A literature review of recent causality analyses between air transport demand and socio-economic factors

Abstract

This paper reviews scientific papers that analyze causal relationship between air transport demand and relevant socio-economic indicators to provide a comprehensive review of the relevant socio-economic factors to consider while forecasting air transport demand. More accurate forecasting would contribute to the optimization of the transport and technological processes of airline operations in post-crisis periods. Due to the pandemic of the COVID-19 virus and the imposed travel restrictions, the air transport industry faced a deep economic crisis and a consequently reduced demand that is more intense than any previous recession. It is of utmost importance to find more accurate short-term forecasting model that would help airlines navigate more steadily through the uncertainty recession periods. Authors reviewed papers from Web of Science database, from 2010 until the end of 2021, finding 19 relevant papers investigating causality between air transport demand and socio-economic factors. In most of the papers GDP was used as proxy to economic growth, and number of passengers flown (domestic and/or international) is used as a proxy to air transport demand. After reviewing papers, authors propose the use of multivariate approach, using more socioeconomic factors in the future studies, using quarterly data (if not monthly), and the use of revenue passenger kilometers as a proxy for air transport demand.