European Journal of Operational Research 139 (2002) 166177 www.elsevier.

com/locate/dsw

O.R. Applications

A survey analysis of service quality for domestic airlines

Yu-Hern Chang a, Chung-Hsing Yeh
a

b,*

Department of Transportation Management, National Cheng Kung University, Tainan, Taiwan, ROC b School of Business Systems, Monash University, Clayton, Victoria 3800, Australia Received 14 June 1999; accepted 27 March 2001

Abstract This paper presents an eective approach for evaluating service quality of domestic passenger airlines by customer surveys. To reect the inherent subjectiveness and imprecision of the customers perceptions to the quality levels provided by airlines with respect to multiple service attributes, crisp survey results are represented and processed as fuzzy sets. A fuzzy multicriteria analysis (MA) model is used to formulate the evaluation problem. The model is solved by an eective algorithm which incorporates the decision makers attitude or preference for customers assessments on criteria weights and performance ratings. An empirical study of domestic airlines on a highly competitive route in Taiwan is conducted to demonstrate the eectiveness of the approach. The evaluation outcome provides airlines with their internal and external competitive advantages, relative to competitors in terms of customer-perceived quality levels of service. 2002 Elsevier Science B.V. All rights reserved.
Keywords: Survey; Fuzzy sets; Airlines; Service quality; Multicriteria analysis

1. Introduction The rapid growth in passenger trac has been experienced in the deregulated domestic commercial airline market worldwide. Competition is ever increasing as airlines try to acquire and retain customers. Price is initially used as the primary competitive weapon. However, airlines soon realise that competition on price alone represents a

* Corresponding author. Tel.: +61-3-9905-5808; fax: +61-39905-5159. E-mail address: chunghsing.yeh@infotech.monash.edu.au (C.-H. Yeh).

no-win situation in the long term. This is mainly due to the fact that airlines are relatively ecient in responding to competitors price changes (Jones and Sasser, 1995). In addition, the regulators of the airline system may interfere in the price competition as it often results in declined service quality and may aect ight safety. This implies that airlines competitive advantages based on price alone are not sustainable. In a highly competitive environment, where all airlines have comparable fares and matching frequent yer programs (such as Taiwans domestic airline market), airlines competitive advantages lie in the service quality perceived by customers. The study by Abrahams (1983) provides empirical support

0377-2217/02/$ - see front matter 2002 Elsevier Science B.V. All rights reserved. PII: S 0 3 7 7 - 2 2 1 7 ( 0 1 ) 0 0 1 4 8 - 5

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177

167

for the theory of service quality competition in the airline industry. Empirical studies of demand for airline services show that service quality is central to the choice of airlines for both business and leisure travellers (Bureau of Transport and Communications Economics, BTCE, 1994). An empirical study by Ostrowski et al. (1993) shows that continuing to provide perceived high quality services would help airlines acquire and retain customer loyalty. An airline would lead the market if it oers superior quality services relative to its competitors. It is therefore of strategic importance for airlines to understand their relative competitive advantages on service quality. This paper addresses the performance evaluation problem of service quality for domestic passenger airlines based on customer surveys. Empirical research has demonstrated the importance of the customer interactions in the assessment of overall quality with services (Bitner et al., 1990). However, due to the intangible nature of airline services, airline customers may nd it dicult to precisely assess their perceptions of service quality based on their experiences relative to expectations. To better reect the inherent subjectiveness and imprecision of customers assessments, the concept of fuzzy sets (Zadeh, 1965) is used for representing the survey results. An eective fuzzy multicriteria analysis (MA) approach is thus developed to rank airlines based on customers assessments with respect to multiple service quality attributes. This approach allows the decision-makers (DMs) attitude or preference for the customers assessments on criteria weights and performance ratings to be incorporated into the evaluation process. The evaluation outcome would help airlines better understand how the customers view their services relative to their competitors, thus motivating airlines to provide appropriate levels of services. In subsequent sections, we rst discuss the quality measures of airline services and present the criteria suitable for evaluating Taiwans domestic airlines. Next we explain how the passengers point estimates of quality level are represented by fuzzy sets. As a result, we formulate the evaluation problem as a fuzzy MA model and present an effective algorithm for solving the problem. Finally,

an empirical study on a domestic route in Taiwan is conducted. A competitiveness analysis is carried out to explore the relative competitive strengths and weaknesses of the airlines studied.

