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Journal of Air Transport Management 15 (2009) 221226

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Journal of Air Transport Management


journal homepage: www.elsevier.com/locate/jairtraman

Consumer willingness to pay for in-ight service and comfort levels:


A choice experiment
Kelvin Balcombe a, Iain Fraser b, *, Liam Harris c
a

University of Reading, Reading, UK


Department of Economics, University of Kent, Wye Campus, Wye, Kent TN25 5AH, UK
c
Imperial College, London, UK
b

a b s t r a c t
Keywords:
Charter airlines
Choice experiment
Mixed logit

In the competitive aviation market as a result of the emergence of low cost carriers, charter airlines have
had to reconsider their approach to service provision. Specically, the reduction in service and comfort
levels offered by the low cost airlines provides charter carriers with an opportunity to differentiate their
product based on the quality of the offering. To consider this strategic option we employ an on-line
choice experiment to examine consumer choices with respect to the bundle of services on offer when
deciding to purchase a ight. With these data we use the Bayesian methods to estimate a mixed logit
specication. Our results reveal that in principle passengers are willing to pay a relatively large amount
for enhanced service quality.
2008 Elsevier Ltd. All rights reserved.

1. Introduction
The competitive landscape of the European aviation industry
has changed signicantly since deregulation in 1992 as a result of
price pressures due to erce competition from the growth of low
cost carriers (LCC). The success of LCCs results from an uncompromising no-frills strategy that minimizes costs per by only
offering a modicum of comfort in terms of legroom, seat dimensions, not installing window blinds, headrests, seat-pockets or seat
reclining mechanisms (Franke, 2003). Furthermore, they charge
passengers to check baggage into the hold, which simplies ground
handling, airport operations and turn-around times, plus food,
drinks and in-ight entertainment provision are supplied on
a buy-on-board basis (Barrett, 2003). The associated ancillary
revenues form a signicant part of the business model; for Ryanair
(2006) 15% of revenues in 2006.
However, because the LCC business model is based on maximizing utilization of aircraft (two return journeys per day); to keep
them in the air for the longest possible time, ight range is limited
to 3 h. Thus, UK based LCC operations only y to European destinations (Francis et al., 2006). In response, existing carriers, especially charter airlines (CAs) have engaged in signicant eet
redeployment outside of the 3-h range. For example, operations to
Spain and the Balearic Islands have been reduced, with destinations

* Corresponding author.
E-mail address: i.m.fraser@kent.ac.uk (I. Fraser).
0969-6997/$ see front matter 2008 Elsevier Ltd. All rights reserved.
doi:10.1016/j.jairtraman.2008.12.005

such as Turkey, northern Africa and the Canary Islands being given
greater emphasis (Bieger and Wittmer, 2006).1 However, the
extensive cost-cutting of LCCs presents an opportunity for CAs to
differentiate away from the commodity travel product on offer
(Dennis, 2007).
We examine how CAs might differentiate their products.
Specically, we consider which attributes of in-ight cabin comfort
and service may have a value to consumers by analyzing consumer
willingness to pay (WTP) for in-ight attributes that are derived
from an Internet delivered choice experiment (CE). With a CE
survey respondents choose between alternative options that
contain a number of attributes of different levels. Our CE was
designed to consider air traveler choice as it relates to on-board
service and comfort levels for CAs for a ight of between 4 and 5 h.
The issue of service provision and ticket price has been previously examined, for example, by Lee and Luengo-Prado (2004) who
considered how legroom impacted the price paid by consumers. For
one airline passengers did appear willing to pay more for additional
legroom, whereas for another they found the opposite. Espino et al.
(2008) and Martin et al. (2008) used a CE undertaken in Spain in
which passengers were presented six attributes (price, penalty for
ticket changes, food (sandwich, hot meal or a la carte), comfort (i.e.,
legroom), frequency and reliability) relating to two virtual airlines

1
Generally CA ownership is heavily concentrated with the largest players
belonging to large vertically integrated tour groups. Vertical integration means that
a large proportion of European CA seats are provided for inclusion in such tour
packages (Bieger and Wittmer, 2006).

