Determinants of international air passenger travel demand in Nigeria: cointegration and causality analysis

Abstract

This paper examines the determinants of international air passenger travel demand in Nigeria using annual data from 1982 to 2019. Autoregressive distributed lag approach was employed to analyse short- and long-run relationships between the variables while Granger causality test was conducted to determine the direction of causality. Total real trade and economic growth are major factors positively influencing air travel demand in the short- and long-run. Contrary to findings in the literature, foreign direct investment impact air travel negatively in the long-run but has a positive effect in the short-run with 1-3year lag. Real exchange rate is found to reduce air travel demand in the short-run. The result indicate a bidirectional Granger causality between air travel and total real trade, and between air travel and economic growth. Infrastructure that will support increase in demand for international air passenger travel due to economic growth are required.