System Dynamic Model for Simulating Aviation Demand: Baghdad International Airport as a Case Study

Abstract

The aviation authorities have long been impacted by fluctuations in demand, which are often caused by the aviation industry's cyclical nature. It is affected mainly by many endogenous or exogenous variables. Despite that, the airport authorities and air carrier management make significant efforts to deal with fluctuating demand. This paper analyzed the factors influencing demand at Baghdad International Airport, based on the pertinent local socio-economic data such as "population size," "GDP," and "terrorism effect," as well as system-based factors related to aviation activities and airport characteristics for the past ten years, to develop a system dynamics simulation model by which the causes of fluctuation are highlighted in order to predict the magnitude and timing of the increment or decline in an offer to minimize losses to all parties in the airport system. The simulation results demonstrated very high goodness of fit with the actual data, producing R2 values of 0.865 and 0.86 for the departing and arriving passengers, respectively. Even though Iraq's unstable political and economic situation led to the interaction between the different demand drivers, external factors have a bigger effect on the country's need for air travel, causing demand shocks that take a long time to recover from.