Short and long run dynamics of domestic air travel for Auckland region 2008-2019

Fil: Davi, Mariano. Universidad de San Andrés. Departamento de Economía; Argentina.Understanding the variables that affect airline operations is crucial in a competitive sector as air transport. The present work will try to shed some light into the determinants of the demand for domestic air travel for Auckland Region using service-related and geoeconomic factors. An Error Correction Model will be developed in order to estimate the income and price elasticities of this particular segment of the market, as well as the substitution effect with other means of transport and the quality of the service provided. It is found that lowering the price is not truly effective to stimulate demand in the short nor in the long run as the main driver of the growth of domestic demand is the income effect