CHING-FU CHEN

WEN-SHIANG TSENG

Exploring Customer-based Airline Brand

Equity: Evidence from Taiwan

Abstract
Although branding management is important to an airline company, the existing literature on
brand equity within the airline industry is sparse. This study proposes an airline brand equity
model from the customer’s perspective and operationalizes the airline brand equity with four
dimensions: brand awareness, brand image, perceived quality, and brand loyalty. In addition,
the inter-relationships among four dimensions and their influences on brand equity are investigated
empirically. Using an empirical survey data of Taiwanese air passengers, the results reveal that
brand loyalty, among other brand equity components, is the main determinant of brand equity,
and a causal relationship between perceptual and behavioral dimensions is confirmed in terms
of inter-relationships among brand equity components. Managerial implications in brand manage-
ment and customer relationship management to the airline industry are provided.

The importance of brand equity to the ser-
vice industry in terms of marketing and busi-
ness management has been addressed recently
by both academics and practitioners, but the
research of brand equity on the airline industry
is still sparse and requires more attention. Chen
and Chang (2008) address the importance of
customer-based brand equity in the airline in-
dustry and explore the relationships between
brand equity and their consequences—namely,
brand preference and purchase intentions.
Their findings confirm the positive effects of
customer-based brand equity on brand prefer-
ence and purchase intentions. More specifically,
better airline brand equity results in customers’
higher preference on an airline and further leads
to a higher likelihood of purchase intentions via
the mediating effect of brand preference.
Despite airlines making great efforts to es-
tablish and maintain their brand equity in
Mr. Chen is associate professor, Department of
Transportation and Communication Management
Science, National Cheng Kung University, Tainan, 701,
Taiwan; e-mail cfchen99@mail.ncku.edu.tw. Mr. Tseng
is master student, Department of Transportation and
Communication Management Science, National Cheng
Kung University, Taiwan.
The authors are grateful to the National Science
Council (NSC), Taiwan, for financial support (NSC 96-
2416-H-006-018).
practice, an appropriate measurement of brand
equity for the airline industry lacks a general
consensus. This is especially so as the inter-
relationships between the components of air-
line brand equity and the effects of components
on overall brand equity are of great importance.
In general, customer-based brand equity con-
sists of four main components: brand aware-
ness, perceived quality, brand image, and brand
loyalty (Chen and Chang 2008). Among them,
the first three components belong to perceptual
brand equity, while the last component refers to
behavioral brand equity (Cobb-Walgren, Ruble
and Donthu 1995; Yoo and Donthu 2001). Ad-
ditionally, a causal relationship is believed to
occur when perceptual brand equity has posi-
tive effects on behavioral brand equity. How-
ever, the inter-relationships among the compo-
nents of perceptual brand equity and what
influences perceptual brand equity in terms of
components on behavioral equity are issues
requiring more research.
The objective of this study are threefold:
First, explore the inter-relationships among the
components of perceptual brand equity, i.e.,
brand awareness, brand image, and perceived
quality in the airline industry; second, investi-
gate the influences of components of percep-
tual brand equity on brand loyalty based on
the perception-behavior causal hypothesis; and
2010 AIRLINE BRAND EQUITY
third, examine the relationships between the
components of brand equity, perceptual and
behavioral, and overall brand equity. This re-
search uses a sample of data collected from
Taiwanese air passengers who take interna-
tional flights by a questionnaire survey in order
to conduct the empirical analysis. The struc-
tural model between constructs is constructed
and examined by employing the structural
equation modeling (SEM) approach.
CONCEPTUAL BACKGROUND
Brand equity, which refers to the incremental
