The influence of service quality and consumption emotions on consumer retention in airline industry

Abstract

Customer retention seems to be a matter of great concern to many companies especially in service sectors. Particularly, the importance of customer retention is highlighted since the competition among the businesses is growing and acquiring new customers is very expensive. For the airline industry, customer retention has become critical as companies are struggling with many challenges, mainly stiff competition, apart from other issues such as terrorism and accidents. Those issues have caused customers to keep switching from one airline to another. Thus, based on Mehrabian and Russell model, this study has sought to examine to what extent the customer retention in the airline industry can be influenced of by service quality, positive and negative consumption emotions. Accordingly, using purposive sampling method, the respondents for this study are passengers who have travelled using national airlines within the past twelve months. Through self-administered questionnaire, 218 questionnaires were usable for analysis which was performed using SPSS and PLS-SEM. The findings show that there is positive and significant relationship between service quality and customer retention, between service quality and positive consumption emotion; and between positive consumption emotion and customer retention. In addition, result also shows that there is a negative relationship between service quality and negative consumption emotion as well as between negative consumption emotion and customer retention. Further, among service quality, positive consumption emotion and negative consumption emotion; positive consumption emotion has the most influence on customer retention. The findings of this study provide valuable implications and contributions from the both managerial side and academic perspective.