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Determinants of ancillary revenue strategies and passenger willingness to pay: Evidence from the airline industry

Author

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  • Merve Sahin
  • Kahraman Susleyici
  • Selim Zaim
  • Talha Harcar

Abstract

The airline industry faces persistent profitability pressure stemming from high fixed costs, intense competition, and macroeconomic volatility. Since the entry of low-cost carriers (LCCs), ancillary revenue—defined as income generated from services and products supplementary to the core ticket—has evolved from a peripheral activity into a strategic financial pillar for both full-service and low-cost airlines. This study investigates the determinants of passenger willingness to pay (WTP) for à la carte ancillary services and identifies behavioural and demographic profiles that predict purchase frequency. Using a survey of 254 air travellers and a multi-method statistical approach (Chi-square tests, Mann–Whitney U tests, and Kruskal–Wallis with Bonferroni-corrected pairwise comparisons), six hypotheses are tested. The results demonstrate that (i) passengers familiar with à la carte services allocate significantly larger travel budgets to such services (p 5 flights/year) are significantly more likely to purchase à la carte services (χ² = 8.44, p

Suggested Citation

  • Merve Sahin & Kahraman Susleyici & Selim Zaim & Talha Harcar, 2025. "Determinants of ancillary revenue strategies and passenger willingness to pay: Evidence from the airline industry," Bussecon Review of Social Sciences (2687-2285), Bussecon International Academy, vol. 7(2), pages 01-12, June.
    • Handle: RePEc:adi:bsrsss:v:7:y:2025:i:2:id:1349
    DOI: 10.36096/yfgcqz22
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