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Passenger booking timing for low-cost airlines: A continuous logit approach

Chieh-Hua Wen and Po-Hung Chen

Journal of Air Transport Management, 2017, vol. 64, issue PA, 91-99

Abstract: Low-cost airlines irregularly launch ticket promotions, where fares may differ by day of the week and departure dates. The timing for purchasing air tickets is thus closely associated with fares. Airlines should analyze booking timing for tickets and increase the accuracy of demand forecasts to achieve efficient use of airplane seating and plan for promotional activities. Therefore, this study develops a continuous choice model for timing decision making regarding bookings. A trigonometric function is used and interacts with trip and socioeconomic characteristics to capture the heterogeneous preferences of air passengers. Data were collected from low-cost airline passengers traveling from Taiwan to Singapore. The results of the continuous multinomial logit model indicate that lower fares increase the number of bookings and heterogeneous preferences in booking timing are present. Some travelers tend to book flights earlier than the other groups: these are the price-sensitive customers.

Keywords: Airline; Itinerary; Booking; Continuous choice (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:jaitra:v:64:y:2017:i:pa:p:91-99