Causes of Customer Complaints at Tigerair Airlines in Australia

Introduction

Customer satisfaction is an important aspect for every company or organization. A profit-seeking company always strives to ensure high levels of customer satisfaction through quality services and products. It is the desire of every company to always receive positive feedback from its customers regarding the services and products since this has positive outcomes on the financial performance of the company. High levels of customer satisfaction translates to high customer retention rates by the company as it increases customer loyalty towards the organization. Loyal customer will not only continue purchasing the company’s services/products but are more likely to refer other potential customers to the company. The reverse is true whenever there is high level of customer dissatisfaction regarding a company’s service or product.

The airlines industry is quite a volatile industry for any operating company due to the increase in number of competitors. Being a service industry, customer satisfaction is of paramount significance. In fact, airlines compete along the ability to best satisfy the needs of customers in terms of airplane design, much minimized delays, as well as effective customer engagement. The Australian airline industry has a number of competitors. There are five major airline companies which operate as domestic carriers. These are Virgin Australia, Jetstar, Rex, Tigerair, and Qantas Domestic (Nick, 2015). All these companies compete for the domestic market share. Due to the many available airlines, customers are quite sensitive to the quality of service offered by a company as well as other factors like price.

Tigerair Australia is a subsidiary of Virgin Australia Holdings. It started its operations in Australia in the year 2007 and sailed on the market entry strategy of being a price leader. Its services were the cheapest in the market during its entry, a strategy that won it a significant number of customers. The company, however, has since been ranked the worst airline in Australia based on the numerous complaints received from customers who used its services. Since its operation, it has faced several complaints, increasing from 13% in 2013 to 31% in 2014 (Dang, 2014). The report released by the Federal Government’s Airline Customer Advocate (ACA) in 2014 indicated that the airline had ranked the worst in three consecutive years based on number of complaints. Customers have launched numerous complaints that include frequent delays caused the airline, the cancellations of flights, refusal to refund customers, poor terms and conditions, as well poor airport customer services (Nick, 2015).

The rise in number of customer complaints every year is a major risk to Tigerair’s operations. It is an indicator of increased customer dissatisfaction, which could result in massive loss of customers. It is also an indicator of poor leadership within the company since the complaints are based on similar issues which have being ignored and not resolved over the years. There is need for these complaints to be clustered into categories and the root causes of such complaints identified. The company should then identify possible solutions to these complaints so as to avoid the devastating outcomes of increased customer complaints.

AIM/OBJECTIVES.

The main aim of this research is to find a lasting solution towards solving the customer complaints at Tigerair. The specific objectives of the study include;

  1. To identify and cluster the complaints raised by the customers.
  2. To identify the causes of those complaints.
  • To determine the possible solutions to those complaints

 

Researching on customer complaints at Tigerair is important for both the company and the customers. Just like most of its competitors, Tigerair is a company that does business primarily to generate profits. It can only achieve profits and its financial objectives by having an adequate number of regular customers who purchase the company’s services. This cannot be achieved with the current situation where majority of the customers are clearly dissatisfied by the quality of the company’s services. The results from this research can, therefore, be very beneficial to the company in achieving more sales. It is expected that the company would adopt the recommendations from this research project in a rational way and implement them within a reasonable timeframe. Secondly, this research is important for the customers. The customers have a right to quality service and products. Such quality is currently definitely not being assured by Tigerair. This research will help in identifying the key causes of the customer complaints and present them to the company for recommendations for change. This is important to the customers whose complaints will be presented collectively which will serve as a reasonable call for change made to the company.

OUTCOMES

This research proposal is expected to have a number of outcomes at the end of the study. The expected outcomes are based on the fulfillment of the stated objectives. These outcomes are outlined below;

  1. Customer complaints will be identified and clustered into common categories.
  2. The causes of the customer complaints will be identified and similarly matched with the clusters of the complaints.
  • A number of possible solutions to the customer complaints will be identified and recommendations will be developed from these possible solutions for implementation by Tigerair.

