Full-Service Carrier (FSC) vs Low-Cost Carrier (LCC): Purchasing Decision-Making Process of Passengers

Year 2023, , 365 - 375, 15.11.2023

Nuran Karaağaoğlu , Şafak Gündüz

https://doi.org/10.30518/jav.1320304

Abstract

The demand for the aviation industry has grown as a result of the shift in people's travel preferences brought on by rising wealth and expanding trade in the world and in our nation. Air travel is now preferred due to state assistance, new airports, superior aircraft, and the relative drop in expenses. This study's main focus is on the consumer purchase patterns of two airline companies that operate in the very competitive aviation sector. Depending on whether the airline is a full-service carrier or a low-cost carrier, these variables change. The "Factors Affecting Airline Preferences Scale" was created and distributed to passengers of two airline organizations at Istanbul Sabiha Gökçen Airport (a full-service carrier (FSC) and a low-cost carrier (LCC) operating in Turkey) to assess the extent to which variables like airline reputation, advertising, frequent flyer programs, price, service quality, and digital marketing tools like websites, e-mails, Facebook, Twitter, Instagram, YouTube, and mobile applications have an impact on the process of ticket purchasing decision of passengers. It was shown that the passengers' purchasing decisions were influenced by reputation, service quality, frequent flyer programs, price, digital marketing initiatives, and advertisement. It was shown that depending on whether the airline is a full-service carrier or a low-cost carrier, the impact of these elements differs.

Keywords

Airline Reputation, Digital Marketing, Purchasing Behavior, Low-Cost Carrier (LCC), Full-Service Carrier (FSC)

