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

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  • Boonekamp, Thijs
  • Zuidberg, Joost
  • Burghouwt, Guillaume

Abstract

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 profound contribution of the paper lies in the inclusion of two innovative variables in the estimations: ethnic links and aviation-dependent employment. The econometric results show that both ethnic links between countries and the share of aviation-dependent employment increase passenger demand. 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.

Suggested Citation

  • Boonekamp, Thijs & Zuidberg, Joost & Burghouwt, Guillaume, 2018. "Determinants of air travel demand: The role of low-cost carriers, ethnic links and aviation-dependent employment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 112(C), pages 18-28.
    • Handle: RePEc:eee:transa:v:112:y:2018:i:c:p:18-28
    DOI: 10.1016/j.tra.2018.01.004
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