222

K. Balcombe et al. / Journal of Air Transport Management 15 (2009) 221226

ying between Las Palmas de Gran Canaria and Madrid. Both


studies found that the WTP vary depending on the type of
economic model estimated. In general the multinomial logit (MNL)
specication yields higher WTP estimates than the mixed logit (ML)
especially for additional legroom, i.e., V33 versus V15. In terms of
on-board food they found that moving from a sandwich to a hot
meal yield a WTP of V5 for both model specications. Overall they
claim that the ML is statistically preferred to the MNL.2
An ML model specication is used here employing the Bayesian
methods for estimation. There are a number of advantages of
employing a Bayesian approach to estimate the ML. Here we
employ the Bayesian methods developed by Balcombe et al.
(in press). We begin by describing our ML model specication and
our Bayesian methods. We then describe our survey instrument
and how it was developed. In Section 4 we present our results and
in Section 5 we conclude.

2. The mixed logit model


For model development we let xj,s,n denote a k  1 vector of
attributes from the CE presented to the jth individual (j 1, ., J) in
the sth option (s 1, ., S) of the nth choice set (n 1, ., N). Next
dene Uj,s,n as the utility that the jth individual attains from xj,s,n. In
addition, let yj,s,n be an indicator variable that is equal to unity if the
jth individual chooses the sth option within the nth choice set, and
zero otherwise. Next assume that an individual j attains utility from
the sth choice in the nth choice set from the utility function


Uj;s;n x0j;s;n t bj es;j;n

(1)

where bj is a (k  1) vector describing the preferences of the jth


individual and t(.) is an appropriate transformation of the parameters. Within the ML literature an important transformation has
been one which also has the researcher to estimate the ML in WTP
space, as opposed to preference space which is the conventional
approach. This is achieved by employing a re-parameterisation of
the form:




0
t bj t1 b1j 1; t2 b2j ; ..; tk bkj

(2)

that means that the quantities t2 b2j ; ..; tk bkj are the marginal
rates of substitution (MRS) with the numeraire being the rst
attribute, which will always be the price or cost attribute within the
CE. We assume that the bj is normally distributed, and that the reparameterisation t(.) does change the distribution, but t(bj) bj
preserves the normality assumption. Finally, the error term es,j,n is
assumed to be extreme value distributed, independent of x0 s,j,n and
uncorrelated across individuals or choices.
The re-parameterisation in Eq. (2) means model estimation is
being performed in WTP space. Typically, the ML is estimated in
preference space such that we would rst estimate marginal utilities. The resulting MRS is derived from these estimates. However,
by estimating our model in WTP space, all the MRS is estimated
directly. It has been found that this approach can signicantly
reduce the instability associated with WTP estimates in preference
space. The issue of WTP instability in preference space has been
found to be particularly problematic when the price or cost variable
is not bounded above zero. In existing studies it has been common
practice to x the payment coefcient that is an ad hoc approach to
resolve the instability especially as xing the price coefcient may

2
Other examples of CEs used to assess other aspects of consumer choice in terms
of air travel include Hess and Polak (2005), Rose et al. (2005), Hess et al. (2007) and
Teichert et al. (2008).

violate other modeling requirement as well as being behaviorally


inappropriate if we assume that individuals responses vary independently of socio-economic characteristics.
The Bayesian approach to estimation of the ML is implemented
by simulating the posterior distribution of the mean and variance/
covariance of the preference parameters {bj}. In the Bayesian
analysis the algorithm used to undertake the simulation is referred
to as the the sampler.3
As is necessary in the Bayesian econometrics we have paid
particular attention to the performance of the sampler to ensure
convergence has been achieved. To begin with the sampler is
initialized at a starting point but is allowed to run for a period
known as the burn-in before draws are recorded. After the burn-in
phase to test for model convergence we initially observe the values
of the parameters sequentially generated by the sampler. If our
model is correctly specied and performing appropriately our
parameters should move away from their initial starting points and
by the time that the burn has nished they should be stable about
a mean. To monitor the serial dependence in the sampled values we
estimate the autocorrelation coefcients for the sequential values
generated by the sampler. Highly dependent draws mean that very
large samples may be required in order to accurately map the
posterior distributions. In accordance with standard practice, in
order to reduce problems of dependence we thin the sample by
recording only every kth value (k > 1) generated by the sampler. We
also formally test for convergence by employing a modied t-test
(taking account of dependency that remains) for which the null
hypothesis is no-difference between the rst and second half of the
sampled values (with a sub-set of values removed from the
middle).
3. Survey design and implementation
The selection of applicable attributes is central to the effectiveness of the CE. It is important to consider all applicable and
relevant attributes, while keeping in mind the available resources
in terms of time and sample size. Increasing the number of attributes and levels greatly increases the size of the full-factorial
model. To identify and focus on the attributes which are most
important in consumer preferences between different airline
comfort offerings, focus groups were set up to conduct exploratory
research and attempt to gain a consensus to this end. In addition,
interviews were conducted with airline management pertaining to
the viability and feasibility of the levels of attributes which were to
be included in the design. The use of industry specic interviews in
conjunction with focus groups at the exploratory stage of attribute
and level generation yielded the set of attributes employed.
As can be seen from Table 1 the selection of attributes and levels
has focused on seat comfort, meal provision, entertainment, bar
service and ticket price. The focus has been on the in-ight experience on a ight with a given length of 4.55.5 h. Punctuality and
airport facilities (e.g., lounges) were not included as they deviated
from this focus.4 The brand image of an airline was not included for
the same reasons, but also due to the vague and ill-dened
perceptions likely to be associated with such an abstract term. The
choices about the levels which these attributes should take were
made with signicant input from airline industry professionals, to
ensure viability.

