines Management Essay

More than a decade back, travel by air was considered as a luxury that only the rich businessmen and high income groups of the society could afford. However, with the introduction of low-fare or budget carriers, travel by air has become affordable to the middle class as well. According to International Air Transport Association (IATA), by 2014 there will be 3.3 billion air travelers, up by 2.5 billion in 2009. India will be among the top five largest markets for domestic passengers (69 million). In order to cater to such a huge demand amidst increasing competition, the low-fare airlines need to focus on achieving a balance between low pricing and customer satisfaction.

With this as the backdrop, the study aims to understand the relation between airline’s service quality (ASQ) and customer preferences. The study also aims to compare four popular low cost airlines i.e. Spicejet, IndiGo, Jetlite and GoAir in India.

Keywords: Aviation Industry, IndiGo Airlines, Service Quality, Customer Preferences

Introduction

More than a decade back, travel by air was considered as a luxury that only the rich businessmen and high income groups of the society could afford. However, a major transformation happened in 2003 with the launch of Air Deccan, the first Low Cost Carrier (LCC) in India. The mindset of air travel changed from “for the elites” to “for the people” in the Indian market. Since then, many players have entered the industry and continue to flourish with increasing revenues and air traffic figures. However, theairlinebusinessstill remainsoneofthemostcomplexindustries.

According to CAPA – Center for Aviation, the ‘Classic’ characteristics of the low-cost carriers include high seating density, high aircraft utilization, single aircraft type, low fares(including very low promotional fares), single class configuration, point-to-point services, no (free) frills, predominantly short- to medium-haul route structures, frequent use of second-tier airports and rapid turnaround time at airports.

Growth drivers that favor the LCC market:

Passenger growth attributed to increase in disposable income (expected to grow at an average rate of 8.5% per annum till 2015) & over 300 million strong middle class that can be tapped as a potential passenger who can be drawn away from Indian railways;

Low entry barriers indicated by recent analysis in the sector that an airline can be launched with a capital of $10 million. Moreover, most components of air service like ground handling, catering, training, reservation etc. are outsourced by the airlines;

Economic factors due to steady economic growth (around 9% per annum) that is giving a boost to many sectors in the country, aviation sector being a prominent one.

Some of the popular LCCs operating in India are Air India Express, GoAir, IndiGo, JetKonnect, SpiceJet and JetLite. The LCCs operate on small margins. Any significant decline in revenue or increase in costs can dramatically impact the profitability of the business. The challenge for these airlines is to maximize profit through efficient use of their fleet, to manage revenues and optimize costs. Their profitability, revenue and yield are primarily driven by economic and external factors which make them most vulnerable to even the slightest variation in economic growth rates, national disasters, epidemic outbreaks, terrorism, war, currency fluctuations and most importantly oil prices.

According to International Air Transport Association (IATA), by 2014 there will be 3.3 billion air travelers, up by 2.5 billion in 2009. India will be among the top five largest markets for domestic passengers (69 million). In order to cater to such a huge demand amidst increasing competition, the low-fare airlines need to focus on achieving a balance between low pricing and customer satisfaction. Research on High Performance Business by Accenture (2009) revealed that most successful carriers will do four things right: (1) manage growth (by dominating their home markets, create the right balance between demand and capacity, build a competitive culture and effectively pursue secondary revenue sources); (2) excel in customer relationship management (by understanding passengers’ needs and preferences along the entire value chain of travelling-from pre-book planning to services upon arrival); (3) increase their efforts on operational excellence (by cutting costs & outsourcing non-core activities); and (4) focus on sustainability (focus on reducing carbon dioxide emissions & environment friendly measures).

In order to stay profitable and competitive, the airlines are increasingly focusing on improving their service quality and overall experience delivered to travellers among many other operational excellence initiatives. With this as the backdrop the study aims to understand the influence of an airline’s service quality (ASQ) on customer preferences. Moreover, in the recent times, Indigo has emerged as one of the fastest growing, most profitable and most popular low fare airline despite being a late entrant into this business. Therefore,this study further investigates whether Indigo airlines is perceived to be superior on key service quality parameters in comparison with the competing low fare carriers – Spice Jet, Jetlite and Go Air.

Literature Review

The research literature on service quality of airlines in the domestic and international markets largelyexaminesrelationships with customer perceptions/attitude towards LCCs; customer loyalty; customer relationship management; brand equity and customer preferences of LCCs. Some of the relevant research spanning from 2005 to 2012 has been summarized below.

