Insurance premium model for case delay or cancelation of Indonesian local flight

Abstract

Inspite land transportation mode in Indonesia is better than that of before, it does not discourage users to use flight transportation modes. This is due to the shorter travel time and the high safety factor. However, the flight delay or even cancelation factor often disappointment because the compensation given by the airline is still felt inadequate even though it has followed government regulations. Airlines, on the other hand, also feel reluctant to make improvements to services, perhaps because the cost of customer compensation is far cheaper than the cost of repairing services. The purpose of this study is to propose a premium calculation to overcome this problem. Assuming the premium is purchased by all users that price is included in the ticket price, the airline gets additional funds to make a better service. This will benefit both parties. There are several premium calculation techniques, but in this paper the standard deviation premium calculation method and Generalized Linier Model are used. The calculation results show that the premium calculation is better calculated based on the airline and the departure city of the flight using GLM.