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Airline daily operations are often limited by delay concerns. The duration of flight delay is difficult to accurately estimate and thus, might certainly cause inconvenience to air travelers for completing their trips in punctual manner. The purpose of this study is to identify the travelers’ preference for passenger arrangement mechanisms under flight delay situations. This study uses the stated preference method which considers a set of attributes, including duration of delay, monetary compensation, snacks and beverages, cabin class upgrade, free airport lounges and free hotel, to capture the passengers’ preferences for alternative arrangements. An integrated model is developed using the cumulative prospect theory combined with the discrete choice model that identifies significant attributes. Approximately 800 distributed questionnaires were collected from the Taiwanese air travelers who took the full-service carriers at the Taiwan Taoyuan International Airport. The result showed that if a major flight delay occurs and the airline wish the passengers to stay with the booked flight, the airlines need to maintain a good long-term relationship with their passengers by offering exclusive arrangements, such as free meals and, more importantly, free lounge and hotel service in long-distance travel. If the booked flight cannot resume operation in time, the airline company could assist high priority passengers to take the next flight by the same airline or transfer to another airline. An effective scheme is to offer fare discount to typical passengers who are willing to fly business class and a free grade to frequent flyers.
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