O’Connel and Williams (2005) studied passengers’ perceptions of low cost airlines and full service carriers through a case study involving Ryanair, Aer Lingus, Air Asia andMalaysia Airlines. The paper provides answers to a number of critical questions: What are the key drivers of each type of airline’s business model? Is there a difference in passengers’ perceptions between low cost carriers and full service incumbents in a mature European market and in a rapidly developing Asian economy? What are the principle reasons why a passenger chooses a particular airline model? How could a legacy carrier encourage passengers to return and so regain their domestic market share? It was found that passengers travelling on full service carriers placed strong emphasis on reliability, quality, flight schedules, connections, frequent flyer programs and comfort, while travellers taking low cost carriers focused almost exclusively on fare. The study indicates that the ideal scenario for passengers would be to have a combination of low fares (at no-frills airline levels) and some of the full service products offered by the incumbent airlines.Pasari (2006) conducted a study on low cost airlines in a developing country especially India. The study provides an understanding of customer attitude towards low cost airlines through primary research and subsequently evaluating secondary research to support the findings of the primary research.

Venkatesh and Nargundkar (2006) did a comparison of customer satisfaction based on service quality among the four major airlines based on responses from frequent fliers across fourteen variables on a five point Likert scale. The flying experience was divided into three stages- namely, pre-flight, in-flight and post-flight experience. The results of this study suggest that implementation of basic service quality is essential to combat the growing competition. Differentiation can occur only by adding new service elements along with providing better quality in delivering the current service.Tarokh and Majidi (2006) evaluated the application of customer relationship management (CRM) in Airline Industry.According to the findings, CRM systems should be used differently in major airlinesand low-cost airlines. In major airlines they should promote customers with better offers that compromise with cost-effect market needs and in low-cost airlines CRM systems should be used to enhance service delivery, service quality and better accuracy.Leick (2007) studied airline passenger loyalty through an understanding of customer value. The results support a shift from the commoditized low-cost, no-frills model to a low-fare, ‘high-value’ model focusing on mass customization through CRM technologies.

Abdullaha, Manaf and Noor (2007) examined the perception of Malaysian consumers on the quality of airline services using the SERVQUAL measurement. The results of the study indicate that the most significant factors in Malaysian customers’ perception of service quality were Empathy, Tangibles and Assurance. In addition, the respondents indicated that the airlines surveyed performed better than expected on the Responsiveness dimension of service quality. There is also a strong indication that satisfaction with service quality can result in future use and the likelihood of recommending the airline to others. Research by Oyewole, Sankaran and Choudhury (2007) examined the problem of customer satisfaction in the airline industry with special reference to the developing country of Malaysia. Findings demonstrated that human interactions, check-in procedures, source of recommendations on choice of Airline, as well as monetary incentives did not influence level of customer satisfaction. On the other hand, factors such as use of ICT (Information Communication Technology), reservation procedures, in-flight services, company image, and mode of registering complaints/suggestions influenced customer satisfaction in Malaysian setting.

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A study examining the relationships between brand equity, brand preference, and purchase intentions on international air passengers’decisions in Taiwan was conducted by Chen and Chang (2008). The findings showed positive relationships between brand equity, brand preference, and purchase intentions with amoderation effect of switching cost that affected the relationship between brand equity and purchase intentions. More specifically, the effect of brand equity on purchase intentions was not significant for passengers with low switching costs. Agarwal and Dey (2010) compared customer satisfaction based on service quality as perceived by air travelers among six domestic airlines. Literature review suggested thatflying experience has three stages: Pre-flight, in-flight and post-flight and a set of six variables can be used to measure satisfaction. These variables are: Ease of bookings through the website/call center; Hassle free check in/efficient ticketing staff/regular announcements during flight delays at airport; on time performance of flights; in flight experience; baggage handling and value for money. Data from six domesticairlines viz., GoAir, Kingfisher, Jet Airways, Indigo, SpiceJet and Air India (Domestic) was examined. One thing that clearly came out in the study was that there was a difference in the perception of customersamong the low cost and the full service carriers. GoAir and Air India were found to be significantly different from the rest as far as ease of booking tickets was concerned. These airlines needed improvement in the structure of their website and ease of booking procedure. As far as hassle free check-in and announcements at the airport during flight delay were concerned, Indigo and SpiceJet were found to be similar to each other and were significantly different from the rest. However customers stated that Kingfisher offered them the best services in this regard. As per feedback of travelers, baggage loss was a problem with GoAir. Air India also needed improvement in this service. Kingfisher and Jet Airways proved to be the undisputed leaders as far as in flight experience was concerned. Customers were very happy with thekind of entertainment offered inside these carriers. Also it comes out clearly from the study that kingfisher wasable to successfully position itself as a five star airlines, providing its passengers the best Services. As far as value for money is concerned, SpiceJet and Indigo fared well. Customers reported that whatever services they were getting for the price paid proved to be satisfactory. GoAir and Air India needed improvement in this respect.