2. Measuring quality of airline services In the passenger airline industry, only the customer can truly dene service quality (Butler and Keller, 1992). The quality of airline service is difcult to describe and measure due to its heterogeneity, intangibility and inseparability. Never theless, quite a few conceptual and empirical studies have been devoted to investigate the service quality issues in the passenger airline industry. Various schemes for dening service quality dimensions or attributes have been proposed from the perspective of passengers. Most of these schemes are presented as quality measures for examining the relationships between service quality and related issues such as airline choice (Ritchie et al., 1980; Etherington and Var, 1984; Wells and Richey, 1996), customer satisfaction (Alotaibi, 1992), customer loyalty (Ostrowski et al., 1993; Young et al., 1994), passenger type (Alotaibi, 1992; White, 1994), airline type (Jones and Cocke, 1981), airline class (Etherington and Var, 1984; Alotaibi, 1992), aircraft type (Truitt and Haynes, 1994), productivity (Ozment and Morash, 1998), changes in quality levels over time (BTCE, 1992), total transportation service oering (Morash and Ozment, 1994), assessment group (Gourdin and Kloppenborg, 1991) and attribute dependency (Elliot and Roach, 1993). The results of existing studies on service quality suggest that the denitions and perceptions of airline service quality are quite diverse, and do not seem to t any single existing quality model (Hynes and Percy, 1994). This implies that service quality attributes are context-dependent and should be selected to reect the service environment investigated. While the denition of service quality and its inuential characteristics continue to be important research issues, the understanding of service quality levels being oered relative to competitors is of signicant importance to airline

168

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177

strategic management. This is the service quality issue to be addressed. Since the 1980s, the mainstream research on service quality has been conducted based on the notion that quality of service is perceived and evaluated by customers (Gronroos, 1990). Service quality, as perceived by customers, can be measured by an evaluation analysis which results from a comparison between customers expectations and experiences. The most widely used customerperceived service quality model is perhaps the Gap Analysis and SERVQUAL model by Parasuraman et al. (1985, 1988). Despite its validation in concept, there is no quantitative yardstick available. In fact, this model may have inherent problems in actually measuring customer expectations of service quality. Gronroos (1993), thus, suggests that measuring customer experiences of service quality, as providing a close approximation, is a theoretically valid way of measuring perceived quality. In practice, this simplies the process of data collection and analysis via survey questionnaires. In fact, service experiences are perceptions of reality, in which prior expectations are inherent. This concept is in line with the consumer behaviour research that views customer attitude as a global evaluation of a product or service. In the context of service quality, attitude can be regarded as an overall evaluation of a service perceived by customers based on their likes and dislikes (Bolton and Drew, 1991; Engel et al., 1995). Customers attitude towards a service depends on: (a) the strength of their beliefs about various features or attributes associated with the service and (b) the weight of attributes. Customers beliefs typically involve perceived associations between the service and its associated attributes, stemming from their direct experiences with the service. The weight of attributes refers to the relative importance of each attribute as perceived by customers. The best known formulation of attitude models is probably the Fishbeins multiattribute model (Fishbein and Ajzen, 1975; Engel et al., 1995). The model states that a customers attitude towards a given object (e.g. a service) is based on the summed set of beliefs about the services attribute weighted by the importance of these attributes. In this sense, service quality refers to the quantities of the char-

acteristics that are embodied in a service and directly interact with the utility functions of the customer (BTCE, 1992). This concept coincides with MA methods based on multiattribute utility (or value) theory (Hwang and Yoon, 1981; Dyer et al., 1992; Stewart, 1992) for ranking a nite set of alternatives characterised by multiple, usually conicting criteria (attributes). MA in this context has been applied to a wide range of decision problems which require a cardinal preference or ranking of the alternatives (e.g. van Gennip et al., 1997; Raju and Pillai, 1999; Yeh et al., 1999b). This is the fundamental methodology on which the approach presented in this paper is based.

3. Evaluation criteria of service quality for Taiwans domestic airlines The airlines service quality perceived by customers is normally represented and measured by a number of manageable, distinct dimensions or attributes. As suggested by existing research results, context-dependent service quality attributes are to be identied for evaluating Taiwans domestic airlines. To this end, a comprehensive investigation was conducted by consulting airline managers, government ocials, expert academics and travel agents in Taiwan. As a result, 15 service attributes embodied by ve categories (construct factors) were selected, as given in Fig. 1. These attributes are independent of each other, thus constituting the criteria (C1 , C2 ; . . . ; C15 ) used in the fuzzy MA model for evaluating service quality performance of Taiwans domestic airlines. The evaluation criteria in Fig. 1 reect the major concerns of passengers travelling on shorthaul routes between two cities in a Taiwanese context. They also represent the service attributes over which Taiwans domestic airlines have control and with which they can dierentiate themselves from other competitors. They correspond to the expressive performance of airline services, known as the functional quality. The functional quality is concerned with the service delivery process, thus reecting customers experiences of service quality. Research has shown that the functional quality plays the most critical role in

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177

169

Fig. 1. Criteria used for service quality evaluation of Taiwans domestic airlines.

customers overall quality perception, and successful service management means the continuous improvement of the functional quality of services (Gronroos, 1984, 1993).

