Direct Demand Models of Air Travel: A Novel Approach to the Analysis of Stated Preference Data

This paper uses what has been termed the direct demand approach to obtain elasticity estimates from discrete choice Stated Preference data. The Stated Preference data relates to business travellers' choices between air and rail. The direct demand methodology is outlined and some potential advantages over the conventional disaggregate logit model are discussed. However, further research regarding the relative merits of the two approaches is recommended. The direct demand model is developed to explain variations in the demand for air travel as a function of variations in air headway and cost and in train journey time, frequency, interchange and cost. Relatively little has previously been published about the interaction between rail and air and the elasticities and variation in them which have been estimated are generally plausible. In particular, the results show that large improvements in rail journey times can have a very substantial impact on the demand for air travel and that the rail journey time cross-elasticity depends on satisfying a three hour journey time threshold.