Impacts of Airport Value-added on Passenger Traffic

With the emergence of intensified competitive market and commoditization of the airport offering, Air passengers' perception towards the different quality of airport service and amenity provided by a certain airport are one of the significant determinants of airport choice. Many airport authorities have been concentrating on delivering the best customer experience to their passengers. One of those strategies is to add value to the airport through the enhancement of airport service and amenities. Such strategies are found to enlarge customer experience, satisfaction, and attract more passengers. This paper, consequently, has tried to scrutinize the effects of airport value-added on passenger traffic at the aggregate level by using the OLS estimator of a multiple linear regression with employing the differences in airport rating stars as a proxy of the different level of airport value-added, and passenger traffic as a proxy of the airport which is selected by passenger from their airport choice. The results suggest that adding value to the airports significantly increases passenger traffic. Besides, this study found that terminal comfort and cleanliness significantly influence passenger's airport choice the most by showing through the highest incremental of passenger traffic.