4. Representing customers assessments as fuzzy sets The level of the functional quality perceived by customers is to be assessed in a subjective manner via a survey process. The result of this subjective assessment is intrinsically imprecise due to the characteristics of airline services. This imprecision is inevitable, especially when the time frame available for airline passengers to make estimates of quality levels is typically short. To reect the subjectiveness and imprecision involved in the survey process, the assessments made by all passengers with respect to criteria weights and performance ratings of each airline on each criterion are represented as fuzzy sets. Modelling using fuzzy sets has proven to be an eective way for

formulating decision problems where the information available is subjective and imprecise (Zimmermann, 1996; Hellendoorn, 1997). Customer-perceived service quality has been universally measured on a point estimate basis (Rust et al., 1999). For example, in a survey process, each of N passengers of an airline is asked to give a rating xk k 2 f1; 2; . . . ; Lg on an L-point Likert-type scale for an assessment item such as the importance of a criterion or the performance rating of an airline with respect to an evaluation criterion. The assessments of all N passengers of the airline with respect to the assessment item are aggregated and represented by a discrete fuzzy set, whose membership function is given as lA xk a1 a2 ak aL ; x1 x2 xk xL k 1; 2; . . . ; L;

where the sign is used to link the elements xk k 1; 2; . . . ; L of A with their corresponding

170

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177

degrees of membership ak k 1; 2; . . . ; L in A, and the + sign indicates that the listed pairs of elements and membership degrees collectively form the denition of the fuzzy set A (Klir and Yuan, 1995). The degree of membership of the elements ak in A is dened as ak Nk ; N
L X k1

the decision matrix) for m criteria and n alternatives is to be given as 2 3 x11 x12 . . . x1m 6x x22 . . . x2m 7 7 3 X 6 21 4 . . . . . . . . . . . . 5; xn1 xn2 . . . xnm where xij represent the overall assessments of the service quality level of alternative Ai i 1; 2; . . . ; n with respect to criterion Cj j 1; 2; . . . ; m. Expressed as in (1), xij are fuzzy sets characterised by the point estimates of all customers of alternative Ai . A fuzzy weighting vector representing the relative importance of the criteria perceived by customers is to be given as W w1 ; w2 ; . . . ; wm : 4

Nk N ;

0 6 ak 6 1; 2

k 1; 2; . . . ; L;

where Nk is the number of passengers who give an xk rating for the assessment item. As an overall assessment result for an airlines performance on a service attribute (evaluation criterion), ak represents the possibility of the airline having an xk rating on the service attribute. This implies that the values for the assessments obtained for each assessment item are regarded as possibilities which are measured using fuzzy sets. With the representation of all passengers assessments on as assessment item as a fuzzy set, there is no need for a consensus test such as Kendalls coecient of concordance among the passengers, as often required by the mean method. This is because all the passengers perceived ratings are incorporated into the fuzzy set to represent the assessment result of the passengers as a whole.

Expressed as in (1), wj (j 1; 2; . . . ; m) are fuzzy sets characterised by the point estimates of all customers involved.

5.2. The solution procedure With the problem structure dened above, mainstream fuzzy MA models in the context of multiattribute utility theory are developed based on a two-phase approach (Zimmermann, 1987; Chen and Hwang, 1992). First, the fuzzy assessments with respect to all criteria for each alternative are aggregated. Second, alternatives are ranked based on the comparison of their aggregated overall assessments represented as fuzzy sets. The main problem with this approach lies in the fact that the comparison of fuzzy sets is not always straightforward and reliable (Zimmermann, 1987; Chen and Hwang, 1992; Chen and Klein, 1997). To overcome the problem of comparing fuzzy sets, we present an eective algorithm for generating a crisp performance index for each alternative. The algorithm is based on the concepts of the degree of optimality and the ideal solution (Hwang and Yoon, 1981; Zeleny, 1982). These two concepts have been widely used in dierent decision contexts due to their simplicity and applicability in solving various MA problems (e.g. Chen and

5. The fuzzy multicriteria analysis approach In this paper, we formulate the performance evaluation of service quality for Taiwans domestic airlines as a fuzzy MA problem with customerperceived performance ratings and criteria weights represented as fuzzy sets.

5.1. The service quality evaluation problem The problem usually involves a set of n alternatives (airlines) Ai i 1; 2; . . . ; n: The service quality levels provided by these alternatives are to be evaluated by their customers in terms of a set of m criteria Cj j 1; 2; . . . ; m, which are independent of each other. A fuzzy matrix (referred to as

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177

171

Hwang, 1992; Zeleny, 1998; Liang, 1999; Yeh et al., 1999a). With a process of transforming a fuzzy vector into a fuzzy singleton (Zadeh, 1973) vector, the algorithm can incorporate the DMs attitude or preference for the assessments into the evaluation procedure. This transformation process is presented below. Given a fuzzy vector V v1 ; v2 ; . . . ; vm , such as x1j ; x2j ; . . . ; xnj of the decision matrix for criterion Cj or the weighting vector W, the degree to which vj is the best result in V is calculated by j comparing it with the fuzzy maximum Mmax (Yager, 1980; Zadeh, 1998), given as ( !), L X minlvj xk ; lM j xk max uRj L; j maxlvj xk ; lMmax xk k1 j 1; 2; . . . ; m: 5

