An assessment of applications of gravity model in air transport demand

Estimating demand and forecasting future aviation trends can have long-term and sustained effects on the status of the aviation industry and the entities active in this industry. The gravity model is one of the most successful models explaining bilateral flows in international trade, transportation, marketing, migration, and other areas that somehow depend on two factors. Reviewing the existing literature on aviation demand and examining existing methods, shows that the gravity model is becoming one of the most important and most popular tools for evaluating air passenger and air cargo flows. This article addresses the challenges which are prevalent in estimating gravity models and also solutions to such challenges. The two main challenges associated with gravity model estimation are the problem of zero flow values and the heteroscedasticity problem which are almost present in any gravity model research. In the field of air transport, these challenges are also identified in determining the factors affecting air passenger/freight traffic. Issues such as aviation policies, macroeconomic indicators, distance effects, alternative modes of transportation, and presence of low-cost carriers, and so on, are some of the influential factors in this air traffic. The paper shows that among the methods available for estimating the gravity equation, the Poisson Maximum Likelihood Estimator (PPML) is the best and most optimal method that simultaneously considers the two challenges discussed above. Ultimately, the results of such analyses will be used at different levels of the industry and will result in the optimal use of facilities including aircraft, airports, services, and more. Finally, since the air transport industry is a low-profit margin industry, the findings of such analyses can result in an efficient allocation of resources at different levels and lead to optimal utilization of facilities such as airplanes, airports, services, etc.

کلیدواژه ها:

Air transport ، Gravity model ، Estimation methods ، Determinant factors