Consumer Value on Unbundling Practices by Full-service Carrier – a Qualitative Study

Despite the media outcry whenever a full-service carrier announces its plan to unbundle its flight service and charge some of the service components as add-ons, there is an increasing number of full-service carriers around the globe dropped the full bundling approach in exchange for add-on bundling when selling their flight tickets. At the same time, the market of ancillary revenue continues to grow annually and has been identified as one of the major revenue sources for modern airlines. Using qualitative approach of semi-structured interviews and netnography, this study aims to gain more in-depth knowledge on consumers’ perception of the unbundling trend. With the aid of an adopted version of Holbrook’s typology of consumer value, this study investigates the consumer value behind the consumption of unbundled flight service and its reflection on consumers’ purchase decision. The findings indicate that consumers’ experience, carrier’s implementation and specific situation could influence the consumer value perceived in different dimensions of consumer value, while purchase decision could have been reshaped in terms of price perception, information requirement, perception on ease of booking process, and searching behavior on alternatives