Traditional models that explain the nature of the relationship between cust
omer service quality and airline demand assume that the relationship can be
approximated by using smooth or differentiable curves. Suzuki and Tyworth,
however, recently argued that this assumption may not be valid, and that,
if it is invalid, the model performance can be improved by using non-smooth
functions to represent the relationship (Suzuki, Y., Tyworth, J.E., 1998.
A theoretical framework for modeling sales-service relationships in the tra
nsportation industry. Transportation Research E 34 (2), 87-100). We use the
ir framework to develop a model that represents the relationship between se
rvice quality and market share in the airline industry and then empirically
compare its performance with conventional airline demand models. The resul
ts indicate that the relationship is characterized by a non-smooth curve an
d that our model provides a significantly better goodness of fit than other
conventional demand models. (C) 2001 Elsevier Science Ltd. All rights rese
rved.