IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v112y2018icp18-28.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856418300156
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2018.01.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Button, Kenneth & Taylor, Samantha, 2000. "International air transportation and economic development," Journal of Air Transport Management, Elsevier, vol. 6(4), pages 209-222.
    2. Martijn Burger & Frank van Oort & Gert-Jan Linders, 2009. "On the Specification of the Gravity Model of Trade: Zeros, Excess Zeros and Zero-inflated Estimation," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(2), pages 167-190.
    3. Veldhuis, Jan, 1997. "The competitive position of airline networks," Journal of Air Transport Management, Elsevier, vol. 3(4), pages 181-188.
    4. Carson, Richard T. & Cenesizoglu, Tolga & Parker, Roger, 2011. "Forecasting (aggregate) demand for US commercial air travel," International Journal of Forecasting, Elsevier, vol. 27(3), pages 923-941, July.
    5. A S Fotheringham & D W S Wong, 1991. "The Modifiable Areal Unit Problem in Multivariate Statistical Analysis," Environment and Planning A, , vol. 23(7), pages 1025-1044, July.
    6. Valdes, Victor, 2015. "Determinants of air travel demand in Middle Income Countries," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 75-84.
    7. Abed, Seraj Y. & Ba-Fail, Abdullah O. & Jasimuddin, Sajjad M., 2001. "An econometric analysis of international air travel demand in Saudi Arabia," Journal of Air Transport Management, Elsevier, vol. 7(3), pages 143-148.
    8. Brons, Martijn & Pels, Eric & Nijkamp, Peter & Rietveld, Piet, 2002. "Price elasticities of demand for passenger air travel: a meta-analysis," Journal of Air Transport Management, Elsevier, vol. 8(3), pages 165-175.
    9. Kennedy, Peter E, 1981. "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations [The Interpretation of Dummy Variables in Semilogarithmic Equations]," American Economic Review, American Economic Association, vol. 71(4), pages 801-801, September.
    10. Frédéric Dobruszkes, 2009. "New Europe, new low-cost air services," ULB Institutional Repository 2013/95851, ULB -- Universite Libre de Bruxelles.
    11. Klophaus, Richard & Conrady, Roland & Fichert, Frank, 2012. "Low cost carriers going hybrid: Evidence from Europe," Journal of Air Transport Management, Elsevier, vol. 23(C), pages 54-58.
    12. de Wit, Jaap G. & Zuidberg, Joost, 2012. "The growth limits of the low cost carrier model," Journal of Air Transport Management, Elsevier, vol. 21(C), pages 17-23.
    13. Graham, Anne, 2000. "Demand for leisure air travel and limits to growth," Journal of Air Transport Management, Elsevier, vol. 6(2), pages 109-118.
    14. Sismanidou, Athina & Tarradellas, Joan & Bel, Germà & Fageda, Xavier, 2013. "Estimating potential long-haul air passenger traffic in national networks containing two or more dominant cities," Journal of Transport Geography, Elsevier, vol. 26(C), pages 108-116.
    15. Stephen J. Appold & John D. Kasarda, 2013. "The Airport City Phenomenon: Evidence from Large US Airports," Urban Studies, Urban Studies Journal Limited, vol. 50(6), pages 1239-1259, May.
    16. Chi, Junwook, 2014. "A cointegration analysis of bilateral air travel flows: The case of international travel to and from the United States," Journal of Air Transport Management, Elsevier, vol. 39(C), pages 41-47.
    17. Grosche, Tobias & Rothlauf, Franz & Heinzl, Armin, 2007. "Gravity models for airline passenger volume estimation," Journal of Air Transport Management, Elsevier, vol. 13(4), pages 175-183.
    18. David E. Giles, 2011. "Interpreting Dummy Variables in Semi-logarithmic Regression Models: Exact Distributional Results," Econometrics Working Papers 1101, Department of Economics, University of Victoria.
    19. Suau-Sanchez, Pere & Burghouwt, Guillaume & Pallares-Barbera, Montserrat, 2014. "An appraisal of the CORINE land cover database in airport catchment area analysis using a GIS approach," Journal of Air Transport Management, Elsevier, vol. 34(C), pages 12-16.
    20. Walter Isard, 1954. "Location Theory and Trade Theory: Short-Run Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 68(2), pages 305-320.
    21. Fridström, Lasse & Thune-Larsen, Harald, 1989. "An econometric air travel demand model for the entire conventional domestic network: The case of Norway," Transportation Research Part B: Methodological, Elsevier, vol. 23(3), pages 213-223, June.
    22. Bieger, Thomas & Wittmer, Andreas & Laesser, Christian, 2007. "What is driving the continued growth in demand for air travel? Customer value of air transport," Journal of Air Transport Management, Elsevier, vol. 13(1), pages 31-36.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. de Grange, Louis & González, Felipe & Marechal, Matthieu & Troncoso, Rodrigo, 2024. "Estimating multinomial logit models with endogenous variables: Control function versus two adapted approaches," Transportation Research Part A: Policy and Practice, Elsevier, vol. 183(C).
