Competing on Value: Perspectives on Business Class Aviation

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. The authors 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.

Language

  • English

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  • Accession Number: 01155597
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Apr 21 2010 8:58AM