How Passengers Select an Airport in a Multiple Airport System a Preliminary Study in Beijing

HOW PASSENGERS SELECT AN AIRPORT IN A MULTIPLE AIRPORT SYSTEM – A PRELIMINARY STUDY IN BEIJING

Jing Yu Pan

Embry-Riddle Aeronautical University

Dothang Truong

Embry-Riddle Aeronautical University

ABSTRACT

While Multiple Airport System (MAS) has been studied extensively in North America and Europe, it has not received the same attention in Asia. The high travel demand in China has put many airports to their capacity limit. Beijing is proceeding with a plan to build a second airport with similar capacity and market position to compete with the current Beijing International Airport. The purpose of this paper is to examine how Beijing passengers select an airport in a MAS and what factors affect their decision. The research model investigates various impact factors including airport access time, airport access cost, flight frequency, fare, airport shopping and food services, flight delay, and frequent flyer membership. A preliminary survey was conducted in Beijing International Airport to collect the data, and logistic regression was used to test the effects of these factors on the passenger choice. The results indicate that fare is the most significant determinant of Beijing passengers’ airport choice, followed by flight delay.

Keywords: airport selection, multiple airport system, airline management, passenger choice

INTRODUCTION

The high travel demand worldwide has put airports to theircapacity limit, especially in large cities, where airports generally sufferfrom constrained capacity and limited potential for expansion. Multiple airport system (MAS) has emerged as a solution to ease the tension between growing travel demand and limited airport capacity.Beijing is the capital of China with a population of more than 20 million (Beijing Municipal Bureau of Statistics, 2016), which results in increasingly high travel demand in recent years. In Beijing, the Beijing Capital International Airport is the main airport that provides travel services to passengers. In 2005, the airport transported 41 million passengers, and this number was doubled in 2015,making it the world’s second busiest airport (CAAC, 2005, 2015; ACI, 2016). Since Beijing Capital International Airport will soon reach its full operating capacity, the Beijing government recently announced the decision to build a second airport in the city which is set to be completed by 2019 (Zhao, 2016). The new airport will be used as an international hub with the expected capacity of 72 million passengersa year by 2025 (National Development and Reform Commission, 2014).

Beijing Capital International Airport is located in the eastern part of the city, 21 kilometers from the city center. The new airport will be located in the southern part of the city, 46 kilometers away from the city center (Chen, Huang, Yan, & Zhang, 2012). As the new airport will become an international airport serving domestic and international passengers, it will compete directly with Beijing Capital International Airport. Airline executivesneed to decide which airport to use or how to distribute their operations between airports. Similarly, they also need to determine required facilities and services at airports. Accordingly, it is important for airports and airlines to understandhow passengers choose an airport for travel purpose.

This paper aims at examining different factors that influence passenger choice for airport in Beijing area.A preliminary survey of Beijing passengers was conducted at Beijing Capital International Airport to collect data. Logistic regression was used to analyze the data and determine impact factors. The results of this paper provide airports and airlines with useful information on how passengers choose an airport for travel purpose, based on which airport and airline executives can form necessary strategies to locate facilities and services to meet passengers’ needs and attract more passengers.

The rest of this paper is organized as follows. Next section reviews relevant literature and identifies research gaps. Then, the research methodology and data collection process are described and explained, followed by result presentation and interpretation. Finally, result discussion and implications of the paper are provided.

LITERATURE REVIEW

MAS is a relatively new phenomenon to Asian air transportation market since air transport deregulation in Asian countries has been a slow process. Despite a late start, MAS has experienced a rapid development as the result of economic expansion in major Asian cities. Loo (2008) pointed out that “there is a need to strengthen the understanding of passengers’ airport choice in the Asian context. So far, it is not clear whether passengers’ airport choice within Asian multiple airport regions is shaped by the same set of airport level of service attributes as in the West”. Such research is particularly important because some MASs in Asia are unique in that government still plays an important role in flight operation allocation to airports. Takebayashi (2012) stated that “in Japan, the government adopted a policy of using the urban airport for domestic flights and suburban airport for both international and domestic flights for the airport system in the Tokyo Metropolitan Area and Osaka Metropolitan Area”.

Udayasen, Fujuda, and Yai (2007) conducted asurvey to examine passenger choice between two airports in Tokyo, and the results showed that airfare and access time were significant factors influencing the airport selection decision, especially for domestic flights. In another study, Rezashirazian, Saffarzdeh, Parah, and Taherpour (2012) used a binary logit model to analyze Tehran’sMAS in Iran. The results indicated that flight frequency, types of public access to the airport, and airport taxes (air fare) were the most important factors influencing the airport choice. In China, Liu(2008) built a multinomial logit model to examine the impacts of access time, flight frequencies, airfare, and passenger experience on passenger choice between two airports in Shanghai. The results suggested that flight frequency and airfare were the most significant factors influencing passenger choice for airport, while airport access time was a less important variable in such decision making. Liu (2008) further concluded that “travelers in developing countries have higher airfare elasticity than those in developed countries, while travelers in developed countries have higher access time elasticity than those in developing countries”.