utility or value added to a product by its brand
name (Keller 2003), has been deemed as pri-
mary capital for many industries. Due to char-
acteristics such as intangibility, inseparability,
heterogeneity, and perishability embedded in
services, the service industries have recently
paid more attention to the importance of brand
equity to their performance and hence have
devoted great efforts to establish unique brand
equity for their companies. Strong brands can
increase customers’ trust from an invisible pur-
chase and enable customers to better visualize
and understand intangible products (or ser-
vices). Rather than management strategies,
many western companies have re-evaluated the
longstanding brand power for short-run per-
formance. In addition, brand management has
played an important role in forming a corporate
strategy (Kim and Kim 2005). On the other
hand, researchers have also had to focus to a
considerable extent on brand equity. According
to Yoo and Donthu (2001), the related issues
on brand equity include the positive effect of
brand equity on a company’s future profits and
long-term cash flow, a consumer’s willingness
to pay premium prices, merger and acquisition
decision making, stock prices, sustainable
competitive advantage, and marketing success.
However, understanding brand equity has been
hampered due to a lack of consensus on the
measurement of brand equity.
In his Equity Engine model of brand equity,
Morgan (2000) identifies two classes of equity
components: functional performance and affin-
ity, which are emotional and intangible. The
former is category-specific, while the latter is
not. More specifically, the affinity component
is the set of ‘‘universal rules’’ for the emotional
side of branding that transcends any category.
25
Furthermore, the affinity component is repre-
sented by three factors: authority (such as brand
heritage, trust, and innovativeness), identifica-
tion (such as bonding, caring, and nostalgia)
and approval (prestige, acceptability, and en-
dorsement).
Brand equity can be defined in many con-
texts. According to Kim and Kim (2005), the
main contexts include the added value en-
dowed by the brand name (Farquhar 1989);
brand loyalty, brand awareness, perceived
quality, and brand association (Aaker 1991);
differential effect of brand knowledge on con-
sumer response to the marketing of the brand
(Keller 1993); incremental utility (Simon and
Sullivan 1993); total utility (Swait et al. 1993);
and the difference between overall brand pref-
erence and multi-attributed preference based
on objectively measured attribute levels (Park
and Srinivasan 1994). In sum, brand equity can
be defined as the incremental value of a product
due to the brand name.
The literature has built up three main per-
spectives of brand equity: the financial per-
spective, the customer-based perspective, and
the combined perspective (Keller 1993). The
financial brand equity is based on the incre-
mental discounted future cash flows that result
from a branded product’s revenue over the rev-
enue of an unbranded product. On the other
hand, the customer-based brand equity is de-
fined as the differential effect of brand knowl-
edge on a customer’s response to the marketing
of the brand (Keller 1993). The combined per-
spective incorporates both financial brand eq-
uity and customer-based brand equity. For a
summary of previous research on brand equity,
one may refer to Kim and Kim (2005).
This study focuses on the customer-based
perspective of brand equity hereafter. In ac-
cordance with Aaker (1991, 1996), Cobb-Wal-
gren et al. (1995), and Yoo and Donthu (2001),
the operationalizations of customer-based
brand equity are divided into two categories:
consumer perception and customer behavior
(e.g., brand loyalty). Although some research-
ers define customer-based brand equity by only
perceptual dimensions, Aaker (1991)’s defini-
tion of customer-based brand equity, which has
been broadly accepted and employed by many
researchers, includes both perceptual and be-
havioral dimensions. ‘‘Consumer-based’’
26 TRANSPORTATION JOURNAL™
means a measurement of perceptual and/or be-
havioral brand equity at the individual con-
sumer level through a consumer survey. Col-
lectively, brand equity consists of four
dimensions: brand awareness, perceived qual-