3
A detailed description of algorithm, in this case Gibbs with a MetropolisHastings (MH) Step is provided in Balcombe et al.
4
As a referee indicated, another reason for excluding lounges is that they are
likely to correlate with the quality of seat on the plane and such could be a source of
multicollinearity in the resulting analysis.

K. Balcombe et al. / Journal of Air Transport Management 15 (2009) 221226


Table 1
Attributes and levels used in choice experiment.
Attribute

Units

Status Quo
Levels

Additional Levels

Seat Pitch
Seat Width
In-Flight Meal
In-Flight Entertainment

Inches
Inches
Level
Level

28
17
Hot Meal
Standard

Complementary in-Flight
Drinks
Ticket Prices

Level

None

31, 34
18.5
None, Sandwich
Standard plus Amenity Pack,
Standard plus Amenity Pack
plus Own Screen
Complementary Bar Service

Euros

300

285, 325, 400, 500

Seat pitch represents the distance between the back of a seat


and the back of the seat in front. The 28inch level of seat pitch
represents a typical CA seat pitch. This is very close to the legal
minimum and is often a source of complaints and passenger
discontent (Quigley et al., 2001). However, due to cost pressures,
CAs may wish to minimize their unit costs by reducing the seat
pitch to the legal minimum. This strategy is also often employed by
LCCs, whose seat pitch is also kept close to the minimum.
Increasing seat pitch will lead to rows of seats having to be removed
from the aircraft. The 31inch seat pitch level is representative of
British Airways Euro-Traveler, short-haul economy class. Any
perceived differential between British Airways and a CA or LCC may
be captured here. The 34inch seat pitch conforms to BAs Club
Europe short-haul business product.5 The British Airways
comparisons are merely representative and seat pitch can vary
from aircraft to aircraft with the same airline. Respondents were
presented with an interpretation of the legroom associated with
each level in a pre-survey brieng.
The 17inch seat width represents a typical CA seat, and is also
the width of a British Airways Euro-Traveler-class seat. British
Airways superior Club Europe-class seat width is 19inch; the upper
level chosen here is 18.5inch. Increasing seat width can be even
more costly than increasing pitch, due to the fact that the increased
dimension can result in a far larger number of seats needing to be
removed (i.e., one from each row).
The levels of in-ight meal provision were chosen with focus on
shedding light on the viability of not serving meals on the aircraft at
all. Several airlines have changed their level of service provision to
mimic the LCCs. However, they have subsequently re-introduced
free on-board food provision for a number of reasons including
negative image (Dennis, 2007). Thus although it is commonly
assumed that eliminating meal provision greatly reduces
complexity of operations, and is incorporated in the LCC business
model this need not be a strategy that all airlines employ. The
sandwich option would be simpler in practical implementation,
and is included as an intermediary, in order to assess both the
potential to create ancillary revenue in the form of on-board
sandwich sales, but also to improve the interpretation of any
willingness to accept (WTA) having no meal. For example,
Thomas Cook currently serves hot meals on its ights. The estimation of the levels of this attribute will reveal if the carrying,
preparing and serving of a hot meal are valued by customers.
The entertainment levels were chosen to represent the standard
CA in-ight entertainment provision, consisting of overhead
screens showing pre-set programming. The second level adds an
amenity pack (AP), which may include items for children, a blanket,
a pillow or other typical airline amenity items. The third option

These products apply to non-domestic inter-EU ights, the longer of which


approach the ight duration in question here.

