Effect of perceived value on passenger satisfaction and loyalty: A case study of VietJet Air

Abstract

This study identifies the factors that reflect passengers’ perceived value for services of Low Cost Carrier (LCC) and examines the role of perceived value on passenger satisfaction and loyalty through the case study of VietJet Air (VJ). The data is collected from surveying 354 passengers on VJ flights. The results of the scale evaluation by Cronbach’s Alpha coefficient, Exploratory Factor Analysis (EFA), Confirmatory Factor Analysis (CFA), and hypothesis testing by Structural Equation Modeling (SEM) have confirmed six key components of perceived value are: 1) tangibles, 2) employees, 3) empathy, 4) brand image, 5) price, and 6) promotion. The perceived value has a positive impact on passenger satisfaction and loyalty. Furthermore, passenger satisfaction not only has a strong and positive influence on loyalty but also plays an important mediating role in the impact of perceived value on passenger loyalty. These findings are the basis for proposing implications for airlines in improving passenger satisfaction and loyalty through components of perceived value such as service quality, pricing policies, and promotional programs.