Terrorism, war, and global air traffic

Jurgen Brauer and John Dunne

Economics of Peace and Security Journal, 2012, vol. 7, issue 1, 22-29

Abstract: It is thought that one of the affected industries of the 9/11 terror event was the global airline industry through the attack's effects on global air traffic demand for international, scheduled flights. Using data from the International Civil Aviation Organization, this article considers whether this was indeed the case. The study applies panel data analysis, focusing on the 20 largest airline companies. We find that when one takes account of potential confounding factors such as the general state of the economy, global air traffic was not greatly affected by the general level of terrorist attacks worldwide, and that it takes a truly exceptional event such as 9/11 to find a measurable impact on air traffic demand. Even then, the measured effect for the industry as a whole is small in magnitude. The reason for this finding appears to be that the demand for international scheduled air flights is rather heterogeneous across airlines. Aggregating across the whole of the global industry is not in all instances warranted.

Keywords: Terror; war; air traffic (search for similar items in EconPapers)
JEL-codes: D74 H56 L93 (search for similar items in EconPapers)
Date: 2012
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