 

Customer satisfaction in the airlines industry is a topic that has been explored extensively through research and past surveys. The surveys have focused on the various aspects of customer satisfaction in this industry which include factors of satisfaction as indicators of customer satisfaction in the industry. Grigoroudis and Siskos (2009) identified a number of methods that can be used to measure customer satisfaction in various industries. They first identifies the three main satisfaction dimensions for customers of airlines. These dimensions are customer satisfaction before, during, and after their flights. These two authors adopted the use of dual importance diagram which is a satisfaction criteria based on four quadrants.

Fig: The dual importance diagram(Grigoroudis and Siskos, 2009).

As can be seen from the diagram below, the four determinants of customer satisfaction in the airlines industry include pricing, quality of service, and relationship with company personnel, and speed of service delivery. Grigoroudis and Siskos (2009) then propose a number of techniques that can be used by the airline companies. One of the proposals is the integration of information technologies in enhancing quality and speed of customer service. One of the technologies proposed is Automated Response Systems (ARS). These are technologies that help in offering customer services by responding to any inquiries from the customers. The advantage of using ARS is increased efficiency in terms of reduced response time. ARS establishes a customer’s identification based in database contact information, identifies the inquiries or complaints launched and seeks to automatically respond to these inquiries based on matching programmed responses. Renart (2013) also provides an analysis based on the importance of customer relations in airlines industry. He observes that airlines companies can always gain competitive advantage by building a strong customer relationship. Customer satisfaction is deemed to be the key marketing aspect for any airline company which cannot be ignored at any given time. Renart (2013) suggests that companies should always first identify the specific needs of eth customers when developing marketing strategies. The common needs of airlines customers include affordability and convenience in terms of time management and customer service. Improving ion these facets will always make an airline more attractive to customers compared to its competitors

Constant and effective communication is also an aspect that has been identified by Renart (2013)as being necessary in enhancing customer satisfaction. Reputable airline companies always communicate with their customers to inform them of any new offers, rescheduling, or even refunds. Such companies are also very responsive to inquiries made by customers. They are also always apologetic to any customers who launch complaints and who feel they have received below-par services. Communication can be done through email, social media, and even through the mainstream media like television and radio.

Survey agencies like the ACA provide important statistics on the common customer complaints. ACA often ranks airline companies in Australia based on the number and type of complaints received by the companies’ customers. According to the agencies, the following are the three most common complaints raised by airline customers;

  1. Delays and flight cancellations.
  2. Hidden fees and charges.
  3. Poor customer service. A number of complaints are raised in this category including poor in-flight services as well as poor airport services like lack of adequate reception guidelines or restrooms.

Other complaints that are commonly launched against the airline companies include non-reimbursements. ACA reports that some airlines do not reimburse their customers who miss flights or who incur extra costs arising from inconveniences created by airline. In some cases, for instance, the airline can postpone a flight to the next day, necessitating that the customers seek hotel accommodation for the night. It is normally the responsibility of the airline to cater for such costs hence should offer full compensation to the customers in the form of reimbursements. The other complaint that is raised against most airlines is poor accessibility, that is, their websites are prone to downtimes. Most companies have online platforms for customers to make various complaints regarding quality of services. Most of the successful companies use these complaints to their advantage. Khan and Khan (2014) observe that “Customer complaints offer organizations with a chance to correct their mistakes, retain dissatisfied customers, and manipulate customers’ future”. That is what most of the successful airlines like Virgin and Qatar airlines have developed a strong customer base. They have developed the reputations for being the ‘listening airlines’ who always listen positively to customer complaints, acknowledge their mistakes, and initiate corrective measures.

