1 Executive Summary The demand for air travel is sensitive to changes in air travel prices and incomes. However, the degree of sensitivity (i e. its demand elasticity) will vary according to different situations. To ensure that air transport policies are effective, reliable estimates for demand elasticities are essential. This report provides important new evidence on the size and appropriate use for demand elasticities for air travel. It outlines the key findings from extensive research undertaken on behalf of IATA by InterVISTAS Consulting Inc. to estimate air travel demand elasticities applicable to a wide range of air transport markets ltbuilds upon previous academic fesearch to provide new estimates of air travel demand elasticities in different locations and scenarios, based on a comprehensive econometric analysis using key air travel databases The aim of the study is to provide robust air travel demand elasticity estimates to ensure that policy decisions related to issues such as liberalisation, airport charges, taxation, emissions schemes are made onthe basisof appropriateandreliable evidence ltprovides important new estimates to ensure that price elasticity estimates do not underplay the sensitivity of passengers to price and are used correcty, DEFINITION OF DEMAND ELASTICITIES Demand elasticities measure the change in the quantity demanded of a particular good or service as a fesult of changes to other economic variables, such asits own price, the price of competing or complementary goods and services income levels and taxes They provide a key insight into the proportional impact of different economic actions and policy decisions. This report estimates the demand elasticity of air travel under various scenarios and locations, it focuses on three main types of demand elasticity: The report intervint 2008,Estimating An Travel Domand Elasticites contains more details on the ulta and be found at wwwiataorg/economics