ISSN: 2320-5407 Int. J. Adv. Res.

9(08), 912-920

Journal Homepage: - www.journalijar.com

Article DOI: 10.21474/IJAR01/13344

DOI URL: http://dx.doi.org/10.21474/IJAR01/13344

RESEARCH ARTICLE
FACTORS CAUSING STUDENT LOYALTY TO THE LOW COST CARRIERS AIRLINE INDUSTRY IN
JAKARTA

Makmuri, Bambang Purwoko, Tony Sitinjak and Widarto Rachbini

University of Pancasila, Indonesia.
……………………………………………………………………………………………………....
Manuscript Info Abstract
……………………. ………………………………………………………………
Manuscript History The aim of this study is to analyze the effect of the implementation of
Received: 29 June 2021 service marketing strategies on student loyalty of LCC users. The
Final Accepted: 30 July 2021 student segment consumer contributes a considerable amount to the
Published: August 2021 number of LCC airline users in Indonesia. This research using
verifiative and descriptive methods using data analysis tools is
Key words:-
Service Marketing Mix, Consumer descriptive statistics and Structural Equation Modeling (SEM) analysis
Satisfaction, Consumer Loyalty, supported by Lisrel and SPPSsoftware. Aumlah 240 respondents how
Consumer Trust, Consumer Value to sample selection using judgment sampling techniques. The results of
the study based on descriptive analysis are known that the marketing
mix of services, consumer satisfaction, consumer loyalty, consumer
confidence and consumer value of students of LCC airline users in
general is considered inadequate. The results of the study showed that
Service Marketing has an effect on Consumer Satisfaction; Consumer
value affects consumer loyalty; Consumer Value affects Consumer
Satisfaction; Consumer value affects consumer confidence; Consumer
Satisfaction affects Consumer Loyalty; Consumer Satisfaction affects
Consumer Confidence; Consumer trust affects consumer loyalty. While
the hypothesis that is rejected is that the marketing of services has no
effect on consumer loyalty.

Copy Right, IJAR, 2021,. All rights reserved.

…………………………………………………………………………………………………....
Introduction:-
The object of this research is some national airlines that are classified aslow-cost airlines(abbreviated LCC)are airlines
that provide low fares but by removing some of the usual passenger services.

The LCC's choice of national airline in the study refers to the largest number of aircraft owned to date
(https://www.planespotters.net/), as in Table 1.1.

Table 1.1:- Number of Active Aircraft per Airline.

No. Name of airline Number of airplane
1 AirAsia Indonesia 32
2 Sriwijaya Air 61
3 Citilink 58
4 Lion Air 122

Corresponding Author:- Makmuri

Address:- University of Pancasila, Indonesia. 912
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AirAsia Indonesia has two business units in Indonesia namely AirAsia Indonesia and AirAsia Indonesia X. In Indonesia,
AirAsia allocates 32 aircraft units of 23 each for AirAsia Indonesia and 9 for AirAsia Indonesia X. All AirAsia
Indonesia aircraft use Airbus A320-200 while AirAsia Indonesia X operates 5 Airbus A320-200 and 2 Airbus A330-300
units.

Sriwijaya Air was founded in 2003 and has a fleet of 61 boeing 737 aircraft with an average age of 17.1 years.
Nevertheless, the majority of Sriwijaya Air's fleet is relatively young with Boeing 737-800 24 units and Boeing 737-900
2 units. While for the old model, the Boeing 737-500 6 units and Boeing 737-300 5 units.

Citilink is a subsidiary of PT Garuda Indonesia Tbk and was established in 2001 and has a fleet of 58 aircraft with an
average age of 5.7 years. Airbus aircraft dominate Citilink's fleet of 58 airbus A320-200 and Airbus A320 respectively.

Lion Air is a private low-cost airline that has a fleet of 112 units and an average age of 6 years. There are two series of
aircraft currently used by Lion Air, the Airbus A330 and Boeing 737 as many as 109 units.

