Airline brand image, passenger perceived

value and loyalty towards full-service and

low-cost carriers
Yan-Kai Fu

Abstract Yan-Kai Fu is based at

Purpose – This study aims to examine the mediating and moderating processes that link airline brand Department of Aviation
image to passenger loyalty through perceived value. Services and Management,
Design/methodology/approach – The research participants were Taiwanese passengers with China University of Science
experience travelling abroad by air. Structural equation modelling and multigroup analysis were used to and Technology, Hsinchu,
investigate the effect of airline brand image and perceived value on the loyalty of passengers using full-
Taiwan.
service and low-cost carriers.
Findings – For both airline types, airline brand image had a significant and positive effect on passenger
perceived value. Perceived value had a significant and positive effect on passenger loyalty, perceived
value was a crucial mediator and airline type was not a key moderator in the model.
Originality/value – In this study, focusing on the perspective of Taiwanese passengers, a conceptual
model of the factors that lead to passenger loyalty, with a focus on brand image, was developed. This
paper contributes to the literature and application field by examining the mediating effect of perceived
value and the moderating role of airline type in the aviation industry; on the basis of the results, potential
recovery strategies for airlines in the post-COVID-19 era are provided.
Keywords COVID-19, Brand image, Perceived value, Passenger loyalty, Multigroup analysis,
Full-service and low-cost carriers
Paper type Research paper

全服務型和低成本航空公司品牌形象、乘客知覺價值、與忠誠行為意向之研究
摘要
Received 31 July 2022
目的: 本研究檢驗透過知覺價值將航空公司品牌形象與乘客忠誠度連結起來的中介和調節過程。 Revised 23 October 2022
設計/方法/途徑: 受訪者是曾經有搭乘飛機出國旅行經驗的台灣乘客。本研究採用結構方程模式和多群組 28 November 2022
分析進行驗證, 分別從搭乘全服務型航空與低成本航空的乘客探討航空公司品牌形象和知覺價值對乘客忠 2 December 2022
Accepted 3 December 2022
誠行為的影響。
結果: 不論是就全服務型航空或低成本航空而言, 航空公司品牌形象對乘客知覺價值都具有顯著的正向影 Contributions: Conception or
design of the work; Data
響, 知覺價值對乘客忠誠行為同樣具有顯著的正向影響; 知覺價值是一個重要的中介變數, 而航空公司類型 collection; Data analysis and
不是關鍵的調節變數。 interpretation; Drafting the
獨創性/價值: 在這項以台灣乘客的視角為重點的研究中, 開發了一個以品牌形象為重點的導致乘客忠誠度 article; Critical revision of the
article; Final approval of the
因素的概念模型。本研究通過檢驗知覺價值的中介作用和航空公司類型在航空業中的調節作用, 為文獻和 version to be published.
應用領域做出了貢獻; 最後根據研究結果, 提供後疫情時代航空公司的潛在恢復策略。
Funding: The research was
关键词 COVID-19, 品牌形象, 知覺價值, 乘客忠誠行為, 多群組分析, 全服務型與低成本航空 supported by the Ministry of
文章类型 研究型论文 Science and Technology of
Taiwan, grant numbers MOST
110–2410-H-157-001.
Imagen de marca de la aerolı´nea, valor percibido por los pasajeros y lealtad hacia las aerolı´neas de Data availability statement:
servicio completo y de bajo costo Some of the data used to
support the findings of this
Resumen study are available from the
corresponding author upon
 sito: este estudio examino los procesos de mediacion
Propo  y moderacion  que vinculan la imagen de request, and other data is also
 del valor percibido.
marca de la aerolı´nea con la lealtad de los pasajeros a traves included within the article.

DOI 10.1108/TR-07-2022-0369 © Emerald Publishing Limited, ISSN 1660-5373 j TOURISM REVIEW j

 Diseño/metodología/enfoque: los participantes de la investigacion  eran pasajeros taiwaneses con

experiencia en viajes al extranjero por vı´a aerea. Se emplearon modelos de ecuaciones estructurales

y analisis multigrupo para investigar el efecto de la imagen de marca de la aerolı´nea y el valor
percibido en la lealtad de los pasajeros que utilizan lı´neas aereas  de servicio completo y de bajo
costo.
Hallazgos: para ambos tipos de aerolı´neas, la imagen de marca de la aerolı´nea tuvo un efecto
significativo y positivo en el valor percibido por los pasajeros. El valor percibido tuvo un efecto
significativo y positivo en la lealtad de los pasajeros, el valor percibido fue un mediador crucial y el tipo
de aerolı´nea no fue un moderador clave en el modelo.
Originalidad/valor: En este estudio centrado en la perspectiva de los pasajeros taiwaneses, se
desarrollo un modelo conceptual de los factores que conducen a la lealtad de los pasajeros, con un
enfoque en la imagen de marca. Este documento contribuye al campo de la literatura y la aplicacion  al
examinar el efecto mediador del valor percibido y el papel moderador del tipo de aerolı´nea en la industria
 Sobre la base de los resultados, se proporcionan posibles estrategias de recuperacion
de la aviacion; 
para las aerolı´neas en la era posterior a la COVID-19.
Palabras clave COVID-19, Imagen de marca, Valor percibido, Lealtad de los pasajeros,

