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The Effects of Perceived Quality Factors on the Customer Loyalty: Focused on the Analysis of Difference between PB and NB (지각된 품질요인이 고객충성도에 미치는 영향: PB와 NB간의 차이분석)

  • Ye, Jong-Suk;Jun, So-Yon
    • Journal of Distribution Research
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    • v.15 no.2
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    • pp.1-34
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    • 2010
  • Introduction As consumers' purchase behavior change into a rational and practical direction, the discount store industry came to have keen competition along with rapid external growth. Therefore as a solution, distribution businesses are concentrating on developing PB(Private Brand) which can realize differentiation and profitability at the same time. And as improvement in customer loyalty beyond customer satisfaction is effective in surviving in an environment with keen competition, PB is being used as a strategic tool to improve customer loyalty. To improve loyalty among PB users, it is necessary to develop PB by examining properties of a customer group, first of all, quality level perceived by consumers should be met to obtain customer satisfaction and customer trust and consequently induce customer loyalty. To provide results of systematic analysis on relations between antecedents influenced perceived quality and variables affecting customer loyalty, this study proposed a research model based on causal relations verified in prior researches and set 16 hypotheses about relations among 9 theoretical variables. Data was collected from 400 adult customers residing in Seoul and the Metropolitan area and using large scale discount stores, among them, 375 copies were analyzed using SPSS 15.0 and Amos 7.0. The findings of the present study followed as; We ascertained that the higher company reputation, brand reputation, product experience and brand familiarity, the higher perceived quality. The study also examined the higher perceived quality, the higher customer satisfaction, customer trust and customer loyalty. The findings showed that the higher customer satisfaction and customer trust, the higher customer loyalty. As for moderating effects between PB and NB in terms of influences of perceived quality factors on perceived quality, we can ascertain that PB was higher than NB in the influences of company reputation on perceived quality while NB was higher than PB in the influences of brand reputation and brand familiarity on perceived quality. These results of empirical analysis will be useful for those concerned to do marketing activities based on a clearer understanding of antecedents and consecutive factors influenced perceived quality. At last, discussions about academical and managerial implications in these results, we suggested the limitations of this study and the future research directions. Research Model and Hypotheses Test After analyzing if antecedent variables having influence on perceived quality shows any difference between PB and NB in terms of their influences on them, the relation between variables that have influence on customer loyalty was determined as Figure 1. We established 16 hypotheses to test and hypotheses are as follows; H1-1: Perceived price has a positive effect on perceived quality. H1-2: It is expected that PB and NB would have different influence in terms of perceived price on perceived quality. H2-1: Company reputation has a positive effect on perceived quality. H2-2: It is expected that PB and NB would have different influence in terms of company reputation on perceived quality. H3-1: Brand reputation has a positive effect on perceived quality. H3-2: It is expected that PB and NB would have different influence in terms of brand reputation on perceived quality. H4-1: Product experience has a positive effect on perceived quality. H4-2: It is expected that PB and NB would have different influence in terms of product experience on perceived quality. H5-1: Brand familiarity has a positive effect on perceived quality. H5-2: It is expected that PB and NB would have different influence in terms of brand familiarity on perceived quality. H6: Perceived quality has a positive effect on customer satisfaction. H7: Perceived quality has a positive effect on customer trust. H8: Perceived quality has a positive effect on customer loyalty. H9: Customer satisfaction has a positive effect on customer trust. H10: Customer satisfaction has a positive effect on customer loyalty. H11: Customer trust has a positive effect on customer loyalty. Results from analyzing main effects of research model is shown as

    , and moderating effects is shown as
