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lOMoARcPSD|9890249 Service Quality of Vietnam Airlines Productivity & Quality Management (Trường Đại học Ngoại thương) Studocu is not sponsored or endorsed by any college or university Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 QUALITY MANAGEMENT & PRODUCTIVITY SERVICE QUALITY OF Vietnam Airlines LECTURER Assoc Prof Dr Le Thai Phong GROUP Tran Khanh An 1810280002 Nguyen Minh Cong 1815280031 Pham Trung Dung 1810280006 Le Huong Giang 1812280037 - - - - Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 Table of Contents Service Quality 1.1 Definition 1.2 Service Quality Measurement 1.3 Standards of aviation service quality 2 Introduction of Vietnam Airline 2.1 Foundation 2.2 Market share 2.3 Outstanding features in service quality 2.4 Business Performance Methodology 3.1 Secondary data 3.2 In-depth Interview & Observation Data Analysis 11 4.1 Secondary Data 11 4.1.1 Examine validity of secondary data through Cronbach’s alpha and EFA 11 4.1.2 Descriptive data 13 4.1.3 Multiple linear regression analysis 13 4.2 IDI & Observation 16 Recommendation 20 Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 Service Quality 1.1 Definition ● Service quality is a concept that has stimulated considerable interest and debate in research literature because of the difficulties in both defining and measuring it, with no consensus on either (Wisniewski et al., 1996) ● Service quality is defined as the context to which a service meets customers’ needs or expectation (Asubonteng, 1996) 1.2 Service Quality Measurement The most popular measure of service quality is SERVQUAL, an instrument developed by Parasuraman et al (1985; 1988) SERVQUAL shows its best valuation when it is used to track service quality trends as well as in combination with other forms of service quality measurement Moreover, SERVQUAL is used to evaluate the firm’s quality according to the five services dimensions These dimensions include Reliability, Assurance, Tangibles, Empathy and Responsiveness (RATER model) ● Reliability: The ability to perform the promised service dependably and accurately ● Assurance: The knowledge and courtesy of employees and their ability to convey trust and confidence ● Tangibles: The appearance of physical facilities, equipment, personnel and communication materials ● Empathy: The provision of caring, individualized attention to customers ● Responsiveness: The willingness to help customers and to provide prompt service 1.3 Standards of aviation service quality Nowadays, customer satisfaction is regarded as one of the most indispensable elements playing a vital part in determining the success and prosperity of a specific business in such a dynamic and fast-growing market According to Rust and Oliver [16], customer satisfaction is defined as an emotional or affective response which surfaces and develops when meeting with any kind of service After service is provided, a positive or negative reaction will emerge from customers getting that service Also, Oliver [13] stated that “customer satisfaction is the outcome Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 of the evaluative process between the impression during or after service is performed and the expectations before experiencing the service.” In specific situations, what people assume before using the service may contradict what we actually encounter during and after the service is performed In transportation context, the fact that passengers are satisfied with the services provided has a crucial effect on determining the long-term continuance of a specific carrier Dissatisfied passengers may lose their trust and not consider choosing the same airline again due to the bad service provided Therefore, it is imperative for airlines to assure what customers expect and experience with their desired service quality We choose customer satisfaction as a measurement for service quality of VNA Introduction of Vietnam Airline 2.1 Foundation ● Founded in 27th May, 1995, Vietnam Airlines is the national airline of Vietnam and majority-owned by the Vietnamese government Vietnam Airlines is the flag carrier of Vietnam and the major carrier in South East Asia, operating 94 routes to 22 domestic and 29 international destinations with an average of 400 flights per day ● Vietnam Airlines became a member of SkyTeam in 2010, reaffirming the carrier’s position on the global aviation map Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 2.2 Market share The figures published by the Civil Aviation Authority of Vietnam revealed that the Vietnamese aviation