Market segmentation of new gateway airports incorporating passengers' curiosity

Abstract

To serve more markets for supporting its sustainable development, Zhuhai airport tends to act as a new gateway by providing an air-bridge-air path that links its domestic network to the international air routes of Hong Kong Airport, through surface transportation via the Hongkong-Zhuhai-Macao Bridge. In order to identify the target passengers using the new gateway service, this paper proposes a market segmentation approach which incorporates the heterogeneity among passengers in the choice of the air-bridge-air route and explicitly incorporates people's curiosity about the new service. A latent class choice model incorporating passengers' curiosity is developed to identify the market segments of the new gateway service offered by Zhuhai Airport. The model is estimated using the stated preference data collected in 12 Chinese cities. The results indicate that people who have a high level of curiosity and/or are price sensitive prefer to use the new gateway service. Meanwhile, some segment-specific strategies of improving the new gateway service are proposed for the sustainable development of domestic airports which have the desire to cooperate with nearby hubs.