Demand Model for Air Passenger Traffic on International Sectors

The economic liberalization in 1991 followed by the deregulation of Indian skies is witnessing exponential growth of the airline industry in India. Near-perfect competition scenario has gifted concerns for the airlines in terms of demand reductions, thereby stressing the requirement to provide superior customer service in order to entice maximum customers. In the above context, in this paper, we present a Passenger Traffic Demand (PTD) forecasting model on international routes operating from India. The PTD model encapsulate the concepts of gravity model of physics and micro-economic theoretic model that links demand to price. The model is validated using the data provided by International Civil Aviation Organization (ICAO) on high demand routes. This research highlights that there are factors outside service that could play an important role in demand growth. The model will find applicability in aviation sector and can be used by any individual airline contemplating operations on international sectors.