Analisis multigrupo, Aerolı´neas de servicio completo y de bajo costo
Tipo de papel Trabajo de investigacion 

1. Introduction
Numerous researchers have noted that the brand image of airlines can alter their brand
equity as well as the purchase behaviours of passengers (Seo and Park, 2018; Lu and
Siao, 2019; Raza et al., 2020). A passenger who has a positive impression of an airline
and who is engaged is more likely to become a repeat customer and recommend the
airline to others (Hapsari et al., 2017). Passenger perception of airline brand image can
be evaluated through passenger perception of brand value as well as passenger
experiences (Dirsehan and Kurtulus, 2018; Singh, 2021). In the highly competitive
aviation market, maintaining long-term customer relationships is a critical factor in
business success. Boubker and Naoui (2022) highlighted that satisfied passengers are
more likely to develop brand love and tend to be more loyal than those who are not
satisfied. Additionally, brand-loving passengers are likely to become loyal and engage
more in positive word of mouth (WOM). Therefore, identifying the key factors that affect
the loyalty of passengers is essential for airlines, especially in the face of international
competition or a pandemic situation.
Researchers have highlighted perceived value as an antecedent variable that affects
satisfaction and loyalty behaviour and have indicated that perceived value is the
strongest predictor of repurchase intention (Gallarza et al., 2017; Mencarelli and
Lombart, 2017; Cakici et al., 2019; Wang et al., 2021; Rasoolimanesh et al., 2022). Singh
(2021) reported that perceived value plays a crucial role in passenger repurchase
decisions for a given service provider. Therefore, this study examined the impact of
passenger perceived value on loyalty behaviour to increase the applicability of this field
in the aviation industry.
The global COVID-19 outbreak had two major effects on airlines. Firstly, supply was
affected because airline operations were greatly reduced as many countries entered
lockdown and implemented border controls; these adverse conditions led to several airlines
filing for bankruptcy (Florido-Benı́tez, 2021; Suk and Kim, 2021). Secondly, demand was
affected because most consumers stopped or reduced their air travel because of health
and safety concerns. These drastic reductions in supply and demand had a devastating
effect on the global airline industry, and global air travel demand may not return to pre-
pandemic levels until 2024 (IATA, 2020). Because the aviation industry is a key enabler of
many other economic activities (Florido-Benı́tez, 2021) and because of the detrimental
effect of the COVID-19 pandemic on this industry, the two main types of airlines – full-
service carriers (FSCs) and low-cost carriers (LCCs) – were considered in this study.

j TOURISM REVIEW j
This study examined the mediating and moderating processes that link airline brand image
to passenger loyalty through perceived value. The following research question guided this
study:
RQ1. What is the moderating role of airline type in the relationship between airline brand
image, perceived value and passenger loyalty?
In this study, focusing on the perspective of Taiwanese passengers, a conceptual model
was developed to represent the factors that lead to passenger loyalty, with a focus on
brand image. The resulting framework can provide scholars and managers with a deeper
understanding of the key factors affecting the loyalty behaviours of passengers who
patronise a certain type of airline, especially from the perspective of airline image. This
paper contributes to the literature by presenting the mediating effect of perceived value as
well as the moderating role of airline type; on the basis of the results, recovery strategies for
airlines in the post-COVID-19 era are presented.

2. Research model and hypothesis development

2.1 Relationship between brand image and passenger loyalty
Brand image has been revealed to be a crucial antecedent variable of loyalty behaviour
(Agmeka et al., 2019; Alam and Noor, 2020; Singh et al., 2021; Chan et al., 2022). Building a
positive brand image is a key marketing strategy for retaining existing customers and
attracting new ones (Yi et al., 2018). Kao et al. (2020) proposed the existence of a causal
model of brand reliability, brand attitude and purchase intention after a large-scale strike by
an airline based in Taiwan. The results demonstrated that the brand attitude of the airline
had a significant and positive impact on the purchase intention of passengers. Boubker and
Naoui (2022) examined the relationship between brand love, passenger loyalty and positive
WOM by using structural equation modelling (SEM); they reported that brand-loving
passengers are likely to develop brand loyalty and engage in positive WOM. However,
Singh (2021) found that passenger satisfaction was the most significant predictor of airline
loyalty, and the relationships between airline image and passenger perceived value with
airline loyalty were nonsignificant. These results are consistent with those of Hapsari et al.
(2017). Accordingly, the following hypothesis was proposed:
H1. Airline brand image will have a positive and significant effect on passenger loyalty.

