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Air transport liberalisation and traffic growth in tourism-dependent economies: A case-history of some US-Caribbean markets

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  • Warnock-Smith, David
  • Morrell, Peter

Abstract

This study looks at the relationship between air traffic/capacity growth and recent air policy reform pertaining to some Caribbean member states. The hypothesis is tested that changes to extra regional air policy can facilitate traffic growth that may result in substantial tourism growth for the region. A time-trend evaluation for three US-Caribbean markets shows that the country-pair which did not make efforts to further liberalise free carrier designation rights between 1995 and 2003 saw less traffic/capacity growth as those that had. The number of competitors, along with low-cost carrier expansion, has increased more notably on US-Bahamas markets than on US-Dominican Republic and US-Jamaica markets. A non-linear air traffic model, modified to include an intuitive liberalisation scale, is used to better reflect the fragmented approach towards air policy development. It is found that a unit increase in air policy liberalisation produced annual log traffic growth coefficients of between 2.55% and 3.02% with the upper estimate affected least by multicollinearity within the US-Bahamas traffic model. These findings challenge current restrictive practises in the region.

Suggested Citation

  • Warnock-Smith, David & Morrell, Peter, 2008. "Air transport liberalisation and traffic growth in tourism-dependent economies: A case-history of some US-Caribbean markets," Journal of Air Transport Management, Elsevier, vol. 14(2), pages 82-91.
    • Handle: RePEc:eee:jaitra:v:14:y:2008:i:2:p:82-91
    DOI: 10.1016/j.jairtraman.2008.02.001
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    References listed on IDEAS

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    Cited by:

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    9. Koo, Tay T.R. & Hossein Rashidi, Taha & Park, Jin-Woo & Wu, Cheng-Lung & Tseng, Wen-Chun, 2017. "The effect of enhanced international air access on the demand for peripheral tourism destinations: Evidence from air itinerary choice behaviour of Korean visitors to Australia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 116-129.
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    15. Lei, Zheng & Yu, Man & Chen, Ruowei & O'Connell, John F., 2016. "Liberalization of China–US air transport market: Assessing the impacts of the 2004 and 2007 protocols," Journal of Transport Geography, Elsevier, vol. 50(C), pages 24-32.
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    18. Warnock-Smith, David & O’Connell, John F., 2011. "The impact of air policy on incoming tourist traffic: the contrasting cases of the Caribbean Community and the Middle-East," Journal of Transport Geography, Elsevier, vol. 19(2), pages 265-274.
    19. Surovitskikh, Svetlana & Lubbe, Berendien, 2015. "The Air Liberalisation Index as a tool in measuring the impact of South Africa's aviation policy in Africa on air passenger traffic flows," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 159-166.
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