Effects of Low-Cost Airlines on Domestic Tourism Economy in Thailand
Air deregulation in 2003 led to the development of the low-cost airline industry in Thailand. The new airlines entered the air transport industry market and helped to further increase tourism destinations across the country, motivating more internal travel. This study aims to examine the impact of low-cost airlines factors on tourism demand and to identify the relationship between low-cost airlines and domestic tourism in Thailand. ARDL (Autoregressive Distributed Lag) model was applied to analyse the long-run and short-run relationship between the dependent variables and domestic tourism demand. The findings show that the chosen economic variables in this study are showing importance in determining the number of domestic tourists particularly in the long-run but a less significant relationship in the short run. The increasing connectivity between the cities, especially between the rural and metropolitan areas is stimulating travel and trade.
 Abda, M. B., Belobaba, P., and Swelbar, W. 2012. Impacts of LCC growth on domestic traffic and fares at largest US airports. Journal of Air Transport Management, 18: 21-5.
 Aguiló, E., Rey, B., Rosello, J., and Torres, C. 2007. The impact of the post-liberalisation growth of LCCs on the tourism trends in Spain Rivista di Politica Economica. SIPI Spa, 97: 39-60.
 Ai-Darwesh, H. R. 2017. The Role of Domestic Tourism in Supporting the National Economy. International Business Research, 10: 34-45.
 Akgüç, M., Beblavý, M., and Simonelli, F. 2018. Low-Cost Airlines Bringing the EU closer together. Centre of European Policy Studies. Brussels.
 Akis, S. 1998. A compact econometric model tourism demand in Turkey. Tourism Management, 19: 99-102.
 Alsumairi, M., and Tsui, K. 2017. A case study: The impact of low-cost carriers on inbound tourism of Saudi Arabia. Journal of Air Transport Management, 62: 29-45.
 Ati, N. L. 2000. Deregulation sparks Thai start-ups. Flight Global. Available at: https://www.flightglobal.com/news/articles/deregulation-sparks-thai-start-ups-121006/
 Badie, B., Berg, D., and Morlino, L. 2011. International Encyclopedia of Political Science. SAGE. Thousand Oaks, CA, US.
 Bharadwaj, A. 2017. Five Consumer Trends to Watch in Thailand. Boston Consulting Group, Available at: https://www.bcg.com/publications/2017/globalization-go-to-markets-five-consumer-trends-watch-thailand.aspx
 Blavy, R. 2001. Trade in the Mashreq: An Empirical Examination. International Monetary Fund. Israel.
 Bobeica, E., Ciccarelli, M., and Vansteenkiste, I. 2019. The link between labour cost and price inflation in the Euro area. European Central Bank. Frankfurt.
 Budd, L., and Ison, S. 2014. Low-Cost Carriers: Emergence, Expansion and Evolution. Ashgate. New York, US.
 Castillo, J. I., López, L., and González, F. 2011. The effects of the LCC boom on the urban tourism fabric: The viewpoint of tourism managers. Tourism Management, 32: 1085-95.
 Chung, J. Y., and Whang, T. 2011. The impact of low-cost carriers on Korean Island tourism. Journal of Transport Geography, 19: 1335-40.
 Ciliuc, A. 2014. Determinants of International Tourism. International Monetary Fund. Washington, US.
 Cook, G., and Goodwin, J. 2008. Airline Networks: A Comparison of Hub-and-Spoke and Point-to-Point Systems Point System. Journal of Aviation/Aerospace Education & Research, 17: 51-60.
 Corrie, K., Stoeckl, N., and Chaiechi, T. 2013. Tourism and economic growth in Australia: An empirical investigation of causal links. Tourism Economics, 19: 1317-44.
 Costa, V., and Almeida, C. 2015. Low-Cost Carriers, Local Economy and Tourism Development at Four Portuguese Airports. A Model of Cost-benefit Analysis. Journal of Spatial and Organizational Dynamics, 4: 245-61.
