The Determinants of Local Destination Air Ticket Demand: A Lesson from Norwegian Airlines Operating on the Link Between Molde and Oslo

Abstract

The study aimed at examining the influence of air ticket full price, air ticket happy price, car price, presence of express bus, train price, population, and seasonality on air ticket demand. Based on secondary data for the air traffic on the link between Molde and Oslo, i.e., from January 2013 to December 2019, and by using multiple linear regression analysis, it was found that air ticket happy price, train price, population, and seasonality significantly predict local destination air ticket demand. The findings are useful in explaining the determinants of local destination air ticket demand. Thus, understanding the determinants of local destination air ticket demand, i.e., air ticket price, train price, population, and seasonality, is essential in determining local destination air ticket demand to enhance managerial planning. Moreover, this study provides building blocks for the applicability of demand theory in the airline industry.