Determinants of air travel demand: The role of low-cost carriers, ethnic links and aviation-dependent employment

Kết quả hình ảnh cho Determinants of air travel demand images

This paper presents a comprehensive gravity model in which the most important determinants for air travel demand have been identified using a two-stage least squares technique. Besides including the standard demand factors like GDP, population and tourism, the effects of other determinants such as domestic traffic, low-cost carrier (LCC) activity and public service obligations are also estimated. The econometric results show that both ethnic links between countries and the share of aviation-dependent employment increase passenger demand. Additionally, positive and significant impacts were shown between the share of people employed in knowledge-intensive services and high-tech manufacturing and the demand for air travel. On routes with a higher share of people working in these aviation-dependent sectors, demand for air travel appears to be significantly higher. Moreover, the results confirm that LCC presence leads to a significant increase in passenger demand, particularly on routes where Europe’s largest LCCs, Ryanair and easyJet, are active.

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