(represented by the fuzzy maximum), thus reecting the DMs optimistic view. In line with this concept, the DMs pessimistic view can be represented by the degree to which vj is not the worst result. This can be calculated by j comparing it with the fuzzy minimum Mmin , given as ( !), L X minlvj xk ; lM j xk min L; uLj 1 maxlvj xk ; lM j xk k1
min

j 1; 2; . . . ; m; where lM j xk
min

xj xk max ; xj xj max min

k 1; 2; . . . ; L;

lvj xk is dened in (1) and the membership funcj tion of Mmax is dened as
j lMmax xk

xj sup max xj min

n [ fx; x 2 R and 0 6 lvj x 6 1g; i1

xk xj min ; xj xj max min

k 1; 2 . . . ; L;

n [ inf fx; x 2 R and 0 6 lvj x 6 1g: i1

where xj sup max xj min

n [ fxk ; xk 2 R and 0 6 lvj xk 6 1g; i1 n [ inf fxk ; xk 2 R and 0 6 lvj xk 6 1g: i1

uRj represents the overall similarity degree between j vj and the fuzzy maximum (Mmax ). The similarity measure used in (5) denotes the average of the similarity degrees on all elements in V. It has the signicance of average (i.e. each element in V plays an equal role) as compared with other similarity measures (Wang, 1997). The similarity concept used in (5) coincides with possibility theory on fuzzy sets (Klir and Yuan, 1995). The similarity degree between V and an ideal solution V (for which the possibility degree is 1) is expressed by a suitable distance between V and V (the possibility of V ) dened in terms of relevant attributes of the elements in V. Thus, uRj in (5) reects the highest degree of possibility of vj s performance to the ideal solution

In actual decision settings, the DMs attitude is not necessarily to be absolutely optimistic or pessimistic, but somewhere in between. An attitude index k in the range of 0 and 1 is thus used to indicate the DMs relative preference between uRj and uLj . Incorporated with the attitude index k, a fuzzy singleton vector S s1 ; s2 ; . . . ; sm is determined by 9 sj kuRj 1 kuLj ; j 1; 2; . . . ; m; where sj indicates the degree of optimality of vj or its degree of preferability over all others in V. In practical applications, k 1, k 0:5 or k 0 can be used to indicate that the DM has an optimistic, moderate or pessimistic view, respectively, on assessment results represented as fuzzy sets. An optimistic DM is apt to prefer higher values of the fuzzy sets, while a pessimistic DM tends to favour lower values. In the context of the case study presented in this paper, an optimistic DM would pay more attention on favourable assessments (high ratings), while a pessimistic DM is more concerned about unfavourable assessments (low ratings).

172

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177

Incorporated with the transformation process described above, the algorithm for ranking alternatives with the weighting vector and the decision matrix given as fuzzy sets is presented as follows: Step 1. Obtain the fuzzy singleton vector Y y1 ; y2 ; . . . ; ym for the criteria weights from the weighting vector W by (5)(9) with a given attitude index kw . Step 2. Obtain the weighted decision matrix by multiplying Y obtained at Step 1 by X given in (3) using fuzzy arithmetic (Kaufmann and Gupta, 1991). Step 3. Set the attitude index kr for performance ratings of the decision matrix and determine the degree of optimality of each alternative regarding each criterion based on the weighted decision matrix obtained at Step 2 by (5)(9), resulting in a fuzzy singleton performance matrix, given as 2 3 z11 z12 . . . z1m 6z z22 . . . z2m 7 7 Z 6 21 10 4 . . . . . . . . . . . . 5; zn1 zn2 . . . znm where zij i 1; 2; . . . ; n; j 1; 2; . . . ; m) indicates the degree of preferability of alternative Ai over all other alternatives in regard to criterion Cj . Step 4. Determine the positive ideal solution z and the negative ideal solution z (Hwang and Yoon, 1981; Zeleny, 1982) by z z ; z ; . . . ; z ; 1 2 m where z supz1j ; z2j ; . . . ; znj ; j z infz1j ; z2j ; . . . ; znj ; j 1; 2; . . . ; m: j 12 z z ; z ; . . . ; z ; 1 2 m 11

Step 6. Compute the overall crisp performance index for each alternative by d 14 Pi i ; i 1; 2; . . . ; n: di di The larger the performance index, the more preferred the alternative. This is based on the concept that the most preferred alternative should not only have the shortest distance from the positive ideal solution, but also have the longest distance from the negative ideal solution.

