Measuring consumer perceptions of airline competition.

In North America, competition among firms that offer transportation services has been a controversial issue of public policy for well over a century. Recently this issue has become part of a much broader and largely ideological debate over government regulation and reform in general. It is a debate that has been conducted mainly among political economists and airline managers. In this paper information is presented which is hoped will contribute to a better understanding of what increased competition means, not from the viewpoint of the political economist, nor from the viewpoint of the airline manager, but from the perspective of the consumer of airline services who, in the final analysis, is the ultimate judge of the value of any airline service offering. Consumer behaviour with respect to the competitive offerings of different airlines is a complex process and a relatively new field of inquiry. It is a field where theoretical concepts still need to be formulated, where significant variables are still to be discovered and where feasible research techniques still need to be designed. Despite all the debate, there has been surprisingly little systematic research concerning deregulation and its effects on consumers of airline service systems. It appears that governments have been busy implementing or resisting deregulation, the airlines have been preoccupied with adjusting to real or anticipated changes in their particular competitive environments and academic researchers are only now becoming aware of the scope and significance of deregulation and are just beginning to grasp the need for systematic basic and applied research. The study reported in this paper sought to achieve two overall objectives: a) to obtain a better understanding of consumers' perceptions of the concept of competition as it pertains to air services by identifying the benefits and disadvantages that consumers feel result from competition in the airline industry; and b) to undertake an in-depth examination of consumers' preferences concerning different variables which define and give rise to competition in the airline industry. (A)