Air passengers’ willingness to pay for ancillary services on long-haul flights

Abstract

While ancillary services were initially provided by legacy carriers on short- and medium-haul flights, the emergence of long-haul low-cost carriers has contributed to the adoption of ancillary services on long-haul flights as well. Nevertheless, limited attention has been paid to the specifics of ancillary services on long-haul flights and to how much passengers are willing to pay for such services. In this research, we aim to assess the willingness of passengers to pay for various ancillary services on long-haul flights and show how these values differ depending on passenger characteristics. Based on a choice-based conjoint analysis, we first investigate the importance of five ancillary services (checked baggage, inflight meal, seat selection, priority boarding, and onboard Wi-Fi) in the flight ticket selection process. In addition, we measure passengers’ willingness to pay for the entire sample and for subsets of respondents based on trip motive and age. Regarding trip motive, we reveal that leisure passengers are willing to pay more for most ancillary services than are business passengers. By contrast, when distinguishing between millennial and nonmillennial respondents, neither subsample is globally willing to pay more for ancillary services, with differences for each service. Finally, we compare the estimated willingness to pay for short- and long-haul services and reveal that flight duration has a contrasting impact on the willingness to pay for ancillary services (with either a positive or null impact on willingness to pay). In addition, our comparison of the estimated willingness to pay with the actual fees charged by airlines allows us to draw conclusions on their attractiveness for passengers.