223

includes the AP plus a private screen built into the seats, which
allow personalized viewing and other media. This option represents the current Premium Economy offering on some CAs longhaul eet services. Complimentary bar service is kept as a simple
binary yes/no option. On-board drinks sales can constitute signicant ancillary revenue. The added perceived value of complimentary drinks can be compared to this, to assess its potential to add
value.
Finally, the price attribute was set as a representative gure for
the 4.55.5-h ight duration presented to the respondent.
Departing from the UK, this would include destinations in countries
such as Egypt, Turkey, and as far aeld as Gambia. The actual
destinations used in the CE were Dalaman, Izmir and Antalya
(Turkey); Sharm el Sheikh and Hurghada (Egypt); and Banjul
(Gambia) with departures from Manchester and London Gatwick.
Prices were researched on the basis of a booking in the summer
season made two months in advance.6
Given the selection of attributes and their associated levels,
employing an orthogonal fractional factorial design and taking
account of dominated options 15 proles are derived. In this case
a prole refers to a combination of different levels of attributes,
with each prole taking on exactly one level of each attribute. The
aim was to construct a choice card based on each of the proles
from the orthogonal design. Each choice card is made up of three
proles. To construct the choice cards each of the proles were
taken as the rst value on each card. Then to generate a second
prole, the shift method was used. Then, to generate the nal set
of choice cards with three proles a status quo was added to each
which represented a standard offering for a CA seat. The status quo
option is 28inch seat pitch, 17inch seat width, a hot meal, standard
in-ight entertainment, no bar service and a price of V300. Finally,
a dont know option was added. This option allows the respondents to provide an answer that does not force an inappropriate
choice. Thus, it enables the elicitation of a more realistic view of the
respondents true preferences. In the analysis we present we
treated dont know responses as a zero choice: that is they were
not included for estimation purposes.
Fig. 1 provides an example of the choice cards presented to
respondents. This card includes various explanatory notes because
it was the one used in the introduction to the survey respondents
how the survey would work. It includes information to improve
response quality but without being so long as to detrimentally
affect response rates. It can be seem that we did not label the
status quo option. This removes potential labeling effects, and
potentially avoids anchoring the respondents choice. However, if
any respondents recognize this combination of attributes, or if the
combination already represents a favored combination for the
sample, this may manifest itself in a bias toward its selection.
The survey instrument was delivered via the Internet. It was
made available to the public via the web site of a large travel
company. We adopted this approach to survey delivery because it
provided the most cost effective means by which to generate
a sample of sufcient size.
In terms of survey delivery, potential survey participants were
initially asked if they would be prepared to undertake the survey.
This took the form of link on the web site. They were informed that
the survey was being conducted for academic purposes and that
the information provided would remain condential. If they agreed
to participate they were then automatically directed to the survey
instrument via an appropriate link. To ensure that the data

6
In this CE we have not addressed the issue of how a price can vary depending
upon time of purchase and associated seat availability. To include this aspect of
consumer behavior would require a very different CE to that developed here.

224

K. Balcombe et al. / Journal of Air Transport Management 15 (2009) 221226

Thank you for your time, this survey should not take more than 5-10 minutes.
You will be asked to select which flight you would choose on a 4 - 5 1/2 hour flight. This
could be to a destination such as the Canary Islands, North- or Western Africa or Turkey.
Assume you are now booking the flight 2 months in advance.
You will be faced with a series of choices between 3 airline tickets. They will each include
different levels of seat-pitch, seat width, in-flight meal, in-flight entertainment and bar
service.
The following shows an example choice card. It also gives some detail about the different
attributes. Please review these and then proceed to the survey.
Standard entertainment includes
movies and short programmes
playing on overhead screens.
Seat Pitch is given in inches,
ranging from 28 to 34.
28 Seat Pitch will give an
average person roughly one inch
legroom, if sitting upright.
Increasing Seat Pitch to 31 or 34
will give 3 or 6 inches extra
legroom, respectively.

An amenity pack can include e.g. a


pillow, free headphones for use with
in-flight entertainment, and special
packs for children.

This Price is
for a Return
flight with all
taxes, fees
etc included.

