Shu - Te University
College of Management
Graduate School of Finance
Master
The Influence of Ground Service Quality and In-flight
Service Quality on Customer Satisfaction: A case study of
Vietnam Airlines
Student： Kim Thi Thu Huyen
Advisor: Dr. Pi-Yen Chen
Co-Advisor: Dr. Ho Thuy Ngoc
June, 2014
Shu-Te University
Graduate School of Finance
Thesis
The Influence of Ground Service Quality and In-
flight Service Quality on Customer Satisfaction:
A case study of Vietnam Airlines
Kim Thi Thu Huyen June 2014
The Influence of Ground Service Quality and In-flight Service
Quality on Customer Satisfaction: A case study of Vietnam
Airlines
Student: Kim Thi Thu Huyen
Advisor: Dr. Pi-Yun Chen
Co-Advisor: Dr. Ho Thuy Ngoc
A Thesis
Submitted to
Graduate School of Finance
College of Management
Shu-Te University
In Partial Fulfillment of the Requirements
for the Degree of

There are many kind of model which can be applied to study the relationship
between Service quality and customer satisfaction such as SERVQUAL Model
developed by Parasuraman (1985), SCSB model developed by Fornell (1992), the
ACSI model developed by Fornell (1996), ECSI model developed by Eklof (2000). The
researcher selected the American Customer Satisfaction Index – ACSI model for this
i
research to analyze the relationship between service quality and customer satisfaction
and the level in model. The research method is quantitative with multivariate statistical
analysis steps such as: testing by Cronbach Alpha coefficient, regression analysis.
The online questionnaire was used for this research to collect the Vietnam
Airlines’ customer opinion about the Vietnam Airlines’ services. From the analyzing of
134 respondents, result of the research shown that service quality had different level of
impact on customer satisfaction at each step of service in which service quality has
extremely strong impact on customer satisfaction in term of Check-in service, Boarding
service and In-flight service. Service quality has weak impact on customer satisfaction
in Airport service due to this service not only offer by Vietnam Airlines but also offer
by the other company. Base on the result of the analysis, it can be concluded that the
service quality has important role for service provider such as Vietnam Airlines to
improve their competitiveness.
In addition, the research results also show some suggestion for improving the
Vietnam Airlines services as well as indicate the limitations of the research.
Keywords: Service quality, Customer Satisfaction, Customer complaint, Airline
service, ACSI model
ii
Acknowledgements
During the performance of this thesis, I have received much assistance from the
people who help me to complete the thesis. I could not finish this thesis without helping
form them, so I wanted to express my deep gratitude to those people.
First, I would like to express my most sincere thanks to the teachers of the
University SHU-TE and the Foreign Trade University Hanoi, Vietnam who taught me

1.3. Research purposes 5
1.4. Research questions 6
1.5. Research procedure 6
2.1. Services in Airline Industry 8
2.1.1. Services Chain in airlines industry 9
2.1.2. Airlines Service attributes 11
2.2. Service quality, Customer satisfaction 15
2.2.1. Service quality 15
2.2.2. Customer Satisfaction 23
2.2.3. Relationship between Airline Service quality and Customer satisfaction 26
2.3. The evolution of satisfaction index model 27
CHAPTER 3 RESEARCH DESIGN 32
3.1. Research model 32
3.1.1. Selected model 32
3.1.2. Reason to select the ACSI 34
3.2. Research hypotheses 34
3.3. Measurement of variables 37
3.4. Data collection and analysis 38
3.4.1. Research method 38
3.4.2. Questionnaire design 39
iv
3.4.3. Sampling method and sample size 42
3.4.4. Data collection 43
CHAPTER 4 RESEARCH RESULT 44
4.1. Sample description 44
4.1.1. Highlights of Vietnam Airlines’ customers 44
4.1.2. Demographic information 45
4.2. Reliability, hypothesis test and discussion 47
4.2.1. Check-in service (CI) 47
Table 6. Data of regression PVCI from ECI, SQCI 48

