Customer satisfaction and the financial performance of Chinese airlines

Research output: Journal PublicationsJournal Article (refereed)

Abstract

This paper focuses on studying the relationship between customer satisfaction measured by customer complaints and the financial performance of Chinese carriers. The financial performance is measured by using the revenue to operating cost ratio, operating profit and net profit to cost ratios of the carriers. The empirical results show that delayed baggage has a negative and significant effect on customer complaints. Rainfall and temperature have positive and negative effects on complaints respectively. Customer complaints have a negative and statistically significant effect on all the three measures of financial performance of carriers. These results are in fact consistent with our expectation that customer satisfaction is indeed relevant for the financial performance of carriers. They also provide support for the carriers to put in their resources to improve their service quality in order to yield a higher customer satisfaction as it can actually raise their profitability in the end.
Original languageEnglish
Pages (from-to)55-68
Number of pages14
JournalInternational Journal of Management Theory and Practices
Volume16
Issue number1
Publication statusPublished - 1 Aug 2015

Bibliographical note

The author would like to thank anonymous referees for their comments and is grateful for the research support provided by Lingnan University. The research assistance provided by Hannah Leung is gratefully acknowledged.

Keywords

  • baggage mishandling and profitability of carriers
  • complaints
  • customer satisfaction
  • on-time performance of scheduled flights

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