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Investigating business traveller heterogeneity: Low-cost vs full-service airline users?

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  • Huse, Cristian
  • Evangelho, Fabio

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.

Suggested Citation

  • Huse, Cristian & Evangelho, Fabio, 2007. "Investigating business traveller heterogeneity: Low-cost vs full-service airline users?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(3), pages 259-268, May.
  • Handle: RePEc:eee:transe:v:43:y:2007:i:3:p:259-268
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    1. de Oña, Juan & de Oña, Rocío & Eboli, Laura & Mazzulla, Gabriella, 2013. "Perceived service quality in bus transit service: A structural equation approach," Transport Policy, Elsevier, vol. 29(C), pages 219-226.
    2. Azadian, Farshid & Vasigh, Bijan, 2019. "The blurring lines between full-service network carriers and low-cost carriers: A financial perspective on business model convergence," Transport Policy, Elsevier, vol. 75(C), pages 19-26.
    3. Martínez-Garcia, Esther & Ferrer-Rosell, Berta & Coenders, GermÃ, 2012. "Profile of business and leisure travelers on low cost carriers in Europe," Journal of Air Transport Management, Elsevier, vol. 20(C), pages 12-14.
    4. Juan de Oña & Rocio de Oña, 2015. "Quality of Service in Public Transport Based on Customer Satisfaction Surveys: A Review and Assessment of Methodological Approaches," Transportation Science, INFORMS, vol. 49(3), pages 605-622, August.
    5. Yaghoub Abdi & Xiaoni Li & Xavier Càmara-Turull, 2023. "Firm value in the airline industry: perspectives on the impact of sustainability and Covid-19," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-24, December.
    6. Lieshout, Rogier & Malighetti, Paolo & Redondi, Renato & Burghouwt, Guillaume, 2016. "The competitive landscape of air transport in Europe," Journal of Transport Geography, Elsevier, vol. 50(C), pages 68-82.
    7. Chen, Ching-Fu & Wu, Tsai-Fang, 2009. "Exploring passenger preferences in airline service attributes: A note," Journal of Air Transport Management, Elsevier, vol. 15(1), pages 52-53.
    8. Neal, Zachary P. & Kassens-Noor, Eva, 2011. "The business passenger niche: Comparing legacy carriers and southwest during a national recession," Journal of Air Transport Management, Elsevier, vol. 17(4), pages 231-232.
    9. Paliska, Dejan & Drobne, Samo & Borruso, Giuseppe & Gardina, Massimo & Fabjan, Daša, 2016. "Passengers' airport choice and airports' catchment area analysis in cross-border Upper Adriatic multi-airport region," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 143-154.
    10. Hernandez, Sara & Monzon, Andres & de Oña, Rocío, 2016. "Urban transport interchanges: A methodology for evaluating perceived quality," Transportation Research Part A: Policy and Practice, Elsevier, vol. 84(C), pages 31-43.
    11. Osaki, Takanori & Kubota, Yukihiko, 2016. "Perceptions of premium service and superiority: Why do customers pay more for high-value-added domestic airline services in Japan?," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 196-201.
    12. Patricia Lippitt & Nadine Itani & John F. O’Connell & David Warnock-Smith & Marina Efthymiou, 2023. "Investigating Airline Service Quality from a Business Traveller Perspective through the Integration of the Kano Model and Importance–Satisfaction Analysis," Sustainability, MDPI, vol. 15(8), pages 1-18, April.
    13. Allen, Jaime & Muñoz, Juan Carlos & Ortúzar, Juan de Dios, 2019. "Understanding public transport satisfaction: Using Maslow's hierarchy of (transit) needs," Transport Policy, Elsevier, vol. 81(C), pages 75-94.
    14. Renan P. de Oliveira & Alessandro V. M. Oliveira & Gui Lohmann, 2021. "A Network-Design Analysis of Airline Business Model Adaptation in the Face of Competition and Consolidation," Transportation Science, INFORMS, vol. 55(2), pages 532-548, March.
    15. Vlachos, Ilias & Lin, Zhibin, 2014. "Drivers of airline loyalty: Evidence from the business travelers in China," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 71(C), pages 1-17.
    16. Avogadro, Nicolò & Malighetti, Paolo & Redondi, Renato & Salanti, Andrea, 2021. "A tale of airline competition: When full-service carriers undercut low-cost carriers fares," Journal of Air Transport Management, Elsevier, vol. 92(C).
    17. Dobruszkes, Frédéric, 2013. "The geography of European low-cost airline networks: a contemporary analysis," Journal of Transport Geography, Elsevier, vol. 28(C), pages 75-88.
    18. Lin, Hsiu-Fen & Huang, Yi-Wen, 2015. "Using analytic network process to measure the determinants of low cost carriers purchase intentions: A comparison of potential and current customers," Journal of Air Transport Management, Elsevier, vol. 49(C), pages 9-16.
    19. Cho, Woohyun & Min, Dong-Jun, 2018. "Longitudinal examination of passenger characteristics among airline types in the US," Journal of Air Transport Management, Elsevier, vol. 72(C), pages 11-19.

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