An analysis of traveler need for and willingness to purchase airline dynamic packaging: A Korean case study |
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| Affiliation: | 1. College of Business and Administration, University of New Orleans, New Orleans, LA 70148, USA;2. Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA;1. Department of Management, Information and Production Engineering, University of Bergamo, Via Pasubio 7, 24044 Dalmine, BG, Italy;2. Robert H. Smith School of Business, University of Maryland, College Park, MD 20742, USA;1. School of Earth and Planetary Sciences, Curtin University, GPO Box U1987, Perth, Western Australia, 6845, Australia;2. School of Public Health, Curtin University, GPO Box U1987, Perth, Western Australia, 6845, Australia;3. Department of Transport, P.O. Box C102, Perth, WA, 6839, Australia;4. School of Occupational Therapy and Social Work, Curtin University, GPO Box U1987, Perth, Western Australia, 6845, Australia |
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| Abstract: | 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. |
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| Keywords: | Airline profitability Airline retail Ancillary revenue Commission-based ancillary Dynamic packaging |
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