AN ASSESSMENT OF SOME FACTORS INFLUENCING THE COMPETITIVE STRATEGIES OF AIRLINES IN DOMESTIC MARKETS

Abstract

Domestic deregulation has brought more marketing freedom to the airline industry. In such a competitive environment, it is important for airline management to quantify the different factors that influence their competitive strategies. Using a multinomial logit choice model, this paper attempts to assess passenger perception of some service attributes of airlines including peak and off-peak frequency of service, airfare, flight itinerary and aircraft size. The model is estimated using observed choices of a sample of air travelers in 1986. A sensitivity analysis of airline service characteristics and their marketing implications are conducted.

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