Yemenia Focus ( Issue No. 2) DEMAND ANALYSIS – ADEN HUB
GRAVITY MODEL
By : Mohammed Salem Awad
Aden Regional Director - Yemenia
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Yemenia Focus ( Issue No. 2) DEMAND ANALYSIS – ADEN HUB
GRAVITY MODEL
By : Mohammed Salem Awad
Aden Regional Director - Yemenia
The strategic location of Aden city in heart of
the world enhance the business activities in
near future in region.
Aden Airport is an excellent bridge between
Arabic countries and the neighborhood
African cities. The most important issue, the
integrated system between three main parties,
i.e Airlines, Airport, and local Authority .
There are many methods to evaluate demand
for new network, we address one of these
methods – Gravity Model which define the
potential traffic between countries in the
proposed network. The idea is to address any
traffic hub that more likely close to Aden city.
So we can reflect Sanaa data airport in this
report, to use its parameters to reflects traffic
demand for Aden airport.
Every team has its own words, but basically all roads lead to Rome. We explore some
basic parameters of the model that address by well brand name consultant company
which is Lufthansa Consulting.
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The model basically reflects the relation between many parameters as shown by the
experience of Lufthansa consulting.
Demand Analysis - Methodology:
Gravity Model – Econometric
The gravity model used in transportation is based on Newton's Law of Universal
Gravitation as is used in Physics. Newton's Law postulates that the force of
gravitational attraction between any two massive bodies is proportional to their
masses and inversely proportional to the square of the distance between their centers
(Pogge). Likely wise in business, we use the same concept but we analogue its input
with different parameters as shown in next step. Thus, the model becomes
However, there are numerous other factors that can be used as factors in the model.
Generation factors can include the personal disposable income of the people living in
the area, the gross domestic product of the area, or the level of business activity.
Attraction factors can include the number of tourists to the region, the gross domestic
product of the area, or the level of business activity. Impedance factors could include
the cost of travel, the time taken to travel, and regulatory issues. Any of these
additional factors could be included easily in the model through the inclusion of
additional terms, provided there is no strong correlation between the factors in the
model. Specifically, both distance and cost are important determinants of travel, but
since they are likely to be highly correlated, only one can be included in the model
(Howrey p218).
For the purposes of this research, the basic gravity model was extended in some ways
to include other economic variables which were believed to have a significant effect
on the demand for air traffic passengers.
The model used is as follows:
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Case Study :
1- Input Data - Sanaa Airport - Cargo Activities
2- Analysis : Gravity Model based on Yemenia Learning Curve
3- Results – Aden Airport
Data stability is an issue for this study due to the political environments in Yemen,
meanwhile Sanaa may represent a good source to develop the data base for the study,
by developing the econometric model Sanaa Airport, and using the model parameters
to reflect the impact on Aden Airport.
1 - Data - Sanaa Airport - Air Cargo Traffic 2009
Tthe most challenging part of this study was the collection of sufficient, accurate data.
Access to traffic volume data was extremely difficult, especially pooled data, which
was the "ideal" data set required for the building of the above model.
The export data was based on the volume of air cargo data that was exported from
Sanaa International Airport to its various international2 destination countries during
1999, as supplied by Statistics Yemenia Cargo Department . The data is measured in
Kilograms of air cargo transported
The original number of partner countries included in the sample set was 23 countries
and territories. This was the total number of countries for which Yemenia Cargo
Department , the sample has been deemed sufficient for the purposes of this research.
In the following table
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2- Analysis: : Gravity Model based on Yemenia Learning Curve
SANAA Hub for comparison the model ( Actual vs Model values ):
By referring to the main model formula and using data of table (
) of 23 observation as input for the analysis by using the proper
regression program, the output summary will be as in table (2 ):
Adjusted R Square = 66.8 %
Where most estimating parameters of the model are listed also in
the following table.
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3- Results – Aden Airport :
The result of the analysis for Aden Airport Hub
are explore Cargo Kg units, the expected market
will be 7000 tonne based on Yemenia Model,
while this figure should multiply by 2 to get the
total market that also served by other operators.
So the total expect market will be 14,000 tonne (
Air Cargo )
While the potential from Aden Sea port will be
75,000 tonne as Air cargo
So The Total Expected Air Cargo Business for
Aden:
1- Demand By Air Cargo Operation ( 14,000
Tonne)
2- Demand By the Strategic Location of Aden City
in the World ( 75,000 Tonne )
Conclusions :
The study shows clearly a huge demand for air
cargo business in Aden in spite of competition of
the major giants in the region ( Emirates, Etihed,
Saudia Cargo and other Cargo companies), the
strategic location of Aden city add a
competitive advantage for the business of Air
Cargo, while the business can be secured by
developed an integrated system for Aden
Cargo Village, Aden Seaport and Aden Free
Zone, the annul air cargo potential for Aden
Air port is 14,000 tonne, which the
contribution of Aden Seaport for Aden Cargo
Village may reach to 75,000 tonne per year.
Aden City is in the heart of the world, and
located at the midpoint of two main major
global cargo hubs.
Singapore & China Hubs in Asia and
Rotterdam Hub in Europe as shown in the map