 Di Giacinto, V., and Migliardi, A. 2014. Low-Cost Carriers and Foreign Tourism Inflows: A Cointegrated VAR Analysis for Italy. Journal of Tourism, Cultural and Territorial Development, 5: 1-23.
 Dickey, D.A. and Fuller, W.A. 1979. Distribution of the Estimators for Autoregressive Time Series with a Unit Root. Journal of the American Statistical Association, 74: 427–31.
 Dobson, A. 2017. A History of International Civil Aviation: From Its Origins through Transformative Evolution. Routledge. Oxon, UK.
 Dutta, S., and Regani, S. 2005. AirAsia - Southeast Asia's Most Successful Low-cost Airline. IBS Center for Management Research, 305: 163-91.
 Ferrer-Rosell, B., Coenders, G., and Martinez-Garcia, E. 2015. Determinants in tourist expenditure composition - the role of airline types. Tourism Economic, 21: 9-32.
 Findlay, C. C., Chia, L. S., and Singh, K. 1997. Asia Pacific Air Transport: Challenges and Policy Reforms. Institute of Southeast Asian Studies. Singapore.
 Fortanier, F., and Wijk, J. 2010. Sustainable tourism industry development in sub-Saharan Africa: Consequences of foreign hotels for local employment. International Business Review, 19: 195-205.
 Fu, X., Hensher, D., and Chen, N. 2021. “Aviation Market Development in the New Normal Post the COVID-19 Pandemic: An Analysis of Air Connectivity and Business Travel”. Economic Research Institute for ASEAN and East Asia – ERIA. Available at: https://www.eria.org/publications/aviation-market-development-in-the-new-normal-post-the-covid-19-pandemic-an-analysis-of-air-connectivity-and-business-travel/
 Fu, X., Oum, T. H., and Zhang, A. 2010. Air Transport Liberalization and Its Impacts on Airline Competition and Air Passenger Traffic. Transportation Journal, 49: 24-41.
 Graham, A. 2000. Demand for leisure air travel and limits to growth. Journal of Air Transport Management, 6: 109-18.
 Graham, A., and Dennis, N. 2010. The impact of low-cost airline operations to Malta. Journal of Air Transport Management, 16: 127-36.
 Hanafiah, M. H., and Harun, M. F. 2010. Tourism Demand in Malaysia: A cross-sectional pool time-series analysis. International Journal of Trade, Economics and Finance, 1: 200-3.
 Hausman, J. 1978. Specification Tests in Econometrics. Econometrica, 46: 1251-71.
 Hesam, M., Kazmi, M., and Rezazadeh, M. 2016. Affecting Factors on Rural Tourism Investment Analyzed through Grounded Theory: The Case of the Villages of Larijan District, Amol, Iran. Journal of Environmental Management and Tourism, 2(14): 256-70.
 Ivanov, S., and Webster, C. 2007. Measuring the Impact of Tourism on Economic Growth. Tourism Economic, 13: 379-88.
 Kenton, W. 2019. Durbin Watson Statistic Definition. Investopedia, Available at: https://www.investopedia.com/terms/d/durbin-watson-statistic.asp
 Koo, T. T., Wu, C., and Dwyer, L. 2009. Transport and regional dispersal of tourists: Is modal substitution a source of conflict between low-fare air services and regional dispersal? Journal of Travel Research 49: 1-16.
 Koumelis, T. 2007. Thailand: Aviation- open skies now the order of the day. Travel Daily News, Available at: http://www.traveldailynews.asia/news/article/7324/thailand-aviation-open-skies-now
 Kühn, K. 2006. Low-cost airlines boost tourism. The Caterer. Available at: https://www.thecaterer.com/archive/low-cost-airlines-boost-tourism
 Lai, P., Jang, H., Xu, C., and Xin, S. 2019. The Impact of Low-Cost Carriers on Inbound Tourism of Thailand. International Journal of Supply Chain Management, 8: 846-53.
