The first study to be analyzed was conducted by Ahmed, Zbib, Sikander & Farhat’s (2014) and revealed that there is a significant relationshipbetween demographic variables such as gender, income and nationality and the importance of some of the service attributes. It also shows that although the purpose of travel can have an important influence on consumer behavior, it is not a key influence. The study confirms that nationality and national loyalty are key drivers that influence consumers’ perceptions when evaluating and selecting airlines of preference.
Product knowledge, brand awareness and purpose of travel are other influencing factors. The authors state that although the role of personal experience could not be proved, in its presence, demographic variables influenced customers’ perceptions and in its absence, the country of origin effect dominated.
Ariffin, Salleh, Aziz and Asbudin’s (2013) study was the service quality and satisfaction for low cost carriers.
However, the study does not consider the differences between two distinct airline business models, but rather concentrates on the passengers of the low cost carriers. This study is included for the insight it provides into the low cost carrier passengers’ behavioral patterns as well as some of the key service elements that distinguish low cost carriers from full service airlines. The study distributed questionnaires to one hundred (100) passengers at the Low Cost Carrier Terminal at Kuala Lumpur International Airport and usable responses were obtained. The researchers found that there were five factors that principally defined the dimensions of service quality in low cost carriers. These are caring and tangible elements, followed by reliability, responsiveness, affordability and visual attractiveness.
“The three most important dimensions that emerged from the factor analysis namely, caring and tangible, reliability and responsiveness are considered as standard dimensions for service quality in the airline industry. They are the “point-of parity” dimensions that each and every airline company must offer in order to be relevant in the marketplace.
The study further stated that those airlines that failed to satisfactorily provide these dimensions would not be able to survive in the long run. The remaining factors were actually the ones that determined the ‘point-of-difference’ or the distinctive dimension for low cost carriers. These were affordability and visual attractiveness. These clearly differentiate the services of low cost carriers from full service airlines.
A critical finding of this study is that certain service elements are valued by all customers and should be present, regardless of the airline model. Key distinguishers of the carriers are price and visual attractiveness. The authors were therefore able to conclude that airliners should not stray too far from their low cost strategies in marketing their services to the prospective customers. An interesting finding was that aspects pertaining to visual attractiveness, such as the exterior and interior aircraft design, ticketing counters and other in-flight materials were found very important in determining passengers’ preference for an airline.
Atal?k & ?zel, (2009) considers the factors and levels of those factors that passengers consider in their selection of a low cost airline. Although the study is limited in its application, it confirms previous findings that safety is a key service attribute taken into account in low cost airline selection. Also important are on-time performance, convenient schedules, personnel behavior and price. Comfort, airline image, baggage services and cabin services also feature as important drivers, whereas aspects such as food and drink, recommendations by travel agents and the type of airline is not as important.
Balcombe, Fraser & Harris (2012), considers the importance of in-flight service and comfort levels and how much consumers are prepared to pay for these features. The authors use a choice experiment as the base methodology for this study. The survey instrument was delivered via the internet and elicited 568 usable responses from mostly UK based respondents. The attributes that were selected were related to seat comfort (seat pitch and seat width), meal provision, entertainment, bar service and ticket price. The choice experiment utilized different levels of comfort within each attribute. Aspects such as punctuality and airport facilities were omitted as they did not relate directly to inflight service levels. Similarly, brand image was not included as the definition for this attribute was considered too abstract to be of value to the study. The study is limited in that it only considers the inflight service attributes and tests whether customers are willing to pay more or less for these. Without testing the other factors that customers may take into account when making decisions on how much they are willing to pay for the total flight experience, the results may be skewed as passengers may be willing to pay extra for an attribute in isolation, but not as part of the total package.
