The impact of emigrants’ homeland relations on air travel demand in a security volatile market: a case study on Lebanon

The impacts of international migration have been heavily studied. Much of this analysis has been carried out within the framework of the economic and social effects of migrants, to both host and home countries. This paper looks at the impact of Lebanese emigrants’ homeland relations on air travel demand in a security volatile market. The emphasis is on two particular features: first, the principal impact of liberal air transport policies in facilitating emigrants’ home visits; and second, the sensitivity of passenger-GDP relation. The paper pulls together data and other cases on the Lebanese emigration evolution and explains its impacts on the economy as well as on the air transport market in Lebanon. The study findings suggest that in Lebanon and due to the presence of interrelated factors, the variation and the strength of the relationship between traffic levels and GDP are neither consistent nor static. The considerably huge expatriate communities, which are three times greater than the Lebanese residents, are said to defy the negative impact of security instability on the air passenger growth through frequently visiting expats. Moreover, the emigrants’ economic support to Lebanon through remittance inflows is observed to dampen the sensitivity of the relationship between passenger and GDP in times of war and peace. The results should be looked at as indicative of trends to encourage policy makers to consider how best to make use of these human and financial flows.     

The impact of Air Service Agreement liberalisation: The case of Nigeria

The positive impact of air transport liberalisation as suggested by economic theories and empirical studies has inspired many developing countries like Nigeria to liberalise some of its Air Service Agreements (ASAs). This paper seeks to examine the extent to which international air service liberalisation has impacted upon Nigeria ten years after it was introduced. The research developed a cross-sectional model with passenger traffic as the dependent variable, while macroeconomic factors (trade and GDP), historical links, distance and ASAs (a proxy for liberalisation) served as independent or predictor variables. The analysis revealed a set of ASA stages in the country's policy-making process (restricted Bilateral Air Service Agreement, Open Skies Agreement and Yamoussoukro Declaration). Further analysis showed that the predictor variables were all significant in explaining passenger demand. The model demonstrated that the liberalisation of market access to the Open Skies Agreement level could stimulate traffic growth by at least 65 percent. The findings can assist in guiding policy and industry stakeholders in future decisions relating to liberalisation and ASAs.     

The determinants of air passenger traffic at Turkish airports

Investigating the determinants of air passenger traffic has become commonplace. In contrast with most previous publications, this paper investigates these determinants in an emerging country, Turkey, at the provincial level between 2004 and 2014. We find that GDP/capita, population, distance to alternative airports, tourism, leading cities, and international migrations all support more air traffic. Furthermore, market concentration is associated with less traffic, and the presence of academics with more traffic. Mapping models' residuals suggest catchment areas, surface transport options, domestic migrations and (geo)politics could also matter. Accordingly, it appears the determinants of Turkey's air passenger traffic do not differ from those of developed economies. The results also suggest new airports should be built based on the aforementioned factors.     

Air accessibility and growth – The economic effects of a capacity expansion at Vienna International Airport

We use an econometric endogenous growth model to estimate the impact of air accessibility on GDP and investment growth. This is done in a dynamic panel system estimation framework for the EU-15 between 1993 and 2006. The results are then used to predict the economic effects of an increase in capacity at the Vienna International Airport using actual forecasts of the required information set. We find a GDP elasticity of air accessibility of 0.014 and an investment elasticity of 0.05 for our sample. Given the official passenger forecast this would lead to additional GDP growth in Austria of accumulated 0.81% based on the values of the restricted scenario (no third runway). In a more conservative forecast scenario of 3% annual passenger growth, a third runway is projected to increase GDP by 0.2% by 2040.     

The causal relationship between air transport and economic growth: Empirical evidence from South Asia

This paper examines the causal relationship between air transport and economic growth in the South Asian context. Using panel data over a period of 42 years (1973–2014), we apply Pedroni/Johansen cointegration test methods, followed by Granger long-run and Wald short-run causality tests. To allow for spatial heterogeneity we then apply Time Series Cross Section (TSCS) Granger causality tests for each of the eight analysed countries separately. Our results confirm a long-run uni-directional Granger causality which runs from GDP to air passenger traffic and also to air freight volumes. Contrary to the existing literature we do not find a long-run bi-directional causality which confirms that spatial dimensions and context matter (i.e. low income and large populations). The absence of short-run causality and the identified time lags of 3–4 years should guide aviation firms and policy makers in the preparation of necessary infrastructure required to support the strong air transport growth potential.     

