Key Factors Determining the Demand for International Air Travel: Source Market Approach as a Region

ABSTRACT This study establishes a model and identifies the key determinants of international air travel demand. It is deployed using data from 11 key source countries to Singapore for the period 1989–2019. The results show the Gross Domestic Product (GDP) per capita and the population size of the source country, bilateral trade between the origin and destination countries, and crude oil prices are the significant factors in explaining international air travel demand. They all positively impact air travel demand, except for crude oil prices, which have negative effects. Air travel to Singapore is still a luxury item, like in most countries worldwide. The Asian financial crisis of 1998 and the Severe Acute Respiratory Syndrome (SARS) epidemic of 2003 were shocks that negatively affected the demand for international air travel to Singapore. In addition, the influencing factors play different roles in explaining international travel demand to Singapore across source market regions.