References

• Abdelhady, M., Fayed, H., & Fawzy, N. (2018). The influence of the 4Ps on passengers' purchasing decision- making: the case of LCCs. International Journal of Heritage, Tourism, and Hospitality, 12(1/2).
• Acar, Z., & Karabulak, S. (2015). Competition between full-service network carriers and low cost carriers in Turkish airline market. Procedia Social and Behavioral Sciences, 207, 642-651.
• Aktepe, C., & Şahbaz, R. P. (2010). Analysis of Turkey's five biggest airlines in terms of brand equity components and practice in Ankara. Economics and Management Journal, 11(2), 69-90.
• Arslan, S., & Atalık, Ö. (2016). E-loyalty on social media sites and research on the airlines in Turkey. N. U. Journal of Economics and Management Faculty, 9(2), 1- 20.
• Atalık, Ö. (2005). Impact of the reward program elements on airlines customers: Case of Turkish Airlines. E- journal of Social Sciences, 4(14), 17-33.
• Atalık, Ö., & Özel, E. (2007). Passenger expectations and factors affecting their choice of low cost carriers: Pegasus Airlines. Proceedings of the Northeast Business & Economics Association, 285-288.
• Atalık, Ö. (2016). Product delivery in airway market. Ö. Atalık (Ed.). (in airway marketing). Eskişehir: Anadolu University Press, 132-157.
• Avram, B. (2017). Ancillaries in the aviation industry: importance, trends, going digital. Expert Journal of Marketing, 5(2), 53-65.
• Bakır, M., & Atalık, Ö. (2021). Application of fuzzy AHP and fuzzy MARCOS approach for the evaluation of e-service quality in the airline industry. Decision Making: Applications in Management and Engineering, 4(1), 127-152.
• Başaran, M., & Gözen, E. (2022). Factors affecting the ticket purchase decision of passengers travelling between Germany and Turkey. Journal of Tourism Intelligence and Smartness, 5(3), 256-273.
• Boomsocial, https://www.boomsocial.com /Instagram
• Breitengraser, R. (2021). Mobile only: It's time to shift your Marketing strategy. https://www.forbes.com/sites forbesbusinesscouncil/2021/04/06/mobile-only-its-time-to-shift-your-marketing-strategy/?sh=7edc908 164f8
• Buaphiban, T. (2015). Determination of factors that influence passengers’ airline selection: a study of low cost carriers in Thailand. PhD dissertation, Embry-Riddle Aeronautical University.
• Bukhari, S., Ghoneim, A., & Dennis, C. (2012). Understanding the factors that attract travelers to buy airline tickets online in Saudi Arabia. Paper Presented at the European, Mediterranean & Middle Eastern Conference on Information Systems, Munich, Germany.
• Campo, S., Yagüe, M. J. (2007). Effects of price promotions on the perceived price. International Journal of Sevice Industry Management, 18(3), 269-286.
• Carlsson, F., & Löfgren, A. (2006). Airline choice, switching costs and frequent flier programmes. Applied Economics, 38(13), 1469-1475.
• Cervera, A., Schlesinger, T., & Yagüe, G. (2013). Influence of advertising on brand personality in the airline sector: the case of Spain. Journal of Travel & Tourism Marketing, 30, 445-454.
• Cornelissen, J. (2004). Corporate communications: Theory and practice. London: Sage Pub.
• Czernoch, C., Verbeek ,L., Verhoeven, J., & Terrence Wong.(2019). Develop a stronger relationship with your customers by implementing CRM systems! https://customerengagementmanagementintourism. wordpress.com/
• Dolnicar, S., Grabler, K., Grün, B., & Kulnig, A. (2011). Key drivers of airline loyalty. Tourism Management, 32(5), 1020-1026.
• Durak, E. E. (2001). The Effect of price promotion from the promotion strategies above the consumers product preference and purchasing intention that applied in large scaled retailers. Master’s Thesis. Marmara University, Istanbul.
• Edwards, J. E. (2011). Key characteristics and attitudes of airline passengers, with particular emphasis upon the low-cost sector: implications for pre-trip decision- making and airline choice. PhD dissertation, University of Westminster.
• Eser, Z. (2016). Promotion mix in airlines. Ö. Atalık (Ed.). (in Airline marketing). Eskişehir: Anadolu University Puplishing, 158-187.
• Faiyetole, A. A., & Yusuf, T. B. (2018). Pre-Flight considerations, in-flight services, and post-flight receptions: factors influencing passengers’ international airline choices. Journal of Air Transport Studies, 9(2), 1-23.
• Fourie, C., & Lubbe, B. (2006). Determinants of selection of full-service airlines and low-cost carriers - a note on business travelers in South Africa. Journal of Air Transport Management, 12(2), 98-102.
• General Directorate of State Airports Authority (2020). https://www.dhmi.gov.tr/Lists/DosyaYonetimiList/ Attachments/730/2018_Havayolu_Sektor_ Raporu.pdf
• Gerede, E. (2015). Airport transportation and economic regulations theory and Turkey. Ankara: SHGM Publishing.
• Görkem, O., & Yağcı, K. (2016). Evaluation of airline passangers' perceptions of in-cabin services: Turkish Airlines example. Journal of Business Research, 8(1), 432-447.
• Grundy, M., & Moxon, R. (2013). The effectiveness of airline crisis management on brand protection: A case study of British Airways. Journal of Air Transport Management, 28, 55-61.
• Hapsari, R., Clemes, M. D., & Dean, D. (2017). The impact of service quality, customer engagement and selected marketing constructs on airline passenger loyalty. International Journal of Quality and Service Sciences, 9(1), 21-40.
• Hess, S., & Polak, J. W. (2006). Airport, airline and access mode choice in the Sanfrancisco Bay area. Papers in Regional Science, 85(4), 543-567.
• Hoon, L. S., Syihabuddin, Sudana, D., & Gunawan, W. (2022). Analysis of sincerity that influences consumer psychology in the advertising text of South Korean and Indonesian products from a pragmatic maxim perspective. Journal of Positive School Psychology, 6(12), 1280-1298.
• Huang, Y. (2009). The effect of airline service quality on passengers' behavioural intentions using SERVQUAL scores: a Taiwan case study. Proceedings of the Eastern Asia Society for Transportation Studies, 7, 427-440.
• IATA. (2018). https://www.iata.org/en/services/statistics /industry-insights--market-data/20-year-passenger- forecast/
• Işılar, H. B. (2021). An evaluation of digital marketing practices in aviation industry. Journal of Aviation and Space Studies, 1(2), 42-63.