A cointegration analysis of bilateral air travel flows: The case of international travel to and from the United States

Demand for international air travel has risen over the past decade causing international visitation to the US to reach a record high in 2012. This paper assesses the dynamic impacts of GDP, exchange rate, and the 9/11 terrorist attacks on bilateral air travel flows between the US and its 11 major travel and trading partners. An autoregressive distributed lag modeling approach is employed to estimate short- and long-run relationships between variables. Long-run results demonstrate foreign GDP as the major determinant of demand for inbound travel to the US and US GDP is a crucial factor affecting demand for outbound travel from the US. These findings support a strong linkage between economic growth and demand for international air travel. The real exchange rate has relatively little impact on the bilateral air travel flows. The US dollar appreciation against foreign currencies is found to reduce demand for inbound travel to the US, while having mixed effects on outbound travel from the US. In the short-run, economic growth tends to be a primary factor influencing international travel flows to and from the US. The 9/11 market shock has a detrimental short- and long-run effect on the bilateral air travel flows, implying that the impact of 9/11 is prolonged in international air travel markets.     

A case study: The impact of low-cost carriers on inbound tourism of Saudi Arabia

This study investigates the impact of low-cost carriers (LCCs) on Saudi Arabia's tourism demand. It also provides an understanding of the relationship between air transport development and tourism development in the Gulf region. The Box–Jenkins SARIMA-X models were employed to model and forecast international tourist arrivals to Saudi Arabia, using monthly international tourist arrivals to Saudi Arabia from July 2010 to December 2015. The forecasting models were significantly accurate, with lower values of MAPE, MAP, and RMSE. The findings suggest that an increase in airline capacity, religious travel, and airline competition are associated with the increasing international tourist arrivals to Saudi Arabia. This also indicates that there is a positive relationship between air transport development and tourism development. Further aviation liberalisation in the Gulf region is discussed to give opportunities for the region's LCCs to increase their share of the increasing air travel demand, thereby enhancing tourism development.     

Inter-regional air transport accessibility and macro-economic performance in Japan

Although there have been various studies on macro-economic effect of public investment, not much attention has been paid to the impact of actual accessibility realized by transport industry and infrastructure. In this paper, we performed a cross-sectional analysis of 47 prefectures in Japan between 1995 and 2000 by Cobb–Douglas production function and growth regression approach. The results explain why deregulation and infrastructure development in air transport during 1990s manifest mixed results of inter-regional accessibility and per-capita GDP growth for core and peripheral areas in Japan.     

Challenges to domestic air freight in Australia: Evaluating air traffic markets with gravity modelling

With two of the busiest air traffic corridors globally, Sydney-Melbourne (SYD-MEL) and Sydney-Brisbane (SYD-BNE), very liberal open skies agreements, and the world's most isolated large city in Perth, air freight in Australia should be destined for substantial growth, but has in contrast to other regions such as the US not yet materialised. This paper identifies challenges surrounding domestic air freight markets in Australia and compares the provision of road vs air freight services utilising gravity modelling methods. Our findings suggest the impedance of domestic air freight services in Australia is greater for regional areas between the primary cities (such as Canberra, between Sydney and Melbourne) than remoter areas (such as Cairns in Northern Australia). Our models show further that in addition to distance, air freight capacity on any of our analysed routes is despite being demand-pulled in terms of GDP dependency significantly attuned to factors at both the origin (in particular domestic trade capability, i.e. manufacturing and logistics) and destination.     

Towards a theory of decoupling: degrees of decoupling in the EU and the case of road traffic in Finland between 1970 and 2001

Traditionally, the transport literature reflects the view that traffic volumes, road traffic volumes in particular, are coupled with Gross Domestic Product (GDP). Recently published literature also argues that the carbon dioxide (CO₂) emissions from transport, passenger cars in particular, have not shown any decoupling from transport volumes for some years. This article presents a theoretical framework for decoupling, defining the difference between decoupling, coupling and negative decoupling. These are further broken down to weak, strong and expansive/recessive degrees of decoupling, laying emphasis on the absolute increase or decrease of the variables. The result section presents data of the development of the relationships between GDP, traffic volumes and CO₂ emissions from transport in the EU15 countries between 1970 and 2001, including the special case of Finnish road traffic. The aggregate EU15 data show a change from expansive negative decoupling to expansive coupling regarding passenger transport, and from weak decoupling to expansive negative decoupling regarding freight transport. Weak decoupling of transport CO₂ emissions from GDP could also be observed. Weak decoupling of all the three aspects (freight, passenger and CO₂) could be seen in the UK, Sweden and Finland in the 1990s. In Finland, the statistics show weak decoupling of GDP from road traffic volume and strong decoupling of road traffic volume and CO₂ emissions from road traffic between 1990 and 2001. Four hypothetical explanations of the Finnish phenomenon are put forward in this article: policy towards sustainable mobility, green urban lifestyle, increasing income differences, and statistical misinterpretation. Each explanation is backed up with some quantitative evidence in observable trends in Finland during the 1990s.     

