Passengers’ perception of airlines’ services: Addressing systematic and random variation in tastes

• Investigate heterogeneities is useful for determining market segments. • An efficient SP design allows statistical efficiency to be obtained. • A Random Parameter Logit is adopted for considering systematic variations in tastes. • Users value significantly the time lost in the initial and final phases of the trip • Women are more sensitive to more qualitative service aspects like cleanliness. This paper investigates heterogeneities in passengers’ perceptions of airlines’ services considering systematic and random variations in users’ tastes. For this purpose, an efficient design of a stated preference survey is carried out, where attributes related to the in-flight travel and to the passenger’s experience before and after the flight are considered. A Random Parameter Multinomial Logit model is estimated with the obtained data, which also considers systematic variations in user tastes. The obtained results show that most of the parameters associated with the considered variables fit better to a normal or uniform distribution, and that part of their variance can be explained by interacting these variables with other variables such as gender, age, travel frequency or income level. The proposed model allows conclusions to be drawn and marketing policies to be implemented that directly aim at certain user segments, in addition to comprehensively explaining passenger behaviour by showing their preferences.