 Law, C. 2021. The Relationship between Air Transport and Rural Tourism in Thailand. Tourism: An International Interdisciplinary Journal, 69: 395-405.
 Lawton, T., and Solomko, S. 2005. When being the lowest cost is not enough: Building a successful low-fare airline business model in Asia. Journal of Air Transport Management, 11: 355-62.
 Lim, K. 2010. Tourism Authority of Thailand motivates domestic travel through 'Hug’ Thailand' campaign. Campaign Asia. Available at: https://www.campaignasia.com/article/tourism-authority-of-thailand-motivates-domestic-travel-through-hug-thailand-ca/219252
 Liu, J., and Yan, Q. 2012. Empirical Study on the Impact of Domestic Economic Cycle on Sichuan's Tourism. Journal of Service Science and Management, 5: 69-75.
 Luis, M., Ana, R., and Andrés, P. 2015. The Development of Low-cost Airlines and Tourism as a Competitiveness Complementor: Effects, Evolution and Strategies. Journal of Spatial and Organizational Dynamics, Cinturs, 3: 262-74.
 Nikolskyaya, E.Y. et al. 2018. The Hotel Sector as an Important Component of Regional Economic Infrastructure. Journal of Environmental Management and Tourism, 6(30): 1178-82. DOI:https://doi.org/10.14505//jemt.v9.6(30).06
 Nilsson, J. H. 2009. Low-cost Aviation. In S. Gossling and P. Upham, Climate Change and Aviation: Issues, Challenges and Solutions (113-30). Earthscan. New York, US.
 Nugroho, E. A. 2013. Lion Air Sees 32m Passengers This Year on Rising Incomes. Jakarta Globe, Available at: http://jakartaglobe.id/business/lion-air-sees-32m-passengers-this-year-on-rising-incomes/
 Pesaran, H. M., and Smith, R. P. 1995. Estimating long-run relationships from dynamic heterogeneous panels. Journal of Econometrics, 68: 79-113.
 Pesaran, M. H., and Pesaran, B. 1997. Working with Microfit 4.0: Interactive Econometric Analysis. Oxford University Press. Oxford, UK.
 Pesaran, M. H., Shin, Y., and Smith, R. P. 1999. Pooled mean group estimation of dynamic heterogeneous panels. Journal of the American Statistical Association, 94: 621-34.
 Pomlaktong, N., Jongwilaiwan, R., Theerawattanakul, P., and Pholpanich, R. 2011. Road Transport in Thailand. In APEC, The Impacts and Benefits of Structural Reforms in Transport Energy and Telecommunications Sectors (267-89). Asia Pacific Economic Cooperation. Singapore.
 Prideaux, B., and Whyte, R. 2014. Implications for destinations when low-cost carrier operations are disrupted: The case of tiger airlines Australia. Advances in Hospitality and Leisure, 9: 99-118.
 Qiu, W., Rudkin, S., and Sharma, A. 2017. An Analysis of the Impact of Low-Cost Airlines on Tourist Stay Duration and Expenditures (1-26). MPRA Paper 81428, University Library of Munich, Germany.
 Rey, B., Myro, R., and Galera, A. 2011. Effect of low-cost airlines on tourism in Spain. A dynamic panel data model. Journal of Air Transport Management, 17: 163-67.
 Sara, I Dharmanegara, I., and Korri, I. 2018. The Dynamics of International Tourism and Economic Growth Convergence in ASEAN+3. Journal of Environmental Management and Tourism, 4(20): 815-23. DOI:https://doi.org/10.14505//jemt.9.4(28).15
 Selva, M. L., Marzal, C. C., and Medina, R. P. 1995. Tourism Expenditure of Airline Users: Impact on the Spanish Economy. In J. Kacprzyk, Studies in Fuzziness and Soft Computing (287-304). Springer. New York, US.
