Influence of Demographic Factors on Air Passenger Demand

Airports use long-term air passenger forecasts as the basis for both airport development plans and for assessing expected future revenue streams and environmental impacts. It follows that the reliability of these forecasts and their ability to anticipate the effect of future changes in the various factors that drive the demand for air travel are issues that airports need to take into account in their planning activities. These forecasts are typically developed using econometric models of air travel demand that explain the level of air passenger activity in terms of a limited number of aggregate measures of demographic and economic information, such as population and gross domestic product. While this approach appears to have worked fairly well in the past, there is an emerging concern that the underlying causal relationships may be changing in a way that is not adequately reflected through the use of such aggregate variables. For example, the changing age structure of society has implications for the demand for air travel that cannot be explained by just measuring changes in total population. Similarly, changes in the distribution of household incomes in recent years, with the incomes of higher income households growing more rapidly than those of less affluent households, must clearly have an effect on the demand for air travel, given the way in which air travel propensity varies with income. In addition, the following factors clearly influence the demand for air travel, yet are typically not included in existing forecasting models: Trip purpose –Trip purpose has an important impact at the airport/city level, with vacation-oriented destinations (such as Las Vegas) having a different response to changing economic conditions than government-oriented destinations (such as Washington, DC), or business-oriented destinations (such as New York). Changes in disposable household income available for travel – the ability of households to engage in activities requiring air travel depends not only on their income, but also on other demands on that income, including housing, energy and gasoline, health care, food, and taxes, which are likely to change at different rates from their income. Generation Y et al – The generations maturing in today’s world have grown up treating air travel as a common occurrence and thus are more likely to make air trips than older generations. Baby-boomers and retirement – with seniors living longer and many having the ability to travel, a lifestyle of frequent world travel is becoming more common. The research is not intended to focus specifically on these sectors of the population, but rather to recognize that different age groups have different propensities to travel and changes in the relative size of each group will have an impact on travel demand. 5. Immigration – immigrants have a higher propensity to return to their country of origin for family and vacation visits

The factors influencing the demand for air travel also vary by region, due to differences in both geographic and demographic characteristics, suggesting that different demand model specifications may be needed for different airports. During the 2014 TRB Annual Meeting a session was held specifically to identify the available sources of data on such demographic information. This session identified a number of promising data sources, including air passenger surveys performed by airport operators, data collected by airlines, and a comprehensive survey of international air travelers undertaken by the U.S. International Trade Administration each year for the past 30 years.

There are two related objectives to the proposed research: the first is to determine how the demand for air travel will be influenced by changes in the distribution of demographic and socio-economic factors across the population as well as by factors other than the aggregate demographic and economic variables currently used in demand models, and second to explore the relative influence of these factors on air travel demand at the local (airport or region) or national level.

The International Trade Administration of the U.S. Department of Commerce conducts an on-going survey of international air travelers. This data goes back to 1983 and contains much valuable information on traveler demographics that can be exploited. Published reports show traveler characteristics for each year of data but no analysis of trends in these characteristics has been identified. The FAA Office of Aviation Policy and Plans recently completed research on the wealth destruction of U.S. families and its impact on air travel (D. Bhadra, Journal of the Transportation Research Forum, Vol. 51, No. 1). Not surprisingly, the research showed that with a loss of wealth people fly less. But what was interesting was that with an increase in wealth, air travel increased at a faster rate. A recently completed ACRP Graduate Research Award Project by Josie Kressner, published in the Transportation Research Record, No. 2266, explored the use of lifestyle segmentation variables to predict home-based trips at a major U.S. hub airport. The results of this research have suggested the value of including a wider range of demographic and socio-economic variables in air travel demand forecasts. ACRP Synthesis 2 Airport Aviation Activity Forecasting has identified numerous areas for expanded research. The incorporation of a better understanding of the role of socio-economic and demographic factors on the demand for air travel would greatly assist in improving aviation activity forecasting techniques. The report on ACRP Project 11-02, Task 7, Strategic Process for Developing ACRP Research Problem Statements (ACRP Research Results Digest 5 Current and Emerging Issues Facing the Airport Industry) identified a number of research requirements that would be covered in whole, or in part, by this problem statement; including Airport/Airline Economics and Forecasting, and Changing Demand for Air Service. ACRP Report 26 Guidebook for Conducting Airport-User Surveys has identified techniques for improving the collection of air passenger information, including demographic and socio-economic factors, with the long-term objective of standardizing the types and methods of data collection. However, to fully leverage the findings of such surveys to support improved aviation activity forecasts there needs to be a better understanding of what demographic and socio-economic data to collect in future surveys. ACRP Report 76 Addressing Uncertainty about Future Airport Activity Levels in Airport Decision Making and ACRP Report 98 Understanding Airline and Passenger Choice in Multi-Airport Regions both provide useful information and insights that are relevant to the issues to be explored by the proposed research described in this problem statement. However, neither project addressed the issues raised in this problem statement or fully answered airport needs for improved forecasting techniques.