Service quality and economic performance in the US airline business

Abstract

The purpose of this paper is to determine the effects of service quality on US airlines’ economic performance.

In order to cover this goal, four quality indexes related to the airline industry, and two economic performance indicators, revenues and return on investment (ROI), have been considered. Data from American airline companies from 2006 to 2013 have been used to determine if airlines’ profitability increases when service quality improves.

Considering the effects on airlines’ profitability, the results confirm the positive and significant influence of service quality on the ROI of the US airline companies. A non-significant effect was found for airline revenues in relation to quality.

No previous research in this area has been done so these findings could encourage airline companies to invest in quality, since this policy can have a positive return on their profitability.

Keywords:

• air transportation
• quality
• airlines
• economic performance
• key performance indicators

Additional information

Notes on contributors

Nicole Kalemba

Nicole KALEMBA is a PhD Student and Research Assistant at the Department of Business Administration in the University Rovira and Virgili (Reus-Spain). She has a Bachelor in Tourism Management and a Master’s Degree in Analytical Techniques and Innovation in Tourism (University Rovira and Virgili), as well as a Master’s Degree in Finance and Banking Management. Her main field of interest is air transportation business.

Fernando Campa-Planas

Fernando CAMPA-PLANAS is a professor at the Department of Business Administration in the Universitat Rovira and Virgili (Reus – Spain). The main fields of interest are management accounting, balanced scorecard and finance related with tourism, especially in the airline business and hospitality. Before becoming dedicated to the University, he was Senior Vice-president Corporate Controller in Iberia Airlines and Chief Financial Officer in Port Aventura, a theme park managed by Universal Studios in Spain.

Ana-Beatriz Hernández-Lara

Ana Beatriz HERNÁNDEZ-LARA is a senior lecturer and Head of the Department of Business Management at Rovira and Virgili University (Spain). In 2007, she obtained her PhD at Pablo de Olavide University (Spain) with a thesis on the influence of corporate governance on innovation. Her research is related to corporate governance, innovation, internationalisation, tourism and e-learning. She currently participates in different research groups and projects on the internationalisation process and innovation strategies of Spanish firms and the effectiveness of e-learning methodologies in the learning process of university students.

Maria Victória Sánchez-Rebull

Maria Victòria SÁNCHEZ-REBULL is an associate professor and the Director of the Department of Business Management at URV (Spain). She obtained her PhD at Rovira and Virgili University (Spain) in 2002; her thesis was on the implementation of activity based costing in the hotel sector. Her main research line is related to cost and management accounting and to the tourism and air transport sectors.