market saw noticeable changes in 2019 VNA witnessed a slight decrease in its market share due to the expansion of of private carriers Vietnam Airlines saw a drop to 33.3 percent in market share in December 2019, from approximately 34.5 percent at the beginning of the year Jetstar Pacific and VASCO (2 subsidiaries companies of VNA group) respectively held market shares of 10.6 per cent (down from 14.2 per cent at the beginning of the year) and 1.6 per cent (down from per cent) 2.3 Outstanding features in service quality ● The majority of flights take off on time The frequency of delayed flights is relatively low Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 ● Secondly, you don’t have to pay extra for Additional services( snacks, drinks) are included in the tickets ● VNA offers up to 20kg of check-in luggage free of charge, while you have to pay an extra fee for this item while experiencing other low-cost airlines ● Large investment in refurbishment to provide customers with luxurious and comfortable experience 2.4 Business Performance Total number of flights Passengers carried Cargo and 2015 2016 2017 2018 2019 2020 Thousand 122,8 131,2 141,7 141,3 146,2 95,8 -34,47% Million 17,4 20,7 21,9 21,9 22,9 14,1 -38,43% 208,4 271 323 341,5 348 196 -43,68% 32,8 34,8 36,2 37,6 15,2 -59,57% 35,8 40,6 42,7 44,7 46,5 19,4 -58,28% 80,7 80,8 81,5 81,3 80,9 78,25 -3,28% mail Thousand carried tons Revenue passengerkilometers (RPK) Available Growth rate UNIT (2019-2020) Billion passengers 28,7 km seat- Billion kilometers (ASK) seats.km Load Factor % Business Performance of Vietnam Airlines from 2015 to 2020 As can be seen from the table, VNA experienced a significant drop in every aspect of business performance due to the negative impacts of Covid-19 pandemic The total number of flights decreased considerably from 146,2 thousand to 95,8 thousand with the percentage of 34,47%% In terms of passengers carried, the national airlines carrier witnessed a substantial fall with the rate of 38,43% Other metrics such as cargo and mail carried, RPK, ASK and load cargo also shared a downward trend Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 In conclusion, in the context of the pandemic, VNA has lost a large number of nondomestic passengers and its market share due to the expansion of cheap private airlines Therefore, in order to maintain the loyal domestic customers, VNA should take drastic measures to enhance its service quality Methodology Step Output Determine dimensions Refer Empirical Article: "Customer that mostly affect satisfaction of Vietnam Airline domestic customer satisfaction of service quality" by Giao Ha Nam Khanh VNA Conduct IDI and Observation Issues and solutions related to chosen dimension, recommendation from customer insights Objective Ensure the validity and reliability Find out what aspect of service quality affects customers Digging deeper into chosen dimensions and other issues for better understanding 3.1 Secondary data Variables Framework A quantitative analysis was conducted to test the hypotheses This research applies modified criteria for measuring customer satisfaction with aviation service quality offered by McGraw-Hill survey for North American airline satisfaction in 2010 to the case of VNA in which aviation service quality comprises six determinants: (1) reservation (RES), (2) check-in (CHE), (3) aircraft (AIR), (4) in-flight services (INF), (5) flight crew (FLI), and (6) boarding/deplaning/baggage (BDB) In-depth interviews with three high-ranking VNA officials are conducted to identify determinants of service quality and evaluating criteria The interviewers are followed by a group discussion based on open questions with seven passengers who frequently use VNA domestic services in order to find their perception of determinants of service quality Their opinions are used for improving and developing scales for aviation service quality Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 Population and sampling The target population includes Vietnamese passengers who are in the 18–60 age bracket and used VNA domestic services two times at least in the last months The sample size and sampling result are presented in Table Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 Data Gathering A structured questionnaire with 5-point Likert scales with anchors “strongly disagree” to “strongly agree” was used in this study The questionnaire consisted of two parts The first part was to examine the customer satisfaction through the variables of service quality The second part was designed to collect respondents’ demographic information