FACTORS AFFECTING ON HIGH AIRFARE IN DOMESTIC

FLIGHTS IN THE PHILIPPINES: BASIS OF

LOCAL TRAVELERS AWARENESS

A Thesis
Presented to the Faculty of the College of Tourism Management
Abe International Business College - Cainta,
Carms Bldg., San Isidro, Cainta, Rizal

In Partial Fulfillment of the Requirements for the Degree

Bachelor of Science in Tourism Management

By

Anna Bianca A. De Guia

Rencyella R. Villanueva

2023
 ACKNOWLEDGEMENT

The researchers would like to express their indescribable gratitude to

the professors and teachers for their valuable patience and feedback.

Researchers could not have embarked on this journey without the help of each

other, who generously shared their knowledge and expertise, and for their

editing help, nightly feedback sessions, and moral support.

Additionally, this study would not have been possible without the generous

support of the researchers' parents.

The researchers would also like to express their sincere gratitude to all the

respondents who cooperated with the survey.

Finally, it would be remiss to not mention God. His faith in us kept our spirits

and motivation high throughout this process.

iv
 TABLE OF CONTENTS

APPROVAL SHEET…………………………………………..………..…….…......ii

ACKNOWLEDGEMENT…………………………….………………………..…. iv

TABLE OF CONTENTS………….………………………………………………. v

LIST OF TABLES……………….………………………………………………… vii

LIST OF FIGURES………………….…………………………………….…….... viii

ABSTRACT………………………….....………………………………………….ix

THE PROBLEM AND ITS BACKGROUND……..……………………………… 1

Introduction……………………..………………………………………………..1

Background of the Study……………………………………………………. .3

Theoretical Framework. …………...…………………………………………....4

Conceptual Framework ……………………………………………………..17

Statement of the Problem…………….………………………………………19

Scope and Limitations of the Study. ……………………………………….20

Significance of the Study. ……………………………………………...20

Definition of Terms…………..……………………………………………....21

REVIEW OF RELATED LITERATURE AND STUDIES………… …………..23

Introduction……………..………………………………………………………….23

Foreign Literature……………..…………………………………………………. 23

Local Literature. ……………...………………………………………………24

Foreign Studies………... ………………….…………………………………26

Local Studies……….. …………………………………………………………...29

v
Synthesis and Relevance of the Reviewed Literature and Studies.……. 31

RESEARCH METHODOLOGY.. ……………………………………………...32

Introduction……………...…………………………………………………....32

Method of Research.. ………………………………………………………..32

Population, Sample Size, and Sampling Technique. ………………….32

Description of Respondents …………………………………………………..33

Research Instrument………………….………………………………………... 33

Data Gathering Procedure. …………..…………………………………….34

Statistical Treatment of Data…………….……………………………………...34

Data Analysis ……………….…………………………………………………....36

PRESENTATION, ANALYSIS, AND INTERPRETATION OF DATA………..37

Introduction…………………………………….…………………………… 37

Profile of Respondents ………………………………………………………37

Summary of overall assessment of Respondents………...…….………... .39

SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS…….…….. .46

Introduction………….…………………………………………………………....46

Summary………….………………………………………………………………46

Conclusions……………………………………………………………………...48

Recommendations…………..……………………………………………………49

REFERENCES…………………………………………………………………….50

APPENDICES……………….……………………………………….…….............54

vi
 LIST OF TABLES

Table 1 Age of Respondent .................................................................... 37

Table 2 Gender of the respondents ........................................................ 38

Table 3 Travel Frequency ........................................................................ 39

Table 4 Scheduling ................................................................................. 40

Table 5 Flight Demand ............................................................................ 41

Table 6 Route Distance .......................................................................... 42

Table 7 Airline Corporate Image ............................................................ 43

Table 8 Summary of Overall Assessment ……...……...…….…….……. 44

Table 9 Summary of Profile of Respondents ……………..……………...46

vii
 LIST OF FIGURES

Figure 1 Horizontal Hierarchy .................................................................. 16

Figure 2 Input Process Output .................................................................. 18

viii
 ABSTRACT

This study aimed to grasp the perceptions of domestic travelers in the

Philippines, aiming for a more nuanced understanding of their perspectives. It

delved into identifying effective strategies to heighten local travelers’ awareness

of the factors affecting high domestic airfare, utilizing a quantitative research

approach.

In assessing the significant impacts of these factors on high domestic

airfare in the Philippines, the respondents maintained a neutral stance across

various aspects, including Travel Frequency, Scheduling, Flight Demand, Route

Distance, and Airline Corporate Image.

Drawing from the study's insights, recommendations were proposed for

passengers to proactively book airline packages in advance and consider

weather patterns before travel. The suggestion to travel in groups was

emphasized to potentially mitigate higher airfare, inconvenience, flight

cancellations, and itinerary changes. Airlines were urged to enhance passenger

communication by announcing flight changes or overbooking in advance and to

establish transparent fixed pricing structures to alleviate passenger

inconveniences. Additionally, discouraging hidden charges that might dissuade

passengers from choosing specific flights and leveraging passenger reviews to

improve service quality and enhance the airline's corporate image were

highlighted as key strategies.

ix
 Chapter 1

THE PROBLEM AND BACKGROUND

Introduction

This section introduces the thesis. The background and the context of

the research are described and the problematization is presented. This is

followed by the conceptualization of the research as well as its theoretical

framework is shown. The scope and limitations of the thesis is discussed, and

the section ends with an outline of the paper.

Air travel stands as an integral component of tourism. The remarkable

surge in international tourism in recent decades is attributed to advancements

in air travel, the emergence of the middle class, increased incomes, evolving

information technologies, and the effects of globalization. In 2012, more than

half of all international visitors arrived at their destinations via air travel, closely

intertwining tourism's expansion with the growth of civil aviation's primary arm

(UNTWO, 2012). For both leisure and business purposes, the majority of

passengers on international flights contribute to the tourism sector, essential for

domestic tourism's growth in numerous countries. Ivic (1992) emphasizes the

immense value of air travel, not only as a means of personal transportation but

also as a vital logistical element facilitating rapid and effective distribution of

goods among businesses when surface transportation falls short. Hence, the

airline industry's health attracts considerable interest from multiple

stakeholders.

1
 In the contemporary global economy, tourism has emerged as a pivotal

industry, involving people or groups moving for leisure or business purposes.

Crucial to the functioning of the tourism sector are ancillary necessities like

travel, accommodations, entertainment, and food, all of which rely heavily on

transportation. Basnet (2015) notes the soaring popularity of air travel in today's

world, where its speed has made long-distance travel more accessible,

significantly increasing its market share and impacting both developing and

affluent nations' economies.

Leetavorn (2023) underscores the increasing significance of

international travel and tourism since the early 1970s, posing challenges of

mounting operational and capital expenses for governments and airline

operators. However, technological advancements in aviation have partly

mitigated these challenges. The leisure travel boom observed by airline

operators from the mid- to late-1970s is now waning as major carriers conclude

their re-equipment phase for a growing market. Pricing strategies have become

pivotal for operators to optimize their capacity utilization.

Scholars have employed econometric methods to calculate aircraft

demand functions, deriving aggregate fare elasticities, income elasticities, and

elasticities for various fare classes and services. These estimations underline

the significance of fare and income elasticities in the leisure travel market and

have led to the formulation of practical pricing schemes.

2
Background of the Study

The Philippines boasts three primary airlines—Cebu Pacific,

AirAsia, and Philippine Airlines—handling the majority of the country's air traffic.

Despite facilitating travel between distant locations, certain inevitable

circumstances persist throughout journeys.

