Expectations vs Experience: Managing the Adverse Effects of Service Failures on Customer Satisfaction in the Airline Industry

Abstract

Airlines constantly seek to attenuate the negative impacts of operational service failures, namely arrival delays, mishandled baggage, and involuntary denied boarding, on customer satisfaction. Our study examines the roles of two management decisions—advertising expenses and flight personnel salaries—in shaping customer satisfaction via ex-ante expectations and the actual service experience, respectively. Drawing from expectancy disconfirmation theory (EDT) and the airline service quality literature, we investigate the effectiveness of these two expenses in moderating the impact of service failures on customer satisfaction. We test our hypotheses with a panel dataset created by merging data on 15,979 online airline ratings, operational service failures, and financial and traffic performance from three data sources for the 2010–19 period. We find that both arrival delays and involuntary denied boarding negatively affect customer satisfaction. In addition we find that while advertising positively impacts customer satisfaction, it strengthens the negative effect of involuntary denied boarding on customer satisfaction. However, increasing flight personnel salaries helps mitigate this negative effect through a positive and empathic service experience. These findings underscore the importance of managing passenger expectations about the service and enhancing the inflight experience as to ameliorate the negative effects of operational failures on customer satisfaction.

A Methodology for Machine-Learning Content Analysis to Define the Key Labels in the Titles of Online Customer Reviews with the Rating Evaluation

“…In addition, they show the most important aspects of services identified by the passengers assigned to each cluster group rating of Iberia, and the main aspects is about (1) quality of customer service which refers to the important of the performance of this service, (2) inflight experience, (3) punctuality of flight, (4) flight delays, ( 5) check-in, (6) personnel service. Research from Masorgo et al [102] using expectancy disconfirmation theory EDT, they found that both arrival delays and involuntary denied boarding negatively affect customer satisfaction, their results show the importance of managing passenger expectation about airline service and the inflight experience.…”

How to offer good service? A study on behavior of consumer expectations over time in educational service

“…H2 reveals an inverse association between negative experiences and consumer expectations. Those who see service failures tend to lower their expectations (Hess, 2008; Masorgo et al. , 2022).…”