An Analysis of the Relationship between Passenger Loyalty and Consumer Buying Behavior for Network and Low-Cost Carriers

Abstract

AbstractThis essay investigates passenger loyalty and consumer buying behavior within the airline industry using an Internet-based survey approach. Four hundred and seven air travelers from network and low-cost carriers are segmented into Dick and Basu’s (1994) loyalty groups (“Loyal,” “Latent Loyalty,” “Spurious Loyalty,” and “No Loyalty”), derived from their relative attitude and repeat patronage toward the airline that they used the most. To investigate the significance of the relationships between the loyalty groups and passengers’ individual characteristics, an evaluation of purchasing criteria within loyalty groups was conducted. Frequent-flier program (FFPs) and range of destinations were found to be the product variables rated highest among the most frequent travelers from network carriers. Passengers of low-cost carriers rated price, schedule, and airport location most highly. The results show that network carriers can develop a sizable group of loyal passengers. These airlines also have a substantial group of passengers who display latent loyalty that may be converted into fully loyal passengers by better meeting their needs. In comparison, very few travelers displayed any level of loyalty to their most-used low-cost carrier.