Synopsis

Premium Economy is found mostly on international flights and, compared to standard Economy, offers about 5-7 inches of extra legroom as well as additional amenities, which can include: 1-2 extra inches of seat width. 2-3 extra inches of seat recline. Adjustable headrests, legrests, or lumbar support.This analysis aims to understand the main factors behind the differential pricing for Economy, and Premium Economy classes.

Exercise

Read the dataset into R

airlines<-read.csv(paste("SixAirlinesDataV2.csv",sep = ""))

Prepare summary statistics

library(psych)
describe(airlines)
##                     vars   n    mean      sd  median trimmed     mad   min
## Airline*               1 458    3.01    1.65    2.00    2.89    1.48  1.00
## Aircraft*              2 458    1.67    0.47    2.00    1.71    0.00  1.00
## FlightDuration         3 458    7.58    3.54    7.79    7.57    4.81  1.25
## TravelMonth*           4 458    2.56    1.17    3.00    2.58    1.48  1.00
## IsInternational*       5 458    1.91    0.28    2.00    2.00    0.00  1.00
## SeatsEconomy           6 458  202.31   76.37  185.00  194.64   85.99 78.00
## SeatsPremium           7 458   33.65   13.26   36.00   33.35   11.86  8.00
## PitchEconomy           8 458   31.22    0.66   31.00   31.26    0.00 30.00
## PitchPremium           9 458   37.91    1.31   38.00   38.05    0.00 34.00
## WidthEconomy          10 458   17.84    0.56   18.00   17.81    0.00 17.00
## WidthPremium          11 458   19.47    1.10   19.00   19.53    0.00 17.00
## PriceEconomy          12 458 1327.08  988.27 1242.00 1244.40 1159.39 65.00
## PricePremium          13 458 1845.26 1288.14 1737.00 1799.05 1845.84 86.00
## PriceRelative         14 458    0.49    0.45    0.36    0.42    0.41  0.02
## SeatsTotal            15 458  235.96   85.29  227.00  228.73   90.44 98.00
## PitchDifference       16 458    6.69    1.76    7.00    6.76    0.00  2.00
## WidthDifference       17 458    1.63    1.19    1.00    1.53    0.00  0.00
## PercentPremiumSeats   18 458   14.65    4.84   13.21   14.31    2.68  4.71
##                         max   range  skew kurtosis    se
## Airline*               6.00    5.00  0.61    -0.95  0.08
## Aircraft*              2.00    1.00 -0.72    -1.48  0.02
## FlightDuration        14.66   13.41 -0.07    -1.12  0.17
## TravelMonth*           4.00    3.00 -0.14    -1.46  0.05
## IsInternational*       2.00    1.00 -2.91     6.50  0.01
## SeatsEconomy         389.00  311.00  0.72    -0.36  3.57
## SeatsPremium          66.00   58.00  0.23    -0.46  0.62
## PitchEconomy          33.00    3.00 -0.03    -0.35  0.03
## PitchPremium          40.00    6.00 -1.51     3.52  0.06
## WidthEconomy          19.00    2.00 -0.04    -0.08  0.03
## WidthPremium          21.00    4.00 -0.08    -0.31  0.05
## PriceEconomy        3593.00 3528.00  0.51    -0.88 46.18
## PricePremium        7414.00 7328.00  0.50     0.43 60.19
## PriceRelative          1.89    1.87  1.17     0.72  0.02
## SeatsTotal           441.00  343.00  0.70    -0.53  3.99
## PitchDifference       10.00    8.00 -0.54     1.78  0.08
## WidthDifference        4.00    4.00  0.84    -0.53  0.06
## PercentPremiumSeats   24.69   19.98  0.71     0.28  0.23

Generate plots to understand how the different variables are correlated

airlines1<-airlines[,c("FlightDuration","SeatsEconomy","SeatsPremium","PitchEconomy","PitchPremium","WidthEconomy","WidthPremium","PriceEconomy","PricePremium","PriceRelative","SeatsTotal","PitchDifference","WidthDifference","PercentPremiumSeats")]
cor.airline<-cor(airlines1)
library(corrgram)
## Warning: package 'corrgram' was built under R version 3.4.3
corrgram(cor.airline,upper.panel = panel.pie)

RESEARCH QUESTION

What factors explain the difference in price between an economy ticket and a premium-economy airline ticket?

Relevant Plot

Since the difference in price(PriceRelative) is mainly related to the WidthDifference and PitchDifference, the correlogram for these three variables is most relevant.

 airlines1<-airlines[,c(14,16,17)]
cor.airline<-cor(airlines1)
library(corrgram)
corrgram(cor.airline,upper.panel = panel.pie)

Conclusion

Using correlation tests, it is concluded that the main factors explaining the difference in pricing between an economy ticket and a premium economy ticket are the PitchDifference, and WidthDifference, which provide additional comfort as compared to the regular economy class. These fadctors result in extra legroom, more spacious seats, and all the facilities to make the journey more comfortable.