INVESTIGATING PASSENGERS’ PERCEIVED VALUE OF FULL SERVICE AIRLINES AND LOW-COST CARRIERS

Abstract

This study investigates the customer perceived value seen by Taiwanese passengers who flew between Taipei and Singapore regarding full service airlines and low-cost carriers. We collected a sample of passenger survey data at Taiwan Taoyuan International Airport. Five constructs, forming into customer perceived value, namely, nonmonetary cost, perception of monetary cost, reputation, service quality, and service contact are identified based on the results of factor analysis. A regression model is then adopted to measure the relationships between customer perceived value and potential determinants. Passengers from traditional airlines determined their perceived value based mostly on what they gained from the airlines. Nevertheless, passengers formed their perceived value for the low-cost carrier, Jetstar in this study, according to the trade-off between what they gave, especially the nonmonetary cost, and what they received.