Transportation Quality, Customer Satisfaction and Financial Performance

Abstract

This paper examines the relationship between transportation quality, customer satisfaction and profitability. Specifically, this study examines the simultaneous and asynchronous effect of quality of transportation services on customer satisfaction and financial performance and then performs the same examination in relation to the effect of customer satisfaction on financial performance. The partial least squares approach to structural equation modelling is used to examine longitudinal data from 1995-2018 from the US airline industry. Our findings suggest that low services quality in transportation has adverse effects on customer satisfaction and financial performance, while the impact of customer satisfaction on financial performance in the US Airline transportation industry is mixed. We found that the impact of customer satisfaction on financial performance is significant in full-service airlines but not in low-cost airlines. Surprisingly, we found no significant direct relationship between transportation quality and financial performance in the US airline industry. Full paper available at https://centaur.reading.ac.uk/101497/

Keywords: Transportation quality, customer satisfaction, US airline industry and financial performance