AN INVESTIGATION OF IMPACT OF SERVICE STRATEGY ON CUSTOMER SATISFACTION IN THE BUDGET AIRLINE INDUSTRY IN MALAYSIA: A CASE STUDY OF AIR ASIA

This paper investigates the level of customer satisfaction among the passengers who fly with Air Asia, a budget airline in Malaysia. The factors which investigated are the on-line services, third-party services, fare charging practices, advertisement and customer services. The independent variable which measured is customer satisfaction. A quantitative approach with a multiple regression analysis was deployed to study the relationship between the independent variables and dependant variable. The findings suggest that there is strong correlation found between the independent variables and the dependent variable as the correlation coefficient for all variables is found to be significant at 0.01 and 0.05 levels. The multiple regression analysis reveals that there is a significant positive relationship exist between on-line services and customer satisfaction; third-party services and customer satisfaction; advertisement and customer satisfaction. The factors such as the fare charging practices and customer services though show a positive relationship with customer satisfaction, but the relationship is not significant. It looks like that the customers are not motivated any further with the fare being charged by Air Asia as passengers are already enjoying. The passengers also are not concerned with the customer services provided by Air Asia as the fares paid are relatively very low. However, the passengers are very concern about the on-line services, third-party services and the advertisement used to communicate with them. Therefore, this study highlights the managerial implications for Air Asia Berhad to improve the on-line services, third-party services and misleading advertisements in order to deliver customer satisfactioncontinuously.