CHAPTER 5 CONCLUSION 70
5.1. Findings and contribution 71
5.1.1. Findings for Vietnam Airlines Services 71
5.1.2. Contribution 73
5.2. Implication 74
5.2.1. Check-in service 75
5.2.2. Airport service 75
5.2.3. Boarding service 76
5.2.4. In- flight service 77
5.2.5. For Vietnam Airlines employees 77
5.3. The limitations of the research 80
[1] Angelova, B., Measuring Customer Satisfaction with Service Quality Using
American Customer Satisfaction Model (ACSI Model), Full Professor at Ss Cyril and
Methodius University, Economic Institute, Prolet nr 1, Skopje- Macedonia 82
[13]Lee, H.S. (2013) “Major Moderators Influencing the Relationships of Service
Quality, Customer Satisfaction and Customer Loyalty” Asian Social Science; Vol.
9, No. 2; 2013 ISSN 1911-2017 E-ISSN 1911-2025 Published by Canadian Center of
Science and Education 83
APPENDIX 2: PASSENGER SURVEY (VIETNAMESE) 96
vi
vii
List of Tables
Abstract i
Table of Contents iv
List of Figures x
CHAPTER 1 INTRODUCTION 1
Table 1. Vietnam Airlines Fleet to 2018 3
CHAPTER 3 RESEARCH DESIGN 32
CHAPTER 4 RESEARCH RESULT 44
Table 6. Data of regression PVCI from ECI, SQCI 48

Science and Education 83
APPENDIX 2: PASSENGER SURVEY (VIETNAMESE) 96
ix
List of Figures
Abstract i
Table of Contents iv
List of Figures x
CHAPTER 1 INTRODUCTION 1
Table 1. Vietnam Airlines Fleet to 2018 3
CHAPTER 3 RESEARCH DESIGN 32
CHAPTER 4 RESEARCH RESULT 44
Table 6. Data of regression PVCI from ECI, SQCI 48
Table 7. Data of regression SCI from PVCI 49
Table 8. Data of regression CCI from SCI 50
Figure 15. Result of ACSI in case of Vietnam Airlines Check-in Service 52
Table 10. Data of regression PVAS from EAS, SQAS 53
Model Summary 53
ANOVAa 53
Coefficientsa 53
Table 11. Data of regression SAS from PVAS 54
Table 12. Data of regression CAS from SAS 54
Table 14. Data of regression PVBS from EBS, SQBS 57
Model Summary 57
ANOVAa 57
Coefficientsa 57
Table 15. Data of regression SBS from PVBS 58
Table 16. Data of regression CBS from SBS 59
Table 47. Result of Reliability Test for Inflight service 61
x
Table 18. Data of regression PVIS from EIS, SQIS 62

recovery is slow, Airlines Industry growth estimate to reach only 7.4% in 2015
(Datamonitor, 2011). Second, deregulation of airline industry in 1990s. It is allowed
low- cost carriers (LLCs) to join the Airline market with new business model. It atract
the customers away from traditional airlines. Deregulation introduces the new services
and more competition within the Airline industry, as well as provide customers more
chance to select their flight. In 2009, LLCs accounted for 32% of total market share in
Europe. In addition to existence of LLCs, airline industry has some thing change during
the last few years, such as provide e-tickets, introduction of self-service check-in
machine, etc. (IATA, 2011). In addition, according to Tiernan et al. (2008/1), the airline
industry has challenge to face with a competition from other modes of transportation,
such as high-speed trains.
Thus, the airlines attempted to cope with the challenges. They have searched for
the new generation aircraft, fuel savings equipment and modern furniture to provide
quality services, to attract customers market revenue distribution. Numerous older
1
generation aircraft such as B747, B767, ATR72-200, B737-500, etc. gradually being
replaced by modern aircraft, new generation A380, B777, A321, B737-
600/700/800/900, ATR72-500/600, etc. To meet the trend of the market, the
manufacturer of the aircraft and are continuing to research the new generation aircraft
such as B787, A350, C series. In addition, the worldwide airlines should find the way to
improve their service quality.
1.1.2. The context of the Aviation Industry in Viet Nam and Vietnam Airlines
Vietnam is developing country in the South East of the Asia continent. The
population is approximately 89 million (2010) and the mainland territory is about 331
thousand square kilometre. With a huge number of inhabitants, Vietnam is a prospective
market with both consumer and business opportunities. Since Viet Nam joined World
Trade Organization (WTO) in 2007, many foreign investor coming to Viet Nam to set
up their business in many different fields. Thus, Airline industry in Viet Nam has many
opportunities to grow. Evidence show that there are about 16 airlines choosing Viet
Nam as one of their destination in their routes (E-Guide, 2006).

