Airline service quality evaluation for Indonesian low-cost carriers based on Extenics innovation theory

Abstract

Nowadays, the market is getting competitive in all aspects of the survival of the company. Companies, especially in the service industry, realize that in order to win the market, they need to explore new ways of delighting customers. The airline industry has played a vital role in Indonesia's modern development and competitiveness. Fierce competition and shrinking profits have impelled the airlines to stress upon improving the quality of the services being provided to the passengers. Passengers have become very specific about their service needs and often tend to shift to others that pro-vide better services. Service quality has emerged as a critical consideration for airlines in the competitive global mar-ket, coinciding with Low-Cost Carriers' rapid proliferation (LCCs), bringing a paradigm shift in airline business strat-egy. Twenty-five service quality attributes identified through extensive literature review and results obtained through five modified AIRQUAL dimensions are fruitful for airline managers to address service quality issues. This paper aims to evaluate LCCs’ service quality in Indonesia using the Extenics innovation theory. The Extenics innovation theory is a kind of method with the combination of formalization, quantification, and logicalization. It is effectively applied to put forward creative ideas of new services of airlines. The concepts and principles of service attributes classification based on Extenics are also discussed. To consider interdependence and to calculate the relative importance of each criterion, the AHP method is applied. The study demonstrates and signifies that the Extenics theory and AHP method are promising and pragmatic evaluation model for customer-oriented airline strategic planning. This study has a number of practical implications for LCC airlines, its policy makers and managers. Findings of this study suggest that LCC airlines should focus on appropriate strategies for improving their customers’ satisfaction. Airlines should con-cern on service failures such as delays by providing extra customer care to supplement required material compensation and provide valuable objective feedback and information. A theoretical implication of this study is that Extenics inno-vation theory can classify and prioritize the service attributes of airlines. Further, the scope of future research works has been discussed at the end to conclude the paper.