Strategic Management of Integrated Public Transport and its Value in the Air Bus Service Context

Abstract

While there is a well-developed body of academic literature on how to procure ground transport services and how to integrate those services, there is virtually no literature on how to do this in the context of air services (in combination with ground services). This paper aims to substantially contribute to the area of strategic management of integrated transport based on the concept of mobility as a service including revenue management, marketing operations management and also policy making. All these areas relate to improving efficiency, acceptability and profitability of air services to regional and remote areas (but also air services more generally) that can benefit significantly from any form of integration (integrated fares, timetables, customer information, marketing etc.). We show that customer-centric public transport integration with aviation as the highest priority can create competitive advantage of the air bus transport value chain as particularly in the regional aviation context the total trip travel experience is of high importance given the potential competition from private car travel, except for island air services. The public ground transport experience will therefore not only impact on the perceived flight product quality but also on other products along the aviation value chain. In terms of the demand analysis and travel choice literature, we reveal that integrated planning and management efforts such as joint timetabling and joint pricing are most likely to have an impact on competitive advantage, demand (passenger numbers plus yields, measured in the customers’ willingness to pay) and hence the profitability of regional air services. We use stated choice experiments for flights from Sydney to regional NSW, Australia to establish the willingness to pay for integrated add-ons to scheduled regional air services.