IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v64y2017ipap91-99.html
   My bibliography  Save this article

Passenger booking timing for low-cost airlines: A continuous logit approach

Author

Listed:
  • Wen, Chieh-Hua
  • Chen, Po-Hung

Abstract

Low-cost airlines irregularly launch ticket promotions, where fares may differ by day of the week and departure dates. The timing for purchasing air tickets is thus closely associated with fares. Airlines should analyze booking timing for tickets and increase the accuracy of demand forecasts to achieve efficient use of airplane seating and plan for promotional activities. Therefore, this study develops a continuous choice model for timing decision making regarding bookings. A trigonometric function is used and interacts with trip and socioeconomic characteristics to capture the heterogeneous preferences of air passengers. Data were collected from low-cost airline passengers traveling from Taiwan to Singapore. The results of the continuous multinomial logit model indicate that lower fares increase the number of bookings and heterogeneous preferences in booking timing are present. Some travelers tend to book flights earlier than the other groups: these are the price-sensitive customers.

Suggested Citation

  • Wen, Chieh-Hua & Chen, Po-Hung, 2017. "Passenger booking timing for low-cost airlines: A continuous logit approach," Journal of Air Transport Management, Elsevier, vol. 64(PA), pages 91-99.
    • Handle: RePEc:eee:jaitra:v:64:y:2017:i:pa:p:91-99
    DOI: 10.1016/j.jairtraman.2017.06.030
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699717302995
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jairtraman.2017.06.030?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Chiou, Yu-Chiun & Liu, Chia-Hsin, 2016. "Advance purchase behaviors of air tickets," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 62-69.
    2. Guevara, C. Angelo, 2015. "Critical assessment of five methods to correct for endogeneity in discrete-choice models," Transportation Research Part A: Policy and Practice, Elsevier, vol. 82(C), pages 240-254.
    3. Mantin, Benny & Koo, Bonwoo, 2010. "Weekend effect in airfare pricing," Journal of Air Transport Management, Elsevier, vol. 16(1), pages 48-50.
    4. Hetrakul, Pratt & Cirillo, Cinzia, 2014. "A latent class choice based model system for railway optimal pricing and seat allocation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 61(C), pages 68-83.
    5. Michael Scheidler & Reinhard Hujer & Joachim Grammig, 2005. "Discrete choice modelling in airline network management," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 467-486.
    6. Liu, Yangwen & Tremblay, Jean-Michel & Cirillo, Cinzia, 2014. "An integrated model for discrete and continuous decisions with application to vehicle ownership, type and usage choices," Transportation Research Part A: Policy and Practice, Elsevier, vol. 69(C), pages 315-328.
    7. Weatherford, Larry R. & Kimes, Sheryl E., 2003. "A comparison of forecasting methods for hotel revenue management," International Journal of Forecasting, Elsevier, vol. 19(3), pages 401-415.
    8. Vij, Akshay & Walker, Joan L., 2014. "Preference endogeneity in discrete choice models," Transportation Research Part B: Methodological, Elsevier, vol. 64(C), pages 90-105.
    9. Koppelman, Frank S. & Coldren, Gregory M. & Parker, Roger A., 2008. "Schedule delay impacts on air-travel itinerary demand," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 263-273, March.
    10. O’Connell, John F. & Williams, George, 2005. "Passengers’ perceptions of low cost airlines and full service carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia Airlines," Journal of Air Transport Management, Elsevier, vol. 11(4), pages 259-272.
    11. Puller, Steven L. & Taylor, Lisa M., 2012. "Price discrimination by day-of-week of purchase: Evidence from the U.S. airline industry," Journal of Economic Behavior & Organization, Elsevier, vol. 84(3), pages 801-812.
