IDEAS home Printed from https://ideas.repec.org/a/eee/jaitra/v16y2010i4p202-208.html
   My bibliography  Save this article

Competing on value: Perspectives on business class aviation

Author

Listed:
  • Claussen, Jan
  • O'Higgins, Eleanor

Abstract

This paper presents an airline consumer choice model to analyze value propositions – the benefits delivered to passengers in relation to the fares paid. The model is developed using a study of clientele flying business class, studying three premium start-up airlines Eos, MaxJet and Silverjet that provided business-class-only flights on London–New York routes. Premium airlines were compared to selected rival full-service carriers for sustainability of their business class value propositions, using preference profiles of five target customer groups that comprise the business class passenger population. We find that the three premium start-up airlines were superior in offering some appealing features at reasonable fares that were highly valued by some passengers, although they were unable to replicate some other attractive aspects in the value propositions of the incumbents. This suggests a coexistence of premium entrants and incumbent carriers would have been possible, had the environment they operated in not changed drastically for the worse, before the premium entrants had achieved the financial robustness necessary for survival.

Suggested Citation

  • Claussen, Jan & O'Higgins, Eleanor, 2010. "Competing on value: Perspectives on business class aviation," Journal of Air Transport Management, Elsevier, vol. 16(4), pages 202-208.
    • Handle: RePEc:eee:jaitra:v:16:y:2010:i:4:p:202-208
    DOI: 10.1016/j.jairtraman.2010.01.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969699710000177
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jairtraman.2010.01.005?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. Liou, James J.H. & Tzeng, Gwo-Hshiung, 2007. "A non-additive model for evaluating airline service quality," Journal of Air Transport Management, Elsevier, vol. 13(3), pages 131-138.
    2. Casadesus-Masanell, Ramon & Ricart, Joan E., 2007. "Competing through business models," IESE Research Papers D/713, IESE Business School.
    3. Proussaloglou, Kimon & Koppelman, Frank S., 1999. "The choice of air carrier, flight, and fare class," Journal of Air Transport Management, Elsevier, vol. 5(4), pages 193-201.
    4. Dresner, Martin, 2006. "Leisure versus business passengers: Similarities, differences, and implications," Journal of Air Transport Management, Elsevier, vol. 12(1), pages 28-32.
    5. Kenneth Button & Kingsley E. Haynes & Roger E. Stough, 1998. "Flying into the Future," Books, Edward Elgar Publishing, number 1470.
    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. Hugon-Duprat, Cindy & O'Connell, John F., 2015. "The rationale for implementing a premium economy class in the long haul markets – Evidence from the transatlantic market," Journal of Air Transport Management, Elsevier, vol. 47(C), pages 11-19.
    2. Jeon, Mi-Sun & Lee, Jang-Ho, 2020. "Estimation of willingness-to-pay for premium economy class by type of service," Journal of Air Transport Management, Elsevier, vol. 84(C).
    3. Osaki, Takanori & Kubota, Yukihiko, 2016. "Perceptions of premium service and superiority: Why do customers pay more for high-value-added domestic airline services in Japan?," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 196-201.
    4. Adiloğlu-Yalçınkaya, Leyla & Besler, Senem, 2021. "Institutional factors influencing business models: The case of Turkish Airlines," Journal of Air Transport Management, Elsevier, vol. 91(C).
    5. Berster, Peter & Gelhausen, Marc C. & Wilken, Dieter, 2011. "Business aviation in Germany: An empirical and model-based analysis," Journal of Air Transport Management, Elsevier, vol. 17(6), pages 354-359.
    6. Amit Mittal & Sahil Gupta, 2020. "Vistara: Aiming for the Sky," South Asian Journal of Business and Management Cases, , vol. 9(1), pages 138-147, April.
    7. Maertens, Sven, 2011. "The market potential of all-premium class services on medium haul leisure routes from Germany," Journal of Air Transport Management, Elsevier, vol. 17(3), pages 181-186.

