Unraveling the customer loyalty: Performance drivers of loyalty in low-cost airline business

This study investigates the critical role of performance in low-cost airline businesses, focusing on its impact on perceived value and customer loyalty. Specifically, it aims to analyze factors influencing low-cost airline performance on loyalty and examine perceived value as a mediator in this relationship. Data were collected from 377 customers of low-cost airlines using a structured questionnaire. Exploratory factor analysis and Process Model 4 were employed to analyze the data. The findings reveal that airline performance significantly influences customer loyalty, confirming the direct impact of core operations and service quality. Moreover, perceived value mediated this relationship, indicating that customers’ perceptions of value play a crucial role in translating performance into loyalty. Hedonic value fully mediated the relationship between safety performance and customer loyalty, while utilitarian value partially mediated the effects of core and service performances on loyalty. The findings offer valuable insights that can inform the development of effective business strategies for low-cost airlines, enhancing their competitiveness and customer retention.