2.2 Relationship between brand image and perceived value

Brand image has a direct effect on perceived value and can be considered an influencing
factor of customer purchase intention (Callarisa et al., 2012). A strong brand reputation can
have a positive impact on customer perceived value (Ou et al., 2020). That is, companies
with an excellent brand image gain the trust and favour of consumers more easily than
companies with a less favourable brand image, thereby improving customers’ perceived
value and increasing their purchase intention (Gronholdt et al., 2000). Lien et al. (2015)
reported that brand image had a significant and positive effect on customers’ perceived
value towards a hotel and positively affected customers’ trust in hotel products and
services. Both So et al. (2017) and Kim et al. (2019) have indicated that brand identification
is more likely to be established when customers regard a brand as prestigious, thereby
affecting perceived value. Wattanacharoensil et al. (2022) proposed that an airport’s image
can increase the positive perception of air travellers regarding airport performance.
Similarly, the brand image of an airline is likely to affect passengers’ perceived value in
relation to the airline. Thus, the following hypothesis was proposed:
H2. Airline brand image will have a positive and significant effect on passenger
perceived value.

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 2.3 Relationship between perceived value and passenger loyalty and the mediating
effect of perceived value
Many studies have suggested that perceived value not only has a significant and positive
effect on customer loyalty but also plays a crucial mediating role (Sun et al., 2013; Chen and
Liu, 2017; Hapsari et al., 2017; Touni et al., 2022). Sharma and Nayak (2019) examined the
direct effects of various forms of value on tourists’ loyalty intentions in dark tourism. The
results indicated that these types of value have significant direct effects on loyalty
intentions, with a noteworthy finding being that emotional value has the strongest direct
influence in dark tourism. Zhang et al. (2021) conducted a case study focused on Airbnb
and proposed dimensions of consumer perceived value associated with peer-to-peer (P2P)
accommodation services. The results revealed that each dimension of perceived value
had a significant and positive effect on consumers’ repurchase intention towards P2P
accommodation services. In addition, Brochado et al. (2022) also indicated that emotional
and social value have a positive effect on recommendation intentions. Thus, the following
hypothesis was proposed:
H3. Passenger perceived value will have a positive and significant effect on passenger
loyalty.
Graciola et al. (2020) and Touni et al. (2022) indicated that perceived value had a mediating
effect on the cognitive process of consumers. Hapsari et al. (2017) used confirmatory factor
analysis (CFA) and SEM to examine the relationships between service quality, perceived
value and customer satisfaction; their results indicated that perceived value had a
mediating effect on the relationship between service quality and customer loyalty. Chen and
Liu (2017) explored the relationships between service quality, brand image, perceived
value and customer loyalty pertaining to Taiwan-based airlines. The authors collected 560
valid questionnaires from users of a Taiwanese airport and analysed the data by using SEM.
Their results revealed that perceived value had a direct positive impact on customer loyalty,
with perceived value also serving as a mediator between service quality and customer
loyalty. Thus, the following hypothesis was proposed:
H4. Passenger perceived value will have a significant mediating effect on the relationship
between brand image and passenger loyalty.

2.4 The moderating effects of full-service carriers and low-cost carriers

FSCs and LCCs are the dominant players in the modern aviation industry. A key difference
between the two is related to network structure. FSCs typically develop a hub-and-spoke
network, enabling passengers to reach their destination after transiting through the hub.
Through this network structure, FSCs can serve a vast market without an excessive number
of direct routes, thereby yielding economies of scale. By contrast, LCCs mostly rely on a
linear point-to-point network. Such network structures enable short turnaround times and
efficient crew utilisation, which help LCCs streamline operations, ultimately reducing
operating costs (Birolini et al., 2022). To the best of our knowledge, related research has
focused on FSCs, with comparatively little detailed analysis of the impact of the COVID-19
pandemic on LCCs. Because of the increasing importance of LCCs in the aviation market
(Kim and Kim, 2018) and to address the theoretical research gap, LCCs were incorporated
into the present study’s model, enabling an examination of the moderating effects of both
FSCs and LCCs. The following hypothesis was proposed:
H5. Airline type (FSCs vs LCCs) moderate the paths of the structural model.
This study’s research model, based on the preceding discussion of the literature, is
illustrated in Figure 1. This research model presents the causal relationships between airline
brand image, passenger perceived value and loyalty.

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 Figure 1 Framework diagram on the relationship of model paths

H4(Mediator)

Perceived value
H2 H3

Passenger
Brand image
loyalty
H1

H5

..
Airlines type
(Moderator)
FSCS
LCCS

3. Methodology
3.1 Data collection and sampling
The research participants were Taiwanese passengers who have experience travelling
abroad by air. Convenience sampling was used to distribute questionnaires at Taoyuan
International Airport. The questionnaires were distributed every Friday, Saturday and
Sunday in July and August 2019, a period immediately preceding COVID-19. Of the 600
questionnaires distributed, 200 were distributed near the service counters of two LCCs,
Peach Aviation and Tigerair Taiwan, 100 for each carrier. The remaining 400 questionnaires
were distributed near the service counters of three FSCs; 150 questionnaires each for China
Airlines and Eva Air and 100 questionnaires for Far Eastern Air Transport. In total, 133 and
338 valid responses were received from LCC and FSC passengers, yielding response rates
of 66.5% and 97%, respectively. The demographic data of the 521 passengers who
participated in this survey are presented in Table 1. Female respondents slightly
outnumbered male respondents (53.2% vs 46.8%). The major age brackets were
36–50 years (49.7%) and 21–35 years (30.7%). A total of 62.8% of the respondents had a
college education. The two predominant household income brackets were TWD
30,000–49,999 (39.2%) and TWD 50,000–69,999 (24.4%). Approximately 57.8% of the
respondents were married, with the remainder being single. In terms of airline type, 74.5%
of the respondents preferred FSCs, with the remainder favouring LCCs.