Abe, Anog, Gabay, Mendoza, Mendoza, and Reyes (2015) highlight how

tourists' accessibility and financial capacity significantly influence their

motivation to explore different destinations. Yan-Kai Fu (2023) contends that

passenger loyalty correlates with their affinity for a brand, underscoring the

importance for airlines to discern factors fostering passenger loyalty, especially

amid international competition. Camus (2023) notes operational issues for

Philippine Airlines, including equipment shortages leading to flight cancellations

and inconvenience to passengers due to malfunctioning amenities. Ng

acknowledges efforts to resolve these issues with their suppliers. Reyes (2023)

references Sen. Nancy Binay's compilation of over 3,000 grievances against

Cebu Pacific posted on social media, with the airline attributing flight delays and

cancellations to unusual events like weather disturbances, logistical slowdowns,

and operational challenges. Meanwhile, Cahiles (2023) reports AirAsia's intent

to resolve outstanding refunds for canceled flights during the COVID-19

pandemic in the Philippines by the last quarter of 2023, without specific

information on the number of customers awaiting refunds.

Consequently, this research aims to identify the factors contributing to the

challenges faced by passengers traveling in the Philippines and explore

3
methods to enhance local travelers awareness about the influences on high

domestic airfares.

The research objectives encompass evaluating the perceptions of domestic

travelers in the Philippines to provide comprehensive insights. The study's

significance lies in benefiting local travelers, future researchers, airlines, the

Department of Tourism, and the researchers themselves. And these questions

will be answered: (1) How does domestic high airfare affect local travelers? (2)

What are perspectives of local travelers regarding high domestic airfare? And

lastly, (3) What can the researchers provide in order to endorse strategic ways

to raise local travelers awareness regarding high airfare.

Theoretical Framework

This study is supported by useful working elucidation and their

constituent elements to help the researchers to make research findings

generalizable and relevant, also to help the researchers identify the variables

with regards on high domestic airfare in the Philippines and also this research

was based on the study of Singleton (2015), The Theory of Travel Decision

Making.

Abdella et al. (2021) emphasized the airline industry's adeptness in

employing sophisticated pricing strategies. Presently, ticket prices for adjacent

seats on the same flight can vary substantially and frequently (Etzioni et al.,

2003; Narangajavana et al., 2014). Etzioni et al. (2003) observed that the cost

of a specific flight ticket might change multiple times within a single day. Airlines

aim to maximize overall revenue and optimize profits, while customers seek the

4
best ticket deals. However, disparities between available seats and passenger

demand often result in increased prices for customers or revenue losses for

airline companies. Chen (2023) proposed that the airline sector offers an

excellent context for studying how airlines with diverse products respond to

network selection concerning pricing and service quality. This inclination is

rooted in the wealth of data accessible in databases like BTS' DB1B, which

provides quarterly pricing data on established markets, and the DOT's OTP

data, offering monthly service quality metrics. To delve further, a dataset from

DB1B spanning Q2 2017 to Q4 2019 was collected to examine the potential

impact of altering the network structure on the average fare and OTP of AA's

three hubs (ODR, DFW, and LAX). Lin (2022) discussed the profound impact of

aviation as a significant industry in the capitalist economy. Despite the

inconveniences associated with air travel, such as restricted use of

communication devices and the overall flying experience, airplanes remain

essential for transcontinental journeys due to their unparalleled speed,

significantly reducing travel duration compared to other modes of transportation.

Travel Frequency

According to Singleton (2013), the transformation of RUM theory into

an estimate-able model form led to a surge in applications. Significant effort has

been dedicated to developing disaggregate tools aimed at scrutinizing specific

travel patterns. Initially utilized in the Pittsburgh (Domencich & McFadden, 1975;

McFadden, 1973) and San Francisco (McFadden, 1974) regions, RUM was

employed to estimate and strategize travel demand. Discrete choice models

5
were used to examine various travel options such as trip frequency, destination

selection, time-of-day preferences, and mode selection. Numerous expansions

of core discrete choice models within the realm of random utility maximization

theory have been introduced to explore travel behavior and forecast travel

demand.

Nieto-García et al. (2020) highlighted the increasing significance of

evaluating hotel prices in hospitality research, specifically focusing on the

influence of internal norms shaped by past experiences on customer responses

to pricing. Their study, rooted in insights from behavioral pricing literature,

delves into the impact of travel frequency and reference price on the evolution

of travelers' willingness to pay (WTP) for accommodation. By introducing a

novel methodological approach incorporating the concept of instantaneous

indirect effect, the research indicates support for an inverted U-shaped

relationship between travel frequency and WTP, with the internal reference

price acting as a mediator. The findings suggest that WTP reaches its peak

when a customer has booked accommodation six times in the past two years.

These insights hold crucial implications for industry practitioners, underscoring

the importance of monitoring customers' travel frequency and integrating it into

dynamic pricing models. Such an approach ensures a better alignment of room

rates with travelers' WTP, fostering customer-centric revenue management

strategies and, ultimately, enhancing profitability.

6
Scheduling

Kogutek (2020) highlighted the significance of flight schedules,

indicating that they delineate the services provided, including days, hours,

necessary connections, and even specifics about onboard amenities in cases

where different aircraft types offer varying services. Airlines historically

competed fiercely over schedule details, striving for precision in timing and

minimizing trip durations upon the advent of computerized booking systems.

The primary aim was to maximize visibility on travel agency displays, often

prioritizing appearance over actual demand fulfillment. In the contemporary

landscape, this competition has shifted to online platforms, wherein pricing

exerts a more substantial influence than scheduling. At its core, a flight schedule

is a sequence of flights organized into specific lines of operation. Each leg of

these flights is determined by block times, turn times, and various constraints

intended to optimize the frequency plan. Given the iterative nature of schedule

optimization, they undergo several developmental stages, including multi-year

planning, annual budgeting, operational assessments, and publication cycles.

Presently, the online environment dictates these scheduling strategies,

emphasizing price-driven approaches over the precision of the schedule itself.

Koppelman et al. (2007) highlighted the importance of modeling air-

travel passenger preferences for departure times and evaluating how airlines'

time-of-day offerings affect demand. This modeling helps predict air-travel

patterns and individual flight choices, offering crucial insights into passenger

behavior. These insights guide airlines in decisions about fleet size, route

7
allocation, and scheduling. The existing literature on this issue remains limited

due to data constraints. Notably, studies in this domain fall into two categories:

those based on stated preference responses to hypothetical scenarios and

those based on observed or reported travel demand. Stated preference studies

offer an advantage by directly addressing schedule convenience. For instance,

Nason (1981) measures schedule convenience qualitatively, representing how

well airlines align flight services with customers' preferred departure times.

Other studies such as Proussaloglou and Koppelman (1995, 1999), Algers and

Beser (2001), and Parker and Walker (2005) analyze the impact of schedule

delay on flight choice probabilities, demonstrating the negative influence of such

delays. They show that schedule delay affects business travelers more

significantly than leisure travelers. Additionally, the timing of departure

concerning travelers' desired schedules and the impact of increasing travel

delay on itinerary utility have also been analyzed. Studies by Coldren et al.

(2003), Coldren and Koppelman (2005a, 2005b) incorporate time-of-day

preferences through dummy variables corresponding to local departure times,

representing itinerary choices based on observed bookings and different

competitive structures

Secomandi and Wang (2012) noted the increasing attention in the

media regarding airline flight delays, especially as Federal Aviation

Administration data highlighted a 13-year low in airline on-time performance in

2007. The reasons behind flight delays are attributed to various factors like

weather conditions, airport congestion, airspace congestion, and the utilization

8
of smaller aircraft by airlines. This study specifically investigates the influence

of the scheduled block time assigned to a flight—something controlled by

airlines—on its on-time arrival performance. Using empirical flight data from the

Bureau of Transportation Statistics for major carriers operating in the United

States in 2007, the study estimates the scheduled on-time arrival probability for

each domestic commercial flight. Employing a structural estimation approach

from econometrics, the study calculates the ratio of overage to underage cost

based on the newsvendor model for each flight. Findings suggest an "under

emphasis" by airlines on flight delays, where the costs associated with delays

are often less than the costs of early arrivals for many flights. The study

demonstrates that revenue-related factors (e.g., average fare) and competitive

indicators significantly impact the scheduled on-time arrival probability.

Interestingly, the number of passengers affected by a flight delay or the number

of connecting passengers does not positively influence this probability.

Operational aspects like the hub-and-spoke network structure also play a

significant role in determining the scheduled on-time arrival probability.

