Layout de Cabine, Densidade de Assentos e Segmentacao de Passageiros no Transporte Aereo: Implicacoes para Precos, Receitas Auxiliares e Eficiencia

TL;DR

This paper examines how aircraft cabin layout and seat density affect airline ticket pricing, revealing that higher density lowers prices and highlighting passenger seat allocation behaviors related to ancillary revenues.

Contribution

It introduces an econometric analysis linking cabin design and pricing, incorporating innovative cabin concepts and passenger behavior insights.

Findings

Higher seat density correlates with lower ticket prices.

Passengers with expensive tickets often occupy middle seats when no seat selection fee applies.

Operational efficiencies are associated with increased aircraft size and seat density.

Abstract

This study investigates how the layout and seat density in aircraft cabins influence the pricing of airline tickets on domestic flights. The analysis is based on microdata from boarding passes linked to face-to-face interviews with passengers, allowing us to relate the price paid to the location on the aircraft seat map, as well as market characteristics and flight operations. Econometric models were estimated using the Post-Double-Selection LASSO (PDS-LASSO) procedure in order to select numerous controls for unobservable factors linked to commercial and operational aspects, thus enabling better identification of the effect of variables such as advance purchase, reason for travel, fuel price, market structure, and load factor, among others. The results suggest that a higher density of seat rows is associated with lower prices, reflecting economies of scale with the increase in aircraft size and gains in operational efficiency. An unexpected result was also obtained: in situations where there was no seat selection fee, passengers with more expensive tickets were often allocated middle seats due to purchasing at short notice, when the side alternatives were no longer available. This behavior helps explain the economic logic behind one of the main ancillary revenues of airlines. In addition to quantitative analysis, the study incorporates an exploratory approach to innovative cabin concepts and their possible effects on density and comfort on board.