 Sharma, J., and Mitra, S. K. 2020. Asymmetric Relationship between Tourist Arrivals and Employment. Tourism Economic. DOI: https://doi.org/10.1177/1354816620910000
 Shrestha, M., and Bhattab, G. R. 2018. Selecting appropriate methodological framework for time series data analysis. The Journal of Finance and Data Science, 4: 71-89.
 Sinha, D. 2001. Deregulation and Liberalisation of the Airline Industry: Asia, Europe, North America and Oceania. Routledge. London, UK.
 Sivadasan, F. 2015. Impact of Budget Hotels towards Tourism Industry-A study in Sarawak, Malaysia. Research Journal of Social Science and Management, 4: 95-102.
 Song, H., Li, G., Witt, S. F., and Athanasopoulos, G. 2010. Forecasting tourist arrivals using time-varying parameter structural time series models. International Journal of Forecasting, 27: 855-69.
 Sowawattanakul, P., and Wongsurawat, W. 2013. Domestic airline networks and passenger demand in Thailand after deregulation. International Journal of Aviation Management, 2: 35-53.
 Sriring, O., and Staporncharnchai, S. 2020. Thailand to drive domestic tourism as economy rides out drop in foreign visitors. Reuters. Available at: https://www.reuters.com/article/health-coronavirus-thailand-tourism/thailand-to-drive-domestic-tourism-as-economy-rides-out-drop-in-foreign-visitors-idUSL4N2D71GY
 Thomas, G. 2003. In tune with low fares in Malaysia. Air Transport World, 40: 45-46.
 Tsui, K. W. 2017. Does a low-cost carrier lead the domestic tourism demand and growth of New Zealand? Tourism Management, 60: 390-403.
 Turner, R. 2017. Travel & Tourism Economic Impact 2017 Thailand. World Travel and Tourism Council. London, U.K.
 Vanegas, M., Gartner, W., and Senauer, B. 2015. Tourism and Poverty Reduction: an Economic Sector Analysis for Costa Rica and Nicaragua. Tourism Economic, 21: 159-82.
 Vasigh, B., Tacker, T., and Fleming, K. 2008. Introduction to Air Transport Economics: From Theory to Applications. Ashgate. Surrey, UK.
 Vlad, I. M., Dinu, T. A., and Stoian, E. 2016. Exploring the Links between the Average Income and the Arrival's Number of Tourist Accommodation Establishments in Romania. Agriculture and Agricultural Science Procedia, 10: 591-97.
 Wolla, S. A., and Backus, C. 2018. The Economics of Flying: How Competitive Are the Friendly Skies? Federal Reserve Bank of St. Louis. Available at: https://research.stlouisfed.org/publications/page1-econ/2018/11/01/the-economics-of-flying-how-competitive-are-the-friendly-skies/
 Wongwattanakit, C., Lohatepanont, M., and Pornchaiwiseskul, P. 2017. A Socio-demographic Study of Destination Management for Coastal Tourism in Phuket. Journal of Environmental Management and Tourism, 4(20): 737-50. DOI: 10.14505/jemt.v8.4(20).04
 Yang, Y., Wong, K. K., and Zhang, J. 2011. Determinants of Length of Stay for Domestic Tourists: Case Study of Yixing. Asia Pacific. Journal of Tourism Research, 16: 619-33.
 Zhang, A., Hanaoka, S., Inamura, H., and Ishikura, T. 2013. Low-cost carriers in Asia: Deregulation. Regional liberalization and secondary airports. In L. Budd and S. Ison, Low-Cost Carriers: Emergence, Expansion and Evolution (36-50). Routledge. Oxon, UK.
 Air Asia. 2017. The AirAsia Family. Air Asia. Available at: https://www.airasia.com/th/en/about-us/corporate-profile.page
 AJTP information Center. Statistics Rail Transport. Tokyo, Ministry of Land, Infrastructure, Transport and Tourism. Tokyo, Japan, 2004-2014.