ity of brand, brand image (or associations),
and brand loyalty (Aaker 1991, 1996). These
dimensions may be used to explore the findings
of marketing and consumer behavior research
in relation to brand equity (Yoo and Donthu
2001). This study hypothesizes both perceptual
and behavioral categories as the components of
brand equity and a causal relationship between
perceptual and behavioral dimensions. There
are some advantages of taking both perceptual
and behavioral dimensions into account when
measuring brand equity. Consumer perceptions
are clearly an antecedent to behavioral mani-
festations of brand equity. Although behavioral
measures of purchase reflect the existence of
equity, they fail to reveal the factors actually
driving equity without measuring the percep-
tual dimension of brand equity (Cobb-Walgren
et al. 1995).
Brand awareness is ‘‘the ability for a buyer
to recognize or recall that a brand is a member
of a certain product category’’ (Aaker 1991)
and consists of both brand recognition and re-
call (Keller 1993). Awareness is argued as be-
ing a first and necessary, but not sufficient,
step leading to trial and repeat purchases, be-
cause the effect of awareness results at best in
product curiosity (Konecnik and Gartner
2007). Perceived quality is ‘‘the consumer’s
judgment about a product’s overall excellence
or superiority’’ (Zeithaml 1988) and therefore
based on consumers’ subjective evaluations on
a combination of products, services, and expe-
riences. Perceived quality has been widely
agreed to be a vital element affecting consumer
behavior. The consumer’s opinion about the
product’s quality and its attributes with regard
to its expected performance forms the measure-
ment scale indicator of the brand quality per-
ceived by individuals (Villarejo-Ramos and
Sanchez-Franco 2005). Brand image is ‘‘a set
of brand association that are anything linked in
memory to a brand, usually in some meaningful
way’’ (Aaker 1991) and can be defined as per-
ceptions of an organization reflected in the
associations held in consumer memory (Leone
et al. 2006). Finally, brand loyalty is defined
Winter
as ‘‘the attachment that a customer has to a
brand’’ (Aaker 1991). Brand loyalty plays an
outstanding role in generating brand equity not
only because of its capacity to keep a customer
loyal, but also because that customer’s loyalty
extends to brands in the company’s portfolio
(Villarejo-Ramos and Sanchez-Franco 2005).
In a study on destination brand equity, Ko-
necnik and Gartner (2007) apply the three main
components of image—namely, cognitive, af-
fective, and conative—based on destination
image research by Gartner (1993) so as to oper-
ationalize the dimension of brand equity (see
Figure 1). The cognitive component constitutes
awareness that is associated with what some-
one knows or thinks they know about a brand
(destination). The affective component is built
upon how one feels about this knowledge. The
conative component is then the action stage
that relates to how one acts on the information
and how they feel about a brand (destination).
Konecnik and Gartner (2007) argue that brand
awareness mostly influences the cognitive
component and brand equity cannot be created
without brand awareness. The dimensions of
perceived quality and brand image influence
the affective component more when attitudes
and feelings toward what is known, i.e., brand
awareness, are assessed. Finally, brand loyalty,
attitudinal or behavioral, is pertinent to the con-
ative component. Following the causal path of
cognitive → affective → conative → brand
equity and based on past studies, the inter-
relationships between variables are hypothe-
sized. The eight hypotheses with a conceptual
model (see Figure 2) are proposed as follows:
H1: Brand awareness has a positive effect on
perceived quality.
H2: Brand awareness has a positive effect on
brand image.
H3: Perceived quality has a positive effect on
brand image.
H4: Perceived quality has a positive effect on
brand loyalty.
H5: Perceived quality has a positive direct ef-
fect on overall brand equity.
H6: Brand image has a positive effect on brand
loyalty.
H7: Brand image has a positive direct effect
on overall brand equity.
H8: Brand loyalty has a positive effect on over-
all brand equity.
2010 AIRLINE BRAND EQUITY 27