Anuwichanont (2011) studied theimpact of price perception on customer loyalty in the Airline industry. The moderating effect of price perception was significantly apparent solely on the relationship between brand affect and loyalty constructs. The findings revealed that perceived value (quality/emotional response/reputation and behavioral price) was found to significantly influence brand affect and brand trust. This supported Sanchez-Garcia’s (2007) contention that perceived value is an important factor in the development of brand affect and trust. As hypothesized, the finding revealed that brand trust significantly influences attitudinal and behavioral loyalty in the airline context. Pi and Huang (2011) examined the effect of promotion on relationship quality and customer loyalty in the airline industry. It showed that relationship-orientated promotion had significantly positive effects on satisfaction and trust. Besides, satisfaction, trust, and commitment were powerful and illustrative components for explaining customer loyalty.Sarker, Hossan and Zaman (2012) conducted a study to predict the sustainability of low cost airlines and to identify the future growth options. Focus on Customer Relationship Management (CRM) as a means for being sustainable emerged as an important finding. It further suggests that LCC should revolve around the LCC basic model rather than a complete transformation into Full Service Carrier (FCC). Further, LCC must select a need-based outsourcing model to reduce their unnecessary operational costs. The research concludes with recommendation that LCCs should formulate cost differentiation strategy for future growth and sustainability.

Research Methodology

The study examined the overall difference in service quality ranking among the four airlines. Further, since the objective is understand deeper about customer preferences related to Indigo, the subsequent hypotheses examined the relationship between Indigo’s service quality and customer preferences both in case of business and personal travel. The third hypotheses assess whether there was any relationship between customer preference for Indigo and its ranking as value for money by customers who value cost as a significant service factor (for business and personal travel). The fourth hypotheses evaluate whether there was any relationship between customer preference for Indigo and its ranking on “on-time performance” by customers who value time as a significant service factor (for business and personal travel). Finally, the fifth hypotheses were tested to understand if there was any relationship between customer preference for Indigo and its ranking on “in-flight service” by customers who value in-flight service as a significant factor (for business and personal travel).

The research questions and corresponding hypotheses are listed below.

Is there a significant difference in the service quality among the four airlines?

H0 (1):There is no significant difference in the service quality among all the four airlines considered.

Is customer’s preference for Indigo airlines related to its service quality as perceived by the customer?

H0(2.1): There is no significant relationship between customers’ preference to choose Indigo for business travel and its service quality.

H0(2.2): There is no significant relationship between customers’ preference to choose Indigo for personal travel and its service quality.

Is there a significant relationship between customers’ preference for Indigo and their perception as value for money by customers who value cost as an important service factor?

H0(3.1): There is no significant relationship between customers’ preference for Indigo (for business travel) and their perception as value for money by customers who value cost as an important service factor.

H0(3.2): There is no significant relationship between customers’ preference for Indigo (for personal travel) and it’s perception as value for money by customers who value cost as an important service factor.

Is there a significant relationship between customers’ preference for Indigo and their perception of on-time performance by customers who value time as an important service factor?

H0(4.1): There is no significant relationship between customers’ preference for Indigo (for business travel) and their perception of on-time performance by customers who value time as an important service factor.

H0(4.2): There is no significant relationship between customers’ preference for Indigo (for personal travel) and their perception of on-time performance by customers who value time as an important service factor.

Is there a significant relationship between customers’ preference for Indigo and it’s ranking on in-flight service by customers who value in-flight service as an important factor?

H0 (5.1): There is no significant relationship between customers’ preference for Indigo (for business travel) and it’s ranking on in-flight service by customers who value in-flight service as an important factor.

H0 (5.2): There is no significant relationship between customers’ preference for Indigo (for personal travel) and it’s ranking on in-flight service by customers who value in-flight service as an important factor.

