Table of Contents

Chapter 1: INTRODUCTION……………………………………………………………………….. 1

1. Research background…………………………………………………………………………… 2
   1. Problem statement………………………………………………………………………………. 4
   1. Research objectives……………………………………………………………………………… 5
   1. Subjects, implication and scope of research……………………………………………. 7
   1. Assumptions………………………………………………………………………………………. 8
   1. Research structure……………………………………………………………………………….. 9

Chapter 2: LITERATURE REVIEW AND CONCEPTUAL FRAMEWORK…. 11

• Literature review……………………………………………………………………………….. 11
  • Low-cost carriers…………………………………………………………………………. 11
  • Service quality……………………………………………………………………………… 13
  • Customer satisfaction……………………………………………………………………. 15
  • Behavioral intentions……………………………………………………………………. 16
  • The relationship between service quality and customer satisfaction…….. 17
  • The relationship between customer satisfaction and behavioral intentions

…………………………………………………………………………………………………………… 19

• Conceptual framework and research hypotheses……………………………………. 21

Chapter 3: RESEARCH METHODOLOGY…………………………………………………. 23

• Research strategy and design……………………………………………………………… 23
  • Qualitative research…………………………………………………………………………… 26
  • Quantitative research…………………………………………………………………………. 27

• Variables and measures………………………………………………………………. 27
  • Population and sampling…………………………………………………………….. 30
  • Data collection…………………………………………………………………………… 31
  • Data analysis…………………………………………………………………………….. 33

Chapter 4: DATA ANALYSIS AND DISCUSSION…………………………………….. 37

• Respondent demographics………………………………………………………………….. 37
  • Descriptive statistics………………………………………………………………………….. 39
  • Reliability and validity………………………………………………………………………. 41
    • Reliability test…………………………………………………………………………….. 41
    • Validity test………………………………………………………………………………… 44
  • Hypotheses test……………………………………………………………………………….. 51
  • Summary of data analysis results…………………………………………………………. 52
  • Discussion………………………………………………………………………………………… 55

Chapter 5: CONCLUSION…………………………………………………………………………. 59

• Summary of the research……………………………………………………………………. 59
  • Theoretical implication of study………………………………………………………….. 60
  • Managerial implication of study………………………………………………………….. 61
  • Limitation and future recommendation………………………………………………… 63
    • Limitation………………………………………………………………………………….. 63
    • Recommendation……………………………………………………………………….. 63

REFERENCES APPENDIX

List of tables

Table 1.1: Introduction of the three low-cost carriers………………………………………… 3

Table 2.1: Comparison between low-cost carriers and full-service carriers………….. 11

Table 3.1: Participants in a group discussion…………………………………………………… 26

Table 3.2: Research variables and measures……………………………………………………. 28

Table 4.1: Summary of respondent demographics…………………………………………… 37

Table 4.2: A summary of variables‟ Mean and Standard deviation…………………… 40

Table 4.3: Cronbach‟s alpha test outcomes…………………………………………………….. 42

Table 4.4: EFA results…………………………………………………………………………………. 45

Table 4.5: Factor structure based on factor analysis results………………………………. 46

Table 4.6: Summary of CR and AVE……………………………………………………………. 48

Table 4.7: The convergent coefficients of factors……………………………………………. 48

Table 4.8: The discriminant coefficients of factors………………………………………….. 50

Table 4.9: Standardized regresion weights 1………………………………………………….. 51

Table 4.10:Standardized regresion weights 2…………………………………………………. 52

Table 4.11: Factor structure after hypotheses test……………………………………………. 53

Table 4.12: Hypotheses test summary……………………………………………………………. 54

List of figures

Figure 2.1: Proposed research framework………………………………………………………. 21

Figure 3.1: Research process………………………………………………………………………… 25

Figure 4.1: Direct effects of service quality on customer satisfaction

then behavioral intentions……………………………………………………………. 55

ABSTRACT

The main purpose of this research is to examine the relationships between dimensions of service quality, customer satisfaction, word-of-mouth and repurchase intentions from the customers‟ perspectives in case of international flights with low- cost carriers (LCCs) in Viet Nam.

This research was undertaken with non-probability sampling. 240 questionnaires were delivered and collected, and 238 of them were useful for data analysis. The survey participants were the passengers who have flown abroad with LCCs at least 2 times within a year. The data collected from this survey were utilized for statistical analysis to evaluate the seven hypotheses, the positive associations of five dimensions of service quality and customer satisfaction, then the positive linkage of customer satisfaction and two behavioral intentions (word- of-mouth and repurchase intentions). Both qualitative (focus group) and quantitative research (SPSS 22 and AMOS 20) were applied to find the results.

