Modeling airport choice for a multi-airport area using a random parameter logit model

Abstract

Recent years have seen a growing demand for air transport which has led to an increase in the number of airports providing a significant number of flights in Spain and throughout the rest of Europe. Choosing which airport to use depends on the competition between the airlines operating from them and how accessible they are to the residents in the surrounding areas. This research introduces an efficient design based on D-error using a stated preferences survey to study user behaviour when choosing between competing airports. The data is modelled using a Multinomial Logit Model and a Random Parameter Error Component Logit (RPECL), a discrete choice model which allows us to study user preferences taking into account their varying systemic and random tastes, as well as find specific correlations which may exist between similar alternatives. This meant the authors were also able to calculate the direct and cross elasticities to examine the weight of the different variables involved in making the choice of airport. The results showed, for a study case in Spain (Bilbao and Seve Ballesteros - Santander airports), that increased access time to the furthest airport caused an important fall in demand (choice) for that airport. It was also shown that access fees had a lower elasticity than the flight cost and that the fewer the transfers required to reach the final destination increased the probability of choosing an airport. Therefore, in order for smaller airports to compete with larger airports they need to invest more in reducing the cost of flights, attracting more low-cost companies and offering more direct complementary destinations than those provided by larger airports.