The Determinants of Domestic Air Passenger Demand in the Republic of South Africa

Abstract

Analysing air passenger market is an integral part of air transport industry and form part of corporate planning process. This paper seeks to assess the determinants of domestic air passenger demand in the Republic of South Africa. The methodology used involved collection of data for passenger movements in South Africa for the period 1971 -2012 to determine the pattern of air travels. Data on macro and micro-economic variables considered to affect demand for air passenger travel were also collected. Multiple regression method was then used to develop models of demand in respect of air passenger movement. An attempt was made to develop models for domestic air passenger travel demand in the country with different combinations of explanatory variables utilising a stepwise regression technique. The model, which has the total consumption, population size, airfares and oil prices as the explanatory variables, is the most appropriate model to represent the demand for domestic air passenger travel in South Africa. The rest of the models discussed suffer from multicollinearity. The model selected may be used to identify and measure the relations between domestic air passenger demand and the economic and demographic factors in South Africa.

Measuring the Influence of the Commodity Market Performance over the Supply and Demand of Regional Air Travel

“…The study of Fernandes et al (2014), which analyzed Brazilian cities hierarchy as driver for airport development, also partially matches the findings of this paper, the difference being mainly to the reasons stated in the previous paragraphs, such as the elasticity of the demand to different drivers. All those independent variables considered by Torres et al (2015) and Baikgaki and Daw (2013), which were not considered in this study, present a future opportunity to enhance the model proposed here.…”

“…This conclusion matches the results found by Torres et al (2015), whose study found a high number of drivers of supply and demand for air transport services, meaning that the decision to provide (by airlines) and to use (by consumers) the service is affected by several factors. The study of Baikgaki and Daw (2013) also points for factors such as household income and the average price level of the air ticket, to significantly influence the regional aviation services. The study of Fernandes et al (2014), which analyzed Brazilian cities hierarchy as driver for airport development, also partially matches the findings of this paper, the difference being mainly to the reasons stated in the previous paragraphs, such as the elasticity of the demand to different drivers.…”

“…Current studies show that the main drivers for the demand for air transport are, in general, social and economic aggregates such as population and expenditure, in addition to tariffs and oil prices (Baikgaki and Daw 2013). In the other hand, other studies (Torres and Portugal 2013) claim other drivers, such as airport location, other transport services and even general geographic characteristics may influence the services provided.…”

Systematic review of passenger demand forecasting in aviation industry

“…Regional socioeconomic changes can expect a sharp decline in airport demand. The forecast error is positive, implying that the predicted value is greater than the actual value [ 11 ].…”

Causal Relationship Between Air Transport and Economic Growth: Evidence from Panel Data for High, Upper-Middle, Lower-Middle and Low-Income Countries

“…The studies on factors affecting demand in air transport clearly show that GDP has a significant influence on air transport demand (Hutchinson, 1993;Alperovich & Machnes, 1994;Aderamo, 2010). Additionally, some studies found a high correlation between the variables of air transport and economic determinants (Ba-Fail, Abed & Jasimuddin, 2000;Baikgaki & Daw, 2013).…”