Modelling Stated Choices And Preferences of Air Travelers Towards Determining the Best Airline Business in Namibia

Abstract

Stated preference (SP) experiments are becoming an increasing popular survey methodology for investigating air travellers’ choices. Analysis of this behaviour, which is an element of the demand prediction, helps for a better future planning and development of competing airlines. In this thesis, emphasis is stressed on the stated preferences of passengers in choosing between low-cost carriers (LCC) and full-service carriers (FSC). Binary logit and probit model and latent class model were employed on primary data collected from departing air passengers at Eros airport and Hosea Kutako International airport in Windhoek - Namibia, to model passengers’ stated preferences and examine the determinants of carrier choice between LCC and FSC in Namibia. Major findings show that: airfare, age, income and purpose of travel are significantly important with respect to passenger choice. Furthermore, we observed that passengers have different preferences for different destination regions be it domestic, regional or international. For domestic and regional flights (short-haul) they prefer LCC, while for international flights (long haul) they opted for FSC. In addition, the majority of the passengers were travelling for business purpose, hence their tickets were bought by their respective employers. Most passengers indicated that they were willing to fly LCC if it was available in ii Namibia because of its low fares. There was an indication that air tickets were not affordable and these are a big concern to passengers. Presumably, if ticket prices can come come down or introduce a LCC in Namibia then many will consider flying. This study concluded that, based on the interviewed passengers’ profiles, the best and appropriate carrier in Namibia is a low cost carrier. Introducing a LCC in Namibia might be a viable alternative which may ensure sustainability.