3.2 Data analysis

To avoid nonresponse bias because of the early or late collection of questionnaires, a
chi-squared test was conducted to verify whether the demographic data of questionnaires
collected earlier differed from those collected later. Table 2 presents the chi-squared test
results; none of the chi-squared values of questionnaires collected earlier and later differed
significantly (p > 0.01). Therefore, earlier and later respondents did not give markedly
different responses to questionnaires; nonresponse bias was not an issue. Each respondent
completed the entire questionnaire in a single attempt; hence, common method variance
(CMV) might have arisen. To reduce the likelihood of CMV, a pre-test was administered,
and unclear parts were revised. Harman’s one-factor test was conducted, and the results
demonstrated that the first-order factor did not explain most of the variance. Therefore, CMV
was not a major concern in this study (Podsakoff et al., 2003).

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 Table 1 Demographic profile of the respondents
Demographic variables No. of respondents %

Gender
Male 244 46.8
Female 277 53.2
Age
Under 20 9 1.7
21-35 160 30.7
36–50 259 49.7
51–65 83 15.9
Over 65 10 1.9
Education
Junior high school 13 2.5
Senior high school/vocational 99 19.0
College/University 327 62.8
Postgraduate 82 15.7
Marriage status
Single 220 42.2
Married 301 57.8
Monthly household income
Lower than TWD 30,000 94 18.0
30,000–49,999 204 39.2
50,000–69,999 127 24.4
70,000–89,999 55 10.6
More than 90,000 41 7.9
Airline type
FSC 388 74.5
LCC 133 25.5

Table 2 Chi-squared tests to identify nonresponse bias

Demographic variables Pearson’s chi-square Degree of freedom p

Gender 0.434 1 0.510

Age 9.547 16 0.889
Education 16.395 9 0.059
Marriage status 4.164 1 0.056
Monthly household income 19.937 16 0.223
Airlines type 1.122 1 0.374

This study investigated the relationship between airline brand image, passenger perceived
value and passenger loyalty, with perceived value serving as a mediator, to construct a
behavioural model linking these three variables, with airline type serving as moderator and to
compare the paths of the structural model. IBM SPSS 23.0 and IBM SPSS AMOS 25 were used
to perform data analysis. The data analysis methods included descriptive statistical analysis,
reliability and validity analysis of each dimension, CFA, SEM and multi-group analysis (MGA).

3.3 Variables and measurement

All the items on the questionnaire were examined by experts to confirm their content validity.
Items were rated on a 5-point Likert scale (1 = strong disagreement and 5 = strong
agreement). An operational definition of the three variables examined in this study is
provided in Table 3; the measurement of each variable is described in the following text.
Brand image: With reference to the definitions of Park et al. (1986) and Kim et al. (2001),
relevant dimensions were identified, and scale items were developed to evaluate airline

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 Table 3 Operational definition of each variable
Variable Dimension Operational definition and evaluation

Brand image Functional I think this airline has comprehensive in-flight facilities
I think the employees of this airline provide professional services
I think the pilots of this airline are competent and trustworthy
Prestige I think this airline represents high quality
I think this airline is a leader in the airline industry
I think this airline represents a higher status
Experiential I think this airline is lively and interesting
I think this airline offers a refreshing experience
I think this airline always has different activities and themes
Perceived value Emotional value This flight experience is pleasant for me
The cabin crew are friendly to me
I enjoy the in-flight meals
Social value I think this airline can sustainably operate and grow
I think this airline can become a leader in the airline industry
I think this airline can follow the latest trends
Functional value for the quality Considering the price I paid, I am satisfied with the services provided by this airline
Considering the price I paid, I think this airline offers comprehensive in-flight facilities
Considering the price I paid, I think this airline has diverse in-flight meals to choose from
Functional value for the price I think the airfare I paid is reasonable
I think purchasing this airfare enabled me to save a lot by avoiding additional costs
I think this airfare is a great bargain
Passenger loyalty Repurchase intention I would consider using this airline again
If special offers are available, I would like to use this airline again
Recommendation intention I would share the advantages of this airline with other people
I would love to recommend this airline to my friends and family
Loyalty intention I would still like to use this airline even if its airfare increases slightly
I would prioritise this airline the next time I travel

