Airlines industry has played an important role in the global economy, since this industry supported other industries such as tourism, international business, and many other industry sector. This has caused high competition between airline companies. Therefore, airline company adapted competitive strategy to fulfill passenger’s need, one of the strategy is to increase their service quality. Airline companies strive to find ways to improve their service quality to gain competitive advantage and passenger satisfaction. Moreover, price also become an important factor for passenger in their behavioral intention. The purpose of this study is to analyze the impact airline service quality (including reliability, responsiveness, assurance, empathy, tangibles) towards passenger satisfaction, perceived value and word of mouth, and also analyze the moderating role of price sensitivity. The analysis is conducted with Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM) using SPSS AMOS. This study proves that service quality significantly affecting passenger’s satisfaction, perceived value, and word of mouth. This study also found out that airline company need to pay more attention in empathy dimension. The moderating role of price sensitivity affect the relationship between service quality and perceived value, and passenger satisfaction and word of mouth.

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