Quantifying an Airline's brand Image: The Ryanair disutility effect

This paper supports the hypothesis that airline brand image might seriously impact passenger booking behavior. To offset the disadvantage associated with a negative image, an airline will need to decrease ticket prices. Thus, airline brand name reputation can be monetized and translated into airline revenue loss. We use data from a choice experiment in which 336 passengers from Germany choose out of two airlines, one of which is always Ryanair. The approach employs choice modeling techniques (including mixed logit) and utilizes Ryanair-specific variables to assess their impact on airline choice probability. Results indicate that the higher the passengers’ income, the lower the choice probability for Ryanair. Results are used to compute the required price reduction to render passengers indifferent to both alternatives and term this “the disutility effect”. Additional computations reveal the potential for airlines to increase revenues by improving their reputation and eliminating operational functions that may lead to a detrimental brand image.