The research will be conducted using mixed methodology (Bricki & Green, 2002). It will incorporate both qualitative and quantitative methodology. The qualitative one will be important in analyzing the current situation within the airport whereas the quantitative one will aim at analyzing the data collected in the course of the research (Todd , Waldman, Baker, & Blain, 2004). Once the data has been collected, the questionnaires will be analyzed to check for clarity and completeness. The data obtained will be edited and coded for accuracy. A quantitative form of data analysis will then be used and a frequency distribution table plotted in a tabular form showing the percentages.

Data collection techniques

Both open ended and closed questionnaires will be used for this research. Surveys and case studies will also be used as the tools for data collection. (Moffitt, 2017) This will aid in getting the customer feedback, in analyzing the situation within the airport and in narrowing down previous researches so as to get to more specific details concerning it. This research will ensure that it covers a reasonable target population so that the data collected will be more accurate and serve as a representation of the whole population. Secondary data can also be collected through examination of recorded documents (Kadam, Shaikh, & Parab, 2014). The secondary sources will include data from airline associations like the ACA which keeps summarized data of customer relationship with various airlines operating within Australia. ACA also keeps records of the complaints launched by the customers for each of the airline companies being monitored by ACA. For instance, the sample complaints can be collected from the customer’s complaint book from within the airport. Tigerair also has a website that keeps historical logs of complaints made by customers. These records will be accessed to identify the common complaints and cluster them into common categories.

Other secondary sources that will be explored include articles and peer reviewed journals. These source will serve as important literature which will provide a number of possible solutions to the complaints raised by customers. Case studies will also provide research data. The case studies will be conducted on Virgin Airways, Qantas, and Jeter. These three companies are the major competitors of Tigerair, hence it will be necessary to study how they have handled customer complaints within their companies and how they have always implemented corrective measures to deal with such complaints.

Population and sampling

The target population of this research is 200 customers and 20 employees of Tigerair. Random sampling will be used to identify the 200 customer respondents. 100 respondents will be women while 100 respondents will be men so as to avoid any gender bias. As for the employees, stratified sampling will be used since employees at different management levels will be questioned.The questionnaires given to the 20 employees will, therefore, be different based on the level of employment and the specific roles of the respondent.

Data analysis

Since qualitative and quantitative data collection techniques will be used, it will necessitate the use of different data analysis techniques. The following are the qualitative and quantitative techniques that will be used for data analysis;

  1. Quantitative data: quantitative data consists of all the numerical data. The numerical data shall be derived from the closed-ended The closed-ended questionnaires will be analyzed using SPSS data analysis software.
  2. Qualitative data: the qualitative data will be extracted from the open-ended questionnaires and surveys. The opinions and views raised by the respondents shall be clustered into common categories.

All the data collected shall then be analyzed for variance using ANOVA. Charts and graphs will also be drawn to show proportions of customer complaints collected from the study.

The following are the sections/chapters that will be included in the final research document.

GANTT CHART

 

Activity

Start time

End time

Duration in days

Formulating the research topic
Formulating the research questions
Formulating the research design and selecting of research methodology
Chapter one write-up
Literature review
Data collection
Data analysis
Final report write-up and submission

 

PROJECT BUDGET AND JUSTIFICATION

The following is a breakdown of the budget that would be required to sufficiently achieve all the objectives of this study.

  1. Cost of carrying out literature review: the literature review will require access to journals, books, and articles, most of which are contained in e-libraries and databases. These databases require subscription fees to access. The estimated cost for this is $400.
  2. Sampling and administering of questionnaires: the questionnaires will be administered to the respondents through mail and by direct delivery. This will require at least two employees to help in this. The estimated budget for the sampling, generation of questionnaires and distribution of these questionnaires is $4000.
  • Data analysis: data analysis will be done using a number of analytical tools like SPSS. These software are not freeware hence will require money to purchase from the vendors. The estimated cost for this purpose is $1500.

Below is a tabulated summary of the budget.

Purpose Estimated budget
1 Literature review materials $400
2 Data collection $4000
3 Data analysis $1500
Total $5900

 

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