The findings of the study indicated that, in general, customers are willing to pay extra for additional seat pitch (legroom) as well as for extra seat width, but were not willing to pay for an amenity pack. Respondents were prepared to pay extra for a bar service and a screen. Respondents were willing to accept the loss of the meal service, as long as it was associated with a reduction in the price of the ticket. The study also shows that these findings vary across the age, gender, income and education level demographic elements.
The study concludes that there is scope for FCAs to consider the overall quality of their on-board service provision and not simply follow the approach adopted by the LCCs and operate a ‘no-frills’ service. Indeed, the WTP plus the WTA estimates found for the reduction in food service provision indicate that following the LCC ‘no-frills’ strategy need not be the only business model to pursue. Several FCAs have already started to offer longer-haul flights that embrace the no-frills approach. The success or otherwise of these services will provide important insights and actual market data information on the topic of quality and type of on-board service provision demanded by consumers.
Bieger, Wittmer & Laesser (2010) was concerned with the value that customers place on air transport. This study considers customer value as the key driver of growth in the demand for air transport services. This study was conducted at Zurich airport, which serves a relatively affluent population, and consisted of 1000 interviews. Almost two thirds of the respondents worked in Zurich. The methodology that was used was discrete choice modeling. In the study, different buying criteria were considered and then ranked according to whether the respondents were travelling by business or economy class. These criteria were total travel time, time of departure and arrival, punctuality, number of daily connections, total travel costs, travel comfort, direct connection, safety, sympathy and mileage program and status of the airline.
The authors of this study find that the ticket price is the most important feature for both classes of passengers; direct connections are slightly more important for economy passengers, possibly because leisure travelers compare direct flights, possibly even with charter flights; the airline’s brand is slightly more important for business travelers, possibly due to membership of frequent flier programs; the number of daily connections is more important for business travelers, but that departure and arrival times are more important than number of connections. When comparing the results of a stated preference model, economy class respondents revealed safety, direct connections and punctuality as their top concerns. Business class passengers selected direct connections, safety and total travel time. When revealing their hidden preferences, both classes of passengers selected fares as their major concern.
Carrier (2015) seeks an understanding of the key drivers of passenger choice behavior, citing as the reason, the support for the design of new pricing strategies and revenue management methods. This study asserts that existing studies do not accurately represent the consumer choice environment in the airline. Carrier uses existing airline data in the study, specifically flight schedules, fare rules, seat availability and booking information to construct a passenger choice model, using as dependent variables the airline’s itinerary and the fare product.
Two types of data available in booking records were used; the passenger’s profile and the characteristics of the trip. The traveler’s profile includes both socio-economic characteristics of the passenger such as gender as well as travel-related characteristics such as frequent flyer membership and status. Characteristics specific to the trip could also be useful, particularly aspects such as the dates of outbound and inbound travel (can be used to determine whether the trip included or not a stay at the destination over the weekend), travel within a week is expected to be strongly correlated with business travel, the distribution channel of the ticket also provides a fairly strong indicator of trip purpose (many non-business travelers have shifted to online and direct channels of distribution, while many business travelers still rely on traditional travel agents that provide a range of services.
The range of attributes that are taken into account in this model thus differs from other studies that have attempted to build passenger choice models. This model identified two latent classes of travelers, one of which reflected primarily business style travelers that tended to travel during the week and utilize traditional offline booking methods, whilst the other was orientated towards leisure travelers. Other booking data also reinforced this such as membership of a frequent flier programme, which was likely to indicate business travel, as these travelers travel more frequently and are more likely to be able to take advantage of the benefits of such a programme. Time of day was an important feature in this class as was travel within a week, as business travelers are more likely to regard time as important and return within the week than leisure style travelers. Flexible tickets were also important indicators within this class. In the leisure style class, features such as weekend stays, off peak hour flying and early booking, were all key features. The author (Carrier, 2015) asserts that their “latent class choice model appears to provide a more distinct segmentation between time-focused business-style travelers and a mixed class of leisure-oriented and price-conscious business travelers.
