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The impact of operational exposure and value-of-time on customer choice: Evidence from the airline industry

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  • Cho, Woohyun
  • Windle, Robert J.
  • Dresner, Martin E.

Abstract

This study examines how a passenger’s operational exposure and value-of-time moderate the relationship between airline quality and passenger choice. Using a choice model, we show that the positive impact of providing nonstop flights and higher on-time performance is enforced by a passenger’s exposure to airline operations, and high time value. In particular, the results show that segmenting passengers by their operational exposure may generate demand, even in a fairly standardized service operations industry, such as the airline industry. Finally, we discuss potential ways that airlines can discriminate the quality or the price of services provided based on our findings.

Suggested Citation

  • Cho, Woohyun & Windle, Robert J. & Dresner, Martin E., 2017. "The impact of operational exposure and value-of-time on customer choice: Evidence from the airline industry," Transportation Research Part A: Policy and Practice, Elsevier, vol. 103(C), pages 455-471.
    • Handle: RePEc:eee:transa:v:103:y:2017:i:c:p:455-471
    DOI: 10.1016/j.tra.2017.05.027
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    2. Qiu, Wanling & Rudkin, Simon & Sharma, Abhijit, 2017. "An Analysis of the Impact of Low Cost Airlines on Tourist Stay Duration and Expenditures," MPRA Paper 81428, University Library of Munich, Germany.

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