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Abstract After 1980s, due to economy of free enterprises, the
obstacle to enter into a market gets less severe. The customer*
s freedom of choice to select a commercial product has become
broader. Therefore, the demands for product quality by customer
get higher. In order to increase company*s?信petitiveness, the
managers have changed their management from solely profit
oriented to customer and employee centered management. The
managers want to get a firm grip of customer and employee in
order to face the challenge in a rapid changing market.
Especially, the concept of Service-Profit Chain was brought out
to fully express the essential relation between company*s
operation and the satisfaction of employee and customer. In
1987, the domestic airline*s market was then open. Accompanied
by Taiwan*s economic growth, the demand of having a larger
transportation capacity was getting higher. The quality of land
transport was poor and sea transport was not yet developed to
see its benefits. Therefore, starting in 1988, Taiwan*s air
transport grew rapidly and had reached to peak in 1997. The
passenger flights grow on an average of 20% annually. Before
1987, there were only China Airlines and FAT two companies
running Taiwan*s flights and Formosa and Taiwan Airlines running
offshore island flights. In 1995, the domestic airline expanded
to 9 companies. The domestic market growth had slowed down and
the passenger rate of flights gradually also went down because
of expanding capacity by airlines. Although the government had
stopped to accept new application for domestic airliners in
order to avoid inferior competition to cause below standard air
safety quality. However, this did not stop furious competition
in domestic market. This study uses Service-Profit Chain concept
to make a verification work on services of domestic airlines,
tries to find the applicability of this new concept to the
domestic airlines, and study how to create enterprise*s internal
and external competitiveness under a high competition
environment. By questionnaires, the response data from customer
and employee were collected and analyzed with statistic tool to
obtain meaningful conclusions in order to provide both the
government and domestic airlines a reference for their
management operation.
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