ABSTRACT

Many passengers prefer nonstop over connecting service. Some may prefer connecting service if it is accompanied by high frequency and does not involve severe penalties in total trip time. Passengers prefer to have greater visible differentiation for the variation in price in economy class cabins. Passengers want an improvement in the basic product, namely, on-time performance. Airlines say, for example, that their on-time performance is 80 percent. The main consideration regarding separate aircraft depends on the type of airline, the traffic base, and the objectives. The best aircraft is the one that satisfies passenger market demand with the lowest trip costs and with seat costs well below the average fare and, therefore, maximizes profitability. During a product evaluation process, while possible for an airline to look to innovation, it may be more cost effective and realistic to aim for product renovation than innovation.