Note

Customer perceptions of airline social responsibility and its effect on loyalty

Fang-Yuan Chen
a,
*
, Yu-Hern Chang
b
, Yi-Hsin Lin
c
a
Department of Transportation Technology and Management, Feng Chia University, 100, Wenhwa Rd., Seatwen, Taichung City 40724, Taiwan, ROC
b
Department of Transportation and Communication Management Science, National Cheng Kung University, 1, University Rd., Tainan City 701, Taiwan, ROC
c
Department of Leisure and Recreation Management, Asia University, 500, Lioufeng Rd., Wufeng, Taichung City 41354, Taiwan, ROC
Keywords:
Corporate social responsibility
Airline social responsibility
Customer loyalty
Relationship quality
a b s t r a c t
This study examines customer knowledge and opinions of airline social responsibility and explores the
relationship between it and customer loyalty in the Taiwanese airline market. It is found that customers
are concerned about social responsibility initiatives by airlines but the perceive its performance levels
less than satisfactory. Hierarchical regression analyses show that, when relationship quality is controlled
for, airline social responsibility has a marginally signicant and positive association with behavioral and
attitudinal loyalty.
2011 Elsevier Ltd. All rights reserved.
1. Introduction
Corporate social responsibility (CSR) has received considerable
attention from both academicians and practitioners in recent
decades. Carrolls (1979) CSR pyramid is perhaps the best-known
CSR model that comprises economic, legal, ethical, and philan-
thropic responsibilities that society expects of organizations.
The operations of air transport inevitably cause substantial
environmental and social impacts. The airline industry has been
under increasing pressure to undertake initiatives to reduce or
mitigate its negative impacts. As a result, an increasing number of
airlines have implemented CSR initiatives. When an airline invests
resources in activities related to social responsibility and sees such
investment as a part of the promotion and marketing of the
company (Valor, 2005), airline managers want to know the likely
impact of such measures, especially relating to of customer
knowledge and opinions of CSR, and how it affects the relationship
between customers and airlines.
This paper develops the concept of airline social responsibility
(ASR) and examines the perceived importance and performance of
ASR initiatives in the Taiwanese airline market. In addition, we test
a conceptual model to explore the relationship between ASR and
customer loyalty, controlling the inuence of relationship quality.
2. Methodology
The conceptual framework is presented in Fig. 1, which depicts
relationship quality as a global construct composed of trust and
satisfaction. We control the inuence of relationship quality on
loyalty because previous work has found that it positively inu-
ences loyalty and explains a large amount of variance in it (Lin and
Ding, 2005; Bojei and Alwie, 2010).
We developed a questionnaire in which we dene ASR as an
airline companys responsibility as a social citizen to its stake-
holders. The measure of ASR was developed based on established
instruments (Garcia de los Salmones et al., 2005) and discussions
with airline executives and university faculty specialized in air
transport. The nal listing contained 12 socially responsible activ-
ities appropriate to the Taiwanese airline market and involved four
dimensions: safety, environmental protection, social participation,
and consumer rights.
The denition of relationship quality was a customers general
evaluation of the strength of the relationship between the
customer and the focal airline which included trust and satisfac-
tion, with three items each for assessment (Cheng et al., 2008;
Roberts et al., 2003). The denition of customer loyalty was a
customers promise of maintaining the relationship with a specic
airline based on his/her attitude and behavior. Based on
Mandhachitara and Poolthong (2011) and Chaudhuri and Holbrook
(2001), we divided customer loyalty into behavioral and attitudinal
loyalty with three items for assessing the former and three items
for the latter. The questionnaire also included questions regarding
demographic information such as gender, education, age, occupa-
tion, monthly income, and airline experience. All measures were
assessed using a ve-point rating scale.
The sample subjects for this study were Executive MBA
(EMBA) students from a polytechnic university located in
northern Taiwan. We chose EMBA students because most of them
held managerial positions and had many years of experience in
business operations. They were professionally competent to know
* Corresponding author.
E-mail address: fychen@fcu.edu.tw (F.-Y. Chen).