j TOURISM REVIEW j
 brand image (three items, each related to functional, prestige and experiential brand
image). A higher score indicates a more positive brand image. The overall Cronbach’s a
was 0.877, and the Cronbach’s a values for LCCs and FSCs were 0.881 and 0.869,
respectively, demonstrating that the items had excellent internal consistency.
Perceived value: With reference to the definitions of perceived value from Sweeney and
Soutar (2001) and Chae et al. (2020), various dimensions were identified, and a scale was
developed to measure perceived value (three items each for measuring emotional value,
social value, the functional value of quality and the functional value of price). A higher score
indicates superior perceived value. The overall Cronbach’s a was 0.921, and the
Cronbach’s a values of LCCs and FSCs were 0.924 and 0.919, respectively, demonstrating
that the items had excellent internal consistency.
Passenger loyalty: With reference to the definitions of Cronin et al. (2000) and Fu et al.
(2018), various dimensions were identified, and a scale was developed to measure
passenger loyalty (two items each related to repurchase intention, recommendation intention
and loyalty intention). A higher score indicates superior passenger loyalty. The overall
Cronbach’s a was 0.882, and the Cronbach’s a values for LCCs and FSCs were 0.904 and
0.864, respectively, demonstrating that the items had excellent internal consistency.
The reliability and validity test results are presented in Table 4. All dimensions had squared
multiple correlation (SMC) coefficients between 0.476 and 0.771, indicating that each item
had excellent reliability. The composite reliability (CR) values of the dimensions ranged from
0.817 to 0.875; the lowest value was higher than the threshold of 0.7 recommended by
Fornell and Larcker (1981). In addition, Cronbach’s a was greater than 0.8. Therefore, the
construct reliability of each dimension was excellent. Average variance extracted (AVE)
values of >0.5 indicate convergent validity (Fornell and Larcker, 1981); the AVE in this study
ranged from 0.599 to 0.672. Therefore, most observed variables reflected the latent traits of
each dimension. The factor loadings of all the questionnaire items were greater than the
threshold of 0.6 recommended by Sharma (1995), indicating that the questionnaire had
excellent convergent validity. Discriminant validity is evaluated on the basis of the
correlation coefficient between each dimension and the square root of the AVE (Komiak and
Benbasat, 2006). If the square root of the AVE is greater than the correlation coefficient
between each dimension, then each dimension has discriminant validity. In this study, the
correlation coefficients between each dimension were smaller than the diagonal square root
of the AVE (Table 5). Therefore, the measurement model had discriminant validity.

3.4 Preliminary analyses of confirmatory factor analysis

CFA was performed with all the passengers forming a single group (N = 521).
Subsequently, a structural model was developed, and the moderating effects of airline type
were examined. The ratio between the chi-square value and degree of freedom of the

Table 4 Reliability and validity of each dimension

Variable Dimension SFL SMC CR AVE Cronbach’s a

Brand image Functional 0.805 0.648 0.817 0.599 0.877

Prestige 0.731 0.534
experiential 0.784 0.615
Perceived value Emotional value 0.862 0.743 0.875 0.638 0.921
Social value 0.806 0.650
Functional value for the quality 0.827 0.684
Functional value for the price 0.690 0.476
Passenger loyalty Repurchase intention 0.812 0.659 0.860 0.672 0.882
Recommendation intention 0.878 0.771
Loyalty intention 0.765 0.585

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 Table 5 Discriminant validity of each dimension
Variable Brand image Perceived value Passenger loyalty

Brand image 0.774

Perceived value 0.752 0.799
Passenger loyalty 0.658 0.771 0.820
Note: The numbers in bold on the diagonal are the square root of the AVE of each dimension, and the
rest are the correlation coefficients between dimensions

single-group model was 1–5 (Table 6); the large sample adopted in this study might have
enlarged the chi-squared value. Bollen and Stine (1992) recommended using the
Bollen–Stine p-value and bootstrap sampling to correct the chi-square value and test a
model’s goodness of fit. They also recommended the use of 2,000 bootstraps, with 1,000
being the minimum. The following indices were used to assess the overall model fit:
chi-square/degrees of freedom (df), the goodness of fit index, adjusted goodness of fit
index, incremental fit index, comparative fit index, parsimonious goodness-fit-index,
parsimonious normed fit index and root mean square error of approximation. For both the
single group and separate group CFA assessments, the results demonstrated that the
goodness of fit of the structural model was sufficient for further data analysis.

4. Results
4.1 Evaluation of structural models

4.1.1 Single-group model. A structural model was used to elucidate the relationship between
brand image, perceived value and passenger loyalty. Figure 2 reveals that brand image did
not have a significant and positive direct effect on passenger loyalty (t = 0.433, p > 0.05). That
is, the brand image perceived by passengers did not have a direct effect on their loyalty; thus,
H1 was not supported. The brand image had a significant positive effect on perceived value
(t = 16.103, p < 0.001). Therefore, passenger perceived value increases if passengers
perceive a more positive brand image; thus, H2 was supported. Perceived value had a
significant and positive effect on passenger loyalty (t = 10.347, p < 0.001). Therefore,
passenger loyalty increases with perceived value; thus, H3 was supported.
The path coefficients from brand image to passenger loyalty, from brand image to
perceived value and from perceived value to passenger loyalty were 0.032, 0.849 and
0.845, respectively. Among the types of brand image, the functional brand image had the
highest explanatory power (R2 = 0.805), and among the dimensions of perceived value,
emotional value had the highest explanatory power (R2 = 0.862). In terms of passenger
loyalty, recommendation intention had the highest explanatory power (R2 = 0.878). In other
words, passengers consider in-flight facilities, cabin crew services and flight safety in
their perception of brand image. In terms of perceived value, passengers focus on the
friendly attitudes of cabin crew, quality of in-flight meals and the sustainable development of