(Vietnam Airlines Website at:
/>1.1.3. The necessity of researching the influence of service quality on Vietnam
Airrlines’ customer satisfaction
Vietnam Airlines Company Limited (VNA) is one of the companies supplying
very important service in the economy of Vietnam. VNA is accounting for a main
position in supplying domestic transport service and it is urgently expanding its
operation to international airlines. Therefore, the competition on domestic and
international is a challenge for VNA. In order to win in this competition, VNA has to
3
Item Aircraft type Aircraft quantity
1 F70 02
2 ATR72-500 16
3 A321 58
4 A330-200 10
5 B777-300 10
6 A350XWB-900 14 (Received in 2015-2018)
7 B787-9 19 (Received in 2015-2018)
improve the service quality. The research of service quality to find out the factors of
quality can be improved better; it is a vital issue to win in the global competition.
However, the improvement of service quality is a very difficult and costly work, and to
implement this work, it requires having deep knowledge about the factors constituting
the service and measures on improving the quality of each of such factors in order to
meet the customer satisfaction, lead to the creation of customer loyalty for VNA.
Therefore, researching the influence of aviation service quality (ground and in-flight
services) on customer loyalty for VNA is very necessary, thereby; it is possible to
propose the solutions on improving the feeling of customers on service quality of each
factor as well as general quality to create regular customers for VNA.
1.2. Research motive
The world leading organization on evaluating the aviation firms - SKYTRAX
carries out the evaluation on service quality of aviation firms every year based on

aviation firms such as Mekong Air, Jetstar Pacific, Vietjet Air. Hence, Vietnam Airlines
must improve the service quality to satisfy at the maximum level the demand of
customers and consolidating and improving the competitive capacity of VNA (Vietnam
Airlines Sources). If not improving the service quality, it also means that VNA will lose
gradually the market in not only international market but also in Vietnamese market.
From the past up to now, there were many researches in the field of aviation. For
example, the research on quality of aviation service such as Solution on expanding the
market of VNA by Tran Thi Phuong Hien, 2003; Improving the quality of passenger
service at Noibai Airport Services Joint-Stock Company by Le Duc Long, 2000;
Evaluation target and research on product quality of VNA by Nguyen Manh Quan,
2004. However, there is no research on influence of service quality on customer
satisfaction and customer loyalty. As a staff of VNA, in front of the competition of
VNA and with the aspiration of contributing a part into the development of VNA, I
would like to research this subject in order to find out essential solutions for promoting
the development of VNA in particular and aviation sector of Vietnam in general.
1.3. Research purposes
For VNA, a company specializing in service business, the issue of improving the
service quality to satisfy at the maximum the demand of customers is vital one.
As being stated above: (i) Service quality of VNA according to SKYTRAX is
only at the level of 03 stars, there is no clear improvement (ii) passengers complain very
5
much about service quality of VNA (iii) the competition in the international and
domestic markets is increasingly violent; therefore, it is necessary to increase the
satisfaction of customer to service quality in order to improve the competitive capacity;
that is driving force for implementation of this research. Besides, the implementation of
this research subject helps us:
1. Understand clearly the nature of aviation service quality, influence of aviation
service quality on customer satisfaction. Understand clearly what the customers need
and how to make the customers be willing to further use the service of VNA or
introduce to friends and relatives for using the service of VNA.