    . Results This study is designed with 16 research hypotheses, Results from analyzing their main effects show that 9 of 11 hypotheses were supported and other 2 hypotheses were rejected. On the other hand, results from analyzing their moderating effects show that 3 of 5 hypotheses were supported and other 2 hypotheses were rejected. H1-1: (SPC: Standardized Path Coefficient)=-0.04, t-value=-1.04, p>. 05). H1-2: (${\Delta}\chi^2$=1.10, df=1, p> 0.05). H1-1 and H1-2 are rejected, so it is prove that perceived price is not a significant decision variable having influence on perceived quality and there is no significant variable between PB and NB in terms of influence of perceived price on perceived quality. H2-1: (SPC=0.31, t-value=3.74, p<. 001). H2-2: (${\Delta}\chi^2$=3.93, df=1, p< 0.05). H2-1 and H2-2 are supported, so it is proved that company reputation is a significant decision variable having influence on perceived quality and, in terms of influence of company reputation on perceived quality, PB has relatively stronger influence than NB. H3-1: (SPC=0.26, t-value=5.30, p< .001). H3-2: (${\Delta}\chi^2$=16.81, df=1, p< 0.01). H3-1 and H3-2 are supported, so it is proved that brand reputation is a significant decision variable having influence on perceived quality and, in terms of influence of brand reputation on perceived quality, NB has relatively stronger influence than PB. H4-1: (SPC=0.31, t-value=2.65, p< .05). H4-2: (${\Delta}\chi^2$=1.26, df=1, p> 0.05). H4-1 is supported, but H4-2 is rejected, Therefore, it is proved that product experience is a significant decision variable having influence on perceived quality and, on the other hand, there is no significant different between PB and NB in terms of influence of product experience on product quality. H5-1: (SPC=0.24, t-value=3.00, p<. 05). H5-2: (${\Delta}\chi^2$=5.10, df=1, p< 0.05). H5-1 and H5-2 are supported, so it is proved that brand familiarity is a significant decision variable having influence on perceived quality and, in terms of influence of brand familiarity on perceived quality, NB has relatively stronger influence than PB. H6: (SPC=0.91, t-value=19.06, p< .001). H6 is supported, so a fact that customer satisfaction increases as perceived quality increases is proved. H7: (SPC=0.81, t-value=7.44, p<. 001). H7 is supported, so a fact that customer trust increases as perceived quality increases is proved. H8: (SPC=0.57, t-value=7.87, p< .001). H8 is supported, so a fact that customer loyalty increases as perceived quality increases is proved. H9: (SPC=0.08, t-value=0.76, p> .05). H9 is rejected, so it is proved influence of customer satisfaction on customer trust is not significant. H10: (SPC=0.21, t-value=4.34, p< .001). H10 is supported, so a fact that customer loyalty increases as customer satisfaction increases is proved. H11: (SPC=0.40, t-value=5.68, p< .001). H11 is supported, so a fact that customer loyalty increases as customer trust increases is proved. Implications Although most of existing studies have used function, price, brand, design, service, brand name, store name as antecedent variables for perceived quality, this study used different antecedent variables in order to analyze and distinguish purchase group PB and NB through preliminary research. Therefore, this study may be used as preliminary data for a empirical study that is designed to be helpful for practical jobs. Also, this study is made to be easily applied to any practical job because SEM(Structural Equation Modeling), most strongly explaining the relation between observed variable and latent variable, is used for this study. This study suggests a new strategic point that, in order to increase customer loyalty, customer's perceived quality level should satisfied for inducing customer satisfaction, customer trust, and customer loyalty. Therefore, after finding an effective differentiating factors in perceived quality in order to increase customer loyalty through increasing perceived quality, this factor was made to be applied to PB and NB. Because perceived quality factors which is recognized as being important by consumers is different between PB and NB, this study suggests how to efficiently establish marketing strategy by enhancing a factor. Companies have mostly focused on profitability in terms of analyzing customer loyalty, but this study included positive WOM(word of mouth). Hence, this study suggests that it would be helpful for establishing customer loyalty when consumers have cognitive satisfaction and emotional satisfaction together. Limitations This study used variables perceived price, company reputation, brand reputation, product experience, brand familiarity in order to determine whether each constituent factor has different influence on perceived quality between purchase group PB and NB. These characteristic variables are made up on the basis of the preliminary research, but it is expected that more precise research result would be obtained if additional various variables are included in study. This study selected a practical product that is non-durable, low-priced and bestselling product in a discount store through the preliminary research because it can be easily estimated by consumers. Therefore. generalization of study would be more easily obtained if more various product characteristics is included. Regarding a sample used in this study, it was only based on consumers who purchase products in a large-scale discount store located in Seoul and in the capital area. Accordingly, this sample has some geographical limitation, If a study is expanded by including more areas, more representative research results may be produced. Because this study is only designed to analyze consumers who purchase a product in a large-scale discount store, some difference may be found according to characteristics of each business type. In other words, there is certainly some application limitation, so research result from this study may not be applied to other business types. Future research may have fruitful results if it adjusts a variable to each business type.