Figure 1. Creation of Brand Equity

Note: Adapted from Konecnik and Gartner (2007)

METHODOLOGY hypotheses introduced. The questionnaire de-

The purposes of this study are to examine an
airline brand equity model of the international
passengers in Taiwan based on four dimensions
of brand awareness, brand image, perceived
quality, and brand loyalty, and to probe the
inter-relationships among four dimensions and
their influences on brand equity. This section
provides an overview of the research methods
that are used to answer the proposed research
sign is described first, followed by an explana-
tion of our research approach and respondent
profile as well as empirical data analysis.
Questionnaire Design
The questionnaire was designed as a survey
instrument including all constructs of the pro-
posed model to investigate the hypotheses of
interest. The questions in the questionnaire are

Figure 2. Conceptual Model of Airline Brand Equity

28 TRANSPORTATION JOURNAL™
based on a review of the literature and specific
airline industry characteristics. A pre-test was
carried out with randomly selected air passen-
gers at the Tainan airport in southern Taiwan.
Based on feedback from a pilot sample of thirty
air passengers, the survey instrument was re-
vised and finalized to improve clarity and con-
tent validity of the questionnaire.
The survey questionnaire consists of six sec-
tions. The first section is designed to obtain
each respondent’s attitudes toward an airline’s
brand awareness with a three-item, 5-point Lik-
ert-type scale based on Aaker (1996) and Yoo
et al. (2000). The second section deals with
the measurement of perceived airline quality
with a twenty-one-item, 5-point Likert-type
scale following Park (2007) and Park, Robers-
ton, and Wu (2004). The perceived quality
scale was structured by six dimensions: in-
flight service (five items), reservation-related
service (two items), airport service (four
items), reliability (three items), employee ser-
vice (five items), and flight availability (two
items). The third section is designed to under-
stand each respondent’s perception of airline
brand image with a three-item, 5-point Likert-
type scale based on Park (2007). The fourth
section deals with the measurement of airline
brand loyalty with three items using a 5-point
Likert type scale based on Park, Roberston,
and Wu (2004), and Yoo et al. (2000). The
fifth section identifies each respondent’s over-
all perception of airline brand equity with a
four-item, 5-point Likert-type scale drawn
from previous studies (Yasin, Noor, and Moha-
mad 2007; Yoo, Donthu, and Lee 2000). The
items of each construct are stated in the Appen-
dix. Respondents are asked to indicate their
agreement level of each item of the first five
sections on the 5-point Likert scale anchored
by ‘‘strongly disagree (=1)’’ to ‘‘strongly agree
(=5).’’ The sixth section reports respondents’
demographic information and trip behavioral
information with seven items—gender, age,
marital status, education level, occupation,
monthly income, and trip purpose—via a cate-
gorical scale.
Data Collection
A self-administered questionnaire survey
was conducted at Taoyuan International Air-
port in Taiwan during February 2008. This
Winter
study adopts the convenience sampling ap-
proach due to an unknown population of air
passengers. International passengers were in-
vited to participate in the survey and assured
of confidentiality in reporting before a ques-
tionnaire was delivered. Three hundred ques-
tionnaires were distributed and 249 valid sam-
ples were obtained after excluding the
incomplete ones, yielding an 83.0 percent re-
sponse rate.
The respondent data consist of almost an
even share of male (50.6 percent) and female
(49.4 percent) respondents. The great majority
of the respondents are aged between 26 and
35 years old (37.4 percent). Of the sample,
58.6 percent are single, 43.8 percent are white-
collar, and 86.3 percent hold a university de-
gree or higher. The great majority of the re-
spondents (37.8 percent) have monthly income
between NT$30,000 (or US$985) and
NT$60,000 (or US$1,970). Most of the respon-
dents are flying for leisure purposes (57.8
percent).
Data Analysis
In line with the two-step approach proposed
by Anderson and Gerbing (1988), a measure-
ment model was tested before testing the struc-
tural model. Confirmatory factor analysis
(CFA) and structural equation modeling (SEM)
analysis were used to check construct validity
and the goodness-of-fit indices for the mea-
surement and structural models and to further
examine the relationships among constructs
under investigation.
EMPIRICAL RESULTS
Measurement Model
Since the scale of perceived quality in this
study was adopted from Park (2007) and Park
et al. (2004), a confirmatory factor analysis
was conducted to ensure the factor structure
of perceived quality that consists of twenty-
one items under six dimensions. One item of
flight availability dimension was deleted due
to its standardized factor loading being less