Additionally, it's noted that full-service airlines prioritize the cost of late arrivals

more than low-cost carriers. Opting for the lowest-fare flight on a route leads to

a decrease in the scheduled on-time arrival probability.

Flight Demand

As described by Millwood (2018), demand refers to the quantity and

interest consumers express in buying a particular item or service within a

specified timeframe. Typically, when the price of a product decreases, its

9
demand tends to increase, and conversely, as the price rises, fewer people tend

to seek it. Economists often refer to this inverse relationship between supply

and demand as the "law of demand." This principle illustrates the expected

number of passengers willing to buy a ticket at a specific price point. Effective

decision-making in air transport policy hinges on understanding demand

elasticity. Misinterpreting demand elasticity could lead to ineffective or

counterproductive policies. For instance, if the elasticity is overestimated, a

revenue-generating strategy that raises ticket prices might result in a steeper

decline in bookings than anticipated. In such cases, when airfare increases

along a particular route, consumers tend to curtail their spending more than

expected due to the price adjustment.

According to Britto et al. (2011), the airline industry has increasingly

focused on improving customer service, particularly on-time performance, over

the last two decades. This emphasis has stemmed from heightened media

attention, research initiatives, and government interest, specifically aimed at

addressing passenger inconveniences, notably extended tarmac delays.

Regulatory actions, like the US Department of Transportation's (DOT) 2009 rule

limiting tarmac delays to three hours and imposing fines for longer delays,

targeted severe incidents. However, more frequent and economically impactful

shorter delays continue to persist. In the US alone, over 20% of flights in 2009

encountered delays surpassing 15 minutes, imposing significant costs on

passengers. These delays force travelers to anticipate disruptions, often

necessitating early arrivals, impacting airline expenses by affecting aircraft

10
usage rates and requiring schedule adjustments that elevate capital and crew

costs. Airlines now make their delay data accessible to consumers, leveraging

performance metrics to influence customer bookings. The paper posits that

consumers consider potential delays when choosing flights, indicating that an

airline's history of flight delays could adversely affect passenger demand and

increase costs. The study delves into the impact of flight delays on passenger

demand, airfares, and consumer and producer welfare by estimating a system

of equations that include passenger demand and airfare equations. By

assessing delays against feasible flying times and accounting for extended

block times set by airlines to accommodate delays, the study suggests that a

10% reduction in delays could result in gains of $1.50–2.50 per passenger for

US consumers, benefiting airlines three times more. The paper's structure is

organized as follows: Section 2 provides a review of pertinent literature, offering

background context. Section 3 outlines the employed data and methodology.

Section 4 discusses the study's findings and its limitations, while Section 5

concludes and proposes future research directions in this field.

Route Distance

As discussed in an Air Travel Tips article (2011), the great circle distance

formula plays a pivotal role in computing air travel distances. This formula

operates on spherical geometry, which differs from the conventional flat-surface

geometry taught in schools. Instead of straight lines connecting points on a flat

surface, this calculation considers the Earth's spherical shape. Interestingly,

despite the shorter distance between Boston and San Francisco compared to

11
Boston and Japan, a round-trip ticket to Japan might be cheaper. This

observation challenges the assumption that distance alone dictates ticket costs

in air travel. Airlines determine ticket prices based on various factors, with

supply and demand being crucial determinants. Airlines employ sophisticated

algorithms and intricate formulas aimed at minimizing vacant seats and

maximizing overall revenue. This pricing strategy ensures optimal income for

the airline while considering the dynamics of supply and demand in the market.

According to Lindgren et al. (2022), the travel industry is experiencing a

substantial evolution, primarily propelled by advancements in information

technology and shifts in distribution channels. This study delves into the

potential price variations in airfare offered by online travel agents (OTAs),

capitalizing on the reduced search costs facilitated by the internet. Initially

hypothesizing the absence of price dispersion among air ticket offerings by

OTAs, the research investigates this phenomenon. Employing hedonic

regression models in a log-linear form, the study meticulously examines the

pricing dynamics of air tickets. The analysis, after accounting for ticket

attributes, uncovers price variations of up to 1.859% across different OTAs.

Remarkably, the research unveils that identical tickets are available at varying

prices across different OTAs. Intriguingly, statistically significant interaction

effects surface between airlines and OTAs, suggesting that individuals, even

with identical ticket attributes, may encounter different prices on various OTAs,

particularly based on specific airline preferences. This study sheds light on

imperfections within the online air ticket market, underscoring the importance

12
for budget-conscious air travelers to explore diverse OTA services to secure the

most favorable deals.

Airline Corporate Image

According to Kijpanjasub and Jitkuekul (2019), security remains a pivotal

aspect within the aviation industry that aircraft must prioritize. It is recognized

as a significant factor influencing an airline’s image (Jeeradist et al., 2016) and

is considered the definitive CSR metric for fostering customer trust and loyalty

(Latif et al., 2019). Consequently, airlines carry the responsibility to fully adhere

to security protocols and procedures while proactively identifying, managing,

and mitigating risks to ensure safe flights for passengers and crew. Given the

aforementioned significance, it is evident that corporate reputation and image

hold considerable importance for businesses. Further related research and

articles also indicate a growing interest among researchers in exploring the

influence of corporate reputation and image on consumer purchasing behavior.

In an article by Aksoy et al. (2003), contemporary marketing practices revolve

around understanding, creating, communicating, and delivering customer value

and satisfaction. Customer service satisfaction takes precedence in modern

business philosophy, placing the customer at the center of business objectives.

Industries like aviation, with unique service-oriented features, require managers

to comprehend customer needs, consistently meeting their expectations and

promises (Zeithaml and Bitner, 2000). Often, the significance of this approach

becomes evident to companies only under challenging circumstances (Kotler,

2000). The events of September 11, 2001, placed immense pressure on airlines

13
operating in an already challenging market environment (Air Transport

Association, 2003). Factors like operational efficiency (Smit, 1997) and

consumer-focused marketing strategies (Driver, 1999) were crucial for airlines’

survival and competitiveness, emphasized by the impact of those events.

Understanding passenger expectations is pivotal in shaping airline service

decisions. Empirical evidence suggests that successful customer-focused

services require a profound understanding of customer needs, expectations,

and preferences (Gustaffson et al., 1999). Moreover, marketing strategies for

international expansion by airlines must consider diverse passenger

expectations and perceptions (Sultan and Simpson, 2000). Demographic

characteristics significantly influence consumer needs, impacting buying

behavior and service expectations.

According to HakJun Sung et al. (2019), the airline industry plays a

significant role in the global service sector, serving 4.3 billion passengers on

46.1 million flights in 2018. The start of 2019 witnessed a 5.3% increase in

revenue passenger kilometers (RPKs) compared to the previous year. This

surge in air travel demand has intensified competition among airlines,

compelling passengers, who are now informed consumers, to seek better value

for their money. Service quality has emerged as a critical factor in enhancing

airlines' competitive edge. Delivering high-quality service not only shapes a

positive corporate image but also fosters trust among passengers, ensuring

their loyalty. The primary goal of improving quality is to meet customer

expectations and retain their loyalty, as studies consistently link good service

14
quality with customer satisfaction and loyalty. Enhancing competitiveness is

another key objective, as high service quality contributes to a favorable

corporate image, aiding customers in understanding products and reducing

decision-making uncertainties. Corporate reputation, an invaluable intangible

asset, plays a pivotal role in maintaining sustainable competitive advantages,

influencing outcomes such as increased cash flow and profitability. However,

building a corporate reputation is a prolonged process shaped by stakeholder

evaluations over time. Scholars assert that a company's credible actions shape

its corporate reputation. While existing literature acknowledges the

interconnectedness of corporate image, customer trust, and corporate

reputation, there's a need for empirical research integrating these aspects with

service quality. Hence, the primary focus of this research is to assess the impact

of airline service quality on corporate reputation, utilizing measures such as

SERVQUAL and reputation quotient (RQ).

15
 Travel Frequency

Scheduling

FACTORS AFFECTING ON HIGH Flight Demand

DOMESTIC AIRFARE

Route Distance

Airline Corporate
Image

Figure 1. Horizontal Hierarchy

16
Conceptual Framework

The researchers adopted the Input, Process, and Output (IPO)

method. It includes all of the materials and the information that is required in the

process, the specific details of the process itself, and the guide on the evaluation

of tourism students regarding the perception of local travelers. The concept

model, as shown in Figure 2.

