The Impact of Corporate Social Responsibility and Sustainability on Customer Loyalty in Airlines

De Silva, Samantha Ashley (2026) The Impact of Corporate Social Responsibility and Sustainability on Customer Loyalty in Airlines. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

The airline industry operates within a highly competitive and globalised environment while facing increasing scrutiny regarding its social and environmental impact. Rising concerns over climate change, carbon emissions, and ethical business practices have significantly reshaped customer expectations. Contemporary airline customers now evaluate airlines not only based on traditional factors such as ticket price and service quality, but also on their commitment to Corporate Social Responsibility (CSR) and sustainability. As a result, CSR and sustainability have emerged as important strategic mechanisms for building long-term customer relationships and maintaining competitive advantage. Despite the growing adoption of responsible practices by airlines, empirical evidence on their effectiveness in enhancing customer loyalty remains inconclusive, particularly when considering the role of customer satisfaction. This study aims to examine the impact of CSR and sustainability on customer loyalty in the airline industry and to investigate the mediating role of customer satisfaction in these relationships. Drawing upon Social Exchange Theory, the study posits that customers respond positively to organisations that demonstrate responsible behaviour, reciprocating such efforts through increased satisfaction and loyalty. CSR in this study is conceptualised based on Carroll’s Pyramid of CSR, encompassing economic, legal, ethical, and philanthropic responsibilities, while sustainability focuses on reducing environmental impact and ensuring long-term operational viability. A quantitative research approach was employed using a cross-sectional research design. Primary data were collected through a structured online questionnaire distributed via Google Forms to airline customers, including frequent travellers and airline employees as customers. A non-probability purposive sampling technique was applied to ensure respondents had relevant airline experience. A total of 300 valid responses were obtained. All constructs were measured using a five-point Likert scale adapted from previous validated studies to ensure clarity and reliability. Data analysis was conducted using the Statistical Package for the Social Sciences (SPSS) version 27. Descriptive statistics were used to profile respondents, while reliability and validity tests were performed to assess the measurement model. Correlation and regression analyses were subsequently conducted to test the proposed hypotheses and mediating effects. The empirical findings reveal that CSR and sustainability have positive and significant impacts on customer loyalty in the airline industry. Both CSR and sustainability were also found to positively influence customer satisfaction. Furthermore, customer satisfaction significantly impacts customer loyalty and plays a crucial mediating role in the relationship between CSR and customer loyalty. These results provide empirical support for Social Exchange Theory, indicating that customers tend to reciprocate responsible and sustainable organisational practices through enhanced satisfaction and loyalty. The findings are consistent with prior studies that emphasise the importance of ethical and environmentally responsible business practices in shaping customer behaviour. This study contributes to the existing literature by providing airline-specific empirical evidence on the distinct roles of CSR and sustainability in influencing customer loyalty and by highlighting customer satisfaction as a key mediating variable. From a managerial perspective, the findings suggest that airlines should strategically invest in CSR and sustainability initiatives and communicate these efforts transparently to enhance customer satisfaction and foster long- term customer loyalty. Overall, the study demonstrates that responsible airline practices are not only ethically important but also strategically beneficial for long-term organisational success