than 0.5. According to the indices of goodness-
of-fit, the perceived value scale reveals a well-
structured dimensionality. Due to the space
limit, the CFA results of perceived quality are
not reported here, but are available from the
authors upon request. The subsequent analysis
2010 AIRLINE BRAND EQUITY
uses the summated variables of perceived qual-
ity calculated from the means of the items for
each dimension as indicators of perceived qual-
ity in the conceptual model.
Before conducting the path analysis, this
study examines the validity and reliability of
the constructs by confirmatory factor analysis.
According to the goodness-of-fit indices from
CFA, the measurement model proves parsimo-
nious. More specifically, although the Chi-
square statistic (␹2=330.6, d.f. = 142) is signifi-
cant, the ratio of the Chi-square value to de-
grees of freedom (␹2/d.f. = 2.33) is less than
the cut-off value of 3 suggested by Bagozzi
and Yi (1988). Furthermore, other indices such
as CFI (0.95) and NNFI (0.97) are greater
than the recommended value of 0.9. The root-
mean-square error of approximation
(RMSEA) is 0.07, which is less than 0.10
(Hair et al. 2006).
The adequacy of each multi-item scale in
capturing its respective construct is subse-
quently examined. Convergent validity is ex-
pected when each measurement’s estimated
pattern coefficient on its underlying construct
factor is significant. The internal validity of the
measurement model is examined by calculating
the construct reliability and average variance
extracted (AVE). As seen in Table 1, the con-
struct reliabilities of the five constructs range
from 0.85 to 0.95 and are well above the recom-
mended value of 0.7 (Hair et al. 2006). The
AVE of each measure ranges from 0.53 to 0.79,
which is more than 50 percent of the variance
as suggested by Bagozzi and Yi (1988) and
indicates that the variance captured by the con-
struct is greater than the variance due to mea-
surement error (Fornell and Larcker 1981). In
addition, as seen in Table 2, a squared root of
AVE for each construct is greater than the
correlation coefficients of corresponding inter-
constructs, confirming discriminant validity
(Fornell and Larcker 1981). Therefore, the in-
ternal validity of the measurement model is
adequate. Moreover, a descriptive analysis was
run on each construct to measure their means:
brand awareness (3.75), perceived quality
(3.68), brand image (3.45), brand loyalty
(3.55), and overall brand equity (3.38).
Structural Model and Test of Hypotheses
The study takes the simultaneous maximum-
likelihood-estimation procedures to examine
29
the hypothesized relationships among brand
equity, brand preference, and purchase inten-
tions. Figure 3 reports the goodness-of-fit indi-
ces of the final estimated structural model. The
chi-square statistic (␹2=338.84, d.f.=144) is
significant; however, the ratio of the chi-square
value to degrees of freedom (␹2/d.f. = 2.35) is
less than 3. Other fit indices, including CFI
(0.98), NNFI (0.97), and RMSEA (0.07), indi-
cate that the structural model has a reasonable
explanation of the observed covariance among
the constructs of interest.
Regarding the hypothesis tests, as shown in
Table 3, six out of eight hypothesized relation-
ships are supported in the estimated structural
model except for H5: perceived quality → over-
all brand equity and H7: brand image → overall
brand equity. As shown in Figure 3, brand
awareness has significant positive effects on
both perceived quality (␥1 = .40, t-value = 5.30)
and brand image (␥2 = .21, t-value = 3.26).
Hence, H1 and H2 are supported. Furthermore,
perceived quality also has significant positive
effects on brand image (␥3 = 0.57, t-value =
7.13) as well as brand loyalty (␥4 = 0.34, t-
value = 5.03), indicating that H3 and H4 are
supported. A significant positive effect of
brand image on brand loyalty (␥6= 0.58, t-
value = 8.81) is also found, and thus H6 is
supported. Finally, brand loyalty is found to
have a significant positive effect on overall
brand equity (␥8 = 0.74, t-value = 8.26), and
thus H8 is supported.
Table 4 reports the direct, indirect, and total
effects of independent variables on the overall
brand equity. The results show that only brand
loyalty has a direct effect on overall brand
equity while brand awareness, perceived qual-
ity, and brand image have indirect effects on
overall brand equity. The total effect of individ-
ual variables on overall brand equity is calcu-
lated from the sum of direct and indirect effects.
The total effect of brand loyalty on overall
brand equity is 0.74, equaling its direct effect
due to no indirect effect. The total effect of
brand awareness on overall brand equity is
0.36, equaling its indirect effect from no direct
effect. The effect of perceived quality on over-
all brand equity is 0.64, which consists of a
direct effect of 0.10 and an indirect effect of
0.54. Finally the total effect of brand image on
overall brand equity is 0.50, including a direct
30 TRANSPORTATION JOURNAL™ Winter

