Service failure and recovery in a strategic airline alliance context: Interplay of locus of service failure and social identity

There has been a dramatic increase in the past decade in the number of strategic alliances and business networks. Yet, despite these trends in the business environment, the individual firm-customer dyad has remained the contextual focus of most services marketing research (Gittell, 2002). Using a scenario study, this research investigates the effects of service failures in a strategic airline alliance setting, with a particular focus on locus of service failure and strength of social identification, on three alliance entities-a consumer's home carrier, the alliance partner airline, and the alliance. Study findings suggest that consumers' evaluations are more stable (less extreme) when the home carrier causes the service failure. In contrast, when a lesser known entity (partner airline) causes the service failure, consumers are more willing to rate that entity harshly. Furthermore, compared to weak identifiers, strong identifiers were not only more positive in their evaluation of the home carrier but also in their evaluation of the alliance, pointing to a halo effect, whereby positive evaluations of the home carrier are transferred to the alliance. Implications of study results are discussed and directions for future research provided.