The factors affecting people's willingness in participating in and paying for upgrading their seats from the economy class to the premium class

As information technology develops rapidly and network information becomes increasingly transparent, airlines seek to increase load factors and maximize pre-departure profits through marketing. Seat upgrade bidding has been adopted by many airlines globally but not yet in Taiwan. This study uses a double-hurdle model to examine factors influencing passengers’ participation in seat bidding and their willingness to pay (WTP) for upgrades, and compares long- versus short-haul flights. Results indicate different determinants between long- and short-haul contexts, with common positive effects for younger passengers and those with prior knowledge of bidding. Estimated WTP premiums are about 55% of the reference price for long-haul and 24% for short-haul upgrades. Findings offer references for future research and airline strategies.

Chung-Wei Kuo, Rong-Chang Jou, Yi-Chun Chiu