From Price Fairness to Price Acceptance: The Study of Low-Cost Carrier Airlines in Indonesia

Abstract

<jats:p>This study is conducted to investigate the relationship between price fairness, customer satisfaction, loyalty, and price acceptance in Indonesia’s low-cost carrier market. The study is using a combined method of a quantitative study with paper-based questionnaires and a qualitative study by means of a focus group discussion, to LCC customers in Jakarta. Convenience sampling collects 200 usable respondents. The data is analyzed using the regression method in SPSS. The empirical result shows that in the low cost carrier market, price fairness has an impact on customer satisfaction, loyalty, and price acceptance. Customer satisfaction affects price acceptance and loyalty positively. However, loyalty has shown no effect on price acceptance. This study suggests that customer satisfaction is the main factor to build price acceptance in the low-cost airlines industry. Some managerial implications relevant to the findings are provided.</jats:p>