For input, it consists of the respondent's profile as well as aspects related to the

educational research's variables. Usually, all the details specified in the

statement of the problems are stipulated here.

For process, includes the questionnaires that were utilized, the observations

that were made, the data collection method, and the statistical treatment of data

data-gathering procedure. In developing the questionnaire, the researcher

conducted a survey of the local travelers on their perception of high airfare

prices in terms of: Travel Frequency, Scheduling, Flight Demand, Route

Distance, and Airline Corporate Image.

For output, this includes the action taken after interpreting the results of the

study. Action plans, intervention programs, recommendations, and other related

things are taken into consideration. From this, the researcher conceptualized a

recommendation that will help passengers understand and be more aware of

high airfare prices.

17
 Input Process Output

Profile of respondents in
terms of :
1.1 Name (Optional)
1. Understand the
1.2 Age Analysis of Data perception of
1.3 Sex through: domestic travelers
1.4 Profession regarding high
airfare in the
a. Questionnaire Philippines.
Factors affecting high b. Survey the 2. Discern the
domestic airfare on local statistical treatment of awareness of
travelers basis for local data gathering domestic travelers
travelers awareness in procedure on high airfare
terms of:
c. Giving the local 3. Endorse strategic
2.1 Travel Frequency travelers the survey ways to raise local
2.2 Scheduling through Google form. travelers awareness
2.3 Flight Demand regarding high
airfare
2.4 Route Distance
2.5 Airline Corporate
Image

Figure 2. Input Process Output (IPO)

18
Statement of the Problem

This study aims to determine if local travelers are aware of the factors

affecting high domestic airfare in the Philippines. Moreover, this sought to

answer the following:

1. Profile of respondents in terms of :

1.1 Name (Optional)

1.2 Age

1.3 Sex

1.4 Profession

2. What are the significant impacts of the factors affecting high domestic

airfare on local travelers in terms of:

2.1 Travel Frequency

2.2 Scheduling

2.3 Flight Demand

2.4 Route Distance

2.5 Airline Corporate Image

3. Are there any significant differences in the responses of the local travelers

about the factors affecting high domestic airfare in terms of airline travel

frequency, scheduling, flight demand, route distance, and airline corporate

image when respondents are classified according to their profile?

4. Based on the findings, what strategic plan should be employed to raise

local travelers awareness about the factors affecting high domestic airfare?

19
Scope and Limitations of the Study

This study is confined to exploring the experiences and perceptions of

local travelers. Utilizing content analysis, the researchers employed a random

sampling method for our quantitative study. The respondents are chosen from

the pool of random local domestic travelers in the Philippines, sourced from the

DIY Travel Facebook Page. These participants will engage in answering a

series of questions presented in a questionnaire developed and administered

by the researchers during the specified timeframe directed by the subject

teacher. It is essential to clarify that the study does not encompass an

examination of the confidential profitability of airline companies.

Significance of the Study

This study is conducted to benefit the following:

Airlines. This study aims to generate ideas for enhancing the performance of

airline industries and identifying specific areas that require focused attention

within the industry.

Department of Tourism. The outcomes of this study will contribute to raising

awareness within the Department of Tourism (D.O.T.) by shedding light on the

perspectives of Filipino local tourists regarding High Domestic Airfare.

Future Researchers. This research will be a useful reference for the

researchers who would plan to make any related study precisely in High

Domestic Airfare underlying the topic on the degree Bachelor of Science in

Tourism Management.

20
Local Travelers. This study will give them knowledge on the factors affecting

high domestic airfare and may serve to raise local travelers awareness.

The Researcher. The researcher can also gain significance in this study. They

would improve their skill, strategy, and knowledge in engaging research.

Definition of Terms

Airline- An airline represents a structured organization that operates as a

service provider in the public domain, offering air transportation services across

single or multiple routes. This service facilitates the movement of passengers

or goods through aerial means using various aircraft under its operational

domain.

Corporate Image- The corporate image of a business or brand encapsulates

the collective perception, reputation, and identity it projects to the public. Often

synonymous with corporate reputation or corporate identity, it encompasses

how the business is viewed, recognized, and evaluated by its audience,

stakeholders, customers, and the general public. This perception results from a

culmination of the business's actions, communications, values, and overall

conduct in the market.

Domestic- The term 'domestic' pertains to activities, occurrences, or services

that exist and operate within the confines of a specific country's geographical

boundaries. It denotes matters that are internal to the country and are not

categorized as foreign or international in nature.

21
Route- A 'route' signifies the defined pathway or itinerary followed to navigate

from an initial starting point to a designated destination. In the context of

transportation, it refers to the prescribed course or direction taken by vehicles,

particularly aircraft in the case of airlines, to traverse from one location to

another.

Seasonal Flights- Seasonal flights refer to air travel services tailored to

fluctuating or cyclic demands influenced by specific seasons or times of the

year. Airlines often strategize their flight schedules to align with seasonal

variations in passenger traffic, typically during peak travel periods such as

holidays, festivals, or vacation seasons.

22
 Chapter 2

REVIEW OF RELATED LITERATURE AND STUDIES

This chapter includes the ideas, finished thesis, generalization or

conclusions, methodologies and others. Those that were included in this

chapter helps in familiarizing information that are relevant and similar to the

present study.

Foreign Literature

According to McMahon (2018), Air Canada, a major Canadian airline,

has faced criticism for its transportation policies, sparking concerns that

potential changes might lead to costly re-regulation, impacting Canada's

prosperity in comparison to the United States. Despite two successful decades

of aviation deregulation in Canada, Transport Minister David Collenette is

contemplating the possibility of re-regulating the country's air travel. However,

Air Canada's CEO, Robert Milton, dismissed Collenette's musings about

opening Canadian skies to competition as mere posturing.

There's speculation within the Department of Transportation about stringent

regulations, potentially dictating airline routes and creating monopolies on

specific travel paths. Such monopolies tend to escalate prices and introduce

politicization into Canada's aviation industry. This intertwining of politics and

airlines might become a significant element in election campaigns. Critics argue

against re-regulating air travel, asserting that such a move could lead to

inefficiencies and increased costs, adversely impacting communities, especially

those supporting opposition parties. They emphasize the superiority of the

23
global aviation system over Air Canada and urge the Canadian government to

refrain from intervening in the re-regulation of air travel.

Koopmans and Lieshout (2015) highlight the fluctuating nature of aviation costs

influenced by multiple factors like input prices, operational conditions, tax

systems, and airport fees. Fuel expenses, accounting for a substantial portion

of total costs, have exhibited significant fluctuations over the past 15 years,

impacting the financial stability of aviation operations. The ability to pass on

increased costs to passengers through policy measures, such as fee or tax

adjustments, is contingent on various assumptions about market structures.

Wang et al. (2017) draw attention to the rapid growth of the aviation industries

in China and India. While both countries witnessed significant improvements

since the 1980s, there's been a notable shift in the performance of their

respective aviation sectors. Private airlines in India claimed an 80% market

share, contrasting with four state-owned airlines in China holding a 90% market

share in the domestic market by 2016. The rise of low-cost carriers (LCCs) has

been substantial, yet comprehensive comparative evaluations between the

aviation sectors of China and India remain relatively limited despite their similar

population sizes.

Local Literature

Rosales (2023) reported an approved gasoline surcharge increase by

the Civil Aviation Board (CAB) affecting airlines operating in Manila, Philippines.

Starting next month, the new surcharge, level 6, will range from P185 to P665

for domestic flights and P610.37 to P4,538.4 for international flights. Airlines

24
intend to maintain low airfares this year by implementing this adjustment. Per

CAB guidelines, airlines seeking the new fuel surcharge must apply by the end

of September, with a conversion rate of $1.54 for September. According to

Inquirer.net (2023), impending approval of a higher fuel surcharge by the Civil

Aviation Authority indicates increased ticket costs for air travelers starting next

month. This surcharge affects both domestic and international flights,

augmenting fares in addition to the base fare to offset airlines' fuel expenses.

