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.

DOI: 10.5901/mjss.2013.v4n13p389