    12. Chiou, Yu-Chiun & Liu, Chia-Hsin, 2016. "Advance purchase behaviors of air passengers: A continuous logit model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 474-484.
    13. Hetrakul, Pratt & Cirillo, Cinzia, 2013. "Accommodating taste heterogeneity in railway passenger choice models based on internet booking data," Journal of choice modelling, Elsevier, vol. 6(C), pages 1-16.
    14. Salanti, Andrea & Malighetti, Paolo & Redondi, Renato, 2012. "Low-cost pricing strategies in leisure markets," Tourism Management, Elsevier, vol. 33(2), pages 249-256.
    15. Mason, Keith J., 2001. "Marketing low-cost airline services to business travellers," Journal of Air Transport Management, Elsevier, vol. 7(2), pages 103-109.
    16. Domínguez-Menchero, J. Santos & Rivera, Javier & Torres-Manzanera, Emilio, 2014. "Optimal purchase timing in the airline market," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 137-143.
    17. Marco Alderighi & Marcella Nicolini & Claudio A. Piga, 2015. "Combined Effects of Capacity and Time on Fares: Insights from the Yield Management of a Low-Cost Airline," The Review of Economics and Statistics, MIT Press, vol. 97(4), pages 900-915, October.
    18. Lemp, Jason D. & Kockelman, Kara M. & Damien, Paul, 2010. "The continuous cross-nested logit model: Formulation and application for departure time choice," Transportation Research Part B: Methodological, Elsevier, vol. 44(5), pages 646-661, June.
    19. Malighetti, Paolo & Paleari, Stefano & Redondi, Renato, 2009. "Pricing strategies of low-cost airlines: The Ryanair case study," Journal of Air Transport Management, Elsevier, vol. 15(4), pages 195-203.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tangjian Wei & Feng Shi & Guangming Xu, 2019. "Estimation of Time-Varying Passenger Demand for High Speed Rail System," Complexity, Hindawi, vol. 2019, pages 1-24, March.
    2. Guevara, C. Angelo, 2018. "Overidentification tests for the exogeneity of instruments in discrete choice models," Transportation Research Part B: Methodological, Elsevier, vol. 114(C), pages 241-253.
    3. Guerrero, Thomas E. & Guevara, C. Angelo & Cherchi, Elisabetta & Ortúzar, Juan de Dios, 2022. "Characterizing the impact of discrete indicators to correct for endogeneity in discrete choice models," Journal of choice modelling, Elsevier, vol. 42(C).
    4. 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.
    5. Tan, Wee-Kheng & Wang, Wei-Jie, 2021. "The application of information values and construal level theory for examining low cost carrier advertisements," Journal of Air Transport Management, Elsevier, vol. 90(C).
    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. Yuan, Yalong & Yang, Min & Feng, Tao & Ma, Yafeng & Ren, Yifeng & Ruan, Xinpei, 2022. "Heterogeneity in the transfer time of air-rail intermodal passengers based on ticket booking data," Transportation Research Part A: Policy and Practice, Elsevier, vol. 165(C), pages 533-552.
    8. Bulchand-Gidumal, Jacques & Melián-González, Santiago, 2021. "Post-COVID-19 behavior change in purchase of air tickets," Annals of Tourism Research, Elsevier, vol. 87(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Moreno-Izquierdo, L. & Ramón-Rodríguez, A. & Perles Ribes, J., 2015. "The impact of the internet on the pricing strategies of the European low cost airlines," European Journal of Operational Research, Elsevier, vol. 246(2), pages 651-660.
    2. Morlotti, Chiara & Redondi, Renato, 2023. "The impact of COVID-19 on airlines’ price curves," Journal of Air Transport Management, Elsevier, vol. 107(C).
    3. Domínguez-Menchero, J. Santos & Rivera, Javier & Torres-Manzanera, Emilio, 2014. "Optimal purchase timing in the airline market," Journal of Air Transport Management, Elsevier, vol. 40(C), pages 137-143.
