The Effect of Service Failures and Service Quality on Customer Loyalty and Repurchase Intentions: A Case Study of Lion Air Group During the COVID-19 Pandemic
Abstract
The COVID-19 pandemic restricted people’s movement and forced airlines to cancel or reschedule flights. Lion Air Group is one example, cutting at least 65% of their regular frequency and rescheduling flights since March 2020. This paper aimed to examine the effects of service failure and service quality of Lion Air Group on their passengers’ loyalty and repurchase intention during the COVID-19 pandemic. 100 respondents participated through an online questionnaire, and SEM-PLS was used for quantitative analysis. It was found that the service quality of Lion Air Group influenced passenger loyalty. Following this, passenger loyalty significantly influenced repurchase intention. Interestingly, passengers did not consider service failures as a factor that influenced their decision to be loyal and fly again with Lion Air in the future, but rather the service quality of the airline group when handling service failures.
Keywords: service failure, service quality, customer loyalty, repurchase intention, Lion Air, Batik Air, Wings Air, COVID-19, airline
References
[1] Sun X, Wandelt S, Zhang A. How did COVID-19 impact air transportation? A first peek through the lens of complex networks. J Air Transp Manage. 2020 Oct;89:101928.
[2] The Jakarta Post. Tens of thousands of flights canceled in Indonesia because of COVID-19. 2020.
[3] Liputan 6. Sepanjang 2020, Penumpang Paling Banyak Komplain soal Lion Air ke YLKI. 2021.
[4] Bisnis.com. Anggota DPR Minta Kemenhub Tegur Batik Air. Seenaknya Ubah Jadwal; 2021.
[5] Hassan LK, Santos BF, Vink J. Airline disruption management: A literature review and practical challenges. Comput Oper Res. 2021;127:105137.
[6] ICAO. PASSENGER PROTECTION UNDER CASES OF FLIGHT DISRUPTION. 2013. pp. 4–6.
[7] Leow SC. Airline Service Failure and Recovery : A Conceptual and Empirical Analysis. 2015.
[8] Fathullah A, Ferdian A, Octora Y, Bijaksana G, OPG. The Effect of Passengers Satisfaction to Service Quality in Batik Air. Adv. Transp. Logist. Res. 2018;pp. 996– 1006. https://doi.org/ISSN. 2662-5778.
[9] Efthymiou M, Njoya ET, Lo PL, Papatheodorou A, Randall D. The Impact of Delays on Customers ’ Satisfaction : an Empirical Analysis of the British Airways On-Time Performance at Heathrow Airport. pp. 1–13, 2019.
[10] Kalamas M, Laroche M, Makdessian L. Reaching the boiling point: Consumers’ negative affective reactions to firm-attributed service failures. J Bus Res. 2008;61(8):813–24.
[11] Zeithaml VA, Malhotra A, Parasuraman AP. E-S-Qual: A Multiple-Item Scale for Assessing Electronic Service Quality. J. Serv. Res. 2005. https://doi.org/10.1177/1094670504271156
[12] Phuong NND, Dai TT. Repurchase Intention: The Effect of Service Quality, System Quality, Information Quality, and Customer Satisfaction as Mediating Role: A PLS Approach of M-Commerce Ride Hailing Service in Vietnam. Mark. Brand. Res. 2018;5(2):78–91.
[13] Kheng LL, Mohamad O, Ramayah T. The Impact of Service Quality on Customer Loyalty : A Study of Banks in The Impact of Service Quality on Customer Loyalty : A Study of Banks in Penang, Malaysia. Int. J. Mark. Stud. 2010;(October): https://doi.org/10.5539/ijms.v2n2p57.
[14] Oliver RL. Whence Consumer Loyalty. 1987. pp. 33–44.
[15] Chow CK. On-time performance, passenger expectations and satisfaction in the Chinese airline industry. J Air Transp Manage. 2015;47:39–47.
[16] Ostrowski PL, Brien TVO, Gordon GL. Commercial Airline Industry. 1993 https://doi.org/10.1177/004728759303200203..
[17] Curry N, Gao Y. Low-Cost Airlines — A New Customer Relationship? An Analysis of Service Quality, Service Satisfaction, and Customer Loyalty in a Low-Cost Setting Low-Cost Airlines — A New Customer Relationship? An Analysis of Service Quality, Service Satisfaction. Serv. Mark. Quarterl. 2013;37– https://doi.org/10.1080/15332969.2012.662457.
[18] Ibzan E, Balarabe F, Jakada B. Consumer Satisfaction and Repurchase Intentions. Dev. Ctry. Stud. 2016;6(2):96–100.
[19] Saleem MA, S. Zahra S, Yaseen A. Impact of Service Quality and Trust on Repurchase Intentions - The Case of the Pakistan Airline Industry. Asia Pacific J. Mark. Logist. https://doi.org/10.1108/APJML-10-2016-0192.
[20] Boomsma A. On the robustness of LISREL (maximum likelihood estimation) against small sample size and non-normality (abstract). Stat Neerl. 1984;38(1):45–6.
[21] Zeithaml VA, Berry LL, Parasuraman AP. SERVQUAL : A multiple- Item Scale for measuring consumer perceptions of service quality. J. Retail; 1988.
[22] Rahyuda KK, Atmaja NP. PENGARUH KEWAJARAN HARGA, CITRA PERUSAHAAN. EKUITAS. 2009;15(110):370–95.
[23] Parasuraman AP, Zeithaml VA, Berry LL. The Behavioral Consequences of Service Quality. J. Mark. 1996;60:31-46.
[24] Nikbin D, Ismail I, Marimuthu M, Abu-Jarad IY. The impact of firm reputation on customers’ responses to service failure: the role of failure attributions. Bus Strateg Ser. 2011;12(1):19–29.
[25] Hair JF, Risher JJ, Ringle CM. When to use and how to report the results of PLS-SEM. Eur Bus Rev. 2018;31(1):2–24.
[26] Sarstedt M, Ringle CM, Smith D, Reams R, Hair JF. Partial least squares structural equation modeling (PLS-SEM): A useful tool for family business researchers. J. Fam. Bus. Strateg. 2014;5(1):105–15.