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 1. It builds upon
previous academic research 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 on the basis of appropriate and reliable evidence. It provides
important new estimates to ensure that price elasticity estimates do not underplay the
sensitivity of passengers to price and are used correctly.