While these studies are valuable in exploring determinant factors for passenger choice for airport in Asia, they mainly compared two incomparableairports, which often offer very different flight services.In a two-airport MAS where domestic flights and international flights are allocated separately to different airports, it is very likely that flight availability would become the primary consideration when passengers choose an airport due to limited options. The dominant influence of flight availability may weaken the impact of other important factors, such as air fare or flight delay, on passenger airport choice. Up to date, research on passenger choice between like-sized airports providing similar services in Asia has been very limited. This study is intended to fill that gap in the literature.

METHODOLOGY

Survey method wasselected to collect data for the purpose of this paper.The survey instrument was adopted from validated instrument in the literature. Specifically, Loo (2008) and Liu (2008) had determined that air fare was an important factor in determining airport choice. In addition, the literature also identifiesairport access time, flight frequency, flight delay, airport access cost, and airport shopping as potential impact factors (Pels, Nijkamp, & Rietveld, 2000; Loo, 2008; Gupta, Vovsha, & Donnelly, 2008; Ishii, Jun, & Dender, 2009). These variables were included in the survey questionnaire. Target respondents were passengers in the Beijing area, and data collection was conducted in Terminal 3 of the Beijing Capital International Airport. A total of 155 passengers were invited to participate in the survey, of which 125 filled out the questionnaire voluntarily and 30 declined. Among those who returned the questionnaire, 70 were male and 55 were female. The response rate was 80%. For the preliminary purpose of this research, the sample size is considered acceptable.

RESULTS

Respondents’ Profile

The results of the survey show that a majority of respondents have ages between 28 and 47 years and about 60% of them travel for business purposes (see Figure 1).Due to the higher percentage of respondents traveling from the Beijing International Airport for business purposes, a closer look was taken on how often the passengers travel and the destination of their trips. Figure 2 shows that a majority of the flights are domestic flights, and about 60% of respondentshave four flights in the past twelve months.

Figure 1. Passengers by age group and purpose of trip.

Figure 2. Frequency and destination of flight from Beijing International Airport.

Logistic Regression Results

Logistic regression was used to test the effects of predictors on passenger choice for airport. Table 1 shows the variable selection process using the stepwise procedure.Step 0 represents the base model, in which no variable were included in the model. Fare was added to the model in Step 1, and flight delay was added to the model in Step 2. Thus, in the final model, fare and flight delay are the two factors that have significant influences on passenger choice for airport in Beijing.

Table 1. Logistic Regression Model Variable Selection

Note. OR = Odd ratio; CI = Confidence interval; LL = Lower level; UL = Higher level.

Table 2 compares the model fit across three models. The chi-square test for changes in the -2LL value from the base model to Model 2 (173.807Step 0, 162.538Step 1, 158.028Step 2) indicates improvement in the model fit (the lower the value of -2LLthe better the model fit). Similarly,NagelkerkeR2 and Hosmer and Lemeshowvalues show improvement from the base model to Model 2. The overall classification accuracy for the final model is 63.2 %.

Table 2. Model Fit Evaluation

The results of the logistic regression indicatesthat fare and flight delay significantly influence passenger choice for airport in Beijing. Specifically, for each point increase on fare score, the odds of passengers choosing the new airport in Beijing would decrease by 21.2 percent. Similarly, for each point increase on flight delay score, the odds of passengers choosing the new airport in Beijing would decrease by 20.8 percent. In addition, this relationship can be assessed by looking at the confidence interval. Both fare and flight delay have confidence intervals less than 1 (.644Fare, LL, .963Fare, UL; .632Flight Delay, LL, .963Flight Delay, UL), indicating that as fare or flight delay increases the odds of passengers choosing the new airport in Beijing would decrease.

CONCLUSION

The high travel demand in Beijing has driven a plan to build a second international airport in the area, which creates a competition between two airports. This paper examines how passengers choose one airport over another for travel and what factors influence their decision. The preliminary results of this paper show that fare and flight delay are two factors that influence the passenger choice for airport in Beijing when the new airport is completed. This finding has important contributions to the literature. While existing MAS studies in North America and Europe indicated airport access time as the dominant factorthat influences passenger choice for airport (Hess & Polak, 2005), this study shows that for Beijing passengers air fare and flight delay are most important factors that affect their decision in selecting an airport for travel.

Future research should focus on conducting a large scale survey in Beijing to further validate the instrument and effects of these factors. In addition, the research model can be expanded by adding more impact factors pertaining to the behavior and culture of Chinese passengers. This research will provide a more holistic view on how Chinese passengers make their decision in selecting an airport in a MAS.

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