Journal of Business & Economic Policy

Modeling Air Passenger Demand in Bandaranaike International Airport, Sri Lanka
Maduranga Priyadarshana, Anuja Shamini Fernando

Abstract
Developing economies experience higher growth rates in air passenger traffic and modeling passenger demand is essential for designing and strategic planning of facilities in the airports. Research presents a demand model for forecasting air passenger traffic in Bandaranaike International Airport (BIA), Sri Lanka. Demand model is developed by using econometric modeling. Economic growth and air fare impact are included as two explanatory variables in the model. The tourist arrival growth is included since Sri Lanka is known as a tourist destination in Asia. Terrorist activity is considered as a qualitative explanatory variable. Model is developed as a semi logarithmic model including quantitative and qualitative variables after identifying the significant correlations between total air passenger demand and these explanatory variables. Research is provided the best fit model for forecasting passenger demand in BIA through analyzing data over 24 years. Demand model can be benefited to capacity utilization and passenger terminal expansion.

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