Delayed Reaction: The Hidden Cost of Late Flights
Article published in the Journal of Air Transport Management
Following a European Court ruling in October 2012, airlines now face the very real possibility of having to pay out millions in compensation to passengers for flight delays. But it doesn't end there, as a new study on the behavioral effects of repeated flight delays shows.
IESE's Paulo Rocha e Oliveira, writing in the Journal of Air Transport Management together with Juan-Carlos Ferrer and A. Parasuraman, finds that flight delays have hidden effects, resulting in a disproportionate amount of dissatisfaction for an airline's most valuable customers, and leading them to switch to a more reliable carrier.