THE DETERMINANTS OF DOMESTIC AIR TRAVEL DEMAND IN THE KINGDOM OF SAUDI ARABIA

Abstract

For an airline, analyzing and forecasting air travel market is a part of its corporate planning process. This paper addresses the determinants of domestic air travel demand in the Kingdom of Saudi Arabia. Here an attempt is made to develop models for domestic air travel demand in the Kingdom with different combinations of explanatory variables utilizing stepwise regression technique. The model, which has the total expenditures and population size as the explanatory variables, is the most appropriate model to represent the demand for domestic air travel in the Kingdom. The rest of the models discussed suffer from multicollinearity. The model selected may be used to identify and measure the relations between domestic air travel demand and the economic and demographic forces in the Kingdom.