Various routes from Manila, including destinations like Caticlan, Legaspi, Kalibo,

and others, will be subject to these new surcharges. Flights to Taiwan, Hong

Kong, and Vietnam will incur a surcharge of P722.71. Passengers flying with

AirAsia anticipating fare changes are advised to book in advance and seek

further assistance.

Manuela (2006) highlighted Executive Order (EO) 219's impact in 1995,

liberalizing domestic air travel by reducing ticket prices, airfares, and access

requirements. This order facilitated the entry of several airlines into the market,

yet after Grand Air and Air's Mindanao Express ceased operations in 1998, only

four airlines remain operational in the country, notably Philippine Airlines, Cebu

Pacific, Air Philippines, and later, South East Asian Airlines (SEAir) in 2003.

Cabangon et al. (2016) noted that the removal of fuel surcharges didn’t

significantly decrease overall ticket costs, as airlines compensated by raising

general ticket prices to offset revenue losses. However, passengers on low-cost

flights benefited from avoiding extra fees at check-in. Early bookings exempted

passengers from fuel surcharges, while last-minute bookings incurred additional

25
costs. Efforts by the Civil Aviation Authority to eliminate fuel surcharges aimed

to regulate airlines but necessitated verification of these adjustments.

Llanto and Rodolfo (2020) highlighted Philippine government efforts to lower

startup costs for aviation companies and improve their competitiveness.

Republic Law No. 10378, enacted in 2013, addressed concerns of international

aviation operators by reducing the air passenger tax revenue by three percent.

Implementation of RA No. 10378 included limitations on the cancellation of

Gross Philippine Billings, conditioning it upon reciprocity and 24/7 customs,

immigration, quarantine, and security services (CIQS) at international airports.

The competitive market concept, introduced by Baumol in 1982, and Hanlon's

(1996) contention that the aviation sector lacks the characteristics of a

competitive market were debated regarding ease of entry, exit, and company

conduct within the industry.

Foreign Studies

Homsombat et al. (2013) discussed Southwest Airlines' adoption of the

low-cost carrier (LCC) business model in the 1970s as an aggressive alternative

to traditional full-service carriers (FSAs). LCCs revolutionized air travel by

offering low-cost flights, excluding complimentary meals and in-flight

entertainment. Key characteristics of the LCC model include single,

unrestricted, point-to-point fares, direct sales, open seating, frequent flights,

standardized aircraft fleets, high aircraft utilization rates, utilization of secondary

or congested airports, and competitive employee compensation with profit-

sharing arrangements. These operational features significantly reduce LCCs'

26
unit costs compared to FSAs, positioning them as significant players in

liberalized and mature markets. The Asia-Pacific region has witnessed the

emulation of the low-cost business model, leading to the establishment of

numerous LCCs in several Asian countries. This market presents lucrative

prospects for LCCs due to factors such as growing middle-income

demographics, urbanization, ongoing aviation liberalization and deregulation,

and favorable geographical conditions.

Wenliang Ma et al. (2019) highlighted Australia's domestic airline market as a

traditional duopoly dominated by two major airline groups: the Qantas Group

and the Virgin Group. Qantas, established over 90 years ago, holds a prominent

position in the market. Virgin, initially introduced as a low-cost carrier in 1999,

emerged as Australia's second-largest airline following the collapse of Ansett

Airlines in 2001. Qantas responded by launching its own LCC subsidiary,

Jetstar, in 2003, prompting Virgin Blue's transformation into a full-service carrier

known as Virgin Australia in 2012. Subsequently, Virgin acquired a 60% stake

in Tiger Airlines in 2013, becoming the sole owner in 2014. This market

evolution resulted in a duopoly structure comprising the Qantas Group (Qantas

and Jetstar) and the Virgin Group (Virgin and Tiger). This duopoly formation

aligns with Douglas's (1993) perspective that the Australian domestic airline

market naturally tends toward a duopoly due to its limited size, compelling

airlines to expand to reduce operating costs, leading to fierce competition

between Australian carriers. Qantas, committed to maintaining a 65% domestic

27
market share, has spurred competitive price battles between the two major

players.

Escobari (2009) defined peak pricing as the practice of charging higher fares

during peak hours when capacity limitations drive up marginal costs. Borenstein

and Rose (1994) elaborated on how changes in capacity utilization on different

flights or days result in variations in the opportunity cost of airline seats. At peak

times, airlines' marginal costs soar due to increased congestion and the

expected high shadow costs of aircraft capacity. Peak demand significantly

influences airlines' pricing strategies, encompassing system peak pricing that

reflects changes in the anticipated shadow cost of capacity based on flight

schedules, enabling airlines to discern peak times and adjust ticket availability

accordingly. Stochastic peak pricing involves uncertainties in aggregate

demand for individual flights post-flight scheduling. Airlines set peak prices

during ticketing based on the likelihood of demand exceeding supply and the

projected virtual cost in such scenarios. To manage capacity constraints during

peak demand periods, airlines may alter flight schedules. Advance purchase

requirements, as shown by Gale and Holmes (1993), can be a revenue-

maximizing strategy for monopoly airlines grappling with capacity constraints

during peak periods. In summary, peak demand is a critical factor in airline

pricing strategies, dictating their pricing approaches based on the likelihood of

demand surpassing capacity and anticipated shadow costs.

28
Local Studies

Hernandez and Gatmaitan (2019) highlighted changes made by the

Civil Aviation Authority in the aviation industry, notably the amendments brought

about by the Acceleration and Inclusion Tax Reform Act. This Act raised the jet

fuel excise tax from 3.67 per liter/kg to 4 psi. Such alterations could potentially

impact industry growth, altering tax incentives for domestic airlines. The

Authority governs technical, operational, and safety aspects of aviation,

maintaining an aircraft register, issuing air carrier certificates, and providing

administrative franchises to both domestic and foreign airlines. Specific

requirements are set for domestic and international airlines in the Philippines,

mandating minimum paid-up capital of £10 million for domestic scheduled

airlines and £50 million for both domestic and international scheduled airlines.

Domestic carriers are subject to standard corporate income tax, while

international airlines are typically taxed at 2.5% of their gross income from

passenger transport, extra baggage, cargo, and mail. Civil Aviation Authority's

Monetary Rule 7 outlines passenger rights in the case of delays and

cancellations, obligating carriers to provide free meals, communication, and

basic medical assistance if delays exceed an hour.

Verdida and Preciados (2018) discussed the challenges facing the Philippines'

burgeoning tourism industry, including safety concerns, travel restrictions,

increasing fuel costs, and limited flight availability. Despite legislative efforts like

Republic Act No. 9593 aimed at fostering tourism growth, implementation has

encountered limitations. Factors affecting tourism demand in the Philippines

29
involve income levels, market size, distance, relative costs, cost of living, and

prices of goods and services. The gravity theorem has been applied to analyze

tourism flows within the Philippines, identifying trends in visitor arrivals and

determinants of these arrivals. The study aims to propose policy enhancements

to augment the tourism industry's contribution to the Philippine economy and

explore evidence supporting the gravity theory in explaining tourism demand.

Roque et al. (2021) focused on selecting the most efficient aircraft for domestic

flights to minimize daily operational costs. They employed a hierarchical

analysis technique to choose aircraft for daily operations, followed by linear

programming to optimize frequency allocation for planned destinations. The

A330-200 was selected for its passenger and cargo capacity, maximum takeoff

weight, and low cost per available seat mile (CASM). However, not all Philippine

airports can accommodate this type of aircraft, necessitating consideration of

operational compatibility with destination airports. Using Excel-based linear

programming, flight frequencies for each aircraft type were determined to meet

passenger demand at minimum cost. The optimal solution maximizes the

operational hours of the CEO A330-200 and A321-200 planes. While the A330-

200 accommodates more passengers on a single flight, only 21% of the A321

NEO's operational capacity is utilized. The effectiveness of the linear

programming approach lies in guiding suitable aircraft to specific destinations

based on operational constraints. The model developed can potentially factor in

other constraints like crew schedules, flight timings, airport traffic, and various

operational factors influencing flight operations.

