Exploring the green image of airlines: Passenger perceptions and airline choice

During the last few years there has been an increasing trend for companies to market their products or services as green or environmentally friendly as part of their corporate social responsibility. Few studies have analyzed the effects of this recent focus on the environment and its impact on airline passengers. Therefore, we examine passengers' general attitudes towards the green image of different airlines, perceived differences in eco-friendliness among these airlines, and effects on airline choice during booking. We also investigate how passengers' recent experiences with an airline affect perceived eco-friendliness of that airline. In addition we compare passenger ratings of airline eco-friendliness to those published by independent 3rd parties. Our findings show that the green image of airlines does influence airline choice during booking. We observed a passenger willingness to pay extra for a green image, however, not as much as their willingness to pay extra for amenities, such as additional legroom.     

Airline in-flight entertainment: the passengers’ perspective

Following relaxation of economic regulation in many aviation markets, the competition amongst airlines has intensified in recent years. This has resulted in improvements in airline products, especially in the in-flight services. One of the areas on which airlines have focused their attention is the provision of personal in-flight entertainment (IFE). In 1998, airlines spent $1.8 billion on IFE. However, the industry is faced with a number of questions in relation to such levels of investment: Are the investments justified? Does IFE influence passengers’ choice of airline? Does IFE have a revenue-generating potential? What does the future hold as far as the IFE services are concerned? This paper addresses these questions based on a passengers survey and literature review. The results indicate that while IFE is not amongst the primary factors affecting passengers’ choice, it contributes greatly to passengers’ satisfaction with airline services. While provision of IFE can currently act as a differentiating factor, in the future it will become part of passengers’ expectations. It has also become apparent that, while IFE has the potential to generate some revenue, it would not be enough to cover the total costs associated with the installation and running of IFE systems. The impact of IFE would be felt, indirectly, through increase in passenger loyalty which should have a positive impact on airline revenues.     

Airline services marketing by domestic and foreign firms: differences from the customers’ viewpoint

Based on a survey of 1014 passengers of five European airlines, this paper reveals differences between passengers on the Turkish domestic airline and those on four foreign airlines on the same flight destinations with respect to demographic profiles, behavioral characteristics, understanding of airline service dimensions, and satisfaction levels. Differences between the two passenger groups are highlighted in terms of age, sex, education, occupation, sector affiliation, location of domicile, travel purpose, travel frequency, service expectations, and satisfaction levels. It is concluded that the differences in consumer profiles and expectations are valuable clues for domestic and foreign airline firms in understanding their consumers and in designing their marketing strategies.     

The effect of frequent flyer programs: A case study of the Korean airline industry

Frequent flyer programs are important for airlines in Korea in their marketing of services. This paper develops a conceptual model to investigate the effect of such programs by examining the relationships them and, airline service quality, pricing, passenger satisfaction, airline image, and airline selection. Path analysis is used to analyze data collected from Korean international air passengers. The results show that frequent flyer programs have direct and indirect effects on pricing, passenger satisfaction, airline image, and airline selection. In addition, their effects on passengers' selections are significantly different between Korean and foreign airlines.     

Recovering costs through price and service differentiation: Accounting for exogenous information on attribute processing strategies in airline choice

The entry of low cost airlines has thrown out a challenge to all airlines to find ways of attracting passengers, through a mix of fare discounting, greater frequency, improved flight times and no-frill's levels of on-board service. These competitive strategies have an impact on cost recovery. As airlines seek business in an increasingly heterogeneous passenger market, a greater understanding of what matters to potential passengers in choosing an airline grows in importance. Traditional studies of passenger airline choice assume that all attributes matter, but some to a lesser extent. What happens to the empirical evidence on willingness to pay when specific attributes are totally ignored by particular passengers? In this paper, we examine the impact of individual-specific attribute processing strategies (APS) on the inclusion/exclusion of attributes on the parameter estimates and behavioural outputs of models of airline service and fare level choice. Modelling practice assumes that whilst respondents may exhibit preference heterogeneity, they employ a homogenous APS with regards to how they process the presence/absence of attributes of stated choice (SC) experiments. We demonstrate how information collected exogenous of the SC experiment on whether respondents either ignored or considered each attribute of the SC task may be used in the estimation process, and how such information may be used to provide outputs that are attribute processing strategies segment specific.     

