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Modelling air carrier choices with a Segment Specific Cross Nested Logit model

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  • Drabas, Tomasz
  • Wu, Cheng-Lung

Abstract

A number of customer segments may exist in any air travel market, differing in the willingness-to-pay, income, age, time of travel or airline preferences. Not accounting for this diversity may introduce a significant variance into any choice model. In this paper we present a Segment Specific Cross-Nested Logit with Brand Loyalty (SSCNL-BL) model that explicitly accounts for this heterogeneity. The model is estimated using data from a stated preference choice experiment conducted among Australians travelling to the United States. The resulting SSCNL-BL model performs better than the more complex Mixed Logit model without the additional computational burden.

Suggested Citation

  • Drabas, Tomasz & Wu, Cheng-Lung, 2013. "Modelling air carrier choices with a Segment Specific Cross Nested Logit model," Journal of Air Transport Management, Elsevier, vol. 32(C), pages 8-16.
    • Handle: RePEc:eee:jaitra:v:32:y:2013:i:c:p:8-16
    DOI: 10.1016/j.jairtraman.2013.04.004
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    Cited by:

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    3. Munoz, Claudia & Laniado, Henry, 2021. "Airline choice model for international round-trip flights: The role of travelers’ satisfaction and personality traits," Research in Transportation Economics, Elsevier, vol. 90(C).
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    5. Escobari, Diego, 2017. "Airport, airline and departure time choice and substitution patterns: An empirical analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 198-210.
    6. Freund-Feinstei, Uzi & Bekhor, Shlomo, 2017. "Airline Itinerary Choice In A Dynamic Supply Environment: Results From A Stated Preference Survey," Journal of Tourism, Sustainability and Well-being, Cinturs - Research Centre for Tourism, Sustainability and Well-being, University of Algarve, vol. 5(4), pages 400-424.
    7. Yang, Chih-Wen & Liao, Pei-Han, 2016. "Modeling the joint choice of access modes and flight routes with parallel structure and random heterogeneity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 19-31.
    8. Gonzalez-Valdes, Felipe & Raveau, Sebastián, 2018. "Identifying the presence of heterogeneous discrete choice heuristics at an individual level," Journal of choice modelling, Elsevier, vol. 28(C), pages 28-40.
    9. Fukushi, Mitsuyoshi & Delgado, Felipe & Raveau, Sebastián & Santos, Bruno F., 2022. "CHAIRS: A choice-based air transport simulator applied to airline competition and revenue management," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 297-315.
    10. Tomasz Drabas & Cheng-Lung Wu, 2020. "A market spill–recapture unconstraining model for estimating airline true demand," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(1), pages 43-60, February.
    11. Xie, J. & Wong, S.C. & Zhan, S. & Lo, S.M. & Chen, Anthony, 2020. "Train schedule optimization based on schedule-based stochastic passenger assignment," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 136(C).
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    13. Johnson, Daniel & Hess, Stephane & Matthews, Bryan, 2014. "Understanding air travellers' trade-offs between connecting flights and surface access characteristics," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 70-77.

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