Analysis of demand for air travel in Lebanon. (c2009)

Abstract

Aviation demand forecast is a very important tool that is essential in the planning and development processes in the aviation business. It is related to identifying infrastructure requirements in order to plan medium and long term investments. In general, forecasting in developing countries suffers from the lack of data. For instance, data on GDP can be calculated; however, financial data is almost non-existent. This is partly due to the fact that liberalization and privatization in aviation is not there yet, therefore, governments either do not wish to reveal financial information, or simply do not reveal that data as there are no shareholders worrying about their returns. Looking at the case of Lebanon, data is very scarce to the extent that almost all data used had to be derived, or estimated. This research aims to determine the factors affecting demand for air travel in Lebanon. This is approached using an econometric model with two sets of variables in an attempt to identify the underlying drivers of demand for air transportation. It has been concluded that economic activity and security are the main factors driving demand. However, we recommend additional research on the topic taking into account the fmdings of this study.