Table 6 Goodness of fit statistics on structure model

Goodness of fit indicator X2/df PGFI PNFI RMSEA GFI AGFI IFI CFI

Critical value 1–5 >0.5 >0.5 <0.1 >0.9 >0.9 >0.9 >0.9
Single-group model 6.554 0.609 0.709 0.093 0.917 0.867 0.802 0.802
Bollen–Stine correction 2.554 0.686 0.721 0.01 0.971 0.946 0.982 0.982
FSC passenger model 3.284 0.605 0.684 0.105 0.912 0.866 0.897 0.895
LCC passenger model 2.650 0.544 0.644 0.102 0.894 0.857 0.892 0.890
Note: PGFI: parsimonious goodness-fit-index, PNFI: parsimonious normed fit index, RMSEA: root mean square error of approximation,
GFI: goodness of fit index, AGFI: adjusted goodness of fit, IFI: incremental fit index, CFI: comparative fit index

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 Figure 2 The diagram on single-group model path

Emotional

0. 8
62
0.8
Social 06

27 Perceived value
0. 8
Quality

90
0. 6
Price

0.849*** 0.845***

Functional Repurchase

0.8
intention

2
5

81
0.731 0.032 0.878 Recommendation

0.
Prestige Brand image Passenger loyalty
intention

0.
76
4
78

5
0.
Experiential Loyalty intention

Note: ***p < 0.001

airlines. Passengers demonstrate their loyalty by being willing to share the advantages of an
airline with their friends and family and recommending that they use that airline.
4.1.2 Separate group model. Separate structural models were constructed for FSCs and
LCCs to consider the effect of airline type. According to the results in Figure 3, the brand
image perceived by FSC passengers had a significant and positive effect on perceived
value (t = 12.157, p < 0.001), and their perceived value also had a significant positive effect
on their loyalty (t = 9.795, p < 0.001). In the FSC structural model, the highest explanatory
power was observed for the experiential dimension of brand image (R2 = 0.826), the
emotional dimension of perceived value (R2 = 0.830) and the recommendation intention
dimension of passenger loyalty (R2 = 0.847). The brand image of LCC passengers had a
significant positive effect on perceived value (t = 8.647, p < 0.001), and passenger

Figure 3 The diagram on FSC/LCC passengers’ model path

Emotional
0. 8
30
/0.

0. 8
Social
90

23
/0.7
3

51
8 Perceived value
.82
2 5 /0
0.8
Quality
3
73
/0.
98
0. 6

Price

0.824***/0.873*** 0.897***/0.673***

Functional Repurchase
0.

intention
4
75

84
8/

.
/0
0.

88
8
19

7
0.

Prestige 0.734/0.688 0.023/0.219 0.847/0.923 Recommendation

Brand image Passenger loyalty
intention
0.
4
77

75
0.

2 /7
6/

7
82

0
0.

Experiential Loyalty intention

Note: ***p < 0.001

j TOURISM REVIEW j
perceived value also had a significant positive effect on their loyalty (t = 3.814, p < 0.001).
In the LCC structural model, the highest explanatory power was observed for the functional
dimension of brand image (R2 = 0.879), emotional dimension of perceived value (R2 =
0.903) and recommendation intention dimension of passenger loyalty (R2 = 0.923). In other
words, FSC passengers care the most about the experience and pleasure associated with
the brand image, whereas LCC passengers care the most about the functional value and
reliability associated with the brand image. FSC and LCC passengers both value the
friendly attitudes of cabin crew and the quality of in-flight meals at an emotional level, and
they both exhibit loyalty by sharing the advantages of an airline with their friends and family
and encouraging them to use the airline.

4.2 Mediating effect of perceived value

Airline brand image perceived by passengers affected their perceived value, which
affected their loyalty. Therefore, this study further investigated whether the perceived value
was a crucial mediating variable in the relationship between brand image and passenger
loyalty. Firstly, the extent to which perceived value and passenger loyalty were predicted by
the brand image was estimated, and the direct and indirect effects of brand image on
perceived value and passenger loyalty were compared.
To examine the mediation effects, in accordance with Shrout and Bolger (2002), the
bootstrap method was applied to consider indirect effects. In this study, 2,000 bootstraps
were used to construct the confidence intervals of bias-corrected (BC) indirect effects. If a
95% confidence interval does not include 0, then an indirect effect is significant, and a
mediating effect is verified. The bootstrap results revealed that the unstandardised
coefficient of the indirect effect was 0.921 and that the bootstrap BC 95% confidence
interval was 0.553–1.877. Because the confidence interval did not include 0, the confidence
interval was significant (p < 0.01), and the hypothesis related to mediating effects (H4) was
supported (Table 7). Therefore, brand image only indirectly affects passenger loyalty
through perceived value, confirming the presence of a mediating effect.