6. Empirical study Taiwans domestic passenger airline market has become a major transport service sector with an annual average growth rate of nearly 20% since deregulation in 1987. To examine passengers perceptions of service quality for Taiwans domestic airlines, the TaipeiTainan route was chosen. Being a major route with more than 60 scheduled ights per day, the TaipeiTainan route is served by four airlines, namely, Far Eastern Air transport A1 , TransAsia Airways A2 , Eva Air A3 and Great China Airlines A4 . A survey questionnaire was designed to measure the existing quality levels of services perceived by passengers of four airlines. The passengers of each airline were asked to rate the importance of the evaluation criteria (service attributes) in Fig. 1 and assess the performance of the airline on each criterion on an 11-point scale ranging from 10 (extremely high) to 0 (extremely low). This scoring method is familiar to the general public in Taiwan, thus, better reecting their perceptions on an assessment item in terms of scores. The questionnaire form is given in Appendix A. The survey process was conducted at Tainan Airport in the morning and afternoon over a period of one month. The survey questionnaire was randomly given face-to-face to both arriving and departing passengers who have own the Tainan Taipei route with the same airline at least twice in the last six months. Frequent travelers were preferred as rst-time travelers may nd it dicult to evaluate and discern dierences in service quality, especially before the service (Turley, 1990). A total

Step 5. Calculate the Hamming distance between each alternative and the positive ideal solution z and the negative ideal solution z , respectively, by m X z zij ; di j
j1

di

m X j1

13 zij z ; j i 1; 2; . . . ; n:

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177 Table 1 Fuzzy singleton weights of evaluation criteria Criteria C1 Weight C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15

173

0.4482 0.4465 0.4087 0.4541 0.4653 0.4682 0.4536 0.5026 0.5085 0.4867 0.4508 0.4613 0.4513 0.4552 0.4575

Table 2 Fuzzy singleton performance matrix of four airlines Airlines A1 A2 A3 A4 C1 0.4120 0.3938 0.4186 0.4244 C2 0.3784 0.4144 0.4120 0.4102 C3 0.4302 0.4136 0.3972 0.3876 C4 0.3916 0.4036 0.3948 0.3928 C5 0.4250 0.3702 0.4226 0.3934 C6 0.3902 0.4132 0.4180 0.3954 C7 0.4134 0.4078 0.3998 0.3978 C8 0.4658 0.4640 0.4824 0.4360 C9 0.4436 0.4418 0.4018 0.4426 C10 0.4324 0.4182 0.4400 0.4238 C11 0.4314 0.4340 0.3888 0.3828 C12 0.4070 0.4120 0.3848 0.4026 C13 0.3766 0.4024 0.3942 0.3822 C14 0.4172 0.3748 0.3962 0.3808 C15 0.4024 0.3834 0.3972 0.3906

of 390 respondents were selected and 354 eective responses (93 for A1 , 80 for A2 , 109 for A3 and 72 for A4 were received. Most respondents were able to complete the questionnaire within 10 minutes. Because all surveys conducted were essentially identical at around the same time, the survey results can be aggregated and used as the existing passengers overall perceptions of criteria weights and performance ratings on service quality provided by four airlines. In what follows, we briey illustrate how the fuzzy MA approach presented in the previous section is used to rank four airlines based on the respondents assessments. We rst consider the situation where the DM has a moderate attitude toward the respondents assessments, that is, kw 0:5 and kr 0:5. This indicates the DM weights all the responses equally. Given all the respondents valid assessments on criteria weights and kw 0:5, a fuzzy singleton vector Y, as shown in Table 1, is obtained by (1) and (2) and (5)(9). Given the assessments of all the respondents of individual airlines, the decision matrix X, expressed as in (3) with n 4 and
Table 3 Performance rankings of four airlines under dierent kw and kr Ranking order (performance index) kr 0:0 kr 0:5 kr 1:0 kw 0:0 kw 0:5

m 15, can be determined. A weighted decision matrix is accordingly generated by multiplying Y by X. Given the weighted decision matrix and kr 0:5, a fuzzy singleton performance matrix Z, as shown in Table 2, is obtained by (5)(9). With the performance matrix in Table 1, the overall performance index Pi of four airlines Ai i 1; 2; 3; 4 can be obtained by (11)(14). The values of Ri i 1; 2; 3; 4 are 0.6782, 0.4233, 0.7832, and 0.2227, respectively, indicating the ranking order of their service quality performance is A3 > A1 > A2 > A4 . To examine how the DMs attitude or preference for the customers assessments may aect the evaluation outcome, further experiments were carried out by changing the values of kw and kr . Some representative results are given in Table 3. The evaluation outcome presented in Table 3 reects that the passengers of four airlines have dierent views on the quality level of their services, consistent with the survey results. The overall rankings of four airlines are clearly aected by the DMs preference for: (a) favourable responses

kw 1:0

A1 > A3 > A2 > A4 0:8215 > 0:5920 > 0:5056 > 0:2010 A3 > A1 > A2 > A4 0:8946 > 0:7508 > 0:3187 > 0:2407 A3 > A4 > A1 > A2 0:9960 > 0:4187 > 0:2065 > 0:1910

A1 > A2 > A3 > A4 0:7089 > 0:6103 > 0:5260 > 0:1752 A3 > A1 > A2 > A4 0:7832 > 0:6782 > 0:4233 > 0:2227 A3 > A4 > A1 > A2 0:9989 > 0:4000 > 0:1966 > 0:1190

A2 > A1 > A3 > A4 0:7182 > 0:3746 > 0:2291 > 0:1755 A2 > A3 > A4 > A1 0:6590 > 0:4290 > 0:2853 > 0:2554 A3 > A4 > A2 > A1 0:7641 > 0:4602 > 0:2994 > 0:2727

