Globally airline industry Free Essay Example

Introduction

Globally airline industry is extremely competitive, over 1000 airlines. In 2017 the yearly expansion rate of worldwide air travel was about 7.5% (International Air Transport Association, 2017).

The World Tourism and Travel and Council 2015, stated as traveling is one of the fastest and largest growing worldwide service industries, and its entire contribution to global economy in 2017 rose to $2.9 US trillion. This increase was mainly due to the changing of business development and lifestyles. As a result the number of airlines passenger globally was estimated in 2017 at over 4 billion (International Air Transport Association, 2017).

Thus, technology has extensively transformed the interactions between consumer and service providers, self-service technology is substituting employee in numerous counter operations, which enabling customers to involve in the service process, without employees participation (Ostrom, Bitner & Meuter, 2002; Roundtreeet al., 2000). Therefore, this allows the company to provide services anywhere and anytime (Yoo & Lyytinen, 2002).

For example, self-service technologies, online check in system, are broadly employed in air transport industry. These self-service technologies system in self-check in service not merely allow airlines to reduce their operating costs and optimize space, but also help travelers to save money and time through the faster and better interactions they allow between their customer and service providers (Ching-Fu Chen, Jing-Ping Wang, 2016).

In addition to airline’s readiness to implement the self-service technology, the benefits and success of such technologies depend on critically on customer’s involvement (Ching-Fu Chen, Jing-Ping Wang, 2016). According to Kulwant Pawar & Christopher Durugbo, (2014), Airline online self-check in system are one of the characteristic of businesses to customer.

Through customer involvement, the values shared by passengers and the airline can be co-created.

Moreover, in dynamic business environment customer involvement enables product quality improvement, sales promotion, decrease in risk and costs, increases customer satisfaction and increase competitive advantage (Di Gangi & Wasko, 2009; Brodie, Ilic, Juric & Hollebeek, 2013). According to Vargo and Lusch (2004), Prahalad and Ramaswamy (2004), value created jointly by companies and customers is a foundation for forthcoming competition. The results determine corporate value that can be influenced by customer involvement (Jurate Banytea & Aiste Dovaliene, 2014).

Ethiopian Airlines is a publicly owned company, which was established in 1945. Progressively, it started to provide international and domestic flights to cities (Civil Aviation Authority, 2007). The last ten years, on average the development of Ethiopian Airlines estimated around 28%, which makes it the fastest rising airline in Africa and the most profitable one (International Air Transport Association, 2017). In 2015, Ethiopian Airline was voted as No.1 airlines in Africa and also given a 4-star ranking (SKYTRAX, 2017). Furthermore, this rating certifies the airlines are providing on board services and highest standard of airport (Gary L.Frankwick, Osama Sam Al-Kwifia, & Zafar U. Ahmed, 2018)

Some prior studies have conducted to explore the circumstances in which firms gain pro?t from consumer co-creation (Storback, & Frow, 2008; Nambisan 2008; Vargo Maglio & Akaka 2008; Schau, Mu~niz, Payne & Arnould, 2009). For example, Nambisan (2008) forward different strategies which are implemented by company managers for better benefits from consumer co-creation, such as scheming co-creation platform that facilitates customer innovation, building direct relationship between inside product development team and outside customers and incorporating the co-creation process with the consumers relationship management framework.

On the other hand, some studies have explore the influence of co-creation on shaping consumers behavior and psychology, including, brand loyalty and community commitment (Zhang, Luo & Liu, 2015), loyalty, expenditures and satisfaction with the company (Stokburger-Sauer & Grissemann, 2012), brand awareness (Hsiao, Yang, Yichuan Wang & Hajli, 2016). Furthermore, some scholars have examined the drivers of co-creation. Numerous range of drivers give the impression to attracts consumer into co-creation activities, including learning benefits, social integrative bene?ts and perceived customer benefits (Guoxin Li & Xue Yang, 2016), challenges and opportunities of value co creation (Yonggui Wang et al., 2017).

According to Kulwant Pawar & Christopher Durango (2014), There is still a gap how co-creation is actually conducted, which poses a fundamental questions for practices and research (Hennala, Parjanen & Konsti-Laakso, 2012). In general, even though the concept of service-dominant logic and value propositions are increasingly in use, little empirical research has been previously indicates the business-to customers context (Chan et al., 2010) has examined how customer participations affect customer perceived value and how the perceived value affects customer satisfaction and loyalty, the main benefit that are required by the arm that use such technology. (Ching-Fu Chen, Jing-Ping Wang, 2016). As value co-creation are a vital principle of service dominant logic & the key premise of customer involvement (Davey, Fitz Patrick, Muller & 2013; Chan et al., 2010).

Besides, researchers have tried to elucidate the unique nature of airlines service industries, which are significantly di?erent from other service industry, (Muhammad Shoaib Farooqa et al., 2017) that warrants further research to explore the value co-creation and its impacts on overall customer satisfaction and customer loyalty online check-in system (Radovic-Markovic et al., 2017; Farooq et al., 2017).

Considering the above discussed gap the aims of this study will be to investigate how customer involvement, service quality enables customers to co-create intrinsic and extrinsic values and loyalty, which then affects their satisfaction in an airlines online check-in system service perspective, which will be measures the passenger’s co-created values through their involvement in using an online check-in systems in Ethiopian airlines industry.

Therefore, this study will try to answers the following three main questions:

• 1. What is the effect of value co-creation in customer satisfaction and customer loyalty in terms of online check in system in Ethiopian airlines industry?
• 2. What is the relationship between customer involvement, intrinsic and extrinsic value co-creation, customer satisfaction and loyalty in online check-in system in Ethiopian airlines industry?
• 3. What is the moderating effect of service quality on the relationship between customer satisfaction and customer loyalty in Ethiopian airlines industry online check-in system?

This research will be significant for Ethiopian airlines as well as other airlines industry in managing intrinsic and extrinsic value co-creation. The findings of this study will also help aviation industry to propose more effective service strategy, which used to increase customer experience and service quality.

Moreover, it will used as a reference for airlines industry to be aware of the impacts of value co-creation on customer satisfaction and customer loyalty. Therefore, understandings about value co-creation, service quality, customer satisfaction and customer loyalty are very essential for airlines industry, as well as for passengers who engage in value co-creation service process in online check-in system.

Finally, this study will investigate how customer involvement enables to co-create intrinsic and extrinsic values, increase customer satisfaction and loyalty in online check-in system in Ethiopian airlines industry. The following section will discuss about the previous researchers arguments, findings and suggestions or literature review which are relevant to customer involvement including value co-creation, customer satisfaction, customer loyalty, and also the moderating role of service quality. Then it will describe the methodology used to conduct the research, including research framework, data collection and analysis techniques and measurements.