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Investigating business traveller heterogeneity: Low-cost vs full-service airline users?
Institution:1. London School of Economics, Houghton Street, London WC2A 2AE, UK;2. EBAPE – Fundacao Getulio Vargas, Praia de Botafogo, 190, Rio de Janeiro, RJ 22250-900, Brazil;1. Department Strategy, Toulouse Business School, 31068 Toulouse, France;2. Faculty of Commerce and Business Administration, University of British Columbia, 2053 Main Mall, Vancouver, BC, V6T 1Z2, Canada;3. Federal University of Rio de Janeiro, Brazilian Institute of Strategic Studies and Public Policies in Air Transport (CEPTA), Brazil;1. Animal and Plant Sciences, University of Sheffield, S10 2TN, UK;2. Institute for Chemistry and Biology of the Marine Environment, CvO University of Oldenburg, 26111 Oldenburg, Germany;1. Carl von Ossietzky University of Oldenburg, Center of Interface Science (CIS), Department of Pure and Applied Chemistry, D-26111 Oldenburg, Germany;2. Department of Physical Chemistry and Electrochemistry, Faculty of Chemistry, Jagiellonian University, ul. R. Ingardena 3, 30-060 Krakow, Poland;3. Structure et Réactivité des Systèmes Moléculaires Complexes, UMR CNRS 7565, Faculté des Sciences et Techniques, Université de Lorraine, 54506 Vand?uvre-lès-Nancy, France;1. University of Bristol, Faculty of Engineering, Merchant Venturers Building, BS8 1UB, United Kingdom;2. CvO University Oldenburg, ICBM, Carl-von-Ossietzky-Strasse 9-11, 26111 Oldenburg, Germany
Abstract:This paper investigates business traveller heterogeneity using data from a survey carried out amongst airline passengers. Traditional methods employed are usually based on mean responses, thus providing an incomplete picture of what business travellers perceive to be the main sources of differentiation in the airline industry. Factor analysis was used to find types of travellers through grouping of preferred attributes. Then, ordered discrete response methods were used to assess which attributes are perceived in a different way by the two types of travellers identified by factor analysis, controlling for route and passenger characteristics. The results show that a substantial portion of business travellers, who previously did not fly for business reasons, use low-cost air services. Furthermore, after having experienced the low-cost product, business passengers tend to reassess the valuation of some attributes in a way which is more favourable to the LCC. Hence, we conclude that LCC marketing strategies should be aimed at getting business travellers to experience the low-cost product.
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