174

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177

(high ratings) when kw or kr is close to 1 or (b) unfavourable responses (low ratings) when kw or kr is close to 0. This analysis would help airline management understand how their passengers opinions are distributed relative to their competitors. For example, airline A1 ranks the highest when the unfavourable opinions are weighted more, and ranks the lowest when the favourable opinions are weighted more. This implies that relatively fewer passengers of airline A1 have given low ratings or high ratings on their service performance as compared with other airlines. This means that the assessments made by airline A1 s passengers are relatively consistent. Airline A3 performs the best consistently except for the situations where unfavourable opinions are weighted more. This indicates that relatively more passengers of airline A3 think their service performance is the best, while some passengers have dierent views. The evaluation process and the corresponding outcomes can help an airline identify its competitive advantages relative to its competitors in a specic context. The airline can concentrate on improvement of certain service attributes that are important in aecting relative rankings. To examine the airlines relative competitive strengths and weaknesses on service attributes identied as

important to their customers, a competitiveness analysis can be carried out based on the weighted performance evaluation result in Table 2. In the analysis, we regard the best or worst ve service attributes assessed by passengers of an airline as the internal strengths or weaknesses of the airline. For a particular service attribute, the two airlines with higher or lower performance rankings are regarded as having external strengths or weaknesses on the attribute. By combining the competitive strengths and weaknesses both internally and externally, the overall competitiveness of airlines on individual service attributes can be obtained. Table 4 shows the results, which are based on the situation where all the passengers assessments are weighted equally. The internal competitiveness result in Table 4 indicates that the reliability of service C8 , C9 and C10 of airlines as a whole performs much better than the handling of abnormal conditions C13 , C14 and C15 . The airlines with more external competitive strengths in these two categories (such as A3 and A1 have a higher overall ranking. The overall competitiveness of airlines indicated in Table 4 is consistent with their performance rankings. These evaluation results would help airlines better manage their competitive advanta-

Table 4 Competitive strengths and weaknesses of four airlines Internal A1 C1 C2 C3 C4 C5 C6 C7 C8 C9 C10 C11 C12 C13 C14 C15 X O X X O O O O X X O O O O X X X A2 X O A3 O A4 O O X External A1 X X O X O X O O O O O O X O O A2 X O O O X O O X O X O O O X X A3 O O X O O O X O X O X X O O O A4 O X X X X X X X X X X X X X X Overall A1 X O X X O O O O X X X A2 X O A3 O A4 O X X O O O O O O X X X X X

X O O O O X X X X O O O X X X X

O: Competitive strength; X: Competitive weakness.

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177

175

ges and provide an incentive for them to improve quality levels of specic services relative to their competitors.

problem formulation and data collection. We also thank Prof. Roman Slowinski, the editor, and anonymous referees for their valuable comments and advice.

7. Conclusion The intensive competition of the domestic airline market under deregulation has made airlines adopt an attitude towards customer-oriented service quality. To help airlines better understand how the customer views their services relative to their competitors, a customer-driven evaluation approach of service quality has been presented. Crisp assessments of all the customers on quality levels of service provided by airlines are modeled as fuzzy sets to better reect the inherent subjectiveness and imprecision of the survey process. A fuzzy MA model with eective handling of fuzzy data has been developed to evaluate the relative performance of airlines in terms of customers perceptions of service quality. The DMs attitude or preference for the customers assessments on criteria weights and performance ratings can be specied to reect their major concerns on various customers opinions. An empirical study of a domestic route in Taiwan has been conducted to demonstrate the eectiveness of the approach. The evaluation outcome helps airlines identify their internal and external competitive advantages relative to their competitors. It provides a guideline for airlines to provide appropriate levels of service in response to customers needs. The underlying concepts used by the approach are comprehensible, and the survey process and computations required are straightforward and simple. The approach is particularly applicable to major routes between two cities which are served by several airlines.

Appendix A. Airline service quality survey This questionnaire is purely an academic research survey, aiming at understanding the current quality level of airline services on the Taipei Tainan route. The survey result will be strictly used for academic purposes only, in which no individual responses can be identied. To ensure the fairness and eectiveness of the responses, we expect that all participants have own with the same airline at least twice in the past six months. It should only take 10 minutes to complete. Section 1 The following questions relate to your travel prole on the TaipeiTainan route. 1. Which airline do you ight with this time (or last time)? Far Eastern Air Transport TransAsiaAirways EvaAir GreatChina Airlines 2. How many times did you y with the same airline in the last six months? 1 25 610 11 or more 3. What is your main purpose for taking this trip? Business Commuting Pleasure Personal Other 4. What is your main reason of choosing this airline? Service quality Discount price Timing At random Other 5. How many times did you y in the last year? 1 25 610 11 or more Section 2 Based on your experiences and expectations as a passenger of domestic airlines, please rate how important the following service attributes are to you when you choose an airline. The score 10 represents that the attribute is extremely important, and the score 0 means that the attribute is not important at all. There are no correct answers. The score you circle or tick should truly reect your