 AOT (Airport of Thailand). Annual Report. Airport of Thailand. Airport of Thailand Company limited. Bangkok, Thailand, 2004-2014.
 AOT (Airport of Thailand). 2019. “Air Transport Statistic.” Airport of Thailand Company Limited (AOT), Available at: https://www.airportthai.co.th/en/airports-of-thailand-plc/about-aot/air-transport-statistic/
 ATRS (Air Transport Research Society). Air Transport Liberalization and the Economic Development of the Countries. Montreal, Canada, 2016
 Bangkok Post. 2015. “Thai VietJet Air ready for take-off.” Bangkok Post, Available at: http://www.bangkokpost.com/archive/thai-vietjet-air-ready-for-take-off-after-turbulence/477878
 CAPA. 2018. “Thailand low-cost airlines: rapid growth as fleet triples in 5 years.” CAPA, Available at: https://centreforaviation.com/analysis/reports/thailand-low-cost-airlines-rapid-growth-as-fleet-triples-in-5-years-407712
 DOA (Department of Airport). 2020. Air Transport Statistics. Department of Airport, Thailand. Available at: https://www.airports.go.th/en/content/262.html
 ICAO (International Civil Aviation Organisation). 2017. Low-Cost Carriers (LCCs). International Civil Aviation Organisation Economic Development. Available at: https://www.icao.int/sustainability/Pages/Low-Cost-Carriers.aspx
 ICAO (International Civil Aviation Organisation) 2004. The contribution of air transport to sustainable development in Africa. International Civil Aviation Organisation. Geneva, Switzerland
 ILO (International Labour Organisation). 2016. Sustainable tourism: A driving force of job creation, economic growth and development. International Labour Organisation. Available at: https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_480824/lang--en/index.htm
 Nok Air. 2013. Nature of Business. Nok Air. Available at: http://nok.listedcompany.com/nature_business.html
 NSO (National Statistical Office). 2020. Situation Domestic Travellers by Province: 2009 - 2018. 17 Tourism and Sports Branch: National Statistical Office. Available at: http://statbbi.nso.go.th/staticreport/page/sector/en/17.aspx
 The Transport Co., Ltd. Annual Report. The Transport Co., Ltd. Bangkok, 2004-2014.
 World Bank 2020. Consumer price index (2010 = 100) – Thailand, World Bank, Available at: https://data.worldbank.org/indicator/FP.CPI.TOTL?locations=TH
The Copyright Transfer Form to ASERS Publishing (The Publisher)
This form refers to the manuscript, which an author(s) was accepted for publication and was signed by all the authors.
The undersigned Author(s) of the above-mentioned Paper here transfer any and all copyright-rights in and to The Paper to The Publisher. The Author(s) warrants that The Paper is based on their original work and that the undersigned has the power and authority to make and execute this assignment. It is the author's responsibility to obtain written permission to quote material that has been previously published in any form. The Publisher recognizes the retained rights noted below and grants to the above authors and employers for whom the work performed royalty-free permission to reuse their materials below. Authors may reuse all or portions of the above Paper in other works, excepting the publication of the paper in the same form. Authors may reproduce or authorize others to reproduce the above Paper for the Author's personal use or for internal company use, provided that the source and The Publisher copyright notice are mentioned, that the copies are not used in any way that implies The Publisher endorsement of a product or service of an employer, and that the copies are not offered for sale as such. Authors are permitted to grant third party requests for reprinting, republishing or other types of reuse. The Authors may make limited distribution of all or portions of the above Paper prior to publication if they inform The Publisher of the nature and extent of such limited distribution prior there to. Authors retain all proprietary rights in any process, procedure, or article of manufacture described in The Paper. This agreement becomes null and void if and only if the above paper is not accepted and published by The Publisher, or is with drawn by the author(s) before acceptance by the Publisher.