The Impact of Corporate Social Responsibility on Airplane Reputation and Passenger Satisfaction and Loyalty

Research by: Tamilla Curtis, Scott Ambrose, and Wilfred S. Manuela Jr.

EXECUTIVE SUMMARY

Corporate strategy and corporate social responsibility (CSR) have become interconnected. In addition to stockholder profit maximization, stakeholder theory emphasizes that companies have a broader purpose of adding value to society and contributing to sustainable development while providing benefits to all stakeholders (Latapí Agudelo et al., 2019). The literature indicates that CSR provides many benefits to airlines, such as long-term financial gains, improved stakeholder relationships, and a positive impact on business reputation (Choi et al., 2020; Gomez-Trujillo et al. 2020; Liu et al., 2020; Park, 2019; Yang et al., 2020), which compel firms to invest in CSR initiatives and explore its benefits.

Despite its significant positive economic impact, air transport also has negative consequences. Among aviation’s negative impacts are pollution, noise, waste, labor issues, and over tourism, among others (Cowper-Smith & de Grosbois, 2011; Harley et al., 2020; Okumus et al., 2020). While research indicates that environmental sustainability initiatives and financial performance in the aviation industry are connected (Abdi et al., 2020; Lu et al., 2020), research analyzing customer perception and behavior in relation to airline social responsibility is limited and not well understood (Upadhaya et al., 2018).

The purpose of this study is to better understand customer perceptions of CSR and their impact on corporate reputation, customer satisfaction, and customer loyalty, across a variety of airlines in multiple regions.

In this paper, we define CSR as conceptualized by Schwaiger (2004) and designed to assess the degree that a firm is concerned about company initiatives and activities beyond profit, such as conservation of the environment, behaving in a socially conscious manner, having a fair attitude toward competition, and being straightforward in giving information to the public. All of these factors are relevant in the highly competitive commercial air transport system.

We created a survey instrument to assess the perceptions of airline customers and to test the proposed model. We designed the survey using the survey design principles suggested by Podsakoff et al. (2003) to mitigate common method variance and was pre-tested (n = 85) for feedback on wording clarity. Hosted by Amazon’s Mechanical Turk Marketplace (MTurk), the process is designed to reach respondents across different geographic regions. MTurk, Amazon’s crowdsourcing marketplace created in 2005 (Smith et al., 2016), is a reliable platform rapidly becoming popular in academia (Daly & Nataraajan, 2015; Hasan et al., 2021). The MTurk process involves a ‘job’ that is referred to as Human Intelligence Tasks (HIT), which is published, and anonymous participants or workers have access to the survey link. The diversity of the participants with different demographics and backgrounds throughout the world is another research benefit of using MTurk (Hasan et al., 2021). We used partial least squares structural equation modeling in order to measure the model and test the hypothesized associations.

The Eberl (2010) model of corporate reputation exhibited robust support across different airlines and different geographical regions. Hence, the findings of Park et al. (2015) and Park (2019) that customer perceptions of airline CSR positively influence their satisfaction and loyalty are validated and extended beyond a single country focus. Moreover, the associations are sequenced within a wider nomological network of connected relationships. A post-hoc model comparison was made with Park (2019) in which customer satisfaction is an antecedent to corporate reputation. Findings indicate that the corporate reputation model implemented in this study with satisfaction positioned as consequent to reputation yielded a superior fit. All three loyalty dimensions exhibited higher adjusted R² values and lower Bayesian information criterion (BIC) values. When comparing alternative models, the model that minimizes BIC values indicates a superior fit (Hair et al., 2021). The findings also indicate partial mediation throughout, further supporting the causal sequencing of the model.

This paper provides additional insights into the role of CSR in aviation and the perception of CSR activities of airlines from the perspective of passengers. The literature review identified the need to investigate this topic further and what value CSR brings to aviation. Effective CSR management is established as a significant antecedent of corporate reputation regardless of geographic region, business model type, and customer demographics. Reputation, primarily through the affective component of likeability, ultimately has a significant impact on customer loyalty in what historically has been a difficult level of success for airlines to achieve.

To cite this article: Curtis, T., Ambrose, S., & Manuela Jr., W. S. (2024). The impact of corporate social responsibility on airline reputation and passenger satisfaction and loyalty.International Journal of Aviation, Aeronautics, and Aerospace, 11(4). https://doi.org/10.58940/2374-6793.1945

To access this article: https://doi.org/10.58940/2374-6793.1945

About the Journal

International Journal of Aviation, Aeronautics, and Aerospace (IJAAA) was founded in 2013 by the College of Aeronautics of Embry-Riddle Aeronautical University – Worldwide. It was created to provide a publication opportunity for both those within and outside the academic realm. The editorial staff welcomes any sound aviation/aeronautical/aerospace research from authors at all levels of education, industry stakeholders and participants, government officials and researchers, as well as position papers and book reviews.

The IJAAA is open access, providing readers and authors access to content without fees or other costs. There are no fees charged to authors for their submissions or for publication.

Journal ranking