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 We
are all aware that GDP and GDP growth influence the level of
aviation and tourism activity. However, these are not the only
drivers of demand. For example, the entry of LCCs changes the
propensity to fly, so any demand forecasting model needs to take
into consideration the price elasticity of existing flyers, and
likely switching behaviour by non-flyers.
Our work in developing countries has also demonstrated the
importance of factoring in population growth and changing population
dynamics. Traditional flyers may be being replaced by new customer
segments who have different needs. Understanding these needs has a
major bearing on which airlines are likely to emerge as "winners".
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