30
Synthesis and Relevance of the Reviewed Literature and Studies

The compilation of various local and foreign studies yields information

indicating several common factors contributing to high airfare. These studies

collectively underscore the reasons behind elevated airfare, citing elements

such as airplane fuel costs, passenger ticket taxes, aircraft availability, and flight

frequency.

Studies conducted by Cabangon, Rosales, Verdida, and Preciados highlight a

consistent finding, emphasizing the significant impact of fuel prices on airline

ticket costs. Fluctuations in fuel prices necessitate airlines to incur additional

expenses to sustain their operations during periods of high fuel prices. In

discussions on Taxation in the Aviation Industry, Koopmans, Lieshout,

Hernandez, and Gatmaitan converge on a similar viewpoint, highlighting airport

taxes as a component integrated into the overall cost of an airline ticket. These

taxes are levied on travelers for utilizing airport facilities.

Additionally, the availability of aircraft appears to be linked to travel frequency,

establishing a direct relationship between service frequency and both

passenger wait times and expenses. This correlation is echoed in studies by

Roque et al. and Homsombat. These collective studies on high airfare aim to

raise awareness among travelers about the factors contributing to elevated

ticket prices. Their relevance lies in providing crucial insights that will aid

researchers in conducting and concluding their research. This study aims to

distinguish itself by employing a comprehensive assessment of factors,

intending to develop a strategic plan beneficial to all stakeholders involved.

31
 Chapter 3

RESEARCH METHODOLOGY

This chapter reveals the methods of research to be employed by the

researchers in conducting the study which includes the method of research,

population, sample size, and sampling technique, description of respondents,

research instrument, data gathering procedure, and analysis of data.

Method of Research

This study was made using the quantitative descriptive methods of the

researcher. In order to answer these questions and to justify and meet the

objectives of the study, the researchers attempted to find out the answers for

aforementioned problem. Similarity as regards, in terms of travel frequency,

scheduling, flight demand, route distance, and airline corporate image,

researchers will attempt to obtain information on the impact of these factors in

relation in affecting high domestic airfare in the Philippines.

Population, Sample Size, and Sampling Technique

The research will focus on domestic local travelers in the Philippines.

The sampling technique will involve selecting random participants who are

willing to participate in the study. There will be two hundred (200) respondents.

A sample of the study subject to discussion was drawn up using a random

sampling method. This method is based on the selection of sample members

according to their convenience, as defined by the category of probability

sampled techniques. The convenience sample consists of subjects included in

32
the study because they were in the right place at the right time (Polit and

Hungler, 1993). Using this technique, each sample has the same probability as

the other samples of being chosen to represent the entire population, resulting

in unbiased data collection and unbiased conclusions.

Description of Respondents

This study utilizes stratified random sampling methods to select

participants among local travelers from DIY Travelers Facebook Page. This

sampling technique ensures the inclusion of every population member in the

sample. A total of 200 individuals, specifically local travelers from the

Philippines, were chosen as respondents based on their capacity to address the

researchers' inquiries. The survey outcomes revealed a distribution of 94 males

and 106 females, with a majority being self-employed business owners and a

smaller proportion engaged in delivery courier services. Notably, most

respondents fall within the age range of 26-33 years old.

Research Instrument

The questionnaire was used as the main data-gathering instrument.

The instrument to be prepared focused on answering the statement of the

problem. The positive and negative impact of the factors affecting high domestic

airfare in the Philippines in terms of travel frequency, scheduling, flight demand,

route distance, and airline corporate image. The questionnaire comprises a total

of thirty (30) questions, with (6) questions allocated per variable. The

questionnaires will be distributed to the respondents using Google Forms. The

data-gathering instrument was structured on a scale ranging from 1-5. Where

33
(1) is strongly disagree, (2) is disagree, (3) is neutral, (4) is agree and the last

one is (5) strongly agree. This legend will help the researchers analyze the

results of conducted data-gathering.

Data Gathering Procedure

After confirming the validity and reliability of how gathered, questions

suitable for the study and all essential modifications to the selected respondent.

Two hundred (200) copies of the questionnaires distributed will be completed

and returned. Thus their corresponding answer to the question are kept by the

agreement of the respondents and the researchers. The data gathered was

organized and tabulated according to the result of the statistical treatment done.

Statistical Treatment of Data

The data to be gathered in this study will be subjected to the statistical

treatment:

Frequency and Percentage- this will be used to describe the profile of the

respondents.

P= __F x 100___
N

Where:

P=percentage

F= frequency

N= total number of respondents

34
Weighted Mean- this will be used to compute and determine the average

response of the respondents on the various factors considered in the study.

WM= (X1 * 5) + (X2 * 4) + (X3 * 3) + (X4* 2) + (X5 * 1)

Where:

X1= No. of respondents in strongly disagree

X2= No. of respondents in disagree

X3= No. of respondents in neutral

X4= No. of respondents in agree

X5= No. of respondents in strongly agree

N= Total number of respondents

GWM= x
5
Where:

GWM= General Weighted Mean

x= summation of the weighted mean

35
Data Analysis
Using the data gathered, data analysis plan would encompass

a number of procedures leading to the findings or the result of the study, the

procedures to be observed are as follow:

1. Summarizing the numerical data. This would be done through a tally that

will be based on the certain answer of the respondent in the survey

questionnaires using frequency and percentage.

2. Mathematical/Statistical Interpretation of the summarized data using the

weighted mean and ranking.

3. Verbal Interpretation of the produced outcome. Like a scale type

questionnaire was used by the researchers it used a 5-point scale, in which

point correspondents.

Likert Scale Interpretation

Points Scale Verbal Interpretation

5 4.50-5.0 Strongly Agree
4 3.50-4.49 Agree
3 2.50-3.49 Neutral
2 1.50-2.49 Disagree
1 1.0-1.49 Strongly Disagree

36
 Chapter 4

PRESENTATION, ANALYSIS, AND INTERPRETATION OF DATA

This chapter presents the data analysis and information obtained from

survey questionnaire responses. The said data is presented in tabular form

according to the specific questions posed in the problem statement.

1. Profile of Respondents

Table 1

Age of the Respondents

Profile Variables Frequency Percentage

AGE:

18-25 years old 60 30%

26-33 years old 74 37%

34 to 41 years old 52 26%

42 to 49 and above 14 7%

Total 200 100%

According to Table 1, 30% of the respondent has the age of 18-25

answered the questionnaire, 37% from the age of 26-33 , 26% from the age of

34-41 and 7% from the age of 42-49 and above. Therefore, most of our

respondent came from 26-33 years of age and answered our questionnaire.

37
 Table 2

Gender of the Respondents

Profile Variables Frequency Percentage

GENDER:

Male 94 47%

Female 106 53%

Total: 200 100%

Based on the table. Our male respondent are 47% while our female

respondent are 53%. Therefore, majority of our respondent are female because

it has 53%.

38
2. Assessment on the significant Impacts of the factors affecting High

Domestic Airfare in the Philippines

Table 3
Travel Frequency
INDICATOR WEIGHTED VERBAL
MEAN INTERPRETATION
1. Does the traveler frequently travels 2.98 NEUTRAL
by air every week?
2. Does the traveler frequently travels 3.04 NEUTRAL
by air once in every two weeks?
3. Does the traveler frequently travel by 3.1 NEUTRAL
air once a month?
4. Does the traveler frequently travel by 3.22 NEUTRAL
air once a year?
5. Does the traveler frequently travel by 3.63 AGREE
air twice, thrice or more than in a year ?
6. Does the traveler barely travel by air 3.25 NEUTRAL
due to high airfare?
TOTAL: 3.20 NEUTRAL

Table 3, illustrates the Travel Frequency's impact on the Factors

Affecting High Domestic Airfare in the Philippines. Question number 5 received

the highest weighted mean of 3.63, indicating that respondents agreed that

travelers frequently fly by air at least twice, thrice, or more within a year. The

remaining questions received neutral responses, ranked from highest to lowest:

question number 6 with 3.25, question number 4 with 3.22, question number 3

with 3.1, question number 2 with 3.04, and the lowest being question number 1

with a weighted mean of 2.98.