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  • Studies on Relations between Various Coeffcients of Evapo-Transpiration and Quantities of Dry Matters for Tall-and Short Statured Varieties of Paddy Rice (논벼 장.단간품종의 증발산제계수와 건물량과의 관계에 대한 연구(I))

    • 류한열;김철기
      • Magazine of the Korean Society of Agricultural Engineers
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      • v.16 no.2
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      • pp.3361-3394
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      • 1974
    • The purpose of this thesis is to disclose some characteristics of water consumption in relation to the quantities of dry matters through the growing period for two statured varieties of paddy rice which are a tall statured variety and a short one, including the water consumption during seedling period, and to find out the various coefficients of evapotranspiration that are applicable for the water use of an expected yield of the two varieties. PAL-TAL, a tall statured variety, and TONG-lL, a short statured variety were chosen for this investigation. Experiments were performed in two consecutive periods, a seedling period and a paddy field period, In the investigation of seedling period, rectangular galvanized iron evapotranspirometers (91cm${\times}$85cm${\times}$65cm) were set up in a way of two levels (PAL-TAL and TONG-lL varieties) with two replications. A standard fertilization method was applied to all plots. In the experiment of paddy field period, evapotanspiration and evaporation were measured separately. For PAL-TAL variety, the evapotranspiration measurements of 43 plots of rectangular galvanized iron evapotranspirometer (91cm${\times}$85cm${\times}$65cm) and the evaporation measurements of 25 plots of rectangular galvanized iron evaporimeter (91cm${\times}$85cm${\times}$15cm) have been taken for seven years (1966 through 1972), and for TONG-IL variety, the evapotranspiration measurements of 19 plots and the evaporation measurements of 12 plots have been collected for two years (1971 through 1972) with five different fertilization levels. The results obtained from this investigation are summarized as follows: 1. Seedling period 1) The pan evaporation and evapotranspiration during seedling period were proved to have a highly significant correlation to solar radiation, sun shine hours and relative humidity. But they had no significant correlation to average temperature, wind velocity and atmospheric pressure, and were appeared to be negatively correlative to average temperature and wind velocity, and positively correlative to the atmospheric pressure, in a certain period. There was the highest significant correlation between the evapotranspiration and the pan evaporation, beyond all other meteorological factors considered. 2) The evapotranpiration and its coefficient for PAL-TAL variety were 194.5mm and 0.94∼1.21(1.05 in average) respectively, while those for TONG-lL variety were 182.8mm and 0.90∼1.10(0.99 in average) respectively. This indicates that the evapotranspiration for TONG-IL variety was 6.2% less than that for PAL-TAL variety during a seedling period. 3) The evapotranspiration ratio (the ratio of the evapotranspiration to the weight of dry matters) during the seedling period was 599 in average for PAL-TAL variety and 643 for TONG-IL variety. Therefore the ratio for TONG-IL was larger by 44 than that for PAL-TAL variety. 4) The K-values of Blaney and Criddle formula for PAL-TAL variety were 0.78∼1.06 (0.92 in average) and for TONG-lL variety 0.75∼0.97 (0.86 in average). 