Airline Choice for Domestic Flights in Sao Paulo Metropolitan Area: An Application of the Conditional Logit Model

Using the conditional (multinomial) LOGIT model, this paper addresses airline choice in the S o Paulo Metropolitan Area. There are two airports in this region, where two, three or even four airlines compete for passengers flying to an array of domestic destinations. The airline choice is believed to be a result of the tradeoff passengers face among flight cost, flight frequency and airline performance. It was found that the lowest fare better explains airline choice than the highest fare, whereas direct flight frequencies give better explanation to airline choice than indirect (connections and stops) and total (direct plus indirect) ones. Out of 15 variables tested, the lowest fare was the variable that best explained airline choice. However, its signal was counterintuitive (positive) possibly because the cheapest airline was offering few flights, so passengers overwhelmingly failed to choose the cheapest airline. The model specification most adjusted to the data considered the lowest fare, direct flight frequency in the travel day and period (morning or afternoon peak) and airline age. Passengers departing from S o Paulo-Guarulhos International Airport (GRU) airport make their airline choice in terms of cost whereas those from Sao Paulo-Congonhas Airport (CGH) airport do not. Finally, senior passengers place more importance on airline age than junior passengers.