The overall mean of 3.20 is considered neutral, suggesting a balanced

viewpoint among the respondents.

39
 Table 4
Scheduling

INDICATOR WEIGHTED VERBAL

MEAN INTERPRETATION

1. Does the traveler often books a 3.78 AGREE

flight during holidays?
2. Does the passenger often 3.61 AGREE
experience flight cancelation due to
weather changes?
3. Does the traveler experiencing 3.35 NEUTRAL
flight delays more than an hour?
4. Does the passenger book flights in 3.46 NEUTRAL
advance due to high airfare?
5. Does the airline announce 2.79 NEUTRAL
overbooking in advance?
6. Does the passenger often 3.28 NEUTRAL
chooses to make connecting flights
while booking in order to lessen high
airfare?
TOTAL: 3.37 NEUTRAL

In Table 4, concerning Scheduling and its impact on the Factors

Affecting High Domestic Airfare in the Philippines, respondents showed

agreement with question numbers 1 and 2, earning weighted means of 3.78 and

3.61, respectively. The remaining questions received neutral responses, ranked

from highest to lowest: question number 4 with 3.46, question number 3 with

3.35, question number 6 with 3.28, and the lowest, 2.79, for question number 5.

With an overall mean of 3.37, the respondents' viewpoint on scheduling

appears to be neutral.

40
 Table 5
Flight Demand
INDICATOR WEIGHTED VERBAL

MEAN INTERPRETATION

1. Do travelers often change their minds 3.53 AGREE

in regards of their flight preference?
2. Do passengers believes that 3.16 NEUTRAL
shortage in airline employees affects
flight demands and high airfare?
3. Do passenger still desires to travel 2.92 NEUTRAL
despite of aircraft seats shortage in
supply chain?
4. Do passenger demand for a change 3.46 NEUTRAL
of allocated plane seat?
5. Do passengers believes that the 3.38 NEUTRAL
shortage of aircraft during peak season
affects flight demand?
6. Do the passengers believe that if the 3.21 NEUTRAL
airfare price goes up, the quantity
demand goes down?
TOTAL: 3.27 NEUTRAL

As shown in Table 5, in terms of Flight Demand on the Factors

Affecting High Domestic Airfare in the Philippines, the respondents agreed to

the question number 1 indicating travelers often change their minds in regards

of their flight preference, with the highest weighted mean of 3.53. The remaining

questions received neutral responses, ranked from highest to lowest: question

number 4 with 3.46, question number 5 with 3.38, question number 6 with 3.21,

question number 2 with 3.16 and the lowest is question number 3 with 2.92.

The overall mean of 3.27 indicates that the respondents has a neutral

standpoint in flight demand.

41
 Table 6
Route Distance
INDICATOR WEIGHTED VERBAL

MEAN INTERPRETATION

1. Do travelers often want a 2.59 NEUTRAL

quick flight for their trip?

2. The travelers believes that 3.16 NEUTRAL

an airline runway condition
often affects the amount of
distance to take off.
3. The travelers believes that 3.36 NEUTRAL
the more airspeed, the more
distance it will need.
4. The travelers believes that 2.94 NEUTRAL
the heavier the aircraft, the
more it slows down the flight.
5. The travelers believes that 3.10 NEUTRAL
the position of the air flaps
affect the amount of drag and
lift which impact the landing
distance.
6. The travelers believes that 3.21 NEUTRAL
the longer the flight, the more
it ends up costing them in
airfare.
TOTAL: 3.06 NEUTRAL

In Table 6, concerning Route Distance among the Factors Affecting

High Domestic Airfare in the Philippines, all questions resulted in a neutral

response. Question number 3 obtained the highest weighted mean of 3.36,

while question number 1 recorded the lowest at 2.59. Additionally, questions 6,

2, 5, and 4 achieved weighted means of 3.21, 3.16, 3.10, and 2.94, respectively.

The overall mean of 3.06 indicates that respondents exhibit a neutral

stance regarding Route Distance.

42
 Table 7
Airline Corporate Image
INDICATOR WEIGHTED VERBAL

MEAN INTERPRETATION

1. The travelers looks into the 3.35 NEUTRAL

background of the airline they are
about to book at.
2. The travelers likeness into the 3.22 NEUTRAL
airline corporate image are based
on their experience.
3. The travelers are drawn by the 3.46 NEUTRAL
experience of other travelers who
had good/ bad experience while
booking on an airline.
4. The travelers chooses a certain 3.50 AGREE
airline brand despite of its high
airfare.
5. The travelers believes that 2.91 NEUTRAL
aircrafts affecting the airline
corporate image.
6. The travelers believes that when 3.49 NEUTRAL
the airline brand is influential, the
airline company has a good service
quality.
TOTAL: 3.32 NEUTRAL

In Table 7, examining Airline Corporate Image within the Factors

Affecting High Domestic Airfare in the Philippines, the highest agreement was

observed in question number 4 with 3.50, while the lowest, resulting in a neutral

perspective, was question number 5, scoring 2.91. Questions 6, 3, 1, and 2

exhibited neutral responses with weighted means of 3.49, 3.46, 3.35, and 3.22,

respectively.

The overall mean of 3.32 implies that respondents maintain a neutral

stance regarding the airline corporate image.

43
 Table 8

Summary of Overall Assessment of the Respondents on the significant

Impacts of the factors affecting High Domestic Airfare in the Philippines.

INDICATORS OVERALL VERBAL

WEIGHTED MEAN INTERPRETATION

TRAVEL 3.20 NEUTRAL

FREQUENCY

SCHEDULING 3.37 NEUTRAL

FLIGHT DEMAND 3.27 NEUTRAL

ROUTE DISTANCE 3.06 NEUTRAL

AIRLINE 3.32 NEUTRAL

CORPORATE IMAGE

GRAND MEAN= 3.24 NEUTRAL

In Table 8, the compilation of the respondents’ evaluations regarding the

substantial impacts of the factors influencing High Domestic Airfare in the

Philippines revealed a grand mean of 3.24, signaling a neutral perception.

Scheduling received the highest score at 3.37, followed by airline corporate

image at 3.32, flight demand at 3.27, Travel Frequency at 3.20 and the lowest

rating was 3.06 for route distance, all culminating in neutral assessments.

44
 Chapter 5

SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS

This chapter serves as a comprehensive overview, shedding light on

the study's fundamental discoveries and offering a synthesis of its pivotal

outcomes. Organized in alignment with these findings, the conclusions and

recommendations in this chapter aim to encapsulate the essence of the

research. At its core, this study is driven by the ambition to scrutinize and

evaluate the factors that significantly impact the high domestic airfare in the

Philippines, emphasizing the pivotal role of local travelers awareness in this

context.

The research methodology adopted a quantitative descriptive

approach, leveraging questionnaires as the primary instrument for data

collection. Employing a quantitative framework, the gathered data underwent

meticulous analysis utilizing techniques such as frequency and percentage

computations, alongside the calculation of weighted mean.

In terms of the respondent demographic, the study encompassed 94

male and 106 female participants, all of whom were local travelers hailing from

the Philippines. Their diverse perspectives and experiences contributed

significantly to the insights gleaned from this research endeavor.

45
Summary

Based on the gathered information and presented data, the researcher

arrived at the following findings:

1. Profile of Respondents

Table 9
Summary of Profile of Respondents
Age Sex Count
Female 35
18 to 25 years old Male 25
18 to 25 years old Total 60
Female 35
26 to 33 years old Male 39
26 to 33 years old 74
Female 30
34 to 41 years old Male 22
34 to 41 years old Total 52
Female 6
42 to 49+ years old and above Male 8
42 to 49+ years old and above Total 14
Female 106
Male 94
Grand Total 200

The research study comprises 200 respondents, consisting of 94

males and 106 females. Among participants aged 18-25 years old, there are 25

males and 35 females, totaling 60 individuals. In the 26-33 age group, there are

39 males and 35 females, totaling 74. For the 34-41 age range, there are 22

males and 30 females, totaling 52. Lastly, in the 42-49 and above age bracket,

there are 8 males and 6 females, totaling 14.

