Impact of Aero-Financial Literacy and Passenger Satisfaction on Airline Repurchase Intention: A Mediating Role of Word-of-Mouth

Abstract

The airline industry operates on razor-thin margins, retaining barely US$7 of profit per passenger carried, which makes repeat purchase behavior a matter of commercial survival rather than marketing preference. The global airline industry has evolved from a service-oriented to a customer-oriented sector. Within this shift, passengers' ability to understand, evaluate and interpret airline fare structures, dynamic pricing, ancillary fees and cost–benefit trade-offs referred as Aero-Financial Literacy (AFL) increasingly shapes their loyalty and repurchase decisions. Grounded in expectation–confirmation paradigm, this study examines the direct effects of AFL and Passenger Satisfaction (PS) on Repurchase Intention (RI) and tests the mediating role of Word-of-Mouth (WOM) in transmitting these antecedents to repurchase behavior.  A quantitative, deductive, cross-sectional design was employed and data were collected from total 292 valid responses from frequent flyers (travelling at least 8–10 times per year) in Pakistan analyzed using PLS-SEM. The results reveal that PS and AFL each exerted significant positive direct effects on RI. AFL also exhibited a particularly strong direct effect on WOM which emerged as the strongest proximal predictor of RI. WOM significantly partially mediated both the PS–RI and AFL–RI relationships and the indirect effect of AFL through WOM exceeded its direct effect that indicating that the dominant mechanism through which financial literacy shapes airline repurchase is social rather than purely cognitive. These findings extend financial literacy theory into the aviation context and suggest that airlines in emerging markets prioritize fare-transparency communication and financial-education touchpoints, since these more strongly activate word-of-mouth advocacy than satisfaction management alone.

Keywords-Aero-Financial Literacy; Passenger Satisfaction; Word-of-Mouth; Repurchase Intention; Airline Marketing; PLS-SEM; Pakistan; Aviation Consumer Behavior