Estimation of Willingness-To-Pay for Premium Economy Class by Type of Service

This study aims to estimate the willingness-to-pay (WTP) to upgrade from economy to premium economy class in Korea by six types of services and to identify the socioeconomic and travel characteristics of international travelers affecting the WTP using the Tobit model assumed to be censored at zero. The results confirm that the travelers’ WTP for the premium economy class in the long-haul travel is higher than those in the medium and the short-haul travels. However, the ratio of additional WTP to the economy class fare in the long-haul route is slightly lower than that in the medium-haul route. The results also present that international travelers in Korea have the highest WTP for increased seat width in the premium economy class service attribute, followed by upgraded in-flight meal service and increased seat pitch. Finally, the results indicate that the WTP to upgrade to premium economy class are proportional to the age or the income level of travelers. Furthermore, international travel frequency and the experience of premium economy class have a positive impact as well. This research can be a useful resource for analyzing international travelers’ WTP concerning the type of service and this information will be useful to policy makers in their efforts to determine their fare policies and the target audience for marketing premium economy class.

  • Supplemental Notes:
    • This paper was sponsored by TRB committee AV040 Standing Committee on Aviation Economics and Forecasting.
  • Corporate Authors:

    Transportation Research Board

    ,    
  • Authors:
    • Jeon, Mi-Sun
    • Lee, Jang-Ho
  • Conference:
  • Date: 2019

Language

  • English

Media Info

  • Media Type: Digital/other
  • Features: Figures; References; Tables;
  • Pagination: 6p

Subject/Index Terms

Filing Info

  • Accession Number: 01697410
  • Record Type: Publication
  • Report/Paper Numbers: 19-00279
  • Files: TRIS, TRB, ATRI
  • Created Date: Dec 7 2018 9:26AM