Students’ perceptions of low-cost airlines

Published: 2019/12/05 Number of words: 2369

‘A century after Orville and Wilbur Wright built the first successful aircraft, the world has shrunk […]. Yet for the first half century of its existence, aviation was the exclusive privilege of the rich.’ (Calder, 2002, p. 2)

What Calder means is that, although the travel industry has expanded people’s horizons by introducing them to new territories, it takes time for a new mode of travel to be accepted by the greater public. Therefore, the consumer market is limited by financial capacities and, although flying is the fastest and most popular mode of transport, the prices that the airlines charge can be prohibitive for certain sectors of the market, especially students.

Therefore, a need for more affordable carriers has emerged. This potential demand was first recognised and met by a US airline called Southwest, which was co-founded by Herb Kelleher in 1971. Low-cost airlines operate by eliminating redundant elements such as paper tickets and in-flight meals. This saves time and money, allowing a larger percentage of travellers to fly to their desired destinations. The main difference between the low-cost airlines and scheduled airlines is that the former appeal to a broader market and develop a more varied clientele.

Some of the strategies that the competition uses are internet sales, which save money on paper and eliminate the travel agents’ commission; no free catering, but the offer of a wider choice of food and drinks; no pre-assigned seats, which saves on ground time; and the use of secondary airports. As Ryan’s study (2005) declares, although there has been research conducted on low-cost carriers (LCCs) and their strategies, the subject of passengers’ perceptions and the potential demand has not been investigated to any great extent.

The limited number of studies that have been done only show the perceptions of people travelling from a specific airport or focus on business travellers, disregarding the vast potential inherent in the student market. For instance, Huse and Evagelho (2007) analysed the business segment of the market and concluded that passengers with previous experience with LCCs ‘tend to reassess the valuation of some attributes in a way which is more favourable to the LCC’. This proves that price is not the only determinant of choice.

More focused research, however, is needed in order to understand the specific markets and also to assess non-users’ views. Shaw (1985, p. 21) claims that a ‘study of the market […] must also consider trends in the market and the possible reaction of consumers to products which have not yet been introduced’. The reason for the research deficiency of LCC passengers’ intentions and expectations is that it is presumed that these are related solely to the low fare price. As Chiou and Chen (2010) point out, service value and airline image might also influence passenger choice.

In Kim and Lee’s (2010) study, service quality is seen as a vital factor in the decision-making process. They argue that if full-service carriers (FSCs) lowered their prices, flyers would opt for higher quality. Therefore, LCCs should focus on improving their services to reach or exceed expectations. Elements of the perceived quality are tangibles such as seating comfort, in-flight entertainment and appearance; reliability and punctuality; complaint management and trustworthiness or empathy.

To demonstrate that students are an important and, potentially, a key part of the market, the following statistics are useful. ‘As expected, the low-cost airlines attracted a high number of younger people, with 24% of the Ryanair passengers surveyed’ (O’Connell and Williams, 2005, p.4). The Mintel study in 2007 notes that a significant number of clients are aged between 25 and 44 years in the pre- or no family stage.

As Novelli (2005) points out, experience with internet searching and booking is a significant part of younger people’s motivation. Since LCCs sell tickets exclusively online, they have successfully appealed to the mainly youthful segment. Her research also reveals a different view from that generally assumed about students’ travel motivation; students are willing to pay more for quality, assuming that they work and save up. This shows that price is not the only factor that motivates students to fly with certain airlines and that it would be reasonable to look beyond the stereotype and analyse their perceptions of quality. Furthermore, the increased popularity and opportunities for studying overseas can ensure a higher demand for flights from this segment.

The aim of this research is to gain a deeper understanding of students’ preferences for low-cost airlines. In order to meet this aim, several objectives were established. The first was to determine and differentiate the distinctive views regarding LCCs; the next was to understand the sample’s distinct opinions and where they are rooted, and the final objective related to behaviour patterns and how they differ from the expressed views.

The quantitative method was chosen for this research project, as such a method offers an appropriate means to test students’ opinions and values. It also allows the scanning of numerous samples and generates a response rate that can better reveal students’ preferences. Veal (2006) mentions the advantages of using quantitative surveys that need to be completed by the respondents; these are the low-cost, speed and anonymity. However, there is the risk of frivolous responses if the researcher is not present while the surveys are being completed.

A pilot survey was used to test the effectiveness of the questions and several unclear phrases were pointed out by respondents. This process was completed face to face.

The first part of the survey aimed to acquire information about the students’ past experiences with flying and what airlines they use most frequently. The study revealed that there is a balance between both LCCs and FSCs and proves that most students are able to compare the two experiences. The most popular choice of LCCs was easyJet, with 25% of the responses. British Airways was the most popular choice of FSCs, with 24% of responses.

These results do not reflect preference or flying experience in general; they are a mere scan of the market in terms of which types of airlines have been used at least once. Therefore, the sample will be divided according to airline choice in order to observe the differentiation in the decision-making process and perceptions of quality. The airline-choice results were divided into two categories and proved that an overall of 65% of the sample has flown with LCCs and 62% with FSCs . This indicates that students’ flight experiences are balanced throughout the sample. It was also noted that students averaged 3.5 flights a year; this suggests that those taking part in the sample have experience in this subject and their opinion is of significant value.