Contents lists available at SciVerse ScienceDirect
Journal of Air Transport Management
j ournal homepage: www. el sevi er. com/ l ocat e/ j ai rt raman
0969-6997/$ e see front matter 2011 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jairtraman.2011.11.007
Journal of Air Transport Management 20 (2012) 49e51
and understand the role of CSR in their organizations business
strategies.
A pretest was performed to validate the instrument before the
formal survey. The formal survey was conducted in March 2007,
extending over an entire week. Respondents were asked to choose
a Taiwanese carrier that he/she had patronized most and answer
the questionnaires accordingly. After receiving permission fromthe
students, the questionnaires were distributed and collected in class.
3. Result
Two hundred and fty questionnaires were distributed and 230
valid responses were returned for data analysis. Approximately 54%
of the respondents were female. Most respondents ages ranged
from 21 to 30 years old (33.9%) and from 41 to 50 years old (26.2%).
The sample covered a broad range of professions including
professional service, nance, manufacturing, wholesaling, and
high-tech industry. The majority of respondents had relatively high
incomes.
As shown in Table 1, respondents perceptions regarding the
importance of ASR ranged from 3.81 to 4.45. The mean scores on
each dimension of ASR were: 4.41 (safety), 4.36 (consumer rights),
4.16 (environmental protection), and 4.02 (social participation). In
terms of ASR performance, respondents ratings ranged from 3.09
to 4.25. The mean scores on each dimension of ASR were: 4.18
(consumer rights), 4.17 (safety), 3.97 (environmental protection),
and 3.93 (social participation).
We tested our conceptual model using hierarchical regression
analysis. We used an aggregate measure for ASR performance
items, trust, satisfaction, behavioral loyalty, and attitudinal loyalty
by averaging all items in the scales. The reliability of the study
variables were above 0.70. The results show that a signicant
increase of variance (3.8%) in behavioral loyalty was explained by
adding ASR in the model with satisfaction and trust as control
variables. Similarly, a signicant increase of variance (7.8%) of the
variance in behavioral loyalty was explained by adding ASR in the
model. In these two analyses, variance ination factors for all
variables were less than ten, indicating no concern of
multicollinearity.
4. Conclusions
This study considers the effect of corporate social responsibility
on customer loyalty and identies areas of emphasis for organiza-
tional involvement and support for CSR efforts in the Taiwanese
airline market. It shows that most respondents think that it is
important for airlines to assume their social obligations to society
but that the performance of ASR has considerable room for
improvement. We nd that customer loyalty can be enhanced
through CSR initiatives, with ASR having a marginally signicant
Fig. 1. Conceptual model.
Table 1
Importance and performance of ASR.
Items of ASR Importance Performance
Mean Ranking Mean Ranking
An airline should provide a safe and
reliable transportation service.
4.45 1 4.20 2
An airline should respect consumers
privacy and protect their personal
information.
4.40 2 4.25 1
An airline should provide a safe
working and business environment to
ensure the safety of its employees and
customers.
4.35 3 4.13 4
An airline companys commercials
or promotion should not deceive or
mislead consumers.
4.33 4 4.12 5
An airline should provide a clear
and effective complaint program for
consumers to solve their problems
fairly and immediately.
4.32 5 4.17 3
An airline should volunteer
the services of rescuing,
transportation, and supply in
times of disaster.
4.30 6 4.02 6
An airline should lower the
pollution caused by its business
activities.
4.23 7 3.09 11
An airline should carry out its
business activities in accordance
with the environmental regulations
and policies stipulated by govern-
ments and international covenants.
4.17 8 4.00 7
An airline company should
use renewable energy and reduce
on-ground energy consumption.
4.06 9 3.92 8
An airline should spend a
xed amount of prot on charity
funding.
4.04 10 3.92 8
An airline should establish an
independent foundation for
charity activities.
3.95 11 3.89 9
An airline should encourage
their employees to participate in
volunteer services and include
them in their personal responsibilities.
3.81 12 3.88 10
F.-Y. Chen et al. / Journal of Air Transport Management 20 (2012) 49e51 50
inuence on behavioral and attitudinal loyalty. Further, safety is
found to be the most important concern of customers, followed by
consumer rights, environmental protection and social participa-
tion, all of which also received relatively high scores in terms of ASR
performance assessments.
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