Airline choice by passengers from Taiwan and China: A case study of outgoing passengers from Kaohsiung International Airport

Understanding what factors passengers consider when selecting an airline is critical, as airlines can utilize this information in market segmentation and marketing strategies. However, few studies have explored how passenger demographics and the nationality/type of carrier (full service or low-cost; regional or international) affect the choice factors of passengers when selecting airlines. The main objective of this study was to explore the airline choice factors considered by passengers, compare the choices of passengers with different demographics, and analyze which factors are emphasized by passengers from Taiwan and China when selecting airlines. We conducted a questionnaire survey of outgoing passengers at Kaohsiung International Airport in relation to 22 factors underlying their choice of airline. Using factor analysis, we identified the five factors: ground services, convenience, in-flight services, price, and travel availability. We then utilized cluster analysis to identify four groups, each concerned with price, comfort, convenience, and ground services, respectively. Nationality, age, income, flying frequency, and purpose of travel lead to differences in deciding which factors were considered by cross-strait passengers. Passengers of different nationalities concerned with different factors when selecting airlines. Our findings can add to the completeness of existing research as well as provide airlines with reference in developing marketing strategies for different customer groups.     

Text mining approach to explore dimensions of airline customer satisfaction using online customer reviews

The airline industry operates in a highly competitive market, in which achieving and maintaining a high level of passenger satisfaction is seen as a key competitive advantage. This study presents a novel framework for measuring customer satisfaction in the airline industry. Using text mining methods we explore Online Customer Reviews (OCRs) to provide guidelines for airlines companies to improve in competitiveness. We analyze a database of more than 55,000 OCRs, covering over 400 airlines and passengers from 170 countries. Using a Latent Dirichlet Allocation model we identified 27 dimensions of satisfaction described by 882 adjectives. Dimensions and adjectives were used to predict airline recommendation by customers, resulting in an accuracy of 79.95%. The most relevant dimensions for airlines' recommendation prediction were calculated. OCRs were stratified according to several variables. Of those, type of passenger impacted the least on the number of dimensions of customer satisfaction, while type of cabin flown impacted the most. Observing results in different publication years we showed airline customer trends through time. Our method showed sensitiveness to identify variations in dimensions distribution according to different passenger characteristics and preferences. Practical implications are that airline service providers aiming at maximizing customer satisfaction should focus their efforts on (i) customer service to first class passengers, (ii) comfort to premium economy passengers, and (iii) checking luggage and waiting time to economy class travelers. Regression analysis revealed cabin staff, onboard service and value for money as top three dimensions of satisfaction to predict the recommendation of airlines. Designing services that excel in those dimensions is likely to improve the company's performance with customers.     

Segmentation of passengers using full-service and low-cost carriers – Evidence from Taiwan

Low-cost carriers in Taiwan have rapidly drawn a large number of passengers away from full-service carriers in recent years. However, many passengers still stick with traditional airlines as their primary air carriers. These two groups of passengers should differ in terms of their personal and trip characteristics, valuations of factors in determining an airline, and perceptions of need for ancillary services. The present paper compares the profiles of passengers using different types of air services in Taiwan using data collected from an online survey and assesses the potential of principal component analysis with biplot technique to define different passengers based on their preferences of services and valuations of the importance of factors. Our study shows that passengers of full-service and low-cost carriers have different trip characteristics; principal component analysis is applicable for this context of passenger profile segmentations.     

Transformation of India's Domestic Airlines: A case study of Indian Airlines, Jet Airways, Air Sahara and Air Deccan

India, home to one-sixth of the world's population, is becoming one of the world's economic engines. Its bureaucratic and outdated regulatory policies have been reformed resulting in a three-fold increase in the number of scheduled airlines and a five-fold increase in the number of aircraft operated. This paper reviews how the new regulatory roadmap has transformed the supply of domestic air services. A large passenger survey conducted in Mumbai investigated the sensitivity of passengers to a change in fare and which flight products would encourage them to select either a full service airline or a low cost carrier. The study finds that there is a homogenous set of flight products required by leisure passengers, travelling on both full service and low cost airlines, however there is a considerable dissimilarity overall between the requirements of passengers using a full service airline and a low cost carrier.     

Managing valuable Taiwanese airline passengers using knowledge discovery in database techniques

Taiwanese domestic airline passenger loads have declined over the past decade, and the inauguration of the Taiwan high-speed rail service in 2007 has further intensified the competition facing the airlines. Gaining and retaining valuable passengers thus has become essential in maintaining domestic airline profits in the increasingly competitive transportation market. This study develops a knowledge discovery in database process, including the recency, frequency, and monetary model and the C5.0 decision tree. The former is used to assess passenger value, while C5.0 is used to mine demographic, travel behavior, and critical service quality information for valuable passengers. The results identify valuable passenger characteristics that can help Taiwanese airlines maximize their number and retention.     

