What do Chinese passengers expect from domestic airlines?

Abstract

It is well understood that apart from low fares, passengers today also value convenience and other service aspects such as departure and arrival times and check-in queue time. This paper seeks to investigate the passenger expectations of services in China’s domestic air market and how they evaluate some important airline service attributes in the stated choice experiments. Using the Likert scale data and the stated preference data, this paper first identifies the order of importance of the service items from the point of ticket purchase to the point of arrival baggage claim and then elicits the values that Chinese passengers place on schedule delay, punctuality and the size of network. Not surprisingly, safety was rated as the most important out of the 16 items. Chinese passengers have very low tolerance on flight delays and mishandling of their baggage. Interestingly, the size of fleet and the Frequent Flyer Programs are not considered as very important issues. This research also shows that Chinese airlines have failed to establish a strong brand reputation among passengers, and that consumers are willing to pay a high amount of money to avoid schedule delay and to fly with airlines with improved punctuality, especially when the travel is for business purpose. This research has significant implications for both large and small carriers in the design of non-price competition strategies.