Determinants of Long-distance Air Route Demand in Regional Airports: An Analysis Using Panel Gravity Model and Megacity Scenarios

Purpose : The goal of this research is to identify the determinants of airport passenger demand in line with long-distance and short-distance air routes. The research questions are as follows. 1) How much growth in population and economic scale would be needed to open long-distance air routes within regional areas? 2) How does change in passenger demand after the integration of regional cities with high service demand levels and an upgrading of their economic scale? Research design, data, methodology : A panel gravity model was adopted to analyze the determinants of airport passenger demand using the Korean case with the Pusan airport, Taegu airport, and Incheon airport as the locations. Results : The results demonstrated that the determinants of airport passenger demand are GDP per capita and population. The r-square of the current scenario model and that after the integration of the regional cities scenario model changed from 0.600 to 0.605. Conclusions : This finding indicates that the passenger production effect could be useful if the integration of regional cities could be done. Following the long-distance airline route model, GDP, distance, and population are found to be the determinants of airport passenger demand.