Customer satisfaction and service quality in the Chinese airline industry

• We study the service quality impact on customer satisfaction of Chinese carriers.
• Customer complaints are increasing in broken baggage at a declining rate.
• Customer complaints are decreasing in temperature at an increasing rate.
• On-time performance has no significant effect on the customer complaints.
• Private owned carriers receive significantly more customer complaints.

This paper focuses on studying the relationship between customer satisfaction, measured by customer complaints, and the service quality of Chinese carriers. By using a quarterly unbalanced panel data set covering twelve large and small carriers, our fixed effect Tobit analysis shows that customer complaints rise with increases in the number of damaged bags, but at a declining rate. By contrast, the on-time performance of scheduled flights has no significant effect on customer complaints. Furthermore, non-state or privately owned carriers receive significantly more customer complaints compared with state-owned carriers, and the largest number of complaints are made in the third quarter, which covers the high season of the summer holidays.