Table 1. Confirmatory Factor Analysis Results

Average
Standardized Construct variance
factor Error reliability extracted
Construct Indicator loading variance (CR) (AVE)
Brand AW1 0.79 0.38 0.85 0.66
Awareness AW2 0.70 0.51
(AW) AW3 0.92 0.15
Perceived PQ1 (In-flight) 0.64 0.59 0.87 0.53
Quality PQ2 (Reservation) 0.72 0.48
(PQ) PQ3 (Airport) 0.79 0.38
PQ4 (Reliability) 0.76 0.42
PQ5 (Employee) 0.77 0.40
PQ6 (Availability) 0.66 0.56
Brand Image Image1 0.86 0.26 0.90 0.76
BI Image2 0.88 0.23
Image3 0.87 0.24
Brand Loyalty1 0.90 0.18 0.92 0.79
Loyalty Loyalty2 0.94 0.12
(BL) Loyalty3 0.82 0.33
Overall OBE1 0.94 0.12 0.93 0.78
Brand Equity OBE2 0.89 0.21
(OBE) OBE3 0.89 0.21
OBE4 0.80 0.36

Table 2. Correlation Matrix of Constructs

Construct Mean S.D. BA PQ BI BL OBE
Brand 3.75 0.88 0.81
Awareness (BA)
Perceived 3.68 0.54 0.40 0.73
Quality (PQ)
Brand Image 3.46 0. 82 0.44 0.65 0.87
(BI)
Brand Loyalty 3.55 0.87 0.39 0.72 0.81 0.89
(BL)
Overall Brand 3.38 0.91 0.36 0.68 0.73 0.86 0.88
Equity (OBE)
Note: The values at diagonal are square roots of average variance extracted.

effect of 0.07 and an indirect effect of 0.43.
These results reveal that brand loyalty is the
most influential determinant of overall brand
equity according to its largest effect. Addition-
ally, brand awareness, perceived quality, and
brand loyalty show their effects indirectly
through the mediation of brand loyalty. The
effect of perceived quality on overall brand
equity is greater than those of brand awareness
and brand image, indicating the importance of
perceived quality in the process of creation of
brand equity.
2010 AIRLINE BRAND EQUITY 31

Figure 3. Estimated Model

Note: 1. ␹2=338.84(d.f.=144), RMSEA = 0.07, CFI= 0.98, NNFI= 0.97

2. value in the parenthesis reports t value of the estimate
3. solid lines denote significant estimates at 5 percent while dashed lines denote
insignificant estimates

Table 3. Hypothesis Tests

Path Estimate t-value Hypothesis test
H1: Brand Awareness → Perceived Quality 0.40 5.30** Supported
H2: Brand Awareness → Brand Image 0.21 3.26** Supported
H3: Perceived Quality → Brand Image 0.57 7.13** Supported
H4: Perceived Quality → Brand Loyalty 0.34 5.03** Supported
H5: Perceived Quality → Overall Brand Equity 0.10 1.54 Rejected
H6: Brand Image → Brand Loyalty 0.58 8.81** Supported
H7: Brand Image → Overall Brand Equity 0.06 0.84 Rejected
H8: Brand Loyalty → Overall Brand Equity 0.74 8.26** Supported
** p<0.05.

DISCUSSION AND CONCLUSION equity, i.e., brand awareness, perceived quality,

This study adopts both perceptual and be-
havioral dimensions of brand equity and pro-
poses a relationship model of brand equity in-
volving brand awareness, perceived quality,
brand image, and brand loyalty in the airline
services context. Following the causal path of
cognitive-affective-conative stage that is used
to construct a customer-based destination
brand equity by Konecnik and Gartner (2007),
we construct a customer-based brand equity
scale for an airline. The empirical results reveal
the adequacy of constructing the causal rela-
tionship among various components of brand
brand image, and brand loyalty, based on the
cognitive-affective-conative theory. More spe-
cifically, this study theorizes brand awareness,
perceived quality and brand image, and brand
loyalty as cognitive, affective, and conative
stages of brand equity creation, respectively.
The brand awareness is important because it
helps a certain airline become a customer’s
decision choice set. In other words, if custom-
ers are not aware of a certain airline when
they search for a certain airline, then it is very
unlikely for them to choose this airline. This
is in line with Konecnik and Gartner (2007)
32 TRANSPORTATION JOURNAL™ Winter

Table 4. Direct, Indirect, and Total Effects of Brand Equity

Path Effect Estimates t-value
Brand Awareness → Overall Brand Equity Indirect effect 0.36 6.52**
Direct effect -- --
Total effect 0.36 6.52**
Perceived Quality → Overall Brand Equity Indirect effect 0.54 7.16**
Direct effect 0.10 --
Total effect 0.64 8.26**
Brand Image → Overall Brand Equity Indirect effect 0.43 6.14**
Direct effect 0.07 --
Total effect 0.50 7.05**
Brand Loyalty → Overall Brand Equity Indirect effect -- --
Direct effect 0.74 8.26**
Total effect 0.74 8.26**

