A Study on Determining Factors Influence Pricing Competitive for Airlines in Malaysia

Suhairah Abdul Mutalib,Rafidah Othman,Ilham Sentosa,Poh-Chuin Teo,Beni Widarman Yus Kelana,Zaiful Hasmi Hashim,Theresa C.F Ho

doi:10.6007/ijarbss/v10-i3/7060

Suhairah Abdul Mutalib, Rafidah Othman + Show 5 more

Open Access

https://doi.org/10.6007/ijarbss/v10-i3/7060

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Abstract

The purpose of this study is to determine the factors influence pricing competitive dynamic airlines by passenger for the specific routes of Kuala Lumpur to Singapore between the Prime Carrier and Low-Cost Carrier. This research was derived in response of World’s Busiest International Air Routes report from OAG Aviation Worldwide that shows more than 30,000 flights frequency in both directions for international route Kuala Lumpur to Singapore during 12 months in 2018. This study will be understanding the influence in pricing competitive between forecast on demand, and product quality. A framework model has been proposed to determine the factors on competitive airlines pricing in Malaysia and the variables are Market Segmentation, Product Quality and Demand Forecast. This research used a quantitative data collection method to gather or to prompt information from respondents, in this case passenger who is using flights from Kuala Lumpur to Singapore. A total of 424 passengers was sampled and the set of questionnaires were distributed using the non- probability sampling technique which is convenience sampling to obtain sample data to be analyzed. The analysis in this study was conducted using descriptive statistical analysis tools. – SPSS – version 23. Results from the multiple analysis demonstrate that product quality and demand forecast as factors influencing pricing competitive.

Highlights

This study will determine the factors affecting airlines passenger’s pricing competitive in purchasing airlines ticket between full service network carriers and low cost carriers while only focus on one point of sales from the busiest routing Kuala Lumpur to Singapore in Malaysia
The objective of this study is to discover the factors that determine the airlines pricing competitive between prime carriers and budget carriers for route Kuala Lumpur (KUL) to Singapore (SIN) in Malaysia
According to Smith (1995) who is developed the consumer sovereignty test (CST) which measures this theory by looking at three factors; consumer capability to make rational decision, availability and quality of the information and choice to swing the competitors from airlines perspective

Summary

Introduction

This study will determine the factors affecting airlines passenger’s pricing competitive in purchasing airlines ticket between full service network carriers and low cost carriers while only focus on one point of sales from the busiest routing Kuala Lumpur to Singapore in Malaysia. – Ranked 2nd is Jakarta Airport (CGK) and in 3rd place is Singapore Changi Airport (SIN) At both airports the dominant airline is a legacy carrier indicating the strength of competition between prime legacy and low-cost budget airlines (The Megahubs International Index). This is one of the cause factor of war pricing competitiveness between the Full Service Network Carrier (prime carrier) and Low Cost Carrier (budget carrier) in airlines industry in Malaysia as stated by O’Connell and Williams (2005), low cost airlines have intensified the direct competition with full service airlines, during the weak economic situation in 2008 and 2009. Today’s air transport is a demanding and competitive business, where margins are tight and is usual that some airlines record losses of millions (Cento, 2008)

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