Gap Phenomenon
Operasionization of low-cost carrier group flight business in Indonesia has not run smoothly. Based on the KnKT
Media Release November, 2016 on the knkt.go.id website, among which are marked by:

Low-cost carrier services in Indonesia should be good, the aircraft used should be safe and comfortable. However, a
report from the KNKT at the end of 2016 on aviation accidents showed the number of aviation accidents that have
occurred since 2010-2016 as in Table 1.2.

Table 1.2:- Flight Accident Data.

Year Investigation Accident Serious Incident Death Injuries

2010 18 8 10 5 45
2011 32 19 13 71 103
2012 29 13 16 58 62
2013 34 9 25 2 81
2014 30 7 23 169 44
2015 28 11 17 65 57
2016 41 15 26 5 12
Total 212 82 130 375 404

It is known that since 2010-2016 the number of accidents continues to increase with a total of 212 accidents that killed
375 people and 144 people were injured. Although Indonesia's aviation safety rating shot up to 55th place (in 2017)
from 151st position (2014), the tragedy of the plane crash that claimed many victims actually happened again. On
Monday, October 29, 2018, the crash of Lion Air flight JT 610 carrying 189 people crashed in Tanjungpakis,
Karawang. Lastly, on March 14, 2019, the same type of aircraft Boing 737 MAX 8 crashed on ethiopian airlines flight
number 302, killing 157 people.

Ticket prices from all LCC airlines in Indonesia starting in early 2019 rose sharply although still below the few highest
prices. For students who are financed by parents or families, some of them complain about the price of this ticket. This
is allegedly due to the cartel of them. This is still being investigated by KPPU.

The results of marcella (2017) and Rizan (2016) survey of LCC aircraft passengers, stated that loyalty levels are only in
mediocre positions, when of course airlines expect high levels of loyalty.

One of the market segments of Low-cost Carrier airlines is students who are studying in Jakarta. This research is
interesting because of the current situation that ticket prices are rising high, as well as some results of previous research
that stated that student loyalty to LCC is relatively low. Therefore, consumer complaints need to be considered,
responded to and given the solution.

Passenger characteristics affect the choice of modes of transportation, especially air transportation modes. This is related
to the cost or price of airline tickets that are affordable by students. The cost is a function of a number of attributes
associated with the road such as distance, free current speed, capacity and speed-of-current relationship (Tamin, 2008).
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Prospective passengers with their own characters can choose various means of transportation according to their needs.
The preference of passengers for the new alternative by complying with some basic equipment such as ticket
integration, price, displacement and travel time (Roman et al, 2014) in Wibowo and Rudiarto (2017).

These various characters are very influential on the choice of the mode itself.

Table 1.3:- Student Passenger Number Data.

No. Nama Maskapai Jumlah
Penerbangan 2019 2020
1 AirAsia Indonesia 10.879 3.000
2 Sriwijaya Air 974.516 150.000
3 Citilink 1.589.794 630.000
4 Lion Air 6.626.211 1.220.000

Based on the data, it is known that passengers with student backgrounds choose LCC flights, this is due to the
affordability of prices. In 2020, there is a very drastic decline, this is due to government policies during the Covid-19
pandemic affecting community activities, which have an impact on the decline of airline passengers. As is known the
results of research before pademic Consumer loyalty of air transportation service users is strongly influenced by the
affordability of prices and services provided by airlines.

The growth of the LCC article of international routes at CGK-coded airports is claimed to be a success of the
Connecting The Destination, Origination, Time & Traffic and Services (DOTS) strategy run by AP II. The strategy also
supports the coordination of the provision of flight slots (slot availability), synergy between aviation stakeholders
(stakeholders synergy), and ensures the quality of excellent service levels (service quality).

Based on some problems that occurred in LCC airlines with the most number of passengers up to 33.1 million in 2018
and controlled the market share in its class by 34% in 2018 (Praditya, 2019), it can be seen that one of the causes is poor
service quality so that customer satisfaction is not achieved. With poor customer satisfaction then there is news in the
media about problems that occur automatically will many other consumers who know this, so indirectly this will affect
the performance of the airline.

A company will be able to survive in the midst of intense competition if it is able to satisfy its customers. In fact,
customer satisfaction is the key to a corporation winning competition and improving its reputation. Therefore, LCC
airline is expected to be able to continue to improve its service to the best level so that it can satisfy the airline's own
service users and can continue to survive in the midst of current LCC airline competition.

