The impact of low-cost carriers on consumer travel behaviour.

• Main Authors: Lim, Song Yee., Tan, Serena Xin Miao., Wong, Yoon Sann.
• Other Authors: Chan Ying Lock
• Format: Final Year Project
• Language: English
• Published: 2011
• Subjects: DRNTU::Social sciences::Recreation; DRNTU::Business::Marketing::Consumer behaviour
• Online Access: http://hdl.handle.net/10356/44160
• Institution: Nanyang Technological University

In recent years, the Asian aviation industry has seen a sudden influx of low-cost carriers mainly due to government deregulation. Consequently, this emergence of low-cost carriers has brought about a significant change in consumer travel behavior. As such, this study aims to identify the variables contributing to this shift and recognises its effects on the air travel industry. After some extensive research, two independent variables were identified – price and service delivery. Subsequently, eight hypotheses were formulated to further examine the effects these variables have on consumer travel behavior. To test these hypotheses, 268 completed survey responses were collected and analyzed. Data analysis showed that the price of LCC airfares is negatively related to the emergence of short break holidays, development of existing markets and in general, commoditization of air travel. It indicates that the lower the price, the smaller the emphasis consumers place on airline brands and the greater the amount of spending in other areas (recreational and cultural). In addition, we also found out that baggage brought on board by passengers is inversely related to the price of the baggage allowance. The ease of purchase, on the other hand, is positively related to the customer’s control of the purchase process. A significant finding within this paper would be that the level of safety consciousness amongst passengers is indifferent to the price of airfares. To understand the needs of different consumer groups, further analysis was also conducted against the demographic profiles of respondents.