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Airline on-time performance and its effects on consumer choice behavior

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  • Yimga, Jules

Abstract

Perhaps, owing to the unavailability of delay data on passengers’ flight routing, a challenge in air travel demand estimation is the examination of consumer response to flight delay within an origin-destination framework. An interesting but unanswered question is: how does air travel delay at various airports along a given itinerary affect consumer choice behavior? Using a methodology that enables us to match airline on-time performance data to passenger itinerary and estimating a discrete choice demand model, this paper finds that increases in flight delay negatively impact the likelihood of choosing a product and that welfare costs of delay to consumers may be substantial. These results are robust across different measures of on-time performance and irrespective of market hauls.

Suggested Citation

  • Yimga, Jules, 2017. "Airline on-time performance and its effects on consumer choice behavior," Research in Transportation Economics, Elsevier, vol. 66(C), pages 12-25.
    • Handle: RePEc:eee:retrec:v:66:y:2017:i:c:p:12-25
    DOI: 10.1016/j.retrec.2017.06.001
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    Cited by:

    1. Yimga, Jules, 2018. "Domestic code-sharing agreements and on-time performance: Evidence from the US airline industry," Transport Policy, Elsevier, vol. 71(C), pages 14-27.
    2. Shone, Rob & Glazebrook, Kevin & Zografos, Konstantinos G., 2019. "Resource allocation in congested queueing systems with time-varying demand: An application to airport operations," European Journal of Operational Research, Elsevier, vol. 276(2), pages 566-581.
    3. Yimga, Jules, 2022. "Code-sharing agreements and path quality in the US airline industry," Transport Policy, Elsevier, vol. 116(C), pages 369-385.
    4. Yimga, Jules, 2020. "Price and marginal cost effects of on-time performance: Evidence from the US airline industry," Journal of Air Transport Management, Elsevier, vol. 84(C).
    5. Morlotti, Chiara & Birolini, Sebastian & Malighetti, Paolo & Redondi, Renato, 2023. "A latent class approach to estimate air travelers’ propensity toward connecting itineraries," Research in Transportation Economics, Elsevier, vol. 99(C).
    6. Yimga, Jules & Gorjidooz, Javad, 2019. "Airline schedule padding and consumer choice behavior," Journal of Air Transport Management, Elsevier, vol. 78(C), pages 71-79.
    7. Ren, Junqiushi, 2023. "Financial conditions and incumbent quality responses to entry: Evidence from airlines' on-time performance," Journal of Air Transport Management, Elsevier, vol. 107(C).
    8. Ma, Wenliang & Wang, Qiang & Yang, Hangjun & Zhang, Anming & Zhang, Yahua, 2019. "Effects of Beijing-Shanghai high-speed rail on air travel: Passenger types, airline groups and tacit collusion," Research in Transportation Economics, Elsevier, vol. 74(C), pages 64-76.
    9. Klophaus, Richard & Grosche, Tobias, 2020. "Consumer surplus analysis of selected long-haul air transport routes connecting Germany with California and China," Research in Transportation Economics, Elsevier, vol. 80(C).

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    More about this item

    Keywords

    Airlines; Product quality; On-time performance; Willingness to pay; Discrete choice demand model; Nested logit;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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