Travellers
are induced to select a destination based on the level of air travel price offered, and having booked the flight then consider the other costs associated with the travel (e.g. booking a low-fare air ticket and then
making a separate decision on hotels, etc). In this case, the overall decision to travel is more sensitive to changes in the initial air travel price.
Therefore, passengers can be relatively more sensitive to the cost of the air travel price, even though it is only one component within the overall cost of travel. Air travel itself is a derived demand, based on the demand for
passengers to travel to another location for business or leisure purposes. The other components of the journey cost are derived from the decision to travel and are essentially complementary goods to air travel (i.e. they
have a cross-price elasticity to air travel prices of less than zero).