The global airline industry has been grown gradually but also rapidly. According to the International Air Transport Association (IATA), the industry of revenue had doubled over the past decade from US$369biliion in 2004 to $746 billion in 2014. The gr ...
The global airline industry has been grown gradually but also rapidly. According to the International Air Transport Association (IATA), the industry of revenue had doubled over the past decade from US$369biliion in 2004 to $746 billion in 2014. The grown revenue has been triggered by low-cost carriers (LCCs), which share a quarter of the worldwide passengers.
Korean aviation industry (KAI) has been numerously developed since 1988’s Seoul Olympic and 1989’s overseas tourism freedom. Before and after era of 1997’s International Monetary Foundation (IMF), KAI had shown a little bit fallen in size then has shown a great deal of growth because of Incheon International Airport (IIA)’s opening in 2001 and Low Cost Carrier (LCC)’s entry to an aviation market. Especially, an allotment rate of LCC was 46% in 2012, penetrated to 50% in 2014.
Though numerous growths for KAI, the number of flight departure delay (FDD) has been increased by six times for past decade. Recently, FDD was increased by four times. According to a report, the number of delayed flights is 26,136 during 16 months only, the number of passengers boarding the flights is 3,948,000, and the time loss of them is 5,452,279 in Korean airports including IIA. If we consider a minimum wage, a social cost would reveal about $709,621.
Some aviation experts pointed out some limitations of LCC such as the lack of aviation mechanic. It leads to frequent FDD. This paper has some purposes as followings. Firstly, this paper would add variable of FDD on flight choice behaviour (FCB) model. Secondly, this paper would analyse how much FDD does affect FCB. Then the paper suggests probability choice utility controlling FDD.
As results, FDD’s importance is relatively lower than other attributes of FCB. Both the flight service and schedule availability was positively related to FCB. If passengers take a flight more and more and passengers have a lot of age, the passengers prefer full service carrier (FSC) than LCC. Given the empirical results, we could conclude that most passengers prefer safety factor, In scenario analysis, 1st scenario result shows that FSC’s allotment rate is 0.9247, then LCC’s allotment rate is 0.0753. If LCC has lower FDD, LCC’s allotment rate is lower and lower. This result is line with the descriptive analysis which shows most passengers consider the safety factor as most important.