Next was Adoption and loyalty toward low cost carriers among Taipei-Singapore passengers: a study conducted by Chang and Hung (2013). The study considers the features that will increase loyalty towards the low cost carriers and the duration to accept the low cost carriers, and was based on research done at Tao-Yuan International Airport in Taiwan, where 338 usable observations were obtained. The study considered factors such aspects as the purpose of travel, membership of a frequent flier programme, the fare paid, the method of ticket purchase, the factors that were taken into account for airline selection and the respondent’s familiarity with chosen carrier. Other factors that were considered by the study include gender, occupation, monthly income, education and marital status.
The study finds that the price-sensitive non-business passengers are the low cost carriers’ major customers and that non-business travelers generally exhibit lower levels of airline loyalty. Frequent flier programs can however affirm passenger loyalty, even in low cost carriers. The passenger’s satisfaction with the airline’s service also positively influences passenger loyalty. Where the passengers consider airline image as a significant factor in airline choice, they are more expected to select a full service carrier over a low cost carrier. Age, education and occupation were also shown to have significant influences on passenger loyalty and patronage towards airlines. Age is positively correlated to low cost carrier patronage and loyalty, signifying that younger passengers tend toward higher use of low cost carriers, whereas education and manufacturing occupations are not, designating that passengers with higher levels of education or participants in the manufacturing sector do not much patronize low cost carriers. Fares were obviously the strongest advantage for low cost carriers to attract passengers’ patronage and loyalty, but airlines need to be watchful in over-using this as a marketing tool as it could arouse concerns about safety. Booking channels also tended to be a significant determinant of passengers’ patronage loyalty, with passengers appreciating a more convenient booking process being more likely to adopt sooner and maintain stronger loyalty. In conclusion, the results show that business passengers take longer to accept low cost carriers, but they then maintain stronger loyalty than non-business passengers.
Chang and Sun (2017) studied the stated-choice analysis of willingness to pay for low cost carrier services in Taiwan-China air travel and the factors that influence passengers’ choice between full service and low cost carriers. Passengers were surveyed at Tao-Yuan International Airport in Taiwan and 286 usable responses were received. The study revealed that, for business travelers, fares, luggage restrictions and destination airports were all found to be significant determinants for passengers’ selection of an airline. Higher ticket prices will result in lost sales, as will the use of secondary airports, as this implies poorer facilities and higher access costs. The more international trips per year for business passengers, the less likely they are to select nonstop full service carriers. If fares are a passenger’s major consideration for selecting a carrier and for passengers paying for their own fare, they are less likely to select the more expensive nonstop full service carriers. If punctuality is a focus in flight selection, they are less likely to choose an indirect full service carrier. Travelers with past experiences flying with a low cost carrier are likely to choose it again. Of age passengers are less likely to use indirect full service carriers. High income business passengers are less likely to select a low cost carrier. Company location is also shown to be significant, again highlighting the differences in nationality when selecting a flight. Arrival time, which is less significant for business travelers, is more significant for non-business travelers. Non-business travelers who pay the fares themselves are more likely to opt for a non-stop full service carrier. The opposite is true for business travelers. The authors (Chang Sun, 2017), emphasize that, in Taiwan, “having more international leisure trips is an indication of higher income, and high-income people can be expected to choose nonstop FSC. This would point out that passengers nationality also has an influence on airline selection as this finding is contrary to findings related to business and leisure travelers in other studies described in this section. Age and gender are also found to significantly impact passengers’ airline selection.
To summarize, the result of the study by (Chang & Sun, 2017), revealed that fare, luggage restrictions, and destination airport are significant attributes that can influence the passengers’ preferences for an airline. Passenger traveling experiences and socio-economic characteristics are also identified as influencing their flight selection. The results additionally point out that the choice behavior of business travelers and non-business travelers are significantly different. Non-business travelers tend to be more willing than business travelers to pay more for luggage service and daytime arrival, and in particular they are more willing to use a secondary airport.
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