4.3 Moderating effect of airline type

A single-group structural model was used as the benchmark to separately construct FSC and
LCC structural models. Subsequently, MGA was used to determine the differences between
the two models. To understand whether the type of airline selected by passengers affects the
three direct effects, the airlines were classified as FSCs and LCCs. A total of 388 passengers
were FSC passengers (74.5%), and 133 passengers were LCC passengers (25.5%). IBM
SPSS Amos 25.0 was used to perform MGA and elucidate the moderating effects.
This study analysed the interactions of airline type in the three paths to confirm its moderating
effect. None of the three interaction items were significant, indicating that airline type did not
have a moderating effect on the relationship between brand image, perceived value and
passenger loyalty (Table 8). Figure 4 illustrates the interaction between brand image
and passenger loyalty; for both FSCs and LCCs, brand image was more positively associated
with passenger loyalty. Figure 5 illustrates the interaction between brand image and perceived

Table 7 Mediating effect test of brand image on passenger loyalty through perceived
value
BI 95% CI PC 95% CI
Path SE b Lower Upper Lower Upper

Direct effect 0.447 0.032 –0.891 0.364 –0.936 0.355

Indirect effect 0.450 0.921 0.553 1.877 0.540 1.775
Notes: b: standardized path coefficient; SE: standard error,  p < 0.01

j TOURISM REVIEW j
 Table 8 Moderating effect test of airline type
Path b SE

Brand image  airline’ type ! Passenger loyalty 0.083 ns 0.034

Brand image  airline’ type ! Perceived value –0.007 ns 0.028
Perceived value  airline’ type ! Passenger loyalty 0.049 ns 0.019
Notes: b: standardized path coefficient; SE: standard error. nsRepresents no significant

Figure 4 Interaction diagram of brand image and passenger loyalty

4.5
4
3DVVHQJHU OR\DOW\
3.5
/RZDLUOLQHW\SH
3 +LJKDLUOLQH
W\SH
2.5

1.5

1
/RZEUDQGLPDJH +LJKEUDQGLPDJH

Figure 5 Interaction diagram of brand image and perceived value

4.5

4
3HUFHLYHGYDOXH

3.5
/RZDLUOLQHW\SH
3
+LJKDLUOLQHW\SH
2.5
2

1.5
1
/RZEUDQGLPDJH +LJKEUDQGLPDJH

value; for both the FSCs and LCCs, brand image was more positively associated with
passenger loyalty. Figure 6 illustrates the interaction between perceived value and passenger
loyalty, revealing that perceived value was more positively associated with passenger loyalty.
In conclusion, in each of the paths, FSC and LCC passengers did not differ significantly, and
no moderating effect was observed. Therefore, H5 was rejected.

5. Discussion and conclusions

5.1 Discussion
Findings from empirical studies such as this one are likely to shape theories on passenger
behaviour and marketing management both in the airline industry and broader fields.

j TOURISM REVIEW j
 Figure 6 Interaction diagram of perceived value and passenger loyalty

4.5
4
Passenger loyalty
3.5
/RZDLUOLQHW\SH
3
+LJKDLUOLQHW\SH
2.5

2
1.5

1
/RZSHUFHLYHGYDOXH +LJKSHUFHLYHGYDOXH

The present study yielded several crucial findings. Firstly, FSC and LCC passengers have
high perceived value if an airline’s brand image is positive. If passengers have high
perceived value, then they are more willing to use the same airline again, recommend the
airline to their friends and family, and tolerate airfare increases. Recommendation intention
is the most consequential dimension of passenger loyalty, and the results indicate that FSC
and LCC passengers were both willing to recommend airlines to their friends and family if
their flight experience represented value for money. These results are consistent with those
of Sweeney and Soutar (2001), Sharma and Nayak (2019) and Brochado et al. (2022).
Secondly, airline brand image did not directly affect passenger loyalty. Building a brand
image is crucial, but a brand image cannot guarantee long-term profitability. This result is
consistent with the research of Hapsari et al. (2017) and Singh (2021). The results of this study
have considerable reference value as the world emerges from the COVID-19 pandemic. The
adoption of strong epidemic prevention measures by airlines to gain passenger trust can help
passengers associate the brand with safety, which, in turn, may be instrumental in
encouraging passengers to fly again. For both the FSCs or LCCs, airline brand image was a
crucial factor that positively affected passenger perceived value. An airline with a superior
brand image usually has excellent perceived value. This result mirrors those of So et al. (2017),
Kim et al. (2019) and Wattanacharoensil et al. (2022). Thirdly, passenger perceived value had
a positive effect on passenger loyalty. Passengers with high perceived value were more willing
to use the same airline again or recommend it to their friends and family. This result is in line
with those of Zhang et al. (2021) and Brochado et al. (2022).
Fourthly, passenger perceived value had a mediating effect on the relationship between brand
image and passenger loyalty. Passenger perceived value increases as airline brand image
improve. Their perceived value is likely to transform into loyalty and increase their willingness
to use the same airline again. Consistent with the present results, Chen and Liu (2017) and
Graciola et al. (2020) have both demonstrated that perceived value has a mediating effect.
Thus, airline brand image affects FSC and LCC passenger loyalty only after the perceived
value is considered. Finally, MGA revealed that the paths of the FSC and LCC structural
models did not differ significantly, and airline type did not have a moderating effect. Both FSCs
and LCCs should be aware of the various factors that affect passenger loyalty.