5) The evapotranspiration coefficient and the K-value of B1aney and Criddle formular for both PAL-TAL and TONG-lL varieties showed a tendency to be increasing, but the evapotranspiration ratio decreasing, with the increase in the weight of dry matters. 2. Paddy field period 1) Correlation between the pan evaporation and the meteorological factors and that between the evapotranspiration and the meteorological factors during paddy field period were almost same as that in case of the seedling period (Ref. to table IV-4 and table IV-5). 2) The plant height, in the same level of the weight of dry matters, for PAL-TAL variety was much larger than that for TONG-IL variety, and also the number of tillers per hill for PAL-TAL variety showed a trend to be larger than that for TONG-IL variety from about 40 days after transplanting. 3) Although there was a tendency that peak of leaf-area-index for TONG-IL variety was a little retarded than that for PAL-TAL variety, it appeared about 60∼80 days after transplanting. The peaks of the evapotranspiration coefficient and the weight of dry matters at each growth stage were overlapped at about the same time and especially in the later stage of growth, the leaf-area-index, the evapotranspiration coefficient and the weight of dry matters for TONG-IL variety showed a tendency to be larger then those for PAL-TAL variety. 4) The evaporation coefficient at each growth stage for TONG-IL and PAL-TALvarieties was decreased and increased with the increase and decrease in the leaf-area-index, and the evaporation coefficient of TONG-IL variety had a little larger value than that of PAL-TAL variety. 5) Meteorological factors (especially pan evaporation) had a considerable influence to the evapotranspiration, the evaporation and the transpiration. Under the same meteorological conditions, the evapotranspiration (ET) showed a increasing logarithmic function of the weight of dry matters (x), while the evaporation (EV) a decreasing logarithmic function of the weight of dry matters; 800kg/10a x 2000kg/10a, ET=al+bl logl0x (bl>0) EV=a2+b2 log10x (a2>0 b2<0) At the base of the weight of total dry matters, the evapotranspiration and the evaporation for TONG-IL variety were larger as much as 0.3∼2.5% and 7.5∼8.3% respectively than those of PAL-TAL variety, while the transpiration for PAL-TAL variety was larger as much as 1.9∼2.4% than that for TONG-IL variety on the contrary. At the base of the weight of rough rices the evapotranspiration and the transpiration for TONG-IL variety were less as much as 3.5% and 8.l∼16.9% respectively than those for PAL-TAL variety and the evaporation for TONG-IL was much larger by 11.6∼14.8% than that for PAL-TAL variety. 6) The evapotranspiration coefficient, the evaporation coefficient and the transpiration coefficient and the transpiration coefficient were affected by the weight of dry matters much more than by the meteorological conditions. The evapotranspiratioa coefficient (ETC) and the evaporation coefficient (EVC) can be related to the weight of dry matters (x) by the following equations: 800kg/10a x 2000kg/10a, ETC=a3+b3 logl0x (b3>0) EVC=a4+b4 log10x (a4>0, b4>0) At the base of the weights of dry matters, 800kg/10a∼2000kg/10a, the evapotranspiration coefficients for TONG-IL variety were 0.968∼1.474 and those for PAL-TAL variety, 0.939∼1.470, the evaporation coefficients for TONG-IL variety were 0.504∼0.331 and those for PAL-TAL variety, 0.469∼0.308, and the transpiration coefficients for TONG-IL variety were 0.464∼1.143 and those for PAL-TAL variety, 0.470∼1.162. 