Airline choice for domestic flights in Vietnam: application of multinomial logit model

Abstract

In 2015, Vietnam witnessed the booming of airline industry. The participation of low cost carriers makes the airline market more and more competitive. Understanding the behavior of passengers is essential for any carriers to make their strategic policies. This study employs the multinomial logit model with the data of 122 respondents to investigate the impacts of characteristics of passengers as well as attributes of airlines on the airline choice. The characteristics of passengers include age, gender, marital status, education, and income whereas the attributes of airlines consist of price, number of flights of airlines, punctuality, comfort of seat space, and quality of check in service. A stated preference survey is conducted online from 16th to 23rd of October 2016 to collect the data of 122 respondents, who used to travel by air at least one time before. They are required to finish three tasks. The first task is providing their information, such as age, gender, marital status, education, and income. The second one is evaluating about the quality of services of the three airlines, including Vietnam Airline, Vietjet, and Jetstar. The final part is hypothetical scenarios of fifteen domestic routes given along with the prices of airlines for the respondents to choose one of the three airlines. Jetstar is chosen as the base outcome, the results of multinomial logit model suggest that characteristics of airlines have relationships with the ratios of probability of chosing Vietnam Airline or Vietjet over probability of chosing Jetstar, except for the satisfaction of customers about staff at the check in counter. When comparing one airline and the based airline (Jetstar), the attributes of the third airline is also necessary to be taken into consideration. In general, a good judgment of service of an airline makes the odds ratios of that airline and the base increased. In contrast, a good evaluation of the based carrier or of the other airline makes the odds ratios declined. Besides that, income has positive association with probability of choice Vietnam Airline and Vietjet but negative relation with Jetstar, holding other variables constantly.