Air travel demand depends on many reasons such as geographical region, residents income and even government policy implications. Each airline company must have a firm knowledge about what makes the greatest difference in passengers needs to fully satisfy them, as it is the only way to achieve the best performance. Airline transport demand elasticity is one of the main problems that airline companies face. In locations where low cost airline companies have their influence demand elasticity will be higher, also highly developed countries will have less variation in elasticity due to higher income of residents. Other influencing factors include distance of the haul. Short haul flights are less affected by demand elasticity than long haul flights. Government taxation creates a greater difference in airline ticket prices of short haul flights than long haul flights. An arithmetical method of calculating overall elasticity may be employed if all of these factors are included.

Article in Lithuanian