Experiencing Finnair's new Airbus A350 : How Service Innovation can lead to a Premium Price

Abstract

This study focuses on the customer experiences of air passengers travelling on the latest-technology aircraft currently available on the market, the Airbus A350. A questionnaire was conducted in cooperation with Europe’s first A350 operator, Finnair, to study the customer experience of flying on this new aircraft. Altogether 1,404 responses were recorded. The questionnaire focused on the A350 as a service innovation as well as on 10 aspects that had been used by Finnair to communicate the enhanced customer experience of flying on this new aircraft. These innovations were: larger windows, better cabin air, new interior design, 20% increased fuel efficiency, lower cabin pressure, less noise in the cabin, ambient mood lighting, improved food services, better seats as well as improved entertainment systems. In addition to that we also used contingent valuation to test customer’s willingness to pay a premium for flying on the A350. Our results showed that there is a significant amount of passengers that showed a willingness to pay a premium for flying on the A350 again. Further, we also detected that certain service innovations had enhanced the willingness to pay such as the improved entertainment system, better seats and less noise in the cabin. In addition to that, we also detected that the 20% increased fuel efficiency had played a significant role for the willingness to pay and that introducing such a new aircraft type can also have a positive effect on the brand image of an airline.