Including aviation emissions in the EU ETS: Much ado about nothing? A review

The European Community, motivated by the rapid growth of the aviation industry and related impacts on climate change, has decided to include aviation in the European Emissions Trading Scheme (EU ETS). Mitigation policies such as the EU ETS are considered to be necessary in order to change travel behaviour and induce operational and technological changes in the aviation industry that will result in lower environmental impacts. This paper reviews the available impact assessments of the proposed emissions trading scheme for airlines published between 2005 and 2009. It analyses the methods used and finds that the models used are often over-simplified, omitting important variables or that the reliability and robustness of the modelling results are reduced by linking models that are based on different assumptions. The paper also summarises the possible environmental (CO₂ emissions) and economic (air fares, demand for airline services, supply of airline services, competitiveness, GDP, carbon price) impacts in the studies reviewed for the year 2020. Overall, the effects are found to be small: for example, CO₂ emissions are expected to decline by a maximum of 3.8% and the maximum impact on GDP in the EU was found to be ?0.002%. The reasons for these insignificant impacts are analysed in this paper; it is also found that there are some positive aspects of including aviation in the EU ETS.     

Do the regional growth effects of air transport differ among airports?

This paper empirically studies the contribution of air transport to regional economic development in Germany. We find that the scale and direction of output effects of air services and airport infrastructure differ among airports. These differences are driven by ‘opportunity costs’ of airport capital and by positive output effects from air transport connectivity. We argue that the latter impacts potentially depend on traffic characteristics.     

Spatio-temporal evolution of cities and regional economic development in Nepal: Does transport infrastructure matter?

The literature on the New Economic Geography (NEG) suggests that transport cost is a major driving factor for the emergence of core–periphery patterns within a country. However, very few studies have tested this theoretical explanation in the context of transport infrastructure networks in developing countries. This paper takes a closer look at Nepal and tests four expectations that are drawn from the NEG, which highlight different aspects of the formation of core–periphery dynamic as determined by infrastructure quality. The expectations are tested by relating spatial-temporal patterns of road development to the growth and distribution of cities and examining the transport infrastructure contribution to shaping the patterns of regional economic development. We used intercity travel time estimates, based on the design speed of roads, length of sections and pavement type (from 1961 onwards in 10-year segments) as an indicator for the quality of infrastructure (transportation cost). Next, we computed hubness and accessibility indices of cities, defined by means of a gravity model and as a function of transportation cost, to undertake a cross-city comparison. We applied GIS mapping, multiple regression and mediation analysis techniques to relate these transport and accessibility characteristics to spatio-temporal patterns in city size and GDP per capita. Our study broadly confirms the core expectation derived from the NEG that transport improvements facilitate urbanization and that higher urbanization leads to higher regional GDP per capita. Two independent effects were identified in qualification of these overall patterns – the impact of market potential on city primacy and the impact of highly localized, immobile resources on GDP.     

Major environmental impacts of European tourist transport

By merging European passenger transport demand data with international tourism data, a new data model was created, giving insight in the environmental impacts of tourism transport between the places of residence of European Union citizens and their tourist destinations. Analysis with this data model shows that, of the environmental impacts considered (climate change, air quality, noise and nature/landscape), climate change generates more than half of the externalities of tourist transport. Policies with the objective of reducing the external cost of European tourism should focus on measures reducing the impacts of tourist air transportation and intercontinental tourism.     

Flying into the future: A scenario-based analysis of carbon emissions from China's civil aviation

Aviation emissions will significantly affect climate change with the continued growth of the air transport. This study decomposes the drivers influencing China's civil aviation carbon emissions change in the period from 1985 to 2015. Emission trends are predicted using a Monte Carlo simulation. The results show a peak and reduction in the period between 2016 and 2030. Results also show that air transportation revenue growth is associated with increasing historical carbon emissions, while rising industry energy intensity significantly hampers carbon emissions reduction. The carbon intensity (CI) reduction goals were achieved in the different scenarios before 2020, but the carbon emissions peak target before 2030 can only be achieved under the technological breakthrough scenario (TBS). The reduction of air transport growth rate and promotion of new energy technologies are two essential strategies to reduce carbon emissions in the foreseeing future.     