7) The evapotranspiration ratio, the evaporation ratio (the ratio of the evaporation to the weight of dry matters) and the transpiration ratio were highly affected by the meteorological conditions. And under the same meteorological condition, both the evapotranspiration ratio (ETR) and the evaporation ratio (EVR) showed to be a decreasing logarithmic function of the weight of dry matters (x) as follows: 800kg/10a x 2000kg/10a, ETR=a5+b5 logl0x (a5>0, b5<0) EVR=a6+b6 log10x (a6>0 b6<0) In comparison between TONG-IL and PAL-TAL varieties, at the base of the pan evaporation of 343mm and the weight of dry matters of 800∼2000kg/10a, the evapotranspiration ratios for TONG-IL variety were 413∼247, while those for PAL-TAL variety, 404∼250, the evaporation ratios for TONG-IL variety were 197∼38 while those for PAL-TAL variety, 182∼34, and the transpiration ratios for TONG-IL variety were 216∼209 while those for PAL-TAL variety, 222∼216 (Ref. to table IV-23, table IV-25 and table IV-26) 8) The accumulative values of evapotranspiration intensity and transpiration intensity for both PAL-TAL and TONG-IL varieties were almost constant in every climatic year without the affection of the weight of dry matters. Furthermore the evapotranspiration intensity appeared to have more stable at each growth stage. The peaks of the evapotranspiration intensity and transpiration intensity, for both TONG-IL and PAL-TAL varieties, appeared about 60∼70 days after transplanting, and the peak value of the former was 128.8${\pm}$0.7, for TONG-IL variety while that for PAL-TAL variety, 122.8${\pm}$0.3, and the peak value of the latter was 152.2${\pm}$1.0 for TONG-IL variety while that for PAL-TAL variety, 152.7${\pm}$1.9 (Ref.to table IV-27 and table IV-28) 9) The K-value in Blaney & Criddle formula was changed considerably by the meteorological condition (pan evaporation) and related to be a increasing logarithmic function of the weight of dry matters (x) for both PAL-TAL and TONG-L varieties as follows; 800kg/10a x 2000kg/10a, K=a7+b7 logl0x (b7>0) The K-value for TONG-IL variety was a little larger than that for PAL-TAL variety. 10) The peak values of the evapotranspiration coefficient and k-value at each growth stage for both TONG-IL and PAL-TAL varieties showed up about 60∼70 days after transplanting. The peak values of the former at the base of the weights of total dry matters, 800∼2000kg/10a, were 1.14∼1.82 for TONG-IL variety and 1.12∼1.80, for PAL-TAL variety, and at the base of the weights of rough rices, 400∼1000 kg/10a, were 1.11∼1.79 for TONG-IL variety and 1.17∼1.85 for PAL-TAL variety. The peak values of the latter, at the base of the weights of total dry matters, 800∼2000kg/10a, were 0.83∼1.39 for TONG-IL variety and 0.86∼1.36 for PAL-TAL variety and at the base of the weights of rough rices, 400∼1000kg/10a, 0.85∼1.38 for TONG-IL variety and 0.87∼1.40 for PAL-TAL variety (Ref. to table IV-18 and table IV-32) 11) The reasonable and practicable methods that are applicable for calculating the evapotranspiration of paddy rice in our country are to be followed the following priority a) Using the evapotranspiration coefficients based on an expected yield (Ref. to table IV-13 and table IV-18 or Fig. IV-13). b) Making use of the combination method of seasonal evapotranspiration coefficient and evapotranspiration intensity (Ref. to table IV-13 and table IV-27) c) Adopting the combination method of evapotranspiration ratio and evapotranspiration intensity, under the conditions of paddy field having a higher level of expected yield (Ref. to table IV-23 and table IV-27). d) Applying the k-values calculated by Blaney-Criddle formula. only within the limits of the drought year having the pan evaporation of about 450mm during paddy field period as the design year (Ref. to table IV-32 or Fig. IV-22).