Regarding to the  findings, reliability and  assurance were the most influencing on the customer satisfaction; responsiveness and empathy were also seen as a significance. However, the performance of responsiveness is indeed not that good like the other dimensions. Tangibles was the only factor that did not have a great effect on customer satisfaction along with its not good performance. Word- of-mouth was found to be more affected by customer satisfaction than repurchase intentions.

TÓM TẮT

Mục tiêu chính của nghiên cứu này là xem xét mối quan hệ giữa các tiêu chí chất lượng dịch vụ, sự hài lòng của khách hàng, lời truyền miệng và ý định mua lại từ phương diện của khách hàng trong trường hợp những chuyến bay quốc tế với các hãng hàng không giá rẻ tại Việt Nam.

Nghiên cứu này được lấy mẫu theo phương pháp chọn mẫu thuận tiện. Số lượng mẫu khảo sát phát ra là 240, và 238 mẫu thu về đủ điều kiện để phân tích dữ liệu. Đối tượng khảo sát là những hành khách đã bay đi nước ngoài với các hãng hàng không giá rẻ ít nhất 2 lần trong vòng 1 năm. Dữ liệu thu được từ cuộc khảo sát đã được sử dụng để phân tích thống kê để kiểm tra 7 giả thuyết, mối quan hệ thuận chiều của 5 tiêu chí chất lượng dịch vụ và sự hài lòng của khách hàng, sự hài lòng của khách hàng và lời truyền miệng, ý định mua lại. Nghiên cứu định tính (thảo luận nhóm) và nghiên cứu định lượng (SPSS 22 và AMOS 20) đã được áp dụng để tìm ra kết quả.

Theo kết quả tìm được, sự tin cậy và độ an toàn là 2 yếu tố có tầm ảnh hưởng nhất đối với sự hài lòng của hành khách, sau đó là sự phản hồi và đồng cảm. Tuy nhiên, trong thực tế thì việc phản hồi cho hành khách đang không được đánh giá cao như những yếu tố khác. Yếu tố hữu hình là yếu tố duy nhất không có ảnh hưởng đáng kể đến sự hài lòng của hành khách cùng với thực trạng chưa tốt của nó. Lời truyền miệng được tìm thấy là bị ảnh hưởng bởi sự hài lòng của khách hàng nhiều hơn là ý định mua lại.

Chapter 1: INTRODUCTION

Service industries are the largest contributors to employment and gross domestic product in most countries (Looy et al., 2003). Among them, the growing of airline industry has led to the government around the world to deregulate the industry by enabling companies to form private airlines (Graham and Vowels, 2006). In addition to its technology development, the growing of airline industry has played  a  role as  supporting  the world trade,  international investment, and tourism activities, which is said that the airline industry is the center of globalization for other industries (Hanlon, 2000).

An increasing number of air travelers have become more demanding in the expectation of service quality offered by the airlines. Hence, the delivery of high service quality has become a marketing priority for service companies as strength to get achievement (Hoffman & Bateson, 2002). It is especially true in the airline industry which has become extremely competitive so far particularly due to the emergence of Low-cost carriers (LCCs). The growing of the airline industry provides opportunities along with challenges to the business entities operating in this industry. The opportunities arise due to the increasing demand for the airline service; however, air travelers are also increasingly demanding in terms of their expectations of the service quality offered by the airline carriers (Graham and Vowels, 2006). Meanwhile, the challenges arise not only because of the high level of competition between the airlines, but also due to growing customer demands for the better service. Therefore, managing quality of service has  become the top priority in the airline industry (Wells & Wensveen, 2004).

LCCs compete on their low cost, point-to-point short-haul travel, no extra in- flight service, and direct sales etc., not using the service quality, but cost-conscious market segments for their competitive advantages (Graham & Vowels, 2006). However, airline managers need to know which factors affect customer satisfaction from passengers‟ perspective. Airlines started to examine whether perceived service

quality is a prime driver for customer satisfaction and behavioral intentions (Ahn and Lee, 2011) and to know which attributes really do matter to satisfaction and behavioral intentions (Martin et al., 2008).

This research focused on examining how five dimensions of SEVRQUAL representing for the service quality influence on customer satisfaction and checking whether customer satisfaction can lead to customers‟ behavioral intentions in case of international flights from Ho Chi Minh city with LCCs.

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