Acknowledgements This research was supported in part by the National Science Council of Taiwan, ROC, under Grant No. NSC88-2811-E006-0013. We are grateful to the Tainan Airport Administration and four airlines involved for providing assistance in

176

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177 7. Service eciency of airline personnel 8. Security-related accidents 9. Airline ight safety and security measures 10. On-time performance 11. Service frequency and schedule convenience 12. Convenience of pre-ight and post-ight services 13. Handling of customer complains 14. Handling of ight delays 15. Handling of luggage loss or damage 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10

feelings about the relative importance of airline services that would aect your airline choice.
1.Cleanliness and low noise level of aircraft 2. Good on-board facilities (seat comfort and spaciousness) 3. Good on-board services (meals, drinks and newspapers) 4. Helpful attitudes and courtesy of check-in personnel 5. Good attention by stewardesses 6. Good appearance and courtesy of airline personnel 7. Good service eciency of airline personnel 8. Low level of security-related accidents 9. Good airline ight safety and security measures 10. Good on-time performance 11. High service frequency and schedule convenience 12. Convenience of pre-ight and post-ight services 13. Good handling of customer complains 14. Good handling of ight delays 15. Good handling of luggage loss or damage 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10

References
0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 Abrahams, M., 1983. A service quality model of air travel demand: An empirical study. Transportation Research Part A 17A (5), 385393. Alotaibi, K.F., 1992. An empirical investigation of passenger diversity, airline service quality, and passenger satisfaction. Ph.D. Dissertation, Arizona State University. Bitner, M.J., Booms, B.H., Tetreault, M.S., 1990. The service encounter: Diagnosing favorable and unfavorable incidents. Journal of Marketing 54, 7184. Bolton, R., Drew, J., 1991. A longitudinal analysis of the impact of service changes on customer attitude. Journal of Marketing 55, 19. Bureau of Transport and Communications Economics, 1992. Quality of service in Australian passenger aviation. Australian Government Publishing Service, Canberra. Bureau of Transport and Communications Economics, 1994. International aviation trends and issues. Australian Government Publishing Service, Canberra. Butler, G.F., Keller, M.R., 1992. The cost-constrained global airline industry environment: What is quality? Transportation Quarterly 46 (4), 599618. Chen, S.J., Hwang, C.L., 1992. Fuzzy Multiple Attribute Decision Making: Methods and Applications. Springer, New York. Chen, C.B., Klein, C.M., 1997. An ecient approach to solving fuzzy MADM problems. Fuzzy Sets and Systems 88 (1), 5167. Dyer, J.S., Fishburn, P.C., Steuer, R.E., Wallenius, J., Zionts, S., 1992. Multiple criteria decision making, multiattribute utility theory: The next ten years. Management Science 38 (5), 645653. Engel, J.F., Blackwell, R.D., Miniard, P.W., 1995. Consumer Behavior, eighth ed. The Dryden Press, Forth Worth, TX. Elliot, K.M., Roach, D.W., 1993. Service quality in the airline industry: Are carriers getting an unbiased evaluation from consumers? Journal of Professional Services Marketing 9 (2), 7182. Etherington, L.D., Var, T., 1984. Establishing a measure of airline preference for business and nonbusiness travelers. Journal of Travel Research 22 (4), 2227.

Section 3 Based on your experiences and perceptions with the service of the airline on your previous ight(s), please rate the quality level in terms of the following service attributes. The score you circle or tick should truly reect your feeling about the extent to which the airline service satises you. The score 10 represents that you are extremely satised with the service for the attribute, and the score 0 means that you are totally dissatised with the service for the attribute.
1. Cleanliness and noise level of aircraft 2. On-board facilities (seat comfort and spaciousness) 3. On-board services (meals, drinks and newspapers) 4. Helpful attitudes and courtesy of check-in personnel 5. Attention by stewardesses 6. Appearance and courtesy of airline personnel 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10 0 1 2 3 4 5 6 7 8 9 10