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    Liability of the Compensation for Damage Caused by the International Passenger's Carrier by Air in Montreal Convention (몬트리올조약에 있어 국제항공여객운송인의 손해배상책임)

    • Kim, Doo-Hwan
      • The Korean Journal of Air & Space Law and Policy
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      • v.18
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      • pp.9-39
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      • 2003
    • The rule of the Warsaw Convention of 1929 are well known and still being all over the world. The Warsaw Convention is undoubtedly the most widely accepted private international air law treaty with some 140 countries. In the international legal system for air transportation, the Warsaw Convention has played a major role for more than half century, and has been revised many times in consideration of the rapid developments of air high technology, changes of social and economic circumstances, need for the protection of passengers. Some amendments became effective, but others are still not effective. As a result, the whole international legal system for air transportation is at past so complicated and tangled. However, the 'Warsaw system' consists of the Warsaw Convention of 1929 the Guadalajara Convention of 1961, a supplementary convention, and the following six protocols: (1) the Hague Protocol of 1955, (2) the Guatemala Protocol of 1971, (3) the Montreal Additional Protocols, No.1, (4) the Montreal Additional Protocol No.2, (5) the Montreal Additional Protocol No.3, and (6) the Montreal Additional Protocol No.4. of 1975. As a fundamental principle of the air carrier's liability in the international convention and protocols, for instance in the Warsaw Convention and the Hague Protocol, the principle of limited liability and a presumed fault system has been adopted. Subsequently, the Montreal Inter-carrier Agreement of 1966, the Guatemala City Protocol, the Montreal Additional Protocol No.3, and the Montreal Additional Protocol No. 4 of 1975 maintained the limited liability, but substituted the presumed liability system by an absolute liability, that is, strict liability system. The Warsaw System, which sets relatively low compensation limits for victims of aircraft accidents and regulates the limited liability for death and injury of air passengers, had become increasingly outdated. Japanese Airlines and Inter-carrier Agreement of International Air Transport Association in 1995 has been adopted the unlimited liability of air carrier in international flight. The IATA Inter-Carrier Agreement, in which airlines in international air transportation agree to waive the limit of damages, was long and hard in coming, but it was remarkable achievement given the political and economic realities of the world. IATA deserves enormous credit for bringing it about. The Warsaw System is controversial and questionable. In order to find rational solution to disputes between nations which adopted differing liability systems in international air transportation, we need to reform the liability of air carriers the 'Warsaw system' and fundamentally, to unify the liability system among the nations. The International Civil Aviation Organization(ICAO) will therefore reinforce its efforts to further promote a legal environment that adequately reflects the public interest and the needs of the parties involved. The ICAO Study Group met in April, 1998, together with the Drafting Committee. The time between the "Special Group on the Modernization and Consolidation of the 'Warsaw system'(SGMW)" and the Diplomatic Conference must be actively utilized to arrange for profound studies of the outstanding issues and for wide international consultations with a view to narrowing the scope of differences and preparing for a global international consensus. From 11 to 28 May 1999 the ICAO Headquarters at Montreal hosted a Diplomatic Conference convened to consider, with a view to adoption, a draft Convention intended to modernize and to integrate replace the instruments of the Warsaw system. The Council of ICAO convened this Conference under the Procedure for the Adoption of International Conventions. Some 525 participants from 121 Contracting States of ICAO attended, one non-contracting State, 11 observer delegations from international organizations, a total of 544 registered participants took part in the historic three-week conference which began on 10 May. The Conference was a success since it adopted a new Convention for the Unification of Certain Rules for International Carriage by Air. The 1999 Montreal Convention, created and signed by representatives of 52 countries at an international conference convened by ICAO at Montreal on May 28, 1999, came into effect on November 4, 2003. Representatives of 30 countries have now formally ratified the Convention under their respective national procedures and ratification of the United States, which was the 30th country to ratify, took place on September 5, 2003. Under Article 53.6 of the Montreal Convention, it enters into force on the 60th day following the deposit of the 30th instrument of ratification or acceptation. The United States' ratification was deposited with ICAO on September 5, 2003. The ICAO have succeeded in modernizing and consolidating a 70-year old system of international instruments of private international law into one legal instrument that will provide, for years to come, an adequate level of compensation for those involved in international