To validate the questionnaire, a pilot test was carried out on a convenient sample of 30 passengers and the collected data was used to refine the survey instrument A quantitative survey is conducted in Tan Son Nhat Airport Analysis Method After collecting the data, a statistical package for social sciences (SPSS, 22 versions) was used for analyzing the data Cronbach’s alpha and exploratory factor analysis (EFA) were employed to test the reliability and validity, and then multiple regression analysis was performed to test the hypotheses Subsequently, the tests of regression assumptions and difference tests consolidated the findings Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 Questionnaire Design Criteria Main Points Tuổi Nơi sinh sống Demographic Nghề nghiệp Thu nhập Các kênh thông tin thường xem Tần suất bay? Flight behavior Thường bay với mục đích gì? Cơng tác hay du lịch? Thường chọn hạng vé nào? (với tùng mục đích bay, độ dài chặng bay) Thường mua vé máy bay đâu? Hay hãng bay nhất? (nội địa/quốc tế, tùy độ dài chặng bay) Lý chọn hãng bay đó?/Lý khơng chọn VNA? VNA perception Để miêu tả VNA nghĩ đến từ đặc điểm gì? Bạn có ấn tượng đồng phục, logo màu sắc thương hiệu VNA so với hãng khác? Vì Khi lựa chọn hãng bay, bạn quan tâm đến yếu tố (theo thứ tự giảm dần): BDB, CHE, INF, RES, AIR, FLI Nghĩ chất lượng dịch vụ VNA? Đánh giá chất lượng dịch vụ VNA (theo thứ tự giảm dần): BDB, CHE, INF, RES, AIR, FLI Flight experiences & Issues Bạn có chưa hài lịng q trình Check in ko? So sánh với hãng bay khác (Thủ tục check-in, Staff, Baggage drop, Waiting times) Bạn có chưa hài lịng q trình Lên máy bay / Hạ cánh / Ký gửi, Nhận Hành lý ko? So sánh với hãng bay khác (Xử lý delay, phịng chờ, thay đổi thơng tin cửa khởi hành, Hành lý bảo đảm) Bạn có khó tiếp nhận thơng tin trường hợp chuyến bay có thay đổi ko? Đã có trải nghiệm ko tốt nào, vấn đề khác bay VNA ko? (optional) 10 Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 VNA cải thiện điều gi để nâng cao trải nghiệm KH? Mong muốn VNA có thêm dịch vụ ko? Demand, desire and barrier App Lotusmile nên bổ sung tính để thu hút người dùng? Tiêu chuẩn mà bạn đặt cho VNA có cao hãng hàng không Việt Nam khác ko? Tại sao? Bạn định nghĩa hãng hàng không sao? Với tiêu chí cho VNA sao? Data Analysis 4.1 Secondary Data 4.1.1 Examine validity of secondary data through Cronbach’s alpha and EFA 11 Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 Table 4.1 Cronbach’s alpha coefficients for scales of determinants of quality service and customer satisfaction Table 4.1.2 EFA results Table shows that Cronbach’s alpha coefficients of all scales are greater than 0.6 and all item-total correlation coefficients are greater than 0.3 Thus, all scales are reliable and can be used for EFA In the EFA process, principal determinant analysis and Varimax are employed EFA results show that KMO = 0.888 while the chi-square statistic of Barlett’s test reaches 7298.249 at Sig = 0.000 All 31 determinants are reduced to seven factors with an eigenvalue of 1.041 (greater than 1) with a variation of 66.42% (able to explain 66.42% of changes in the dataset) Observed variables of seven factors all have factor loadings greater than 0.5, and they are used for analyzing the research model of multiple linear regression Thus, resultant scales are acceptable After conducting the factor rotation with all 31 aforementioned variables, seven factors are extracted (Table 4) EFA results show that scales measuring customer satisfaction and determinants of service quality did obtain convergent validity The results also imply that the research model remains stable, comprising six independent variables and one dependent variable 12 Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 4.1.2 Descriptive data Table 4.2 Passengers’ estimates of determinants Results of estimation of determinants of aviation service according to the statistical method describing the mean value in a 5-scale Likert show that scores given by passengers vary from “medium” to “pretty good”(Table 9) The highest scores are given to reservation (mean = 3.60), followed by in-flight services (3.56) and flight crew (3.51), while medium scores are given to aircraft (3.47) and boarding/deplaning/baggage (3.40) and the lowest one to check-in (3.31); SAT is given a pretty high score of 3.41 4.1.3 Multiple linear regression analysis 13 Downloaded by K60 Tr?n Tu?n Hùng (k60.2112250037@ftu.edu.vn) lOMoARcPSD|9890249 Table 4.3 Correlation coefficients between determinants Table shows that the dependent variable has a close linear relation with six independent variables at α