Y.-H. Chang, C.-H. Yeh / European Journal of Operational Research 139 (2002) 166177 Fishbein, M., Ajzen, I., 1975. Belief, Attitude, Intention and Behavior: An Introduction to Theory and Research. Addison-Wesley, Reading, MA. Gourdin, K.N., Kloppenborg, T.J., 1991. Identifying service gaps in commercial air travel: The rst step toward quality improvement. Transportation Journal 31 (1), 2230. Gronroos, C., 1984. A service quality model and its marketing implications. European Journal of Marketing 18 (3), 3644. Gronroos, C., 1990. Service Management and Marketing: Managing the Moments of Truth in Service Competition. Free Press, Lexington Books, Lexington, MA. Gronroos, C., 1993. Quality comes to service. In: Scheuing, E.E., Christopher, W.F. (Eds.), The Service Quality Handbook. AMACOM, New York, pp. 1724. Haynes, R., Percy, J., 1994. Perception paradox: Airline service quality issues. Proceedings of Decision Sciences Institute 1994 Annual Meeting 3, 19501952. Hellendoorn, H., 1997. After the fuzzy wave reached Europe. European Journal of Operational Research 99, 5871. Hwang, C.L., Yoon, K.S., 1981. Multiple Attribute Decision Making: Methods and Applications. Springer, Berlin. Jones, J.R., Cocke, S.I., 1981. A performance evaluation of commuter airlines: The passengers view. In: Proceedings of the 22nd Annual Meetings of the Transportation Research Forum, pp. 248256. Jones, T.O., Sasser, W.E., 1995. Why satised customers defect. Harvard Business Review 73 (6), 8899. Kaufmann, A., Gupta, M.M., 1991. Introduction to Fuzzy Arithmetic, Theory and Applications. International Thomson Computer Press, Boston. Klir, G.R., Yuan, B., 1995. Fuzzy Sets and Fuzzy Logic Theory and Applications. Prentice-Hall, Upper Saddle River, NJ. Liang, G.S., 1999. Fuzzy MCDM based on ideal and anti-ideal concepts. European Journal of Operational Research 112, 682691. Morash, E.A., Ozment, J., 1994. Toward management of transportation service quality. Logistics and Transportation Review 30 (2), 115140. Ostrowski, P.L., OBrien, T.V., Gordon, G.L., 1993. Service quality and customer loyalty in the commercial airline industry. Journal of Travel Research 32 (2), 1624. Ozment, J., Morash, E.A., 1998. Assessment of the relationship between productivity and performance quality in the U.S. domestic airline industry. Transportation Research Record 1622, 2230. Parasuraman, A., Zeithaml, V.A., Berry, L.L., 1985. A conceptual model of service quality and its implications for future research. Journal of Marketing 49 (4), 4150. Parasuraman, A., Zeithaml, V.A., Berry, L.L., 1988. SERVQUAL: A multiple-item scale for measuring consumer perception of service quality. Journal of Retailing 64 (1), 1240. Raju, K.S., Pillai, C.R.S., 1999. Multicriterion decision making in river basin planning and development. European Journal of Operational Research 112, 479488.

177

Ritchie, J.R.B., Johnston, E.E., Jones, V.J., 1980. Competition, fares and fences perspective of the air traveler. Journal of Travel Research 19, 1725. Rust, R.T., Inman, J.J., Jia, J., Zahorik, A., 1999. What you dont know about customer-perceived quality: The role of customer expectation distributions. Marketing Science 18 (1), 7792. Stewart, T.J., 1992. A critical survey on the status of multiple criteria decision making: Theory and practice. Omega 20, 569586. Truitt, L.J., Haynes, R., 1994. Evaluating service quality and productivity in the regional airline industry. Transportation Journal 33 (4), 2132. Turley, L.W., 1990. Strategies for reducing perceptions of quality risk in services. The Journal of Services Marketing 4, 512. van Gennip, C.E.G., Hulshof, J.A.M., Lootsma, F.A., 1997. A multi-criteria evaluation of diseases in a study for publichealth planning. European Journal of Operational Research 99, 236240. Wang, W.-J., 1997. New similarity measures on fuzzy sets and on elements. Fuzzy Sets and Systems 85, 305309. Wells, A.T., Richey, F.D., 1996. Commuter Airlines. Krieger Publishing, Malabar, FL. White, C.A., 1994. The attributes of customer service in the airline industry. Ph.D. Dissertation, Unites States International University, San Diego. Yager, R.R., 1980. On choosing between fuzzy subsets. Kybernetes 9, 151154. Yeh, C-H., Deng, H., Pan, H., 1999a. Multi-criteria analysis for dredger dispatching under uncertainty. Journal of the Operational Research Society 50 (1), 3543. Yeh, C-H., Willis, R.J., Deng, H., Pan, H., 1999b. Task oriented weighting in multi-criteria analysis. European Journal of Operational Research 119 (1), 130146. Young, C., Lawrence, C., Lee, M., 1994. Assessing service quality as an eective management tool: The case of the airline industry. Journal of Marketing Theory and Practice 2 (2), 7696. Zadeh, L.A., 1965. Fuzzy sets. Information and Control 8 (3), 338353. Zadeh, L.A., 1973. Outline of a new approach to the analysis of complex system and decision process. IEEE Transactions on Systems, Man, and Cybernetics 2, 2844. Zadeh, L.A., 1998. Maximizing sets and fuzzy Marko algorithms. IEEE Transactions on Systems, Man, and Cybernetics 28 (1), 915. Zeleny, M., 1982. Multiple Criteria Decision Making. McGraw-Hill, New York. Zeleny, M., 1998. Multiple criteria decision making: Eight concepts of optimality. Human Systems Management 17 (2), 97107. Zimmermann, H.-J., 1987. Fuzzy Sets, Decision Making, and Expert Systems. Kluwer Academic Publishers, Boston. Zimmermann, H.-J., 1996. Fuzzy Set Theory and Its Applications. Kluwer Academic Publishers, Boston.