The private screen includes an


individual screen for each seat, so
passengers can independently
choose what they watch.

Please tick only


one
Seat
Pitch
28"

Seat
Width
17"

none

Seat
Pitch
31"

Seat
Width
18.5"

sandwich

Seat
Pitch
28"

Seat
Width
17"

hot meal

In-Flight Meal

In-Flight Entertainment
standard plus amenity pack

In-Flight Meal

In-Flight Entertainment
private screen plus amenity pack

In-Flight Meal

In-Flight Entertainment
standard

Complimentary
Bar Service
yes

Ticket
Price
300

Complimentary
Bar Service
none

Ticket
Price
400

Complimentary
Bar Service
none

Ticket
Price
300

Don't Know

Extra seat
width is
available on
some options

This is the in-flight meal which will


be served. Snacks can be bought to
eat on board in addition.

Drinks can still be purchased


onboard if there is no
complimentary bar service

For each card, please select only one option. If you are unsure which you prefer, tick
the dont know box.
Fig. 1. Front page of the survey.

collected from the survey avoided fatigue bias on the part of


respondents in terms of responses being made, we blocked the
choice cards into three groups of ve. Thus, each respondent only
needed to undertake ve choice tasks. Each choice task appeared as
a separate screen similar to that shown in Fig. 1.
The sample consisted of 568 useable responses, comprising
56% males with the vast majority of respondents being UK
nationals (almost 90%). This indicates a slight bias in the sample
in terms of males but not large. The current UK population gender
mix is almost 50:50. Next, in our sample 63% of respondents had
no children, and 32% were single. Benchmarking these survey
characteristics against the UK we can see that they are realistic.
Currently in the UK there are estimated to be 33% single households and 62% of households have no children. In terms of
education 22% of our respondents had some level of university
education (undergraduate and/or postgraduate). The distribution
of income was relatively evenly distributed over the sample, with

26% earning below 25,000, 16% earning over 50,000 and


a sample average of 35,000. For the UK the average income for
non-retired households was 37,600 in 2006/07. Finally, the
average age of respondent was 34 years old whereas for the UK it
was 39 in 2007.

4. Results and analysis


We began our estimation of the data by identifying an appropriate model specication. After a rigorous examination of the data
we estimated a model in which all our coefcients are random. We
employed the log-normal distribution for the price coefcient and
the normal distribution for all other coefcients. This choice of
distribution is in contrast to many of the existing classical studies
that have employed the triangular distribution (Hensher and
Greene, 2003), but unlike them, we estimate the data in WTP space.

K. Balcombe et al. / Journal of Air Transport Management 15 (2009) 221226

Thus, the model specication estimated is;

Ui b1 Pricei b2i Pitchi b3i Widthi b4i Bari


b5i Amenity Packi b6i Screeni b7i Sandwichi
b8i No Meali b9i Status Quoi ei

(3)

where Price is the price of the ticket, Pitch and Width are seat
specication characteristics, Bar is a drinks service, Amenity Pack
and Screen are on-board entertainment options, and Sandwich
and No Meal are the food options. These parameters provide us
with a measure of how much our survey respondents are WTP to
change their in-ight on-board travel services. Finally, the Status
Quo captures an option common to all choice sets that can be
consider the current default with respect to in-ight travel service
provision.
In terms of computational performance the MCMC sampler
worked very well for this particular model specication. The results
we generated by employing a burn-in of 1000 draws, then undertaking a further 10,000 draws. Both the burn-in and the subsequent
draws used in the analysis are constructed by sampling only one in
every 100 draws so as to yield robust statistical results. Both
observation of the sample and our convergence statistics indicated
that our model converged.
The rst thing to note about the results reported in Table 2 is
that the Price coefcient is the sign we would expected a priori.
Second, as this model is estimated in WTP space these estimates
can be directly interpreted as WTP estimates. However, it is
necessary to note that some of the variables have been scaled as
part of the estimation process. The Price coefcient has been
divided by 100 and Pitch and Width by 10. Thus, we can see that on
average our survey respondents are WTP an extra V22 for additional Pitch (leg space) and V29 for extra seat width. With respect
to the other attributes we can see that respondents are not WTP for
an Amenity Pack (AP) because of the negative sign, although for this
parameter the posterior mass is to the positive and negative side of
zero as indicated by the lower quartile estimate being negative and
the upper quartile estimate being positive, which means that we
are not condent that this parameter is not equal to zero. Similarly
the sandwich parameter also has a posterior density both positive
and negative. However, respondents are prepared more for a Bar
service and a screen. Finally, the negative sign on No Meal indicates
that survey participants are WTA the loss of this service but only
with an associated reduction in the price of the ticket, i.e., V31. The
WTP for these changes attribute levels are V31, V37, and V31,
respectively. Although these might appear to be rather large it has
to be remembered that once on-board an airline is a monopoly
provider of all services and as such consumers may well have
become conditioned to expect these kinds of values for these
additional services. It also needs to borne in mind that these
additional amounts in and of themselves are relatively small
compared to the overall price of the ticket. To place these values in
context if an individual was to purchase a ticket that included the