whereby brand awareness mostly influences
the cognitive component, and brand equity can-
not be created without brand awareness. There-
fore, airlines are advised to look carefully at
their brand marketing communication strategy
to help maintain customer recognition of an
airline’s brand-name compared to its compet-
itors.
The affective stage, which includes per-
ceived quality and brand image, represents a
customer’s evaluations of the purchase experi-
ence and the association related to the brand
with the airline’s tangible and intangible attri-
butes based upon quality perception. A good
service quality perceived by customers leads
to a good image held in their memory related
to an airline. Furthermore, the positive influ-
ences of effective perceptions and attitudes to-
ward an airline result in positive conative out-
comes, whether attitudinal or behavioral.
Positive conative outcomes can form customer
loyalty and reflect on their willingness to re-
purchase or recommend this airline to others.
The results pertaining to the direct and larg-
est effect of brand loyalty on overall brand
equity and only the indirect effects of perceived
quality and brand image mediated by brand
loyalty on overall brand equity imply the cru-
cial role that brand loyalty plays in creating
a company’s brand equity. According to the
perceptual-behavioral causal path, the invest-
ments and activities that airlines devote them-
selves to in facilitating customers’ perceptual
brand equity in terms of brand awareness, per-
ceived quality, and brand image should clearly
link to the ultimate goal of forming brand loy-
alty. If there is a failure to build customers’
brand loyalty, then the investment performance
of an airline’s branding management imple-
mentation is likely to be undesirable.
Some antecedents affecting airline brand eq-
uity—for example, a company’s marketing
communications and price promotion—are not
taken into account, but deserve more research
efforts in the future. A company’s advertising
spending, which always represents marketing
communications and which makes the brand
name be more recognizable by customers, is
believed to have a positive influence on both
perceived quality and brand image, such that
the more resources a company dedicates to
enhance a particular brand, the higher the per-
ceived quality and brand image the brand is
expected to have. In addition, marketing com-
munications affect perceived quality as they
increase the associated value of a brand, which
helps in purchase intention (Villarejo-Ramos
and Sanchez-Franco 2005). However, in the
context of the airline industry, price promotion
from competitors is always a disturbance of
brand equity, which is believed to make cus-
tomers willing to pay premium prices. The re-
cent success of low-cost airlines and their im-
pact on full-service airlines is a typical
example. Empirical research on how customers
trade off between price and brand equity, which
consists of a mix of various dimensions and
2010 AIRLINE BRAND EQUITY
requires financial investment in branding man-
agement, is of special importance, but still
rather rare. Future research could focus on the
issue of a customer’s willingness to pay for an
airline ‘‘brand equity’’ by applying revealed
and/or stated preference techniques. In addi-
tion, if data are available, brand loyalty could
be better measured based on actual ticket pur-
chases, rather than on passengers’ answers, to
minimize the effect of subjective passenger
perception. Future research also could incorpo-
rate actual behavior data from passengers into
the airline brand equity to obtain more insights
for airlines’ branding management strategies.
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Appendix
Measurement scales (5-point Likert type scale, 1= strongly disagree, 5= strongly agree)
Brand awareness
1. I am aware of this airline.
2. I can recognize this airline among other competing brands.
3. I know what this airline looks like.
33
Keller, K. L., 2003. Strategic Brand Management, 2nd
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(continued)
34 TRANSPORTATION JOURNAL™ Winter

Perceived quality
In-flight service
1. Up-to-date aircraft and in-flight facility.
2. Meal service.
3. Seating comfort.
4. Seat space and legroom.
5. In-flight entertainment services.
Reservation-related service
1. Convenience of reservation and ticketing.
2. Promptness and accuracy of reservation and ticketing.
Airport service
1. Check in service.
2. Promptness and accuracy of baggage delivery.
3. Seat allocation.
4. The amount imposed for overweight baggage.
Reliability
1. On time performance.
2. Sincere interest in solving problems.
3. Safety record.
Employee service
1. Neat appearance of employees.
2. Employees who are willing to help passengers.
3. Courtesy of employees.
4. Employees who have the knowledge to answer passenger’s questions.
5. Give passengers personal attention.
Flight availability
1. Convenient flight schedule.
2. Availability of non-stop flight.*
* Item was removed after CFA
Brand image
1. The airline is a brand leader.
2. Using the airline is a social status symbol.
3. The airline has a good reputation.
4. The airline is recommended by famous people with whom you identify.
Brand loyalty
1. I would consider flying on the airline again in the future.
2. I would recommend this airline to other people.
3. I consider myself to be loyal to the airline.
Overall brand equity
1. Even if another brand has the same features as this airline, I would prefer to fly this airline.
2. If there is another brand as good as this airline, I prefer to fly this airline.
3. If I have to choose among brands of airline, this airline is definitely my choice.
4. If I have to choose an airline I plan to choose this airline even though there other brands as
good as this airline.
5. Even if another brand has the same price as this airline, I prefer to choose this airline.
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