    2. Vergori, Anna Serena & Arima, Serena, 2022. "Low-cost carriers and tourism in the Italian regions: A segmented regression model," Annals of Tourism Research, Elsevier, vol. 97(C).
    3. Dobruszkes, Frédéric & Vandermotten, Christian, 2022. "Do scale and the type of markets matter? Revisiting the determinants of passenger air services worldwide," Journal of Air Transport Management, Elsevier, vol. 99(C).
    4. Iyer, K. Chandrashekhar & Thomas, Nivea, 2021. "An econometric analysis of domestic air traffic demand in regional airports: Evidence from India," Journal of Air Transport Management, Elsevier, vol. 93(C).
    5. Birolini, Sebastian & Cattaneo, Mattia & Malighetti, Paolo & Morlotti, Chiara, 2020. "Integrated origin-based demand modeling for air transportation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 142(C).
    6. Li, Yongling & Wang, Jiaoe & Huang, Jie & Chen, Zhuo, 2022. "Impact of COVID-19 on domestic air transportation in China," Transport Policy, Elsevier, vol. 122(C), pages 95-103.
    7. Xuanyu Yue & Julie Byrne, 2021. "Linking the Determinants of Air Passenger Flows and Aviation Related Carbon Emissions: A European Study," Sustainability, MDPI, vol. 13(14), pages 1-16, July.
    8. Kağan Albayrak, Muhammed Bilge & Özcan, İsmail Çağrı & Can, Raif & Dobruszkes, Frédéric, 2020. "The determinants of air passenger traffic at Turkish airports," Journal of Air Transport Management, Elsevier, vol. 86(C).
    9. Frédéric Dobruszkes & Christian Vandermotten, 2022. "Do scale and the type of markets matter? Revisiting the determinants of passenger air services worldwide," ULB Institutional Repository 2013/336304, ULB -- Universite Libre de Bruxelles.
    10. Bernardo, Valeria & Fageda, Xavier, 2020. "Impacts of competition on connecting travelers: Evidence from the transatlantic aviation market," Transport Policy, Elsevier, vol. 96(C), pages 141-151.
    11. Frédéric Dobruszkes & Didier Peeters, 2019. "The magnitude of detours faced by commercial flights: A global assessment," ULB Institutional Repository 2013/293811, ULB -- Universite Libre de Bruxelles.
    12. Oliveira, Bruno F. & Oliveira, Alessandro V.M., 2022. "An empirical analysis of the determinants of network construction for Azul Airlines," Journal of Air Transport Management, Elsevier, vol. 101(C).
    13. Tuğba Dayioglu & Serdar Alnipak, 2023. "Dynamic effecting factors of air travel demand: an econometric analysis," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(4), pages 3713-3727, August.
    14. Keeling, David J., 2020. "Restructuring Argentina's airline networks: Successes and challenges," Journal of Transport Geography, Elsevier, vol. 86(C).
    15. Katrin Oesingmann, 2022. "The determinants of air cargo flows and the role of multinational agreements: An empirical comparison with trade and air passenger flows," The World Economy, Wiley Blackwell, vol. 45(8), pages 2370-2393, August.
    16. Birolini, Sebastian & Antunes, António Pais & Cattaneo, Mattia & Malighetti, Paolo & Paleari, Stefano, 2021. "Integrated flight scheduling and fleet assignment with improved supply-demand interactions," Transportation Research Part B: Methodological, Elsevier, vol. 149(C), pages 162-180.
    17. Birolini, Sebastian & Jacquillat, Alexandre & Cattaneo, Mattia & Antunes, António Pais, 2021. "Airline Network Planning: Mixed-integer non-convex optimization with demand–supply interactions," Transportation Research Part B: Methodological, Elsevier, vol. 154(C), pages 100-124.
    18. Wang, Sen & Gao, Yi, 2021. "A literature review and citation analyses of air travel demand studies published between 2010 and 2020," Journal of Air Transport Management, Elsevier, vol. 97(C).
    19. Zetina, Carlos Armando & Contreras, Ivan & Cordeau, Jean-François, 2019. "Profit-oriented fixed-charge network design with elastic demand," Transportation Research Part B: Methodological, Elsevier, vol. 127(C), pages 1-19.
    20. Oesingmann, Katrin, 2022. "The effect of the European Emissions Trading System (EU ETS) on aviation demand: An empirical comparison with the impact of ticket taxes," Energy Policy, Elsevier, vol. 160(C).
    21. Gudmundsson, S.V. & Cattaneo, M. & Redondi, R., 2021. "Forecasting temporal world recovery in air transport markets in the presence of large economic shocks: The case of COVID-19," Journal of Air Transport Management, Elsevier, vol. 91(C).
    22. Gunter, Ulrich & Zekan, Bozana, 2021. "Forecasting air passenger numbers with a GVAR model," Annals of Tourism Research, Elsevier, vol. 89(C).
    23. Fageda, Xavier & Fioravanti, Reinaldo & Ricover, Andy & Café, Eduardo & Ansaldo, Mariano, 2023. "Econometric analysis of the determinants of air cargo services supply in Latin America and the Caribbean," Transport Policy, Elsevier, vol. 135(C), pages 33-44.