Measurement

To achieve the study objectives, a survey questionnaire wasdeveloped based on the findings of the literature review. The questionnaire was pre-tested and revised.

The survey consisted of four parts covering the following issues:

perceived service quality of the four airlines i.e. Indigo, Spice Jet, Jet Lite and Go Air

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customer preference for the four airlines

customer’s perceived importance of service quality parameters

demographics

The first section of the questionnaire gathered demographic information regarding the respondents, such as age, gender, education, and monthly income. Secondly, to measure passenger perceptions about service quality of each of the four airlines, the attributes were adapted from Venkatesh and Nargundkar’s (2006) empirical study on Service Quality Perceptions of Domestic Airline Consumers in India. The researchers have adapted the SERVPERF variables developed by Cronin and Taylor (1992) and the process variables (Wen Li and Chen 1998) to suit the Indian market conditions. These attributes include value for money, on-time performance, safety standards & practices, frequency of Service, advance information during delays, in-flight service, in-flight food, waiting time for baggage arrival”, check-in services, online booking services and discounted fare scheme offers. A forced ranking method was chosen to rate the four airlines on these service parameters. Prior to the questions on ranking of four airlines, the respondents were asked to mention which of the four airlines they have traveled at least once in the last one year. Only the responses of customers having experience with at least 3 of the 4 airlines were considered for the final analysis. In addition, two questions measured customers’ relative preferences for the four airlines for business and personal travel (assuming ticket cost to be same). Further, to understand the importance of each service quality attribute by these respondents, two questions were designed to obtain ratings on 5 point scale on each attribute.

Sample Characteristics

The respondents comprised of the “Population” of customers of the four domestic low fare airline companies in Indiaviz. Indigo, Spice Jet, Jet Lite and Go Air. These airlines were selected, as they are representative of the domestic low fare category of the airline industry. Below pie-chart presents the market share of the major airlines in the Indian domestic segment.

Figure 1: Market Share of Major Airlines in Indian Domestic Segment

Source: Economic Times (Dec 2012)

The survey was randomly administered through an online survey tool (www.surveymonkey.com). After administering a test survey to 16 respondents and gaining feedback on it, the questions were modified. After administering the final questionnaire, close to 194 responses were received. However, the final set of responses considered for the analysis were shortlisted based on their experience of traveling by at least 3 of the 4 low fare carriers being evaluated. This criterion was important as the validity of the responses of people who have traveled by only one or two of these airlines would be highly questionable. Therefore, the final sample size considered for analysis was 143. The survey questionnaire and the detailed demographic data of the survey respondents are presented in Appendix I and II respectively.

SPSS tool was used for analysis of the data. Since the data was not normally distributed, Kruskal-Wallis test was used for analyzing the differences between the service quality parameters of the four airlines. In order to analyze the relationship between customer’s preferences and service quality parameters Pearson’s correlation coefficient was used.

Results and Discussion

The results of the data analysis are displayed for each hypothesis as below:

H0 (1):There is no significant difference in the service quality among all the four airlines considered.

To measure service quality, the customer rankings on 12 service quality parameters (1) Value for Money, (2) Punctuality/On-time performance, (3) complying with safety standards & practices, (4) frequency of Service, (5) advance information (through SMS or call) in case of delay, (6) regular announcements during delay, (7) in-flight service, (8) in-flight food, (9) waiting time for baggage arrival, (10) check-in services, (11) online booking services and (12) discounted fare scheme offers for each of the four airlines was summed up to represent an overall score. The figures below depict the mean values obtained for each airline.

Results (1): Differences in mean ranking for service quality among the four airlines

The above SPSS output presents the mean ranks by each airline (1=Indigo, 2=Spice Jet, 3=Jet Lite, 4=Go Air) scored on the 12 service quality parameters. Among the four airlines, Indigo scored the highest mean rank. However, in order to test whether the differences were statistically significant, the Kruskal-Wallis test was performed. The main reasons for using this test were because the data was non-parametric and the analysis was performed on four related samples. The result indicated that the mean differences between the related samples were significant at 0.05 level. Therefore, null hypothesis was rejected. The analysis concludes that Indigo was perceived as the best among the four airlines in terms of the service quality was accepted.

H0(2.1): There is no significant relationship between customers’ preference to choose Indigo for business travel and its service quality.

