Willingness to pay for airline services and product attributes in South Africa

Abstract

The primary objective of this research was to understand airline services and product attributes that customers value and to estimate their willingness to pay for these attributes. The research also aimed to understand the consumer decision making and buying process particularly with reference to rules used in the buying process. Would the ranking of a service or product attribute influence customers’ willingness to pay for that attribute? The research was based in South Africa. This research used a structured survey design, asking customers to rank their preferred product attributes and went on to enquire about their willingness to pay for those attributes. The main findings regarding the preferred attributes mirrored those that were uncovered in the literature review. For business travellers, Frequency, Comfort and Business Lounge were found to be predictors of willingness to pay. Only the Business Lounge was found to be a predictor of willingness to pay for non-business travellers. Willingness to pay responses from the two groups were similar; however the results showed that non-business travellers were significantly more willing to pay for Flight Frequency while business travellers were significantly more willing to pay for access to the Business Lounge. With regards to the use of decision making rules, there did not seem to be any clarity on the use of any decision rules for business and non-business travellers.