There is a view that all good air passenger forecasting systems must incorporate
Gross Domestic Product as an input because there is an implicit assumption that the demand for air travel
is a function of national income.
It is quite different to assert that there is a workable relationship between
month to month GDP movements and month to month changes in passenger numbers.
While there is an association between economic well being, or at least the anticipation
of economic well being, there is no measurable and useful correlation between period to period movements
in GDP and changes in the demand for air travel.
The unit of measurement is the coefficient of correlation, expressed between -1
and +1, and the spotlight is on:
◊ USA and
◊ UK
◊ 1990 to 2000 in order to avoid the confusions of post 2001 passenger changes.
The co-efficients are:
Co-efficients of Correlation, 1990-2000
USA
0.56
UK
0.64
where 1.0 signifies a perfect positive relationship and (1.0) a perfect negative
relationship.
Even if a workable relationship between the two variables had been identified
there are practical considerations set to perplex the forecaster:
◊ economic forecasts are indicative, subject to frequent change and their inherent inaccuracy makes them
less than useful as a forecasting input
◊ there are no consistently produced economic forecasts for over half the countries in this analysis
even if there were
◊ it is not clear how movements in GDP at the national level would be related to the demand for air transport
at the regional level.
A better correlation is auto-correlation because it has practical applications;
auto-correlation is the lagged relationship between past passenger throughput numbers.