Supply-and-demand models for exploring relationships between smaller airports and neighboring hub airports in the U.S.

Airport passenger leakage is the phenomenon of air passengers choosing to travel longer distances to access more extensive air services offered by airlines at an out-of-region hub (or, substitute) airport, instead of using their local airports. Airport leakage can cause further reduction in services offered by airlines at a local airport, thereby causing even further leakage, and so on, which can significantly impact an airport's role in the growth of the local economy. This paper explores the geographic and operational attributes of local-and-substitute airport pairs in the United States, explicitly accounting for the interactive feedback relationship between passenger volumes and air service characteristics that contribute to the onset, persistence, and exacerbation of airport passenger leakage. A two-stage least squares regression model of air passenger demand at small- and medium-sized airports is first presented, where local passengers may travel by vehicle to larger, out-of-region hub airports. The results confirm that airfare and passenger volume relationships exist between the local and substitute airport pairs included in the dataset, and that lower airfares at the substitute airport have a greater impact on airport choices made by larger travel groups. They also suggest the existence of positive feedback in that if an airport attracts increasingly smaller passenger numbers with fewer air services and fewer air services with fewer passengers, without external intervention airport leakage impacts may be irreversible and exacerbate over time. A conceptual market share equilibrium analysis is used to illustrate the mechanisms of a direct two-way feedback relationship between passenger volumes at a local airport and air service characteristics at both the local and substitute airports. With data, this quantitative framework can help guide airport planners in further assessing and verifying suspected passenger leakage issues at their airport. The results suggest that without intervention, airport leakage impacts may be difficult to reverse; further exacerbating the trend are technological advancements that make driving cheaper and easier (connected and autonomous vehicles). However, the results can also guide planners in choosing the types and degrees of infrastructure investments and airline incentives that may be used to expand or retain air services to attract passengers.     

An investigation into traveler preferences and acceptance levels of airline ancillary revenues

This study determines traveler preferences and acceptability levels for a range of airline ancillary products and services by employing an on-line passenger survey to examine booking preferences as well as attitudes toward a selection of air and non-air travel components sold by the airlines. The survey results are combined with expert opinions collated from a recent international conference, along with secondary data, to generate an acceptance ranking which can be used by a range of airlines to formulate their ancillary revenue strategies. It is found that airport car parking and checked baggage charges proved to be the most accepted commission based and unbundled products for airlines to sell respectively. Despite the recent focus and successes in ancillary revenues, however, it can also observed that none of the ancillary products and services examined in this study achieved a high take up rating suggesting that airlines can do much more to convince travelers of the benefit and value in airlines selling non-core products and services to them.     

Competing on value: Perspectives on business class aviation

This paper presents an airline consumer choice model to analyze value propositions – the benefits delivered to passengers in relation to the fares paid. The model is developed using a study of clientele flying business class, studying three premium start-up airlines Eos, MaxJet and Silverjet that provided business-class-only flights on London–New York routes. Premium airlines were compared to selected rival full-service carriers for sustainability of their business class value propositions, using preference profiles of five target customer groups that comprise the business class passenger population. We find that the three premium start-up airlines were superior in offering some appealing features at reasonable fares that were highly valued by some passengers, although they were unable to replicate some other attractive aspects in the value propositions of the incumbents. This suggests a coexistence of premium entrants and incumbent carriers would have been possible, had the environment they operated in not changed drastically for the worse, before the premium entrants had achieved the financial robustness necessary for survival.     

Peripheral market entry,product differentiation,supplier rents and sustainability in the deregulated European aviation market – a case study

Ryanair, in its net margin and passenger numbers compared with its national airline, is the most successful new airline in Europe. The history of the airline is examined briefly and the Ryanair product is analysed. The airline has developed a very low fare product with high staff productivity. It has also tackled costs to airlines of services such as airports, handling, reservations and ticket retailing. Ireland’s island location was an attractive base for a low cost airline and rapid traffic growth has resulted from Ryanair’s entry to the market. The paper examines the sustainability of the low fare Ryanair product in respect of passenger preference, labour markets, and external costs such as airports and reservations. The optimum regulatory environment for the successful operation of low cost airlines is examined in the light of the Ryanair experience.     