    4. Morlotti, Chiara & Cattaneo, Mattia & Malighetti, Paolo & Redondi, Renato, 2017. "Multi-dimensional price elasticity for leisure and business destinations in the low-cost air transport market: Evidence from easyJet," Tourism Management, Elsevier, vol. 61(C), pages 23-34.
    5. Cattaneo, Mattia & Malighetti, Paolo & Morlotti, Chiara & Redondi, Renato, 2016. "Quantity price discrimination in the air transport industry: The easyJet case," Journal of Air Transport Management, Elsevier, vol. 54(C), pages 1-8.
    6. Chiou, Yu-Chiun & Liu, Chia-Hsin, 2016. "Advance purchase behaviors of air passengers: A continuous logit model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 93(C), pages 474-484.
    7. 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).
    8. Cattaneo, Mattia & Malighetti, Paolo & Redondi, Renato & Salanti, Andrea, 2018. "Changes in frequencies and price variations on point-to-point routes: The case of easyJet," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 60-70.
    9. Loh, Hui Shan & Yuen, Kum Fai & Wang, Xueqin & Surucu-Balci, Ebru & Balci, Gökcay & Zhou, Qingji, 2020. "Airport selection criteria of low-cost carriers: A fuzzy analytical hierarchy process," Journal of Air Transport Management, Elsevier, vol. 83(C).
    10. Alderighi, Marco & Nicolini, Marcella & Piga, Claudio A., 2016. "Targeting leisure and business passengers with unsegmented pricing," Tourism Management, Elsevier, vol. 54(C), pages 502-512.
    11. Alderighi, Marco & Nicolini, Marcella & Piga, Claudio A., 2019. "Is low-cost carriers’ revenue management a firm capability?," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 15-22.
    12. Meire, Sarah & Derudder, Ben, 2021. "Virtual interlining within the European airport network: An airfare analysis," Journal of Air Transport Management, Elsevier, vol. 94(C).
    13. Chang, Li-Yen & Hung, Shao-Chih, 2013. "Adoption and loyalty toward low cost carriers: The case of Taipei–Singapore passengers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 50(C), pages 29-36.
    14. Luttmann, Alexander & Gaggero, Alberto A, 2020. "Purchase discounts and travel premiums during holiday periods: Evidence from the airline industry," MPRA Paper 104863, University Library of Munich, Germany.
    15. Andrés Martínez, María-Encarnación & Alfaro Navarro, José-Luis & Trinquecoste, Jean-François, 2017. "The effect of destination type and travel period on the behavior of the price of airline tickets," Research in Transportation Economics, Elsevier, vol. 62(C), pages 37-43.
    16. Li, Haiying & Li, Xian & Xu, Xinyue & Liu, Jun & Ran, Bin, 2018. "Modeling departure time choice of metro passengers with a smart corrected mixed logit model - A case study in Beijing," Transport Policy, Elsevier, vol. 69(C), pages 106-121.
    17. Wen, Chieh-Hua & Huang, Chia-Jung & Fu, Chiang, 2020. "Incorporating continuous representation of preferences for flight departure times into stated itinerary choice modeling," Transport Policy, Elsevier, vol. 98(C), pages 10-20.
    18. Lurkin, Virginie & Garrow, Laurie A. & Higgins, Matthew J. & Newman, Jeffrey P. & Schyns, Michael, 2017. "Accounting for price endogeneity in airline itinerary choice models: An application to Continental U.S. markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 100(C), pages 228-246.
    19. Escobari, Diego, 2014. "Estimating dynamic demand for airlines," Economics Letters, Elsevier, vol. 124(1), pages 26-29.
    20. Kim, Seung-Bok & Park, Jin-Woo, 2017. "A study on the importance of airline selection attributes by airline type: An emphasis on the difference of opinion in between Korean and overseas aviation experts," Journal of Air Transport Management, Elsevier, vol. 60(C), pages 76-83.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jaitra:v:64:y:2017:i:pa:p:91-99. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/journal-of-air-transport-management/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.