Methodology:-
This research model is a combination of descriptive and verifiative analysis. The population of this study is students at 8
(eight) Universities enrolled in LLDikti Wilfather 3 Jakarta. Jumlah sample of each campus selected 30 students in order
to enter in one of the data sample requirements of each campus is normal distribution, so that the research sample of 240
students and sampling techniques is a side judgment, i.e. students who 2 times in a row have used LCC airlines again for
upcoming holiday travel. The analysis tool used is the Structural Equation Modelling (SEM) approach supported by
Lisrel and SPPS software.

Results and Discussion:-

Results:-
Respondent Profile
Statistics data jumlah respondents per campus is the same, namely 30 respondents of male sex 85% and women 15%.
While Jumlah respondents who use the most airlines are Lion Air which is 50.8% next consecutive Sriwijaya Air 26%,
CitiLink 17.1% and Air Asia 5.4%.

Descriptive Analysis of Loyalty

Based on respondents' answers, it is known that the level of respondent achievement in consumer loyalty variables in the
category is not good, namely the value of the respondent's achievement rate (TCR) is at intervals of 55% - 64.99%. This
shows that consumer loyalty, especially students to the services provided by LCC airlines is not able to create loyalty.

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Descriptive Analysis of Consumer Satisfaction

Based on respondents' answers, it is known that respondents' responses to consumer satisfaction variables in categories
are not satisfied. This shows that student consumer dissatisfaction with LCC airline services is in the type of aircraft
used by the company and the age of the aircraft used to serve consumers for quite a long time.

Descriptive Analysis of Consumer Confidence

The results of each item statement about consumer confidence based on percentage and average have been inferred
meaning. Based on respondents' answers, it was concluded that the students lowered the level of trust in LCC airlines
that are commonly used.

Descriptive Analysis of Consumer Value

The results of the analysis of customer values based on student background i.e. different universities, different genders
and different airlines, only from different universities have a real difference in customer value, others are not significant
differences.

Descriptive Analysis of the Service Marketing Mix

The results of the analysis of the marketing mix carried out by companies based on student backgrounds, namely
different universities, different genders and different airlines, only from different airlines that have real differences while
others do not have significant differences.

Influence Analysis between Variables

Based on the results of the GOF test there is one insignificant research hypothesis because the results of the GOF test for
the Absolute Fit Indices criteria are not met. The proposed research model, as in Figure 4.1.

Figure 4.1:- Research Results Model.

The resulting linear regression equation is as follows

Variables that affect trustn

Trust = 0.26*Satisfy + 0.61*Value; R² = 0.66

Variations in consumer satisfaction values and consumer values explain variations in Trust values of 66%.

Variables that affect consumer satisfaction

Satisfy = 0.15*ServMark + 0.62*Value, R² = 0.53

Variations in Service Marketing values and consumer values explain variations in consumer satisfaction values of 53%.

Variables that affect consumer loyalty

Loyalty = 0.40*Trust + 0.31*Satisfy + 0.087*ServMark + 0.18*Value; R² = 0.76

Variations in Trust values, Consumer Satisfaction, Service Marketing and consumer values explain variations in
consumer loyalty values of 76%.

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Discussion:-
Based on the results of descriptive analysis and influence between variables, in the following section is a strategic
discussion for each variable that still has a low assessment, namely: Consumer Loyalty, Consumer Satisfaction and
Consumer Confidence.

Consumer Loyalty Variables

Loyalty is the value that consumers get from long-term relationships with companies through products or services
consumed because they feel they benefit from the relationship. For airline management, consumer loyalty as a passenger
will reduce costs in finding new consumers because with the higher level of loyalty it will facilitate the company in the
implementation of its strategy and will create cross transactions.

