A modified VIKOR multiple-criteria decision method for improving domestic airlines service quality James J.H. Liou a, * , Chieh-Yuan Tsai b , Rong-Ho Lin c , Gwo-Hshiung Tzeng d, e a Department of Air Transportation, Kainan University, No.1, Kainan Road, Luchu, Taoyuan County 338, Taiwan b Department of Industrial Engineering and Management, Yuan Ze University, No.135 Yuantung Road, Chungli City, Taoyuan County 320, Taiwan c Department of Industrial Engineering and Management, National Taipei University of Technology, No.1, Section 3, Chung-Hsiao East Road, Taipei, Taiwan d Institute of Project Management and Department of Business Administration, Kainan University, No.1, Kainan Road, Luchu, Taoyuan County 338, Taiwan e Institute of Management of Technology, National ChiaoTung University, Ta-Hsuch Road, Hsinchu 300, Taiwan Keywords: Service quality Airline service VIKOR SERVQUAL Multiple-criteria decision-making abstract This study applies a modified VIKOR method to improve service quality among domestic airlines in Taiwan. Our model allows decision-makers to understand the gaps between alternatives and aspired- levels in practice. A large sample is used to establish a complete service quality evaluation framework for reducing the gaps to achieve the aspired-level. We then applied the modified VIKOR method to establish the gaps in priorities between alternatives and aspired-levels. Finally, based on these gaps in priorities, we provide managerial implications to improve different carriers for satisfying the customers’ needs to achieve the aspired-level. Ó 2010 Elsevier Ltd. All rights reserved. 1. Introduction In a competitive environment, delivering high-quality service is important but from 2008 the global economic downturn saw airlines are struggling just to survive. This paper evaluates the service level of Taiwan’s domestic airlines and to identify gaps between what airlines provide and what customers’ seek. Traditional statistical testing and multiple-criteria decision- making (MCDM) methods have been used to establish service quality criteria, with most of the latter comparing all alternatives based on synthesized rankings. In practice, however, decision- makers often simultaneously evaluate their progress in attaining one or a limited number alternatives and thus need to know where gaps in alternatives exist to minimize them. Traditional methods are unsuitable for ranking these gaps because each alternative has its own criteria. This study uses a modified VIKOR (VlseKriter- ijumska Optimizacija I Kompromisno Resenje in Serbian, meaning multicriteria optimization and compromise solution) method for tackling this problem (Opricovic and Tzeng, 2004). 2. Service quality in the airline industry There is no universally accepted definition of air service quality. In general, air service quality can be defined as a consumer’s overall impression of the relative efficiency of a supplier’s organization and services (Park et al., 2004) and involves various interactions between a passenger and airline employees, as well as anything that is likely to influence passengers’ perceptions, of a carrier’s image (Gursoy et al., 2005). Understanding exactly what customers expect is a crucial step in delivering high-quality service, but only customers, however, can truly define service quality. Parasuraman et al. (1985), however, have developed a framework that defines service quality as the degree and direction of discrepancy between customers’ expecta- tions and perceptions. Their model, further developed, has become known as SERVQUAL, and contains five dimensions with 22 attri- butes of quality (Parasuraman et al., 1988). It has become the most widely used model of customer-perceived service quality. Most previous MCDM models focus on ranking and selecting from a set of alternatives based on the synthesized scorings for each alternative with the same criteria. Our modified VIKOR method built on SERVQUAL allows solving MCDM problems with conflicting and non-commensurable criteria and provides a solution that is the closest to the optimum. 3. The modified VIKOR method The main difference between our modified VIKOR and the original VIKOR (Opricovic and Tzeng, 2002) is the replacement of a fixed common number of criteria for all alternatives with a set of criteria for each alternative, and providing a method for ranking the * Corresponding author. Tel.: þ886 3 3412500; fax: þ886 3 3016912. E-mail address: jhliou@mail.knu.edu.tw (J.J.H. Liou). Contents lists available at ScienceDirect Journal of Air Transport Management journal homepage: www.elsevier.com/locate/jairtraman 0969-6997/$ e see front matter Ó 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.jairtraman.2010.03.004 Journal of Air Transport Management 17 (2011) 57e61