Consumer willingness to pay for in-flight service and comfort levels: A choice experiment

Balcombe, Kelvin; Fraser, Iain; Harris, Liam

doi:10.1016/j.jairtraman.2008.12.005

Cited by 94 publications

(77 citation statements)

References 12 publications

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“…Besides, neither can the needs and expectations of the target groups be neglected when considering strategic adaptations. For example, the study of Balcombe, Fraser and Harris (2009) shows that customers of network carriers search for high-quality air transportation with certain services included and are also willing to pay for it. Consequently, there is no need for these airlines to concentrate on lowering their ticket prices, but rather they should focus on offering their target groups an appropriate service of air transportation, which best meets their needs and expectations.…”

Section: Discussionmentioning

confidence: 99%

State of the art of pricing policy in air transportation: network carriers vs. low-cost airlines

Wehner

López-Bonilla

et al. 2018

Tour Manage Stud

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The modern air transport industry is highly competitive. To survive in the market, the implementation of a successful marketing strategy is fundamental. In particular, an effective pricing policy has become crucial for airlines to remain profitable. Correspondingly, the different types of airline in the market have also established very distinct pricing policies. The present study is based on a literature review and presents the state of the art of pricing policy in air transportation. The aim is to compare and discuss the pricing strategies of network carriers and lowcost airlines. Special attention is paid to Revenue Management, which is a very important management tool used by airlines to take advantage of the differences in willingness to pay of passengers. The pricing policy, however, depends on the overall business strategy of the airline. Results show many differences, resulting from the fact that these two types of airline are characterized by very different fundamental business models and, correspondingly, also target groups. Since network carriers and also low-cost airlines have adjusted their pricing strategies lately, these recent developments will be discussed as well. This paper adds to the knowledge of this topic because it presents the most up-to-date and complete study on pricing regarding network carriers vs. low-cost airlines.Keywords: Pricing policy, Revenue Management, willingness to pay, network carriers, low-cost airlines. ResumoA moderna indústria do transporte aéreo é altamente competitiva. Para sobreviver no mercado, a implementação de uma estratégia de marketing bem-sucedida é fundamental. Em particular, uma política de preços eficaz tornou-se crucial para as companhias aéreas continuarem lucrativas. Os diferentes tipos de companhias aéreas no mercado também estabeleceram políticas de preços muito distintas. O presente estudo baseia-se numa revisão da literatura e apresenta o estado da arte da política de preços no transporte aéreo. O objetivo é comparar e discutir as estratégias de preços de companhias aéreas de linha e companhias aéreas de baixo custo. Atenção especial é dada à Gestão de Receitas (Revenue Management), que é uma ferramenta de gestão usada pelas companhias aéreas para aproveitar as diferenças na disposição de pagar dos passageiros. A política de preços, no entanto, depende da estratégia geral de negócios da companhia aérea. Os resultados mostram muitas diferenças, resultantes do facto de que esses dois tipos de companhias aéreas são caracterizados por modelos de negócios fundamentais muito diferentes e, correspondentemente, também grupos-alvo. Como as operadoras de rede e também as companhias aéreas de baixo custo ajustaram as suas estratégias de preços ultimamente, esses desenvolvimentos recentes também serão discutidos. Este documento contribui para o conhecimento deste tópico, pois apresenta o estudo mais atualizado e completo sobre preços de companhias aéreas de linha versus companhias aéreas de baixo custo.Palavras-chave: Política de preços, Revenue Manage...

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Section: Discussionmentioning

confidence: 99%

State of the art of pricing policy in air transportation: network carriers vs. low-cost airlines

Wehner

López-Bonilla

et al. 2018

Tour Manage Stud

View full text Add to dashboard Cite

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“…Stated choice experiments have been a popular research methodology for a majority of the previously conducted airline ancillary service studies (Espino, Martiìn and Romaìn, 2008;Martin, Romaìn and Espino, 2008;Balcombe, Fraser and Harris, 2009;Chen and Wu, 2009;Correia, PimpaÞo and TaÞo, 2012;Wittmer and Rowley, 2014). While these studies provide insight into how customers may behave in actual purchase situations, these studies have some limitations.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Usage frequency and number of trips have been widely used in previous studies (Harris and Uncles, 2007;Balcombe, Fraser and Harris, 2009;Leon and Uddin, 2017). The respondents were asked, on average, how many times they fly on domestic flights (DF) per year.…”

Section: Data Collection Instrumentmentioning

confidence: 99%

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Data-driven insights: Assessment of airline ancillary services

Leon

Uddin

2017

JTM

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Airlines increasingly rely on ancillary service fees for revenue generation. As a result, many ancillary services have been conceived and implemented. However, each customer does not desire to purchase every ancillary service. This research examines the heterogeneity among U.S. international airline passengers and their willingness to pay for assorted ancillary services. Antecedents to purchase intention and actual purchase behavior were evaluated using Amazon Mechanical Turk for data collection. Our results show that there are differences in airline passenger preferences when purchasing ancillary services on international flights. The number of times a passenger flies in a year and the reason for travel are found to be consistently significant. Occasionally, age and income are found to be significant. These findings will be very useful to airline marketing executives and could help to assure consumers receive the services they want at the price levels they are willing to pay.

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“…(Balcombe et al, 2009) held a survey to determine passenger's Willingness To Pay (WTP) for in-flight service and comfort level. The survey focused on seat comfort, meal provision, bar service, ticket price, entertainment (i.e., overhead screens for pre-set programs).…”

Section: E-commerce Servicesmentioning

confidence: 99%