Investigating passengers’ intentions to use technology-based self check-in services

As more and more airlines have introduced technology-based self check-in services, it has become increasingly important to understand the factors affecting airline passengers’ attitudes toward this new form of check-in services and also their intentions, especially from Asian passengers’ perspectives. An empirical study was conducted among Taiwanese airline passengers using the technology acceptance model (TAM) as the basic research model while considering additional factors for further analysis such as external stimuli, perceived service quality, perceived behavioral control, need for service, and perceived risk. The findings revealed that attitude and external stimuli best explain passengers’ behavioral intentions to use the kiosks, whereas perceived usefulness and perceived ease of use have little effect on their intentions. These findings suggest that airlines in Taiwan should persuade passengers to acquire a more positive attitude toward the new check-in kiosks and should consider implementation of incentive strategies in encouraging passengers to adopt the self check-in service.     

An analysis of traveler need for and willingness to purchase airline dynamic packaging: A Korean case study

This study analyzes (1) the need among air travelers for commission-based ancillary products and services from airline websites via dynamic packaging and (2) the willingness to purchase them. For this purpose, a survey is conducted with 2030 airline customers in Korea. This study aims to provide insights into Korean traveler preference to enable airlines serving Korean customers to formulate and implement successful business strategies that incorporate dynamic packaging into airline websites to expand ancillary revenues. The results confirm that Korean travelers demonstrate the need for and willingness to purchase commission-based ancillaries when purchasing tickets from airlines. On average, commission-based ancillary products are positively received by respondents. Airport transfers (e.g. rail and shuttle services), foreign currency exchange offers, and travel insurance are the most popular. Female travelers, travelers in their 20s, and frequent travelers (10 + times a year) report a significantly higher need for and willingness to purchase a set of commission-based ancillaries with flights from airline websites. Willingness to purchase third-party products from airlines is higher than in previous studies, and the preference rankings also differ. This study supports the viability of commission-based ancillary offerings from airline websites targeting Korean travelers. It shows the potential for airlines to successfully upsell and cross-sell via dynamic packaging strategies, one of the first steps toward becoming competitive travel retailers.     

Passenger perceptions of service quality: Korean and Australian case studies

This paper investigates air passengers’ perceptions of 11 factors that may influence their buying behaviour namely, in-flight service, reservation-related service, airport service, reliability, employee service, flight availability, perceived price, passenger satisfaction, perceived value, airline image, and overall service quality. Analysis of variance and an independent sample t-test are applied to data collected from Korean and Australian international air passengers. The results reveal that passenger perceptions are significantly different across airlines, seat classes, and usage frequencies.     

Assessing the effects of perceived value (utilitarian and hedonic) in LCCs and FSCs: Evidence from South Korea

In the airline industry, passengers choose and buy service based on their perception of which airline delivers better value. Thus, it is important to compare two types of airlines, Low Cost Carriers (LCCs) and Full Service Carriers (FSCs), to measure how much their product or service is worth and the effect of perceived value on passengers' purchase decisions. This study examined the relationship between perceived value, satisfaction, and purchase intention in both FSCs and LCCs. Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM) were performed for data analysis. Our findings reveal that passenger satisfaction in LCCs is affected by hedonic value and utilitarian value, but passengers' future purchase intention is not dependent on satisfaction even when passengers are satisfied. In FSCs, moreover, utilitarian value is not a significant factor for satisfaction and purchase intention. This research provides implications for airline marketers and directions for future research.     

Focusing on the big picture while observing the concerns of both managers and passengers in the post-covid era

This study reveals how to improve and define the issues of service quality in the airline sector after the outbreak of COVID-19, to what extent customer needs (important issues) and expectations (expected performances) will differ, and the priorities of airline sector managers in terms of resource allocation, costs, planned strategies, and operational efficiency and effectiveness. It offers a systematic and interactive perspective by simultaneously providing the perspective of both airline managers and passengers by using a new hybrid method, namely Fuzzy Importance, Expected Performance, and Priority Analysis (FIEPA) with VIKOR. This method allows the use of different perspectives of different managers in the analysis, which can be prioritized with different weights. According to the results of the study, in which 449 passengers participated on Twitter, the attributes on which airline managers should focus were determined, having three distinctive characteristics of being important for customers, having high priority according managers, and having low expected performance according customers. Twenty-two attributes related to the service quality of airlines during outbreak periods were classified into three main dimensions as “social distance and hygiene during flight”, “information awareness and concern”, and “infection alert procedure”.     

Exploring passenger preferences in airline service attributes: A note

This paper examines passengers' valuations on airline service attributes using stated preference analysis in the direct flight air market between Taiwan and China. An experiment design reflecting the characteristics of low cost airlines is used to collect stated preference data from Taiwanese air passengers. Empirical results reveal not only the implicit values of service attributes but also the preference differences in attributes between business and non-business travelers.