Transformations  in
Business & Economics

EXPLORING PASSENGER PERCEPTIONS OF AIRLINE BUSINESS MODELS⁸
Yi-Hsin Lin, Kuancheng Huang, Feng-Jyh Lin

ABSTRACT: The success of the low-cost business model in aviation and the resulting surge in new demand has propelled the rapid expansion of low-cost carriers (LCCs). Consequently, traditional full-service carriers (FSCs) have undergone substantial operational adjustments. This study explores passengers’ perceptions of services offered by LCCs compared to FSCs and the associated business model, examining their pivotal role in influencing preferences and purchasing behaviour. Survey data were gathered from passengers at Taiwanese airports. The results of the statistical analyses unveil several noteworthy findings organised within a framework comprising four quadrants: LCC Main Course, FSC Main Course, Garnish, and Dessert, drawing an analogy to meal ordering at restaurants. Finally, in-depth discussions provide insights into the disparities between existing literature viewpoints and passengers’ actual perceptions, offering practical recommendations to help airlines differentiate themselves and enhance competitiveness.

KEYWORDS:  low-cost carriers, business model canvas, full-service carriers, airline service, importance-performance analysis.

JEL classification:  M14, M19, P2.

⁸Acknowledgments:  This research received the Ministry of Science and Technology of Taiwan for financial support under grant MOST 105-2410-H-468-016.