Assessing the effects of perceived value (utilitarian and hedonic) in LCCs and FSCs: Evidence from South Korea

• This study examined the impact of perceived value on satisfaction and purchase intention regarding LCCs and FSCs.
• The results showed that passengers perceive value differently for LCCs and FSCs.
• Thus, airlines should investigate passenger needs related to perceived value for delivering better service.

In the airline industry, passengers choose and buy service based on their perception of which airline delivers better value. Thus, it is important to compare two types of airlines, Low Cost Carriers (LCCs) and Full Service Carriers (FSCs), to measure how much their product or service is worth and the effect of perceived value on passengers' purchase decisions. This study examined the relationship between perceived value, satisfaction, and purchase intention in both FSCs and LCCs. Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM) were performed for data analysis. Our findings reveal that passenger satisfaction in LCCs is affected by hedonic value and utilitarian value, but passengers' future purchase intention is not dependent on satisfaction even when passengers are satisfied. In FSCs, moreover, utilitarian value is not a significant factor for satisfaction and purchase intention. This research provides implications for airline marketers and directions for future research.