Results(2.1): Relationship between service quality and customer preferences for business travel (Indigo airlines)

Pearson’s correlation test was performed to evaluate the relationship between service quality and the customers’ preference for traveling by Indigo for business purpose. The sample of 143 was filtered for customers who had travelled by air at least once in the last 3 months for business purpose during end of 2012. Therefore, analysis was performed on a sample of 39 respondents. The two variables tested were: (a) Mean rank on the 12 service quality factors for Indigo (b) their ranking for Indigo airlines when asked about their preference to travel by this airline for business purpose (if ticket price for all 4 airlines was same).

The results showed a fairly good positive correlation (0.536) between the two variables at 0.01 level of significance. Hence, the null hypothesis was rejected. We can therefore conclude that there was a significant correlation between perceived service quality and customers’ preference to travel by Indigo for business purpose.

H0(2.2): There is no significant relationship between customers’ preference to choose Indigo for personal travel and its service quality.

Results (2.2): Relationship between service quality and customer preferences for personal travel (Indigo airlines)

Again, the Pearson’s correlation test was performed to evaluate the relationship between service quality and the customers’ preference for traveling by Indigo for personal purpose. The sample of 143 was filtered for customers who had travelled by air for personal reasons at least once in the last 6 months during second half of 2012. Therefore, analysis was performed on a sample of 63 respondents. The two variables tested were: (a) Mean rank on the 12 service quality factors for Indigo and (b) their ranking for Indigo airlines when asked about their preference to travel by this airline for personal purpose (if ticket price for all 4 airlines was same).

The results showed a fairly strong positive correlation (0.643) between the two variables at 0.01 significance level. Therefore, we can conclude that there was a significant correlation observed between perceived service quality and customers’ preference to travel by Indigo for personal reasons. The null hypothesis was rejected once again.

H0(3.1): There is no significant relationship between customers’ preference for Indigo (for business travel) and their perception as value for money by customers who value cost as an important service factor.

Results (3.1): Relationship between customers’ preference for Indigo (for business travel) and their perception as value for money by customers who value cost as an important service factor

The relationship between customers’ preference towards Indigo for business travel and their perception of Indigo as value for money was examined customers who ranked ticket cost as very important service factor for business travel (Ranking of 1&2 on survey question #25). The sample of 143 was filtered for customers who had ranked ticket cost as an important service factor for business travel. Therefore, the analysis was performed on a sample of 56 respondents. The two variables tested were: (a) ranking of Indigo when asked if Indigo offered value for money service (b) their ranking for Indigo airlines when asked about their preference to travel by this airline for business purpose (if ticket price for all 4 airlines was same).

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The results showed only a moderate positive correlation (0.352) between the two variables at 0.01 significance level. One reason could be that since the company usually bears the ticket cost, the business travellers are less concerned about the cost of the ticket and whether services worth the ticket price were being provided by the airline. We can still conclude that there was a significant correlation observed between perceived value for money service and customers’ preference to travel by Indigo for personal reasons by cost-sensitive customers. Therefore, the null hypothesis was rejected.

H0(3.2): There is no significant relationship between customers’ preference for Indigo (for personal travel) and it’s perception as value for money by customers who value cost as an important service factor.

Results (3.2): Relationship between customers’ preference for Indigo (for personal travel) and their perception as value for money by customers who value cost as an important service factor

The relationship between customers’ preference towards Indigo for personal travel and their perception of Indigo as value for money was examined using Perason’s correlation test among customers who ranked ticket cost as very important service factor for personal travel (Ranking of 1&2 on survey question #26). The sample of 143 was filtered for customers who had ranked ticket cost as an important service factor for personal travel. Therefore, the analysis was performed on a sample of 91 respondents. The two variables tested were: (a) ranking of Indigo when asked if Indigo offered value for money service (b) their ranking for Indigo airlines when asked about their preference to travel by this airline for personal purpose (if ticket price for all 4 airlines was same).

The results were a bit surprising given that the correlation (0.275) was a bit lower than in case of business travellers despite the sample size being larger. However the relationship was positively correlated at 0.01 significance level. Therefore, the null hypothesis was rejected.

H0(4.1): There is no significant relationship between customers’ preference for Indigo (for business travel) and their perception of on-time performance by customers who value time as an important service factor.