    24. Dobruszkes, Frédéric & Peeters, Didier, 2019. "The magnitude of detours faced by commercial flights: A global assessment," Journal of Transport Geography, Elsevier, vol. 79(C), pages 1-1.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frédéric Dobruszkes & Christian Vandermotten, 2022. "Do scale and the type of markets matter? Revisiting the determinants of passenger air services worldwide," ULB Institutional Repository 2013/336304, ULB -- Universite Libre de Bruxelles.
    2. Dobruszkes, Frédéric & Vandermotten, Christian, 2022. "Do scale and the type of markets matter? Revisiting the determinants of passenger air services worldwide," Journal of Air Transport Management, Elsevier, vol. 99(C).
    3. Wang, Sen & Gao, Yi, 2021. "A literature review and citation analyses of air travel demand studies published between 2010 and 2020," Journal of Air Transport Management, Elsevier, vol. 97(C).
    4. Tirtha, Sudipta Dey & Bhowmik, Tanmoy & Eluru, Naveen, 2023. "Understanding the factors affecting airport level demand (arrivals and departures) using a novel modeling approach," Journal of Air Transport Management, Elsevier, vol. 106(C).
    5. Abdelghany, Ahmed & Guzhva, Vitaly S., 2022. "Exploratory analysis of air travel demand stimulation in first-time served markets," Journal of Air Transport Management, Elsevier, vol. 98(C).
    6. Hanson, Daniel & Toru Delibasi, Tuba & Gatti, Matteo & Cohen, Shamai, 2022. "How do changes in economic activity affect air passenger traffic? The use of state-dependent income elasticities to improve aviation forecasts," Journal of Air Transport Management, Elsevier, vol. 98(C).
    7. Dey Tirtha, Sudipta & Bhowmik, Tanmoy & Eluru, Naveen, 2022. "An airport level framework for examining the impact of COVID-19 on airline demand," Transportation Research Part A: Policy and Practice, Elsevier, vol. 159(C), pages 169-181.
    8. Li, Yongling & Wang, Jiaoe & Huang, Jie & Chen, Zhuo, 2022. "Impact of COVID-19 on domestic air transportation in China," Transport Policy, Elsevier, vol. 122(C), pages 95-103.
    9. Suau-Sanchez, Pere & Voltes-Dorta, Augusto & Rodríguez-Déniz, Héctor, 2016. "Measuring the potential for self-connectivity in global air transport markets: Implications for airports and airlines," Journal of Transport Geography, Elsevier, vol. 57(C), pages 70-82.
    10. Truong, Dothang, 2021. "Estimating the impact of COVID-19 on air travel in the medium and long term using neural network and Monte Carlo simulation," Journal of Air Transport Management, Elsevier, vol. 96(C).
    11. Jankiewicz, Jacek & Huderek-Glapska, Sonia, 2016. "The air transport market in Central and Eastern Europe after a decade of liberalisation – Different paths of growth," Journal of Transport Geography, Elsevier, vol. 50(C), pages 45-56.
    12. Pels, Eric, 2021. "Optimality of the hub-spoke system: A review of the literature, and directions for future research," Transport Policy, Elsevier, vol. 104(C), pages 1-10.
    13. Valdes, Victor, 2015. "Determinants of air travel demand in Middle Income Countries," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 75-84.
    14. Mohammadian, Iman & Abareshi, Ahmad & Abbasi, Babak & Goh, Mark, 2019. "Airline capacity decisions under supply-demand equilibrium of Australia’s domestic aviation market," Transportation Research Part A: Policy and Practice, Elsevier, vol. 119(C), pages 108-121.
    15. Hakim, Md Mahbubul & Merkert, Rico, 2019. "Econometric evidence on the determinants of air transport in South Asian countries," Transport Policy, Elsevier, vol. 83(C), pages 120-126.
    16. Yilmazkuday, Hakan, 2021. "Profit margins in U.S. domestic airline routes," Transport Policy, Elsevier, vol. 114(C), pages 245-251.
    17. Borbely, Daniel, 2019. "A case study on Germany’s aviation tax using the synthetic control approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 126(C), pages 377-395.
    18. Kağan Albayrak, Muhammed Bilge & Özcan, İsmail Çağrı & Can, Raif & Dobruszkes, Frédéric, 2020. "The determinants of air passenger traffic at Turkish airports," Journal of Air Transport Management, Elsevier, vol. 86(C).
    19. Hu, Yi & Xiao, Jin & Deng, Ying & Xiao, Yi & Wang, Shouyang, 2015. "Domestic air passenger traffic and economic growth in China: Evidence from heterogeneous panel models," Journal of Air Transport Management, Elsevier, vol. 42(C), pages 95-100.
    20. repec:dau:papers:123456789/6792 is not listed on IDEAS
    21. Tirtha, Sudipta Dey & Bhowmik, Tanmoy & Eluru, Naveen, 2024. "Accommodating spatio-temporal dependency in airline demand modeling," Journal of Air Transport Management, Elsevier, vol. 116(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:112:y:2018:i:c:p:18-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.