• Jenefa, L. (2019). A brand reputation a milestone! Using e-wom marketing. Global Journal of Product and Brand Management, 1 (1), 1-4.
• Jöreskog, K. G., & Sörbom, D. (1979). Advances in factor analysis and structural equation models. New York: University Press of America.
• Kao, G. H., Wang, S. W, & Farquar, J. D (2020). Modeling airline crisis management capability: Brand attitude, brand credibility and intention. Journal of Air Transport Management, 89, 101894.
• Karaağaoğlu, N., & Ülger, G. (2020). The effect of airline companies' digital marketing communication on passenger buying decision. Maltepe University Faculty of Communication Journal, 7(2), 176-206.
• Kaya, L. (2018). Factors that can affect customer trends in civil aviation sector. Master’s dissertation, Maltepe University, School of Social Sciences, İstanbul.
• Kazançoğlu, İ. (2011). The effects of firm image and perceived service quality for customer loyalty in airlines. Akdeniz Journal of Faculty of Economics and Business, 21, 130-158.
• Koçak, B. B., & Atalık, Ö. (2017). Perceptual maps of Turkish airline services for different periods using supervised machine learning approach and multidimensional scaling. International Journal of Sustainable Aviation, 5(3), 205-229.
• Koçak, B. B. (2020). Exploring and identification of passengers’ web search goals using “ticket” related queries in the airline market: a google trends study. Marketing and Marketing Studies Journal, 3, 443-460.
• Koech, A. K., Buyle, S., & RosÃirio, M. (2023). Airline brand awareness and perceived quality effect on the attitudes towards frequent-flyer programs and airline brand choice - Moderating effect of frequent-flyerprograms. Journal of Air Transport Management, 107(4), 102347.
• Kurt, Y. (2017). Social media interaction of low cost airline users: Pegasus Airlines Twitter analysis. The Journal of Academic Social Science Studies, 60, 465-491.
• Mediacat (2018). New Agency for Turkish Airlines. https://mediacat.com/turk-hava-yollarinin-dijital-ajansi/
• Mestçi, A. (2017). Advertising in Internet. İstanbul: Pusula Publishing.
• Milioti, C. P., Karlaftis, M. G., & Akkogiounoglou, E. (2015). Traveler perceptions and airline choice: amultivariate probit approach. Journal of Air Transport Management, 49, 46-52.
• Morris, J. (2013). Social seating: Popular option for passengers. Tourism Review. https://www. tourism- review.com/travel-tourism-magazine-is-social-seating-the-future-of-flight-booking-article2103
• Nofal, E., Reffat, R. M., & Moere, A. V. (2017). Phygital heritage: an approach for heritage commnication. 3rd Immersive Learning Research Network Conference Coimbra, Portugal, 26–29 June 2017, 220-229.
• Oyman, M. (2002). The importance of loyalty programs in customer loyalty. Kurgu Journal, 19, 169-185.
• Özgen, Ö., & Elmasoğlu, K. (2016). Social media and brand communication: a research towards airlines organisations’ usage of Twitter. Journal of Communication, Theory and Research, 43, 181-202.
• Park, J. (2010). The effect of frequent flyer programs: a case study of the Korean airline industry. Journal of Air Transport Management, 16(5), 287-288.
• Peppers, D., & Rogers, M. (2004). Managing customer relationships: a strategic framework. New Jersey: Wiley Publishing.
• Pi, W. P., & Huang, H. H. (2011). Effects of promotion on relationship quality and customer loyalty in the airline industry: the relationship marketing approach. African Journal of Business Management, 5(11), 4403-4414.
• Pirtini, S., Atalık, Ö., & Aygün, G. (2006). Analysis of the factors affecting the consumers’ preferences as for brand communication and brand equity. İstanbul University Faculty of Communication Journal, 0(27), 125-136.
• Real Case Stories. (2017). Freemium pricing model: 25%of Europe's most profitable airline's seats are virtually free. http://www.realcasestories.com/2017/10/ freemium -model-5-of-ryanair-seats-are.html
• Rezelia, A., Margaretha, T., Rafi, S., & Perewati, D. (2023). Impact of the increase ticket prices and passenger service quality on ticket purchase decision for domestic flight pasca pandemic at Soekarno-hatta International Airport 2022 Advances in Transportaion and Logistics Research.
• Sarıışık, M., & Özbay, G. (2012). The virtual consumer reviews as channel of electronic word of mouth International management, Economy and Business Journal, 8(16), 1-22.
• Sarılgan, A. E. (2016). Impact of low cost carriers on Turkish tourism industry, International Journal of Academic Research in Business and Social Sciences, 6(4), 176-188.
• Seo, E., & Park, J. (2018). A study on the effects of social media marketing activities on brand equity and customer response in the airline industry, Journal of Airport Transport Management, 66, 36-41.
• Sesliokuyucu, O. S. (2023). Is gamification important for service systems non-users? A study on airline loyalty programs. Journal of Aviation, 7(1), 123-132.
• Skytrax. (2019). Skytrax world airline awards, 2019. https://www.worldairlineawards.com/worlds-top-100-irlines- 2019/
• Sorensen, T. C. (2005). An analysis of the European low fare airline industry with focus on Ryanair. Master’s Thesis, Aarhus School of Business, Denmark.
• Sternberg, F., Pedersen, K. H., Ryelund, N. K., & Mukkamala, R. R. (2018). Analysing Customer Engagement of Turkish Airlines Using Big Social Data. 2018 IEEE International Congress on Big Data (BigData Congress).
• Şahin, H., Kuşakçı, A. O., & Mbowe, B. (2021). The effects of frequent flyer programs in the airline industry on customer loyalty. Heritage and Sustainable Development, 3(2), 130-147.
• Ünder, Ü. B. (2014). Social media use of airline organisations: Twitter case. 2nd International Aviation Management Conference, Ankara.
• Wever, M. (2020). The Effect of frequent flyer programs on onsumer behavior in the German airline market. Journal of Administrative and Business Studies, 6(6), 222-235.
• Yıldız, B., & Çiğdem, Ş. (2018). The application of structural equation modeling on the analysis of airline service quality and its impact on customer satisfaction. Bingöl University Journal of Graduate School of Social Sciences, 8(16), 235-254.
• Zhang, Y. (2011). What do Chinese passengers expect from domestic airlines? ATRS 15th Annual Air Transport Research Society Conference, Sydney, Australia. http://eprints.usq.edu.au/21230/