The effect of service quality and price on international airline competition

A game theoretic model, integrated with passenger’s international choice behaviour, for the competition between international airlines is developed and used to identify the role of competing service quality. The empirical evidence suggests that safety, convenience, and service quality have a major influence on the choice decision of air passengers. Passengers respond strongly to decreases in price, safety, service comprehensiveness and increases in convenience. In a Cournot model, airlines are predicted to increase service quality, with China Airlines, a dominant carrier, the winner on safety and service quality. Foreign companies are beneficiaries in providing convenient service quality. In a Stakelberg model, all the airlines will increase safety and diversify service quality to a reference point. Foreign airlines will additionally be winners in safety and convenience with China Airlines a winner in diversifying service quality. (a)

• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/14403501
• Authors:
  • JOU, R -
  • LAM, S -
  • HENSHER, D A
  • KUO, C -
• Publication Date: 2006-1

Language

• English

Media Info

• Pagination: 20P
• Serial:
  • Institute of Transport Studies and Logistics Working Paper
  • Issue Number: ITLS- WP-06-01
  • Publisher: INSTITUTE OF TRANSPORT STUDIES AND LOGISTICS
  • ISSN: 1440-3501

Subject/Index Terms

• TRT Terms: Air transportation; Behavior; Competition; International; Level of service; Mathematical models; Passengers; Travel
• ITRD Terms: 1126: Air transport; 9001: Behaviour; 235: Competition; 9034: International; 698: Journey; 653: Level of service; 6473: Mathematical model; 1715: Vehicle occupant
• Subject Areas: Aviation; Operations and Traffic Management; Passenger Transportation; Planning and Forecasting; I71: Traffic Theory; I72: Traffic and Transport Planning;

Filing Info

• Accession Number: 01032333
• Record Type: Publication
• Source Agency: ARRB
• Files: ITRD, ATRI
• Created Date: Sep 6 2006 1:38PM