Branding Satisfaction in the Airline Industry: a Comparative Study of Malaysia Airlines and Air Asia

Topics: Airline, Low-cost carrier, AirAsia Pages: 31 (10395 words) Published: October 30, 2011
African Journal of Business Management Vol. 5(8), pp. 3410-3423, 18 April, 2011 Available online at ISSN 1993-8233 ©2011 Academic Journals

Full Length Research Paper

Branding satisfaction in the airline industry: A comparative study of Malaysia Airlines and Air Asia Kee Mun, Wong* and Ghazali, Musa
Faculty of Business and Accountancy, University of Malaya, 50603 Kuala Lumpur, Malaysia. Accepted 23 March, 2011

Brand is crucial in differentiating the superiority of products or services over others. This is an exploratory study examining the differences in brand satisfaction between Malaysian Airlines (full service airlines) and Air Asia (low cost airlines) in Malaysia. 350 usable questionnaires were obtained from respondents in the two main airlines terminals in Kuala Lumpur. Exploratory factor analysis revealed seven brand satisfaction dimensions which are tangibles, price, core service, reputation, publicity, word-of-mouth, and employee. Generally, respondents were not satisfied with all brand dimensions of both airlines. The level of brand dissatisfaction is also higher for Malaysian Airlines compared with Air Asia. Air Asia was perceived better than Malaysian Airlines in price, publicity, and word-of-mouth. On the other hand, Malaysian Airlines was perceived better in tangibles, core service, reputation, and employee. The paper highlights some of its theoretical, managerial and marketing implications to the development of airline industry. Key words: Airlines, branding, satisfaction, Malaysia Airlines, Air Asia. INTRODUCTION The world airline industry has gone through a rollercoaster ride for the past few years. Among factors contributing to the situation are, increasing fuel prices, escalating security insurance, rapid deregulation of the industry, as well as natural disaster, ranging from the outbreak of diseases to eruptions of volcanoes that hinder the air travel growth. As reported in the recent World Airline Report, the world airline industry has recorded a devastating loss of US$ 16 billion in 2008 and another US$ 9.9 billion in 2009 (Flint, 2010). The tough situation has forced the airlines around the world to revoke their traditional airline strategy and venture into new alliances and new business models in order to keep its competitiveness. One of the main developments in the current aviation industry is the growing popularity of low cost airlines, including the Asia Pacific region. As stated by O’Connell and Williams (2005), low cost airlines have intensified the direct competition with full service airlines, particularly during the weak economic situation in 2008 and 2009. Within Asia Pacific, airlines industry in Malaysia is expected to make a net profit of about US$ 300 million in 2010, making it the highest in the SouthEast Asia region. The aviation industry in Malaysia is dominated by two airlines. These are Malaysia Airlines and Air Asia. According to O’Connell and Williams (2005), Malaysia Airlines has been classified as a full service airline while Air Asia has been classified as a low cost airline. Malaysia Airlines, the national airline of Malaysia is serving both international and domestic routes across 100 destinations worldwide (including code-sharing flights). It has one of the largest fleet sizes in South East Asia and is one of only six airlines to have been awarded a 5-star rating by Skytrax (Skytrax). On the other hand, Air Asia is the first low cost airline in the region, and it operates scheduled domestic and international flights over 75 destinations in 21 countries. This includes Air Asia X, Thai Air Asia, and Indonesia Air Asia. Air Asia has been reengineered and made a remarkable

*Corresponding author. E-mail: Tel: +6012-208-9791.

Wong and Musa


turnaround and turned into a profitable airline in 2002. In 2006, the airline was voted as amongst the top 3 Best Regional airlines in the low cost airline...
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