Segmentation of Airline Market in the GCC Region: Profiling Business Customers Using Low Cost and Full Service Carriers

Abstract

Aims: This paper was designed to identify the differences and similarities between business travelers using low-cost carriers (LCCs) and full-service carriers (FSCs) in the GCC region. Research on the characteristics of business travelers, who are seen as an important market segment for both low-cost and full-service airlines, is sparse and anecdotal at best. This paper represents an initial effort at developing profiles of business travelers using LCCs and FSCs. Study Design: Research paper based on survey data. Methodology: The study employed a survey research design and collected data on business travelers using LCCs and FSCs by means of a brief questionnaire. Data analysis was conducted using the SPSS software package. A combination of nonparametric tests such as Chi Square and T-Test for two independent samples was employed to assess the extent of differences and similarities between the LCC and FSC customer samples.   Findings: The findings lend partial support to the hypothesis that short haul business travelers using LCCs form a fairly distinct market segment from business travelers using FSCs in the GCC region. The two samples revealed substantial differences in terms of organizational resources, respondents’ demographic characteristics, and perception of different service dimensions. While both groups displayed similar level of service satisfaction, they showed significant differences with respect to other service elements such as ticket price, service quality, in-flight service, comfort, frequent flyer programs and having access to business lounge.    Conclusion: The study reveals several differences and similarities between business people traveling by low-cost and full-service airlines in the GCC region. The data presented in this study is timely and strategically significant and may guide the marketing efforts of airlines using different service models.