Furthermore, the aspect of frequency was taken into consideration. The results showed that LCCs are used more often, with 53% of the respondents revealing that they normally fly with LCCs and only 18% fly with FSCs. The option of using both types of airlines was chosen by 29% of the sample. It can be concluded that, for students, FSCs are less affordable, although they are not avoided. Ultimately, students make an informed choice, because, as previously established, those used in the sample are aware of what is available in the market. Novelli’s study (2008) proves that in spite of their low income, students are willing to save up and purchase expensive flights when they plan a holiday.

In order to better understand the decision-making process and which factors contribute to their choice, the students were asked to rate the following terms in order of importance when they consider flying. The key factors were: word of mouth (parents and friends as separate categories), personal experience, service quality, low prices and airport location and destination. When analysing the results, the terms were divided into groups of two or three in order to better understand the relationship between the factors.

The most opposition can be noticed when comparing students’ perceived importance of service with low price. The distribution of responses is positively skewed in the case of price and negatively skewed for service quality. These facts indicate that students prefer saving money to having good service whilst flying, with over half of the sample considering price to be the most important factor. On the other hand, 33% considered service as being important and would rather pay more than be treated poorly.

In comparing what has the greatest influence on the purchase decision, it was found that, to LCC users, low price was the most important factor, with service and flexibility as the least important. Past experience and destination choice scored highest with the FSC users. Service and flexibility were not major factors for full-service airline users either, but they did score higher than the LCC users. All this data was judged by the average scores achieved through a rating system.

Interestingly, both groups consider LCCs to be of lower quality. This opinion was to be expected from FSC users, whose choice explains their view, but was unexpected from their loyal customers. This implies that low price is a more important factor than the perception of quality for the LCC clients, because they still prefer it in spite of their negative opinions towards the airlines. This is a key finding that related to both the objectives about behaviour and opinions, because it shows a gap between LCC users’ views and choices.

The following results support this statement, where most students from both samples would not agree to flying with a LCC if money were not an issue. This also proves that the choice for flying with an LCC is made because of financial constraints and users would probably prefer to use an FSC with better service, if they had the option.

A question to be asked was whether fewer people would fly if there were no LCCs. The majority of LCC users declared that this is not an issue, although, overall, the results are positively skewed. This aspect would require further in-depth analysis, as it appears that, actually, there is no major impediment to accessing FSCs. Judging by these contradicting results from the LCC user sub-sample, it could be argued that financial capacity is not an obstacle, but only a motivation to fly more cheaply. LCCs are not a necessity but a convenience. Alternatively, FSC users would be even less affected by a hypothetical lack of budget airlines.

As expected, it was found that FSC users would rather pay more than fly with a LLC, while LCC airline users would not make the same decision. This could also be explained by the fact that FSC users have more positively skewed results regarding their perception of safety, whereas LCC users disagree with the statement that their airlines would be unsafe. This, again, explains their preference in the first place.

FSC users identified poor image or reputation to be the most unappealing elements of an airline, whereas LCC users identified several more elements, such as hidden fees and constant delays. It is interesting to note that they give more reasons to be dissatisfied with LCCs, yet they fly with them more often.

It is also notable that the majority of FSC users are British (72%), while the LCC users are equally divided between British and foreign students.

In conclusion, the answers given by the FSC users are predictable; their poor opinion of LCCs was expected. However, LCC users have conflicting views and behaviour patterns because of their financial restrictions or, perhaps, because of different perceptions of the value of money.

As the undertaken research only covers part of students’ perceptions and motivations, further investigation is needed, based on the conclusions reached in this study. For instance, since there is a clear difference between the foreign and British samples, with foreigners being more likely to fly with a LCC, a hypothesis about this should be developed to discover the underlying reasons. A further development of this research would be to question whether foreign students have a greater need to fly, which would explain why LLCs are more appealing. This could also be related to the fact that flying is the only way they can get home, or it could mean that British students come from financially better backgrounds. Further research should aim to discover the main reasons for flying and to filter the sample that flies from necessity rather than for leisure. More filter questions could be used to separate income levels and frequency of flying; however, student income is difficult to measure as students are financially dependent on parents or have loans. Therefore, answers can differ from case to case.

Another limitation of this research is the bias previously mentioned in the methodology chapter about self-completion, which assumes that strictly FSC users would be less likely to pursue this survey.

Dann (1994, p. 88) also notes the challenges in analysing nationalities of respondents because of the difference between the terms ‘country of residence’ and ‘country of birth’, which can affect the results and comparison of nationalities.

O’Connell and Williams (2005) state that ‘it will be interesting to observe whether these travellers migrate towards incumbents when they have more disposable income in the future’. This is a likely possibility because it seems that LCC users only fly with the companies out of necessity and place convenience as a lower priority on their list. It is not a case of them having a certain idea of value for money and they don‘t think a flight is worth a less amount of money; they just prioritise.

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