Willingness to Pay for Safety Improvements in Passenger Air Travel

The risk of being involved in an airplane accident seems to play an important role in the public discourse surrounding air travel. However, such safety risks have been largely ignored in air passengers’ choice models. The aim of this paper is to fill this gap by developing and applying a modeling approach to estimate air passengers’ willingness to pay for safety improvements. This approach involves constructing two stated preference experiments that are linked together by a safety perception scale. First, combinations of airline and route attributes are evaluated in terms of safety perception. Second, safety perception is included as an attribute in a stated choice experiment. This modelling approach was applied to a convenience sample of 161 air passengers recruited in the Netherlands. The results indicate that the three airline related attributes- an objective airline safety index, airlines’ involvement in accidents with fatalities, and full service versus low cost carriers - have a larger impact on perceived safety than the route attributes: flying in bad weather conditions, over conflict areas, and over water. The results of both models are combined to calculate the willingness to pay for improved airline and route characteristics, taking into account different traveler characteristics. The results indicate that the average passenger is willing to pay 237 euro for 1 point increase in perceived safety on a 1 to 7 scale if the initial safety perception is low, whereas this willingness decreases to 72 euro if the initial perceived safety is already high.