document, previous research subjects relating to the issues which we intend to research,
previous research models which were applied for the fields similar to this subject. There
are evaluations on suitability or unsuitability or previous researches if they are applied
to this research subject.
Step 3: Step 2 is the premise for step 3. From the evaluations of step 2, the
researcher will have to select the most suitable model to his research subject, state the
reason why the researcher selects this model. It is necessary to give out the hypothesis
about relationship among the variables, build the questionnaire to carry out the survey
on the basis of measurement scale of each variable.
Step 4: Carry out information collection. The information collection can be
implemented through website, email or giving directly the questionnaire to subjects to
be surveyed, explored the information. The questionnaire must be clear, the questions
must be concentrated, not too long. For the surveys having foreign factor, the
questionnaire must have both Vietnamese and English. After finishing the survey, carry
out the data collection for implementing the analysis.
Step 5: After having the data, we must carry out the data update accurately to the
computer and use software programs for data analysis. The data must be analyzed
according to each measurement scale corresponding to each variable in order to see the
influence level to each other among the variables.
Step 6: We will have evaluations on influence to each other among the variables
on the basis of the result of data analysis at step 5 in order to see whether the hypothesis
at step 3 are true or false.
7
Step 7: From the issues discovered at step 6, we will give out the conclusions,
contribution recommendations to the research subject and state the limitations of the
process of implementing the subject research.
CHAPTER 2 LITERATURE REVIEW
Plenty of researches carry out for services, service quality and customer
satisfaction. This chapter aims to provide an overview of the literature in this field.
Firstly, service in airlines industry is discussed to introduce the airlines service

creating towards a service in
question.
Thus, conclusion can be made as Figure 1.
Figure 1. Service process model
Gronroos (1982) and Parasumaran et al. (
1985) suggest that
the customer enter
into a service process with certain expectations, made by word of mouth
prior
marketing campaigns or experiences etc.
The
expected service has an impact on the
service process itself as well as the output of the
process,
i.e. perceived service.
Perceived service quality is
different
between expected and perceived
services
as
Parasumaran’s (1985) gap model
.
Kelley (2012) suggests the service process is based on the airline passenger
lifecycle, which
consists
of five steps as Figure 2 below.
9
Figure 2. Airline passenger lifecycle
(Kelley, 2012)
The airline passenger lifecycle evaluate the opportunities for value creation.

it is not taking
into
account.
Figure 3. Service process
Chang and Yeh (2002) state that way to measure service quality is to define a
number of
service
attributes. Hence, service process is divided into 07 steps,
each step represents a point where
a
customer may experience different types of
services. Each step shall be appointed as service quality attributes (Chang & Yeh,
2002; Gilbert & Wong,
2003;
Park et al., 2004; Chen & Chang, 2005)
. Service
process can be found from Figure 3.
2.1.2. Airlines Service
attributes
(1) Ticket p
urchase
Nowadays m ost of tickets purchasing are through travel agencies or online.
Nevertheless, call centers
still
exist, and it is available for customer to ask for
information and purchase the ticket there. It can be assumed that the ticket purchasing
might happen at the
check-in counter
without direct contact with the airline before
.

bo o

k er s

. f i
www.shermanstravel.com, etc. S
ome
of websites not only provide the
information but also provide the direct ticket purchasing while the others only
provide information and ticket purchasing happens on other websites ore
airline own home pages. The following attributes are for ticket purchasing process
:
* Easily available information on ticket prices, flight schedule
etc.
* Ease, accuracy and speed of booking
.
(2) Check-in
Check-in services have started as over the counter through face-to-face
interaction in last decade. Nowadays, the developing of technology allow passenger
to make some thing online. Regular check-in is still available in smaller airports,
leisure destinations. In addition, there are other options such as check-in online, via
check-in machines at the airport or
via
text message. For example, Finnair has phased
out regular
check-in
completely on economy seat and leisure flights (HS.fi, February
2012). According to Chang & Yang (
2008)
, such changes in infrastructure affect