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Budget airlines closing gap with full-service carriers

BUDGET airline customers are more likely to repurchase tickets from them compared to those flying with full-service carriers.

Furthermore, budget airlines are closing the gap in customer satisfaction with the full-service carriers.

The Institute of Service Excellence's Customer Satisfaction Index of Singapore (CSISG) 2018 results for the air transport and land transport sectors show that the budget airlines' score improved by 2.7 per cent to 73.1 points compared to the previous year.

This was the third consecutive annual increase in customer satisfaction for budget airlines.

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Meanwhile, full-service airlines saw relatively more modest improvements in scores.

The difference in satisfaction levels between full-service airlines and budget carriers has been narrowing since 2014. That year the difference was 7.2 per cent. In 2018 it narrowed to just 1.9 per cent.

Significantly, for the first time in five years, budget airline customers' rating for "likelihood to repurchase" - that is, their propensity to fly with the airline again - surpassed that of full-service airline customers.

This may suggest that travellers could potentially substitute full-service airlines' services with lower-priced alternatives like budget airlines, the ISE study said.

The performance metrics of budget airlines have been converging on full-service airlines for a few years now, said ISE executive director Neeta Lachmandas.

"This suggests that budget airlines, beyond using price as a lever, have been successful in shaping what travellers deem to be a high-quality mode for air travel," she added.

The full-service airlines sub-sector could address the decline in repurchase intentions by exploring ways to create wider differentiation in their service offerings, according to the ISE study.

Scoot, Singapore's leading budget airline, had the highest customer satisfaction score among budget carriers in the latest ISE study with a score of 75.3.

When contacted by The Business Times, the airline said that it is constantly working on elevating the customer experience by offering its customers choice and value.

"With our 787 Dreamliners, we were able to offer more space, better air quality and quieter engines. The 787 Dreamliners have also enabled us to launch low-cost flights to Athens and Berlin," said Scoot chief executive officer Lee Lik Hsin.

"On the customer services front, our team has almost doubled in size since 2017, to closely monitor Scoot's Facebook and Twitter accounts, communicate time-sensitive travel information, and provide on-the-spot service recovery. Customer surveys are conducted after every flight, to identify high-priority pain points from booking to airport to the onboard experience," he added.