Importance and value of airline service attributes. Routes from Helsinki to Germany in non-business segments

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School of Business | Master's thesis
Kansainvälinen liiketoiminta
International Business
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This study focuses on analyzing importance of airline service attributes on routes between Helsinki-Vantaa Airport and Germany. The goal of the study is to find out which airline service attributes are important for the passengers and are there differences in the importance levels caused by the type of passenger. Another interest area was willingness-to-pay measures for two airline service attributes and possible differences inside the focus group. Literature review discusses the most relevant theoretical areas and earlier research in the area of passengers’ airline choice process. Empirical part of the study was conducted as quantitative research. Respondents were recruited at Helsinki-Vantaa Airport and three forums to take part in the questionnaire built with Sawtooth Software to dedicated web domain. Altogether 166 completed and applicable responses were received for the analysis. Willingness-to-pay measures are calculated for reduced travel time and food service attribute from individual-level utilities, which were estimated with hierarchical Bayes estimation. The two most essential findings are the importance levels of different service attributes and willingness-to-pay measures. Low price of the ticket, direct flight to the destination in addition to safety reputation of the airline and punctuality of the flight were found as being the most important attributes. Frequent-flyer programs, name of the airline and seat width were found to be the least important attributes. Some demographic and traveler specific variables were found to affect the importance levels. Average willingness-to-pay measures for direct flight with the reduction of flight with two hours was 97,94 euros and willingness-to-pay for free food and drinks 19,55 Eur. Cluster analysis revealed three clusters; time sensitive (62,65% of the respondents), price sensitive (22,30%), and time sensitive, conditional buyers (15,05%).
airline, hierarchical Bayes, utility, choice-based conjoint analysis
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