Low cost carriers in China: passenger segmentation, controllability, and airline selection

• Published in: Transportation (Dordrecht) 2021-08, Vol.48 (4), p.1587-1612
• Main Authors: Pan, Jing Yu, Truong, Dothang
• Format: Article
• Language: English
• Subjects: Airlines; Avoidance; Behavior; Cluster analysis; Clustering; Controllability; Demographic variables; Demographics; Demography; Domestic markets; Economic Geography; Economics; Economics and Finance; Engineering Economics; Innovation/Technology Management; Logistics; Low cost; Marketing; Markets; Organization; Passengers; Perceived control; Regional/Spatial Science; Segmentation; Segments; Self-efficacy; Stability; Starters; Structural equation modeling; Technology; Travel; Uncertainty
• ISSN: 0049-4488; 1572-9435
• DOI: 10.1007/s11116-020-10105-z

China’s low-cost carriers (LCCs) are poised for fast growth, thanks to the changing competition dynamics and aviation policies in the domestic market. This new trend calls for an in-depth investigation of the characteristics and behavioral intentions of LCC passengers. In particular, passenger demographics must be carefully considered given the likely demographic diversity in China’s emerging LCC market. This study performed a cluster analysis using age, education, and income as joint clustering variables to examine the demographic patterns of LCC passengers in China. The results indicate three distinct LCC passenger segments, which were labeled as Mature Travelers, Elite Travelers, and Young Starters based on the passenger characteristics in each segment. To further investigate the passengers’ behavioral intensions, this study considered the role of control when passengers plan and conduct an LCC trip. Despite the importance of controllability on the passenger side to complete a low-cost trip, given the operational and service characteristics of LCCs, it has not been adequately studied in the literature. Specifically, this study examines the impact of three control-related factors—perceived behavioral control, technology self-efficacy, and uncertainty avoidance—on the intention to use LCCs across the three passenger segments. The findings demonstrate that technology self-efficacy significantly influenced the mode use intention of the three passenger groups, while perceived behavioral control and uncertainty avoidance only affected the Elite Travelers. This study contributes to our understanding of LCCs by providing a new perspective of the composition and behavioral intentions of LCC passengers. Practical implications for the LCC success in China are discussed.