    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. Chen, I-Shuo, 2016. "A combined MCDM model based on DEMATEL and ANP for the selection of airline service quality improvement criteria: A study based on the Taiwanese airline industry," Journal of Air Transport Management, Elsevier, vol. 57(C), pages 7-18.
    2. Peter J. Rimmer, 2014. "Asian-Pacific Rim Logistics," Books, Edward Elgar Publishing, number 12949.
    3. 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.
    4. Chen, Yanhong & Liu, Luning & Zheng, Dequan & Li, Bin, 2023. "Estimating travellers’ value when purchasing auxiliary services in the airline industry based on the RFM model," Journal of Retailing and Consumer Services, Elsevier, vol. 74(C).
    5. 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.
    6. Javier Campos, 2013. "Air transport," Chapters, in: Mattias Finger & Torben Holvad (ed.), Regulating Transport in Europe, chapter 2, pages 36-60, Edward Elgar Publishing.
    7. Redondi, Renato & Birolini, Sebastian & Morlotti, Chiara & Paleari, Stefano, 2021. "Connectivity measures and passengers’ behavior: Comparing conventional connectivity models to predict itinerary market shares," Journal of Air Transport Management, Elsevier, vol. 90(C).
    8. Chandra Mahapatra, Subas & Bellamkonda, Raja Shekhar, 2023. "Higher expectations of passengers do really sense: Development and validation a multiple scale-FliQual for air transport service quality," Journal of Retailing and Consumer Services, Elsevier, vol. 70(C).
    9. Seetaram, Neelu, 2010. "Computing airfare elasticities or opening Pandora's box," Research in Transportation Economics, Elsevier, vol. 26(1), pages 27-36.
    10. Anming Zhang & Yimin Zhang & Joseph A. Clougherty, 2011. "Competition and Regulation in Air Transport," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 35, Edward Elgar Publishing.
    11. Rafael L. Myro & Belén Rey & Pablo I. Hernández, 2014. "Mixed effects of low-cost airlines on tourism in Spain," Working Papers 14-04, Asociación Española de Economía y Finanzas Internacionales.
    12. Koo, Tay T.R. & Hossein Rashidi, Taha & Park, Jin-Woo & Wu, Cheng-Lung & Tseng, Wen-Chun, 2017. "The effect of enhanced international air access on the demand for peripheral tourism destinations: Evidence from air itinerary choice behaviour of Korean visitors to Australia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 116-129.
    13. Vadivelu Tharanikaran & Sutha Sritharan & Vadivelu Thusyanthy, 2017. "Service Quality and Customer Satisfaction in the Electronic Banking," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(4), pages 1-67, March.
    14. Marti­n, Juan Carlos & Román, Concepción, 2003. "Hub location in the South-Atlantic airline market: A spatial competition game," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(10), pages 865-888, December.
    15. Appold, Stephen J. & Kasarda, John D., 2006. "The appropriate scale of US airport retail activities," Journal of Air Transport Management, Elsevier, vol. 12(6), pages 277-287.
    16. Myungsook An & Chongho Lee & Yonghwi Noh, 2010. "Risk factors at the travel destination: their impact on air travel satisfaction and repurchase intention," Service Business, Springer;Pan-Pacific Business Association, vol. 4(2), pages 155-166, June.
    17. Guofeng Ma & Yue Ding & Junyi Ma, 2022. "The Impact of Airport Physical Environment on Perceived Safety and Domestic Travel Intention of Chinese Passengers during the COVID-19 Pandemic: The Mediating Role of Passenger Satisfaction," Sustainability, MDPI, vol. 14(9), pages 1-18, May.
    18. Coldren, Gregory M. & Koppelman, Frank S. & Kasturirangan, Krishnan & Mukherjee, Amit, 2003. "Modeling aggregate air-travel itinerary shares: logit model development at a major US airline," Journal of Air Transport Management, Elsevier, vol. 9(6), pages 361-369.
    19. Freund-Feinstein, Uzi & Bekhor, Shlomo, 2017. "An airline itinerary choice model that includes the option to delay the decision," Transportation Research Part A: Policy and Practice, Elsevier, vol. 96(C), pages 64-78.
    20. Johan Lundberg & Sofia Lundberg, 2010. "Retailer choice and loyalty schemes—evidence from Sweden," Letters in Spatial and Resource Sciences, Springer, vol. 3(3), pages 137-146, October.

    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:16:y:2010:i:4:p:202-208. 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.