aircraft accidents. An international diplomatic conference on air law by ICAO of 1999 succeeded in adopting a new regime for air carrier liability, replacing the Warsaw Convention and five other related legal instruments with a single convention that provided for unlimited liability in relation to passengers. Victims of international air accidents and their families will be better protected and compensated under the new Montreal Convention, which modernizes and consolidates a seventy-five year old system of international instruments of private international law into one legal instrument. A major feature of the new legal instrument is the concept of unlimited liability. Whereas the Warsaw Convention set a limit of 125,000 Gold Francs (approximately US$ 8,300) in case of death or injury to passengers, the Montreal Convention introduces a two-tier system. The first tier includes strict liability up to l00,000 Special Drawing Rights (SDR: approximately US$ 135,000), irrespective of a carrier's fault. The second tier is based on presumption of fault of a carrier and has no limit of liability. The 1999 Montreal Convention also includes the following main elements; 1. In cases of aircraft accidents, air carriers are called upon to provide advance payments, without delay, to assist entitled persons in meeting immediate economic needs; the amount of this initial payment will be subject to national law and will be deductable from the final settlement; 2. Air carriers must submit proof of insurance, thereby ensuring the availability of financial resources in cases of automatic payments or litigation; 3. The legal action for damages resulting from the death or injury of a passenger may be filed in the country where, at the time of the accident, the passenger had his or her principal and permanent residence, subject to certain conditions. The new Montreal Convention of 1999 included the 5th jurisdiction - the place of residence of the claimant. The acceptance of the 5th jurisdiction is a diplomatic victory for the US and it can be realistically expected that claimants' lawyers will use every opportunity to file the claim in the US jurisdiction - it brings advantages in the liberal system of discovery, much wider scope of compensable non-economic damages than anywhere else in the world and the jury system prone to very generous awards. 4. The facilitation in the recovery of damages without the need for lengthy litigation, and simplification and modernization of documentation related to passengers. In developing this new Montreal Convention, we were able to reach a delicate balance between the needs and interests of all partners in international civil aviation, States, the travelling public, air carriers and the transport industry. Unlike the Warsaw Convention, the threshold of l00,000 SDR specified by the Montreal Convention, as well as remaining liability limits in relation to air passengers and delay, are subject to periodic review and may be revised once every five years. The primary aim of unification of private law as well as the new Montreal Convention is not only to remove or to minimize the conflict of laws but also to avoid conflict of jurisdictions. In order to find a rational solution to disputes between nations which have adopted differing liability systems in international air transport, we need fundamentally to reform their countries's domestic air law based on the new Montreal Convention. It is a desirable and necessary for us to ratify rapidly the new Montreal Convention by the contracting states of lCAO including the Republic of Korea. According to the Korean and Japanese ideas, airlines should not only pay compensation to passengers immediately after the accident, but also the so-called 'condolence' money to the next of kin. Condolence money is a gift to help a dead person's spirit in the hereafter : it is given on account of the grief and sorrow suffered by the next of kin, and it has risen considerably over the years. The total amount of the Korean and Japanese claims in the case of death is calculated on the basis of the loss of earned income, funeral expenses and material demage (baggage etc.), plus condolence money. The economic and social change will be occurred continuously after conclusion of the new Montreal Convention. In addition, the real value of life and human right will be enhanced substantially. The amount of compensation for damage caused by aircraft accident has increased in dollar amount as well as in volume. All air carrier's liability should extend to loss of expectation of leisure activities, as well as to damage to property, and mental and physical injuries. When victims are not satisfied with the amount of the compensation for damage caused by aircraft accident for which an airline corporation is liable under the current liability system. I also would like to propose my opinion that it is reasonable and necessary for us to interpret broadly the meaning of the bodily injury on Article 17 of the new Montreal Convention so as to be included the mental injury and condolence. Furthermore, Korea and Japan has not existed the Air Transport Act regulated the civil liability of air carrier such as Air Transport Act (Luftverkehrsgestz) in Germany. It is necessary for us to enact "the Korean Air Transport Contract Act (provisional title)" in order to regulate the civil liability of air carrier including the protection of the victims and injured persons caused by aircraft accident.

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