225

highest specication on offer relative to the status quo then the net
WTP is V121.
The only CE study which provides comparable estimates is
Espino et al. (2008) who found that the MNL yielded higher WTP
estimates than the ML. In the case of additional legroom the MNL
yielded WTP of V33 and the ML V15. Our estimate is V22 which is
clearly comparable. However, our estimate for the WTP for
a sandwich is such that we cannot be condent that the parameter
is not zero. We also nd that the WTP for having No Meal is much
higher than Espino et al. report, although the duration of the ight
examined in our study is signicantly longer. It could also be the
case that the estimate we report is for a reduction in the level of
service provided, as opposed to a level higher than the status quo.
In terms of actual pricing by airlines for various on-board
services, Dennis (2007) notes that Aer Lingus offers a full Irish
breakfast for V7 and a hot ham and cheese Panini for V5. Although
the price of the breakfast is signicantly less than the WTP for the
hot meal we estimate there is a reasonably correspondence with
our mean estimate for the price of a sandwich and the Panini. Thus,
the WTP estimates are comparable with other results and data.
The correlation coefcients are reported in Table 3 reveal that
there is no consistent pattern. For example, we can see that having
more leg space and seat width are negatively correlated. Thus, there
is no reason to assume that tall passengers who would prefer more
leg space demand wider seats. We can also see that extra leg space
is positively correlated with having a screen and correlated with No
Meal. Interestingly, there is a positive correlation between seat
width and having bar service, and a negative correlation between
seat width and no meal.
The socio-economic variables included in the analysis are Age,
Income, Gender and Education. All variables have been included as
dummy variables. In the case of Age and Income the data have been
divided at the sample mean; 34 years old and 35,000 per annum.
These variables are included in the ML as

bij a0 a1 Agej a2 Incomej a3 Genderj


a4 Educationj ei

(4)

This model was estimated assuming the same random parameter distributions. In terms of computational details this model
required a burn-in of 2000 draws, then undertaking a further
10,000 draws. Both were constructed by sampling only one in every
250 draws. This conguration was necessary given the higher
dimension of the model compared to the basic ML specication and
the resulting problems of achieving model convergence. Our results
for this model are presented in Table 4.
As can be seen in the table all the socio-economic variables have
an impact on the various WTPs. Starting with Age we can see that
older respondents are WTP more for aspects of seat comfort
whereas younger respondents are WTP more for an on-board bar
and screen. Thus, differences in Age indicate that older travelers are
more concerned with comfort and Younger travelers prefer very

Table 3
WTP correlation coefcients.

Table 2
MXL regression results (excluding socio-economic variables).
Variable

Mean

Standard Deviation

Lower Quartile

Upper Quartile

Price
Pitch
Width
Bar
AP
Screen
Sandwich
No Meal
ASC

1.337
2.187
2.886
0.307
0.080
0.373
0.068
0.316
1.042

0.484
2.872
0.755
0.372
0.341
0.477
0.364
0.389
1.265

0.991
0.236
2.372
0.056
0.312
0.049
0.174
0.054
1.889

1.592
4.121
3.402
0.561
0.153
0.695
0.316
0.580
0.188

Pitch

Width

Bar

AP

Screen Sandwich No Meal ASC

Price
0.042
0.018 0.024
0.043
0.005 0.045
Pitch
1
0.744 0.205
0.368
0.607
0.523
Width
1
0.125 0.249 0.460 0.433
Bar
1
0.077 0.032 0.185
AP
1
0.202
0.135
Screen
1
0.290
Sandwich
1
No Meal
ASC

