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Challenges to domestic air freight in Australia: Evaluating air traffic markets with gravity modelling

David W. Alexander and Rico Merkert

Journal of Air Transport Management, 2017, vol. 61, issue C, 41-52

Abstract: With two of the busiest air traffic corridors globally, Sydney-Melbourne (SYD-MEL) and Sydney-Brisbane (SYD-BNE), very liberal open skies agreements, and the world's most isolated large city in Perth, air freight in Australia should be destined for substantial growth, but has in contrast to other regions such as the US not yet materialised. This paper identifies challenges surrounding domestic air freight markets in Australia and compares the provision of road vs air freight services utilising gravity modelling methods. Our findings suggest the impedance of domestic air freight services in Australia is greater for regional areas between the primary cities (such as Canberra, between Sydney and Melbourne) than remoter areas (such as Cairns in Northern Australia). Our models show further that in addition to distance, air freight capacity on any of our analysed routes is despite being demand-pulled in terms of GDP dependency significantly attuned to factors at both the origin (in particular domestic trade capability, i.e. manufacturing and logistics) and destination.

Keywords: Air transport demand management; Air cargo; Gravity models (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:jaitra:v:61:y:2017:i:c:p:41-52