46
 2. Assessment on the significant Impacts of the factors affecting

High Domestic Airfare in the Philippines

The analysis of factors affecting high domestic airfare in the Philippines

across different dimension reveals varied perspectives among respondents.

When considering Travel Frequency, respondents agreed on one indicator

while maintaining a neutral stance on five other indicators, culminating in an

overall mean of 3.20.

Similarly, in the context of Scheduling, respondents agreed on two indicators

but held a neutral stance on four other indicators, resulting in an overall mean

of 3.37..

Regarding Flight Demand, the respondents showed agreement on one indicator

and a neutral standpoint on five other indicators, leading to an overall mean of

3.27.

Route Distance displayed neutrality across all six indicators among the

respondents, yielding an overall mean of 3.06.

Assessing Airline Corporate Image, five indicators revealed a neutral

perspective while one indicator indicated agreement, producing an overall mean

of 3.32.

The cumulative evaluation of all variables presented a grand mean of 3.24,

indicating a predominantly neutral standpoint among respondents across the

factors affecting high domestic airfare in the Philippines.

47
 Conclusions

Based on the findings of the study, the following conclusions were made:

1. When evaluating the significant impacts of factors influencing high domestic

airfare in the Philippines, respondents demonstrate a neutral stance across

Travel Frequency, Scheduling, Flight Demand, Route Distance, and Airline

Corporate Image.

2. Regarding travel frequency, respondents indicated that they often travel by

air twice, thrice, or more within a year. In terms of scheduling, travelers

experience instability due to weather changes, flight cancellations, delays, and

late announcements of overbooking. Concerning flight demand, travelers

frequently change their minds about flight preferences, believing there is an

aircraft shortage during peak seasons. Regarding Route Distance, travelers

believe that more airspeed requires greater distance, and they perceive longer

flights as more costly. In terms of Airline Corporate Image, travelers choose

certain airline brands despite high airfares, associating influential brands with

good service quality based on experiences, overall brand image, and the impact

of the aircraft on the airline's corporate image.

48
Recommendations

The following are the researchers’ recommendations based on the

findings of this study:

1. The researchers advise passengers to book airline packages in advance to

evade high airfare and potential flight inconveniences.

2. It is suggested by the researchers that passengers review the weather history

for their travel time to anticipate potential inconveniences and flight

cancellations. Additionally, airlines are recommended to promptly address

passenger inquiries and provide advance notice for any flight cancellations.

3. The researchers recommend that groups of passengers book their flights

together to maintain their flight itinerary and avoid changes. Airlines are also

suggested to announce overbooking in advance to prevent inconvenience to

potential passengers.

4. The researchers suggest that airlines establish fixed pricing for flights with

longer durations to eliminate hidden charges, thereby discouraging passengers

from opting for other flights.

5. The researchers recommend that airlines consider passenger reviews to

enhance their services, ultimately improving their corporate image and better

accommodating passengers.

49
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 APPENDIX A
Questionnaire

A research entitled, “Factors Affecting on High Airfare in Domestic Flights

in the Philippines: Basis of Local Travelers Awareness”.

Requesting participants to answer all questions as accurately and honestly as

possible. Please don't leave any blanks to avoid doubt that someone else can
fill in. We assure you that all your answers will be reasonably and will be
confidential, only for educational purposes. Thank you very much and God bless
you!
- Researchers
____________________________________________________________

I. Profile of the Respondent

Direction: Choose the appropriate answer for each item with a check (/) in
the corresponding box.
Name (Optional): __________________________
Age: ( ) 18 – 25 years old
( ) 26 – 33 years old
( ) 34 to 41 years old
( ) 42 to 49+ years old and above
Sex: ( ) Male ( ) Female
Profession:_______________
II. Survey assessment on the significant impacts affecting high
domestic airfare in the Philippines
Direction: Answer the questions following the Legend Scale. There will be
six questions every variable. Choose the appropriate answer for each item
with a check (/) in the corresponding box using the following scale:

Points Verbal Interpretation

5 Strongly Agree
4 Agree
3 Neutral
2 Disagree
1 Strongly Disagree

54
 i. Travel Frequency 5 4 3 2 1

1. Does the traveler frequently travels by air every

week?
2. Does the traveler frequently travels by air once in
every two weeks?
3. Does the traveler frequently travel by air once a
month?
4. Does the traveler frequently travel by air once a
year?
5. Does the traveler frequently travel by air twice,
thrice or more than in a year ?
6. Does the traveler barely travel by air due to high
airfare?
ii. Scheduling
1. Does the traveler often books a flight during
holidays?
2. Does the passenger often experience flight
cancelation due to weather changes?
3. Does the traveler experiencing flight delays more
than an hour?
4. Does the passenger book flights in advance due to
high airfare?
5. Does the airline announce overbooking in advance?
6. Does the passenger often chooses to make
connecting flights while booking in order to lessen high
airfare?
iii. Flight Demand
1. Do travelers often change their minds in regards of
their flight preference?
2. Do passengers believes that shortage in airline
employees affects flight demands and high airfare?
3. Do passenger still desires to travel despite of
aircraft seats shortage in supply chain?
4. Do passenger demand for a change of allocated
plane seat?
5. Do passengers believes that the shortage of aircraft
during peak season affects flight demand?
6. Do the passengers believe that if the airfare price
goes up, the quantity demand goes down?
iv. Route Distance
1. Do travelers often want a quick flight for their trip?

55
2. The travelers believes that an airline runway
condition often affects the amount of distance to take
off.
3. The travelers believes that the more airspeed, the
more distance it will need.
4. The travelers believes that the heavier the aircraft,
the more it slows down the flight.
5. The travelers believes that the position of the air
flaps affect the amount of drag and lift which impact
the landing distance.
6. The travelers believes that the longer the flight, the
more it ends up costing them in airfare.
v. Airline Corporate Image
1. The travelers looks into the background of the
airline they are about to book at.
2. The travelers likeness into the airline corporate
image are based on their experience.
3. The travelers are drawn by the experience of other
travelers who had good/ bad experience while booking
on an airline.
4. The travelers chooses a certain airline brand
despite of its high airfare.
5. The travelers believes that aircrafts affecting the
airline corporate image.
6. The travelers believes that when the airline brand is
influential, the airline company has a good service
quality

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 APPENDIX B
Supporting Evidence

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 APPENDIX C
Curriculum Vitae

PERSONAL INFORMATION:

Name: Anna Bianca A. De Guia

Birthdate: July 13, 2003
Birthplace: Cainta, Rizal
Address: 041 Dela Paz St., Felix Subd.,
Cainta, Rizal
Contact: 09283790459
E-mail Address: [email protected]
Citizenship: Filipino
Civil Status: Single
Religion: Roman Catholic

EDUCATIONAL BACKGROUND:

2021-PRESENT
ABE INTERNATIONAL BUSINESS COLLEGE
BS IN TOURISM MANAGEMENT

2019-2021
CAINTA SENIOR HIGH SCHOOL
HUMSS STRAND

2016-2019
ST. THERESE OF LISIEUX SCHOOL OF CAINTA
JUNIOR HIGH SCHOOL

2011-2016
ST. THERESE OF LISIEUX SCHOOL OF CAINTA
ELEMENTARY

103
PERSONAL INFORMATION:

Name: Rencyella R. Villanueva

Birthdate: January 28, 2001
Birthplace: Makati City, Metro Manila
Address: 2542 M. Roxas St.,
Sta. Ana, Manila
Contact: 09263050973
E-mail Address: [email protected]
Citizenship: Filipino
Civil Status: Single
Religion: Roman Catholic

EDUCATIONAL BACKGROUND:

2020-PRESENT
ABE INTERNATIONAL BUSINESS COLLEGE
BS IN TOURISM MANAGEMENT

2017-2019
NATIONAL TEACHERS COLLEGE
ICT STRAND

2013-2016
MANUEL ARAULLO HIGH SCHOOL
JUNIOR HIGH SCHOOL

2006-2012
RAFAEL PALMA ELEMENTARY SCHOOL
ELEMENTARY

104