Based on the results of this study indicated that the level of student consumer loyalty to LCC airlines that are still low
should be encouraged in order to increase in various ways, including through direct and indirect causes, namely Service
Marketing Management, Consumer Satisfaction, Consumer Value and Consumer Trust supported from several previous
studies. Some of the researchers who managed to prove it were restated as follows.
1. Andrian (2015) and Ragab et al. (2018) stated that the Marketing of Aviation Services affects the loyalty of aviation
service consumers.
2. Raditha (2015) and Firend and Masoumeh (2014) concluded that the value of airline consumers affects consumer
loyalty including:
3. Ragab et al. (2018) and Satyanarayana (2012) stated that airline consumer satisfaction affects consumer loyalty.
4. Chong et al. (2015) and Simarmata et al. (2017) expressed confidence in the influence of consumer loyalty.

Fulfilling the desires and expectations of consumers can create satisfaction in consumers. Satisfaction embedded in the
consumer does not hesitate to repeat the purchase of a product or come back to the product provider. Consumers who
repeat purchases or come back become important for the company, because a loyal attitude of consumers can help the
company, especially LCC airlines to be more developed and advanced. LCC management must instill an important thing
in consumers, namely the satisfaction of using LCC flight services because the satisfaction created will make consumers
become loyal and return to using the service.

The results stated that student consumer satisfaction has a positive role as a supporter so that student consumer loyalty
based on the service marketing mix becomes positive and significant. The entire marketing mix should be considered
important to consumers, but the tangible results of what is expected have a proven and expected performance. This is a
major challenge for marketing management to realize it.

Consumer Trust Variables

Based on the results of this study indicated that the level of consumer confidence of students in LCC airlines that are
still low should be encouraged in order to increase in various ways, including through direct and indirect causes.
1. Based on the results of research Jennifer Chan et al (2011) it is known that the consumer value of aviation services
affects directly to the consumer confidence of aviation services.
2. (2016) and Akram et al. (2014) it is known that consumer satisfaction of aviation services directly affects the
consumer confidence of aviation services

The results of this study state that consumer value and consumer satisfaction play an important role in strengthening
consumer confidence, namely students in the aviation industry. Therefore, the company's marketing management must
continue to strive so that the realization of thework programcanimprove consumer values and consumer satisfaction
because it will have an impact on student consumer confidence in the LCC aviation industry. Consumer confidence,
especially college students in Jakarta as users of LCC airlines that increase will have an impact on student loyalty and
ultimately have a positive impact on the company's progress.

Trust is the feeling of security that consumers have as a result of their interaction with a brand. A positive perception of
customer value will have a positive impact on consumer confidence that the brand is reliable and responsible for the
interests and safety of consumers. The consumer value of a service brand will logically have a positive influence on
student confidence as a user of LCC airline in Jakarta.

Consumer satisfaction is the result of a service provider's success in meeting consumer expectations and defenitively
influencing changes in attitudes, repurchases and loyalty. Satisfied consumers tend to be loyal consumers, and satisfied
consumers will make repurchases. Consumer satisfaction will affect consumer confidence in industrial exchange
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relationships. Trust in a brand has an important role to play in creating relationships with its customers. Brand trust is
based on their experience with the brand. Experience with brands will be a source for consumers to create trust in the
brand and this experience will affect consumer evaluation in consumption, use or satisfaction directly and indirect
contact with the brand.

Consumer Satisfaction Variables

Based on the hypothesis test submitted in this research model, the service marketing mix affects consumer satisfaction.
That is, student consumers are satisfied with the performance of services provided by LCC-based airlines. But based on
the results of this study, the level of student satisfaction with LCC airlines that are still low must be encouraged in order
to increase in various ways, including through direct and indirect causes. This contradicts the results of firouzeh and
sirion research (2014). Taher et al. (2016) and Akram et al. (2014) which stated that consumer satisfaction of aviation
services directly affects the loyalty of aviation service consumers.

The application of the service marketing mix in the aviation industry, especially LCC-based airlines has a positive
impact on consumers, especially student segment consumers, where the student segment contributes revenue of 20% of
the total users of LCC airlines. With the work of the segment, it will indirectly have an impact on the company's
performance. In addition, it is known that consumer value plays a role in the formation of consumer satisfaction. The
concept of consumer value indicates a strong relationship to customer or customer satisfaction. Where the concept
describes the evaluative consideration of consumers about the product or service consumed. The desired value of the
customer is formed when the consumer shapes the perception of how good a product is playing out in a situation of use.
Consumers evaluate the usage experience on the same attributes.

