On-time performance, passenger expectations and satisfaction in the Chinese airline industry

Service quality has become an important area for competition among Chinese carriers. This paper focuses on studying the relationship between customer satisfaction measured by customer complaints and their expectation of the on-time performance of Chinese carriers. By using a monthly balanced panel data set covering nine large and medium carriers, the empirical results show that an increase in actual on-time performance reduces customer complaints. However, an increase in expected on-time performance significantly raises customer complaints. In addition, although customer complaints are negatively related to the deviations between actual and expected on-time performance, our Wald tests do not support the model of the deviations between actual and expected on-time performance. Listed carriers receive significantly lower customer complaints compared with non-listed carriers. Furthermore, poor weather also affects customer complaints as an increase in rainfall or a decrease in temperature raises customer complaints.