DEMAND ESTIMATION FOR A NEW AIR ROUTE

Abstract

Network connectivity is core competitiveness of the aviation industry and opening a new route is one of critical ways to enhance network competitiveness. As many airport operators are becoming more interested in attracting airlines, there are vast needs to discuss the methods for estimating (predicting) potential demands for a new flight route or by increasing flight frequencies in existing routes.
This study explores demand estimation models for a new air route. Similar to previous studies, this study classified potential demand for a new air route into four types (Local, Beyond, Behind and Bridge). Explanatory variables are identified and constructed for each type of demand, including distance, relative capacity compared with adjacent airports and detour ratio as main independent variables. One of the strengths of the suggested demand models can distinguish the generated demand from the converted or re-distributed demand. Based on this, the model is meaningful for an airport operator to develop an airport policy such as airport-usage charges and incentives to attract airlines.
On the other hand, because of the strong recognition that demand estimation for a new air route is the area of airlines that decide on whether or not to introduce a new route, simply developing demand estimation models from the perspective of an airport operator is not sufficient. Therefore this study is considered as the initial step for an airport operator in its efforts to attract airlines and market new air routes to enhance network connectivity of its airport.