The better the value for consumers provided by the company, the more satisfied the service provided by the LCC airline.
This means that the value for kosnumen has a positive and significant effect on consumer satisfaction.

Service Marketing Mix Variables

Competition pаrа mаskаpаi penerbаngаn di pаsаr penerbаngаn Low Cost Cаrrier makes аlternаtive select consumers
especially high-end student segments, encouraging perusаhааn to аtkаn brand brandа dаn strengthening brand position
in pаsаr. LCC sebаgаi sаlаh sаtu strаtegi penerbаngаn di Indonesiа menyаdаrkаn mаsyаrаkаt bаhwа sekаrаng this semuа
orаng bisа melаkukаn perjаlаnаn menggunаkаn pesаwаt udаrа dengаn hаrgа yаng terjаngkаu dаn tidаk lаgi like jаmаn
dаhulu dimаnа penggunааn trаnsportаsi udаrа hаnyа monopoli orаng-orаng dаri kаlаngаn menengаh keаtаs sаjа.

The results showed that the marketing mix of services in the LCC-based aviation industry was well executed, but
needed improvements related to the set ticket prices, airline officer services, honesty of check-in officers and accurate
and often informed information.

Consumer Value Variable

The value of consumer perception has a number of meanings that are not limited to the perspective of economic
analysis. The value of kosnumen as the overall assessment of the utility of a product based on its perception of what is
received and what is given. Consumer value is the emotional bond that is established between the consumer and the
company after the consumer uses the services produced by the company and finds that the product in question provides
added value.

Assessments of three indicators on consumer values show that student consumers are not proud to use the LCC airline
that is always used; consumers feel LCC airlines are not always pleasant during the trip; and the use of LCC airlines
does not improve the self-image.

Conclusion and Recommendations:-

Conclusion:-
Researchconclusions based on research objectives, findings and results of discussion, as follows.
1. The service marketing mix plays a role in increasing student satisfaction as consumers of Low cost carriers in
Jakarta. By applying the service marketing mix, it will create consumer satisfaction. Kosnumen satisfaction is built
on the basis of a pleasant experience experienced by consumers. The experience is actually sourced from the
elements of the LCC aviation service marketing mix. The marketing mix symbolizes the seller's view of the
ordering devices available affecting the buyer. The performance of a good service marketing mix will create
consumer satisfaction with the services provided by the company.

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2. The service marketing mix plays no role in shaping student loyalty as consumers of Low cost carriers in Jakarta.
That the application of the service marketing mix in the LCC aviation industry is currently unable to create student
loyalty of LCC users.
3. Consumer value is able to create student satisfaction as consumers low cost carriers in Jakarta. Consumer value
felt by consumers, especially students of LCC users, will form consumer satisfaction.
4. Consumer value is able to create student loyalty as consumers low cost carriers in Jakarta. Consumer value is the
ratio of the benefits expected by consumers to the sacrifices of consumers to benefit. With the consumer value that
students feel as current LCC users can form consumer loyalty.
5. Consumer Values plays a role in creating student confidence as consumers of Low cost carriers in Jakarta. Value
6. Consumers have an impact on consumer confidence so it needs to be maintained its role, not to go down but rise. If
you have a higher impact, it is expected that the value of the contribution is higher.
7. Consumer satisfaction plays a role in creating student confidence as low cost carriers in Jakarta. With the level of
satisfaction felt by consumers, it will increase consumer confidence, especially the student segment for the services
provided by LCC airlines in Jakarta.
8. Consumer satisfaction creates student loyalty as consumers of Low cost carriers in Jakarta. Satisfaction is the
conformity between expectation and reality. With the satisfaction shared by consumers (students) for LCC services,
it directly forms loyalty to LCC airline services in Jakarta. Loyalty is a manifestation and continuation of consumer
satisfaction in using the services provided by the company, as well as to remain a consumer of the company.
9. Consumer confidence plays a role in student loyalty as low cost carriers in Jakarta. Trust involves a person's
willingness to behave certainly because he believes that his partner in making transactions will give him what he
expects. If one party trusts the other, it will be possible to form a positive behavior and good intentions. Therefore,
when the consumer has confidence in a particular product or service, the consumer has the intention to repurchase
the service.

