The Effect of Service Quality, Price Fairness and Corporate Image to Customer Retention Mediated by Customer Satisfaction on LowCost Carrier Airlines

Abstract

This research aims to analyze the effect of service quality, price fairness, and corporate image on customer retention of low-cost carrier airlines mediated by customer satisfaction. The research was conducted by quantitative research and testing hypothesis with a purposive sample of low-cost airline passengers. A Google form was used to collect 203 responses, which were then analyzed using the Partial Least Square method of the Structural Equation Model from the Statistical Package for Social Science. The results of the study found that the effect of the independent variables on the dependent variable was as follows: Service quality to customers retention has no effect; Price fairness on customer retention has no effect; Corporate image on customer retention has no effect; customer satisfaction on customer retention has an effect. In addition, service quality, price fairness, and corporate image have effect on customer satisfaction. For the indirect hypothesis, service quality, price fairness, and corporate image influence on customer retention mediated by customer satisfaction were accepted. The research concluded that there are 3 hypothesis that have no effect and 7 hypothesis that have an effect consisting of 4 direct effects and 3 indirect effects. The implication of this research, there is the important rule of customer satisfaction as a mediating variable from service quality, price fairness, and corporate image to customer retention of low-cost carrier airlines. The placement of customer satisfaction as a full mediation variable on the research model became a Novelty in this study.