Results (4.1): Relationship between customers’ preference for Indigo (for business travel) and their perception of on-time performance by customers who value time as an important service factor

The relationship between customers’ preference towards Indigo for business travel and their perception of Indigo as high on on-time service was examined using Pearson’s correlation test among customers who ranked time/punctuality as very important service factor for business travel (Ranking of 1&2 on survey question #25). The sample of 143 was filtered for customers who had ranked on-time service as an important service factor for business travel. Therefore, the analysis was performed on a sample of 58 respondents. The two variables tested were: (a) ranking of Indigo when asked if Indigo offered on-time service (b) their ranking for Indigo airlines when asked about their preference to travel by this airline for business purpose (if ticket price for all 4 airlines was same).

The null hypothesis was rejected as a fairly good, positive correlation (0.514) emerged between the two variables at 0.01 significance level.

H0(4.2): There is no significant relationship between customers’ preference for Indigo (for personal travel) and their perception of on-time performance by customers who value time as an important service factor.

Results (4.2): Relationship between customers’ preference for Indigo (for personal travel) and their perception of on-time performance by customers who value time as an important service factor.

The relationship between customers’ preference towards Indigo for personal travel and their perception of Indigo as high on on-time service was examined using Pearson’s correlation test among customers who ranked time/punctuality as very important service factor for business travel (Ranking of 1&2 on survey question #26). The sample of 143 was filtered for customers who had ranked on-time service as an important service factor for personal travel. Therefore, the analysis was performed on a sample of 93 respondents. The two variables tested were: (a) ranking of Indigo when asked if Indigo offered on-time service (b) their ranking for Indigo airlines when asked about their preference to travel by this airline for personal purpose (if ticket price for all 4 airlines was same).

The null hypothesis was rejected as a moderate positive correlation (0.414) emerged between the two variables at 0.01 significance level.

H0 (5.1): There is no significant relationship between customers’ preference for Indigo (for business travel) and it’s ranking on in-flight service by customers who value in-flight service as an important factor.

Results (5.1): Relationship between customers’ preference for Indigo (for business travel) and it’s ranking on in-flight service by customers who value in-flight service as an important factor.

The relationship between customers’ preference towards Indigo for business travel and their perception of Indigo as high on in-flight service was examined using Pearson’s correlation test among customers who ranked in-flight service as very important factor for business travel (Ranking of 1&2 on survey question #25). The sample of 143 was filtered for customers who had ranked in-flight service as an important factor for business travel. Therefore, the analysis was performed on a sample of 45 respondents. The two variables tested were: (a) ranking of Indigo when asked if Indigo offered good in-flight service (b) their ranking for Indigo airlines when asked about their preference to travel by this airline for business purpose (if ticket price for all 4 airlines was same). The null hypothesis was rejected as a low but positive correlation (0.330) emerged between the two variables at 0.01 significance level.

H0 (5.2): There is no significant relationship between customers’ preference for Indigo (for personal travel) and it’s ranking on in-flight service by customers who value in-flight service as an important factor.

Results (5.2): Relationship between customers’ preference for Indigo (for personal travel) and it’s ranking on in-flight service by customers who value in-flight service as an important factor.

The relationship between customers’ preference towards Indigo for personal travel and their perception of Indigo as high on in-flight service was examined using Pearson’s correlation test was performed for customers who ranked in-flight service as very important factor for business travel (Ranking of 1&2 on survey question #26). The sample of 143 was filtered for customers who had ranked in-flight service as an important factor for business travel. Therefore, the analysis was performed on a sample of 74 respondents. The two variables tested were: (a) ranking of Indigo when asked if Indigo offered good in-flight service (b) their ranking for Indigo airlines when asked about their preference to travel by this airline for business purpose (if ticket price for all 4 airlines was same). The null hypothesis was rejected as a low but positive correlation (0.440) emerged between the two variables at 0.01 significance level.

Summary and Conclusion

The findings of the survey indicate that Indigo is able to successfully leverage upon its service quality to achieve differentiation among the low cost airlines. Specifically, it is interesting to note that Indigo was ranked highest on all the service factors by the 143 respondents who participated in the survey. This is supported by the data published by Directorate General of Civil Aviation (DGCA) on airline performance parameters like on-time, pax load factor, cancellation rate and passenger complaints as depicted in Appendix III. Moreover, Indigo was awarded as fourth among the best ten low fare airlines in Asia by World Airline SKYTRAX Awards 2012. The ratings by customer among the four airlines surveyed were as follows: Indigo (7.9/10), Go Air (7.1/10), Spice Jet (6.1/10) and Jet lite (5.1/10). To summarize, Indigo has been able to successfully perform much higher on most parameters of service quality/excellence thereby making it the most preferred and popular domestic airline in India.

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