5.2 Conclusion

5.2.1 Theoretical contribution. The framework developed in this study can help scholars and
managers gain insight into the key factors that influence the loyalty behaviour of passengers

j TOURISM REVIEW j
 patronizing a particular type of airline, especially from the perspective of airline image. The
present findings can be applied to the hotel, tourism and hospitality industries. This study
analysed the mediating role of perceived value and demonstrated that brand image has an
indirect effect on passenger loyalty through perceived value. This finding should remind
scholars of the key role of perceived value in the relationships between brand image and
engaged passengers. This study’s MGA results indicate that airline type does not play a
significant moderating role in the relationship between brand image, perceived value and
passenger loyalty. Therefore, this paper contributes to the literature by examining the
mediating effect of perceived value as well as the moderating effect of airline type; recovery
strategies for airlines in the post-COVID-19 era are discussed.
5.2.2 Practical implications. On the basis of the present results, several recovery strategies
for airline operators in the post-pandemic era are provided. Firstly, the COVID-19 pandemic
has resulted in the emergence of new business concepts and technological developments.
New business concepts include introducing ultra-long-haul flights, reducing the number of
transfer hubs (Bauer et al., 2020), designing global travel immunity passports to improve the
safety of passengers and airlines, increasing the trustworthiness of destinations (Chen et al.,
2020) and implementing safety-hygiene air corridors to reduce the uncertainty of passengers
and companies and establish a roadmap to restore the airline and tourism sectors (Florido-
Benı́tez, 2021). New technological developments include big data, artificial intelligence and
machine learning. Smart services are increasingly being adopted in the hotel and tourism
industries (Buhalis, 2019; Kabadayi et al., 2019; Leung, 2019; Magnini et al., 2020; Fu, 2020;
Wen et al., 2021) and further become a driving force of branding and co-creation (Buhalis and
Park, 2021). Airlines can accelerate the development of various artificial intelligence and robot
technologies to replace services with human contact (Jiang and Wen, 2020). Secondly,
airlines should also ensure that relevant information regarding their safety protocols and
measures is clearly publicised during the COVID-19 pandemic (Teeroovengadum et al.,
2021). In response to the impact of the COVID-19 pandemic and future unanticipated events,
airlines should focus on improving their loyalty programmes or implementing new ones and
endeavour to incorporate passenger requirements in terms of service quality and pricing
policies (Albuquerque et al., 2022; Boubker and Naoui, 2022; Herjanto et al., 2022).
Finally, the COVID-19 pandemic has reshaped the travel behaviours, perceived value and
purchase intention of consumers (Akkaya, 2021). Mohammed et al. (2022) observed a strong
negative relationship between customers’ repurchase intentions and airline communication
regarding cancellation policies and customer satisfaction during the COVID-19 outbreak;
these factors can affect customers’ decision to fly with the same airline in the future. Wei and
Kim (2021) also emphasised that airlines should prioritise effective communication during the
crisis. Therefore, maintaining clear communication with customers, preventing service failure
and minimising customer complaints will help increase passenger loyalty (Elbaz et al., 2022).

5.3 Future research

The limitations of the present study represent opportunities for further research. Firstly, this
study did not differentiate between long-haul and short-haul flights. Compared with
domestic flights, international flights have a higher passenger flow and more passenger
interactions (Harries et al., 2021). In addition, this study did not consider whether
passengers flew first, business or economy class (Huang and Liu, 2020). Studies can thus
examine the moderating role of flight type and travel class. Secondly, a cross-sectional
survey was performed, with changes over time not being considered. Researchers can use
longitudinal data and cross-lagged analysis to predict the behaviours of passengers over
time and improve their understanding of the interrelation between variables (Jime nez-
nchez-Ferna
Castillo and Sa ndez, 2019).
Finally, Yu et al. (2021) investigated the effect of corporate capabilities and social
responsibility on consumer trust and purchase intention. Their results demonstrated that

j TOURISM REVIEW j
corporate capabilities and social responsibility increased consumer trust, thereby
increasing consumer purchase intention; consumer trust was a mediating variable.
Researchers can use consumer trust as a mediating variable and include it in models for
analysis. Chen et al. (2019) reported that if brands are attractive and provide unforgettable
brand experiences, the relationship between the perceived value and repurchase intention
of consumers is strengthened. Studies can use attractive brands and unforgettable brand
experiences as moderating variables and include them in models for discussions on
passenger loyalty. The findings of Han et al. (2019) and Lee et al. (2022) highlight that
brand love plays a key role in building airline customer loyalty. Studies can incorporate this
variable into relevant models to gain insight into passenger loyalty.

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About the author

Yan-Kai Fu is a Professor in the Department of Aviation Services and

Management, China University of Science and Technology. He holds a PhD
degree in Public Administration and Public Policy from National Taipei
University, Taipei, Taiwan. His major research interest covers tourism
marketing research, air transport management and quantitative research
methods. ORCID ID https://orcid.org/0000-0002-6750-5789, Yan-Kai Fu can
be contacted at: yankaifu@cc.cust.edu.tw

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