Ancillary Revenue of Full Service Airline An analysis of the Passenger’s Willingness to Pay |WTP| (The Case of Middle East Airlines)

Abstract

Purpose: The provision of auxiliary services to paying customers is becoming an increasingly important focus for full-service airlines as they look for novel strategies and opportunities to generate more revenue. Therefore, the measuring of passengers' willingness to pay, also known as WTP, is critical for accurately estimating the demand for ancillary services and setting prices for those services. The current study investigates whether the type of consumer, the purpose for the journey, the duration of the flight, and the aircraft class can have an effect on the willingness-to-pay for supplementary services provided by Middle East Airlines (MEA).
 Design/Methodology/Approach: The data that are utilized in this quantitative research is derived from a survey that was administered to the passengers of Middle East Airline. This was followed by an exploratory and confirmatory analysis that investigated the link between WTP and the factors that were involved.
 Findings: The study revealed that business travelers are more likely to pay for additional luggage and priority boarding, particularly when they are taking long trips. In addition, bundles, which often consist of car rental and hotel stays, are of utmost significance and are given considerable thought by business travelers.
 Implications/Originality/Value: This research may assist airline businesses (mainly MEA) in both short- and long-distance travel in providing new and additional services for business travelers in order to boost ancillary revenue. This research will be helpful to airlines in developing an efficient and accurate pricing system for the ancillary services and products, which will be carried out by measuring the consumer's WTP (willingness to pay).