The spatial and temporal dimensions of the interdependence between the airline industry and the Chinese economy

The airline industry contributes largely to the economic development of a region. At the same time, the fortunes of the industry can also be affected by regional economic change. This paper uses geographically weighted correlation analysis to investigate the spatial heterogeneity and temporal change of this interdependence as seen in China over the years from 2005 to 2016. The results show that the interdependence between the airline industry and provincial economies is non-stationary, generally with a spatial variation along the east-west axis across China's provinces. Further, the temporal change in the interdependence was affected by specific economic changes, such as the global crisis of 2008, when it weakened. Specifically, air passenger activities in the eastern provinces were more sensitive to some economic changes of 2012, while air freight activities in the western and central provinces were more sensitive to the global economic crisis of 2008. The size of urban agglomeration and regional GDP also influence the spatial heterogeneity of this interdependence with weaker links as GDP increases. It is possible that liberalization of the airline industry could enhance the interdependence in advanced regions. Thus, our results provide significant policy implications for a joint focus on the development of the regional economy and the airline industry.     

How influential factors affect aviation networks: A Bayesian network analysis

The aviation industry was the catalyst for the economic development of advanced cities, and there has been a close relationship between the development of cities' aviation industries and economic indexes. Researchers have long been interested in investigating which economic factors affect the passenger and cargo volumes of airports. By leveraging statistical analysis, most existing research only indicates the significant factors affecting aviation networks and quantifies the positive or negative relationship between those factors and aviation passenger volume. However, it is difficult to envisage how the degree of changes in economic factors affects aviation networks, especially passenger and cargo volume. This paper utilizes Bayesian network analysis to bridge this gap. The airport-level data collected from OAG was combined with city- or country-level economic data that are exploited to build the Bayesian network. We find that GDP and inflation directly influence passenger and cargo volume, while fuel prices directly influence only cargo volume. Both networks change with time, indicating that evolving external economic factors influence the network. This study is the pioneer in using Bayesian network analysis to analyze aviation networks. We identify how airport passenger and cargo volumes change with respect to different degrees of economic factors change. In addition, the Bayesian network exhibits the output in a probabilistic way to fully address the uncertainty worldwide. The findings could potentially facilitate policymakers’ decisions to improve global aviation network development.     

The economic impact of aviation: A review on the role of market access

In recent decades, advancements in telecommunications and (air) transportation have driven globalisation processes. Consequently, policymakers and scholars view access to transportation as an essential prerequisite for economic development. For aviation, existing empirical studies have attempted to estimate the wider economic impacts from regional, country-level and global perspectives. However, no theoretical framework has yet been presented that comprehensively captures the full set of mechanisms by which aviation can contribute to economic development. Such a framework would cover both positive and negative regional impacts, as well as the mechanisms and spatial distribution behind them. In this paper, we use a New Economic Geography approach to comprehensively describe the impact mechanisms. We then apply this theoretical framework to an empirical study of metrics of air transport supply, which policymakers and researchers can use to assess how well airports and their surrounding regions are connected by means of the air transport network. The results of our analysis can inform scholars and policymakers on how air transport can shape economic geography and the productivity of economic systems. The results might also provide guidance for future empirical work on the wider economic impacts of air transportation.     

Two-sided platforms in airport privatization

This paper develops an empirical model to examine the relationship between ownership change and two-sided-platform formation in the air transport industry. We investigate whether privatization enhances the dynamic capabilities of airports so that they more closely resemble a two-sided platform. We study the case of the recent privatization of Brazilian airports. We find evidence of a permanent, ceteris paribus increase in demand triggered after the privatization program. The results are consistent with a preemption of assets with a view to expanding operations and so benefiting from the network effects offered by a two-sided platform.     

Efficiencies and scope economies of Chinese airports in moving passengers and cargo

The paper looks at the technical efficiency of Chinese airports using multi-output stochastic input distance function analysis. This method provides a statistical test of scope economies to investigate the contribution of air cargo transport to airport efficiency. Our findings confirm the presence of scope economies in air passenger and air cargo transport among airports in China. We compare and contrast these results with results obtained from single-output stochastic production frontier analysis in which the effect of scope economies is not included. Our results indicate that the presence of scope economies significantly affects the estimation of technical efficiency, thus implying different efficiency rankings among airports in China.