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Modeling the Effect of Enlarged Seating Taiwan

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Journal of Air Transportation Vol. 9, No. 2 - 2004 MODELING THE EFFECT OF ENLARGED SEATING ROOM ON PASSENGER PREFERENCES OF DOMESTIC AIRLINES IN TAIWAN Jin-Long Lu and Li-Nung Tsai Department of Aviation and Maritime Management Chang-Jung Christian University ABSTRACT This study focuses on measuring the effect on Taiwanese airlines if they were to enlarge the seating room in airplanes per passengers’ preferences. A stated choice experiment is used to incorporate passengers’ trade-offs regarding preferred measurements; furthermore, a binary logit model is used to model the choice behavior of airline passengers. The findings show that the type of seat is a major significant variable; price and the airline company are also significant. The conclusion is that airlines should put more emphasis on the issue of improving the quality of seating comfort. INTRODUCTION After the deregulation of the airline industry, and due to the expectations of an increased demand, most airlines placed as many seats as possible in each plane. As a result, the seating space for each passenger, including legroom and arm rest room, had to be sacrificed. Consequently, airlines offer poor service when it comes to standards of seating comfort. Airline travelers are becoming more and more concerned about the quality of seating comfort during their journey in the sky, especially during long-haul inter-continental trips. Based on the results of some reports, the majority of airline passengers consider the legroom, armrest, and personal seating room of their seat to be Dr. Lu, Jin-Long, got his Ph.D. degree from National Cheng-Kung University. He is an Assistant Professor in the Department of Aviation and Maritime Management at Chang-Jung Christian University, Taiwan. Mr. Tsai, Li-Nung, is a senior student of the Department of Aviation and Maritime Management at Chang-Jung Christian University in Taiwan. © 2004, Aviation Institute, University of Nebraska at Omaha84 Journal of Air Transportation quite important. Business travelers especially viewed the quality of seating room as a critical index in the level of total service of an airline (Toynbee, 1994; Flint, 1995). Alamdari (1999) indicated that airline passengers considered the quality of seating room to be one of the important factors when selecting an airline. Fiorino (1999) stated that the uncomfortable seating configuration in coach class is the root of much passenger discontent. Hence, there are more and more airlines, including United Airlines, American Airlines, British Airways, Virgin, and Singapore Airlines, that are directing a lot of effort into reconfiguring seating and expanding legroom so that they can provide better seating comfort to their passengers (McDougall, 2002). In Taiwan, some local researches have shown that the quality of seating room is one of the most important factors when travelers select a domestic airline. However, the quality of seat comfort those airline passengers actually receive falls far short of their expectations. It is evident that if an airline would pay more attention to improving seat comfort, the passengers might attach a higher value of total service quality to that airline, and this could very well change their preferences. In other words, the effect of seating environment on a passenger’s choice of airline should not be ignored. In addition, because of the gradual decline in the passenger load factor in recent years and the upcoming competition of high speed rail in Taiwan, it appears the time has come to seriously discuss the policy of passenger-maximization. If airlines are willing to adjust their cabin configuration and decrease the total number of seats, or rather enlarge the seating space of each seat in economy class, they can promote different price strategies and most likely raise their load factor as well as their revenue. The aim of this study is to explore the change in airline passengers’ preferences in situations where service quality (in terms of seating room) has improved by offering an enlarged seat size. It should be noted that, in this study, enlarged seats do not mean increasing the number of business class seats. Enlarged seating capacity could simply mean that the size of the economy class seats is enlarged. The stated choice method (Louviere, Hensher & Swait, 2000) is used to administer an experimental design that includes three variables: seat type, price, and company (airline). Then a binary logit model is used to describe the choice behavior of airline passengers. Though this paper focuses on Taiwan’s domestic airline passengers market, the results can also be applied to the marketing practice of international airlines. This is especially true for those domestic airlines in Taiwan that are well prepared to service future routes between Taiwan and Mainland China. The results of this study could provide some suggestions for improvement in passenger service.Lu and Tsai 85 BACKGROUND Taiwan’s Domestic Airline Passenger Market The airline industry in Taiwan has grown rapidly over the past two decades, especially after its deregulation in 1988. Air transportation in Taiwan services about two percent of intercity traffic. The round trip between Taipei in the north, the political and economical center of Taiwan, and Kaohsiung, the largest metropolitan city of southern Taiwan, is the main element of the domestic airline transportation. In 2001, there were almost four million passengers, 33 percent of Taiwan’s domestic air transportation traffic, between Taipei and Kaohsiung. However, in recent years, due to a combination of drastic expansion of the airline industry, and a slow but steady decline in the economy, the passenger load factor has gradually declined. In 2001, the passenger load factor was only about 56 percent. This trend is illustrated in Figure 1. Figure 1. The growth trend of Taiwan’s airline passengers market, 1984-2001. 2006501100155020001984 1986 1989 1992 1995 1998 200150%60%70%80%90%Ye arPassenger Load Factor(%)Passengers (10,000)Source: The Statistic Year Book of Civil Aviation, Civil Aeronautics Administration (C.A.A.), 2002. At present, there are four domestic airlines in Taiwan: Far Eastern Air Transport, Trans Asia Airways, Uni Air, and Mandarin Airlines. Their individual market share of the Taipei-to-Kaohsiung route is shown in Figure 2. The figure shows that Far Eastern Air Transport dominates the air passengers market on this


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