Management Implications
Efforts to Increase Student Consumer Loyalty
Based on the findings of this study, as input for companies as set out in one of the Objectives of this Research is as
follows:
1. LCC airlines need to review the factors that are the direct and indirect cause of low consumer loyalty, namely
efforts to increase value.
2. consumer satisfaction, consumer satisfaction and marketing mix programs. The review was conducted on service
marketing programs consisting of product aspects, price, promotion, place, people, process and physical evidence.
3. LCC airlines need to review marketing strategies related to their marketing mix programs. Review based on aspects
of market segmentation which includes geographic, demographic, psychography and behavior segments. Then, the
aspects of target setting and positioning.
4. LCC airlines need to review the marketing programs that have been implemented so far to find out the weaknesses
related to the impact on customer values that are still low. The improvement of a marketing program not only
impacts the consumer value variables but can also have an impact on other aspects.
5. LCC airlines need to review programmatically and continuously the level of passenger satisfaction so that it is
known that its position to be improved because loyalty will be affected.
6. LCC airlines need to review the marketing programs that have been implemented so far to find out the weaknesses
related to the impact on consumer confidence.

Efforts to Increase Student Consumer Confidence

LCC airlines need to review the factors that are the direct and indirect cause of low consumer confidence. Company
management needs to strive to improve: a) Employeeintegrity, referring to honesty and truth. Competence, related to
the technical and interpersonal knowledge and skills that individuals possess; b) Employee consistency, related to
reliability in predicting and assessing individuals and being able to handle situations; c) Employee openness, can be seen
from referring to the willingness of self-disclosure, honesty to the messages of others; And have good feelings and
thoughts.

LCC airlines need to review marketing strategies related to their marketing mix programs if segmentation and one of its
target markets is that students are retained.

LCC airlines need to review the marketing programs that have been implemented so far to find out the weaknesses
related to consumer value, because consumer value will have an impact on consumer confidence.

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Efforts to Improve Student Consumer Satisfaction Based on the findings of this study, as input for Such
companies are set out in one of the Purposes of this Research are as follows
LCC airlines need to review the marketing programs that have been implemented so far to find out the weaknesses
related to the impact on consumer satisfaction. In the review process will lead to a marketing mix program that can be
improved according to the company's capabilities. Reviewing business competition conducted by other rival airlines
also needs to be done.

LCC airlines need to review the factors that are the direct and indirect cause of low consumer loyalty. These factors
include the marketing mix consisting of 7P as also suggested earlier and aspects of customer value that have low value.
LCC airlines need to review marketing strategies related to their marketing mix programs if segmentation and one of its
target markets is that students are retained.

Marketing Management Evaluation Efforts

Improvements are also needed for marketing management, especially

It deals with marketing management strategies that are relegated to service marketing mix programs. As the airline
industry LCC proposed a decrease in ticket prices became the main thing, because it had an impact on the decrease in
customer numbers. Decrease in numbers customers due to the impact of the use of other modes of transportation such as
trains and buses as well as the use of cheaper overseas airlines.

Recommendations:-
Based on the results of the discussion of all the findings of this study, which consists of the results of descriptive and
causal analysis discussions, then here are the suggestions for LCC Airline Management

Based on the results of the analysis it is known that the performance of the mix

Marketing still has to be improved because it has an impact on student consumer behavior, including regarding delay
services, the check-in process at the departure airport, and expensive ticket prices so it is necessary to think about
discounts for students.

Low consumer satisfaction is due to its expectations of unmet LCC airline service. Therefore, company management
must improve performance while not doing excessive promotions that have an impact on increasing consumer
expectations. The results of this study state that consumer loyalty is strongly influenced by consumer satisfaction,
therefore, satisfaction must be increased because if consumers are satisfied then loyalty increases, and vice versa.

Consumer confidence will increase when consumer value and customer satisfaction of LCC airlines increases, as a
result of consumer confidence will have an impact on loyalty. Therefore, between promotions carried out by the
company must be able to adjust to the reality received by consumers.

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