Econometric analysis of the factors that determine the demand for domestic air transport in Turkey

In this study, characteristics of the Turkish domestic air transport market are reviewed and the factors that determine the interprovincial demand for air transport are analysed. Since the market shows oligopolistic characteristics, but at the same time, Turkish Airlines has concessionary position and there exists government intervention, the term "imperfect oligopoly" is used to define the market. Domestic traffic between airport pairs issued by State Airports Authority for years 2013-2016 is considered to represent the demand. Economic, structural, monetary, infrastructural, demographical and other indicators were collected to act as determinants of the demand. Econometrical analyses of three datasets showed that provincial GDP per capita, population and number of bed-places, distance between provinces and hub status of the provinces impact the demand. Also, it was observed that this impact is dependent on the characteristics of the provinces.