0.019
0.522
0.418
0.077
0.187
0.312
0.412
1

0.026
0.940
0.71
0.233
0.374
0.587
0.505
0.502
1

226

K. Balcombe et al. / Journal of Air Transport Management 15 (2009) 221226

Table 4
Mixed logit results conditioned on socio-economic variables.
Age Variable

Price
Pitch
Width
Bar
AP
Screen
Sandwich
No Meal
ASC
Income Variable

Young

Old

Mean

stdv

Mean

stdv

1.019
2.028
2.773
0.473
0.141
0.408
0.044
0.372
0.991

0.425
3.662
1.656
0.398
0.361
0.596
0.406
0.449
1.451

1.179
2.702
3.738
0.200
0.024
0.188
0.157
0.279
1.559

0.496
3.602
1.709
0.396
0.363
0.594
0.403
0.449
1.434

Below Average

Above Average

Mean

stdv

Mean

stdv

Price
Pitch
Width
Bar
AP
Screen
Sandwich
No Meal
ASC

1.083
1.623
2.500
0.351
0.138
0.322
0.010
0.407
1.206

0.466
3.527
1.441
0.416
0.359
0.603
0.398
0.440
1.456

1.078
3.309
4.126
0.375
0.021
0.307
0.209
0.221
1.258

0.456
3.519
1.717
0.429
0.360
0.607
0.397
0.441
1.450

Gender Variable

Male

Price
Pitch
Width
Bar
AP
Screen
Sandwich
No Meal
ASC
Education Variable

Price
Pitch
Width
Bar
AP
Screen
Sandwich
No Meal
ASC

Female

Mean

stdv

Mean

stdv

1.293
2.997
2.652
0.322
0.116
0.463
0.168
0.272
1.366

0.480
3.575
1.645
0.420
0.359
0.586
0.400
0.446
1.456

0.824
1.513
3.826
0.409
0.058
0.137
0.003
0.406
1.071

0.298
3.590
1.668
0.415
0.364
0.585
0.399
0.448
1.459

School

Higher

Mean

stdv

Mean

stdv

1.065
2.491
2.450
0.447
0.073
0.303
0.096
0.301
1.201

0.452
3.631
1.139
0.392
0.365
0.609
0.406
0.449
1.470

1.152
1.794
5.598
0.079
0.147
0.373
0.092
0.422
1.331

0.489
3.617
1.196
0.386
0.365
0.604
0.410
0.449
1.461

specic forms of on-board service provision. In terms of Income we


see that higher income respondents are WTP signicantly higher
amounts for seat comfort, e.g., Pitch Young V16 versus Old V33.
Interestingly lower income respondents require a higher WTA no
meal compared to higher income respondents. When we consider
gender we see that females are WTP more for seat width and males
set pitch. Males are also WTP far more for an on-board entertainment screen and females require signicantly higher WTA for no
meal. Finally, when we consider education we can see that levels of
higher education are related to lower WTP for seat pitch but much
higher seat width. Also lower levels of education yield a much
higher WTP for use of the bar.
5. Conclusions
A CE has been deployed to examine consumer WTP for onboard/in-ight service provision and level of comfort. Our results
indicate that product differentiation and avoidance of the intra-EU

competition are viable strategies to deal with the signicantly


increased competition within the LCC 3-h range. This survey has
addressed which attribute levels are perceived to be valuable by
consumers, and has provided WTPs for specic levels of these
values. In addition, we have been able to identify which type of
customer is WTP for which specic type of service provision.
Overall the results indicate that a revised provision of additional
on-board comfort and service levels yield a net WTP of approximately V120. This may appear to be a rather large amount but it
needs to be remembered that price differences of this magnitude
already exist in the market for trips of this type when comparing
different airlines. Thus, it would appear that there is scope for CAs
to consider the overall quality of their on-board service provision
and not simply follow the approach adopted by the LCCs and
operate a no-frills service. Indeed, the WTP plus the WTA estimates
found for the reduction in food service provision indicate that
following the LCC no-frills strategy need not be the only business
model to pursue. However, several CAs have already started to offer
longer-haul ights that embrace the no-frills approach. The success
or otherwise of these services will provide important insights and
actual market data information on the topic of quality and type of
on-board service provision demanded by consumers.
Acknowledgements
The authors thank two anonymous referees for their comments
on an earlier version of this paper.
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