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Are Flights Becoming Non-Luxury Commodity? An Evaluation on the Elasticities of the Product of the Turkish Air Transportation
Air transportation sector has achieved an impressive success changing the structure of the tranportation permenantly in the second half of the last century. Important elements of this success are its getting through structural changes by the means of important liberalization process and also the success of the airline companies elected as best ones through the competition of economical competitiveness. In the literature, there is a argument over the change of the microeconomical properties of the sectoral product while the sector is changing structurally. For example, it is being proposed that the air transportation can not be classified as luxury commodity. Our study analyze that allegation by using Turkey case application for an important after-crisis period. Our study, however, did not find any supporting proof for the allegation. In contrast, this study found the price and income elasticities of the product stay higher than the unity, i.e. in elastic region. The finding of the results of Turkey application is compatible with the result of the general analysis of the Turkish air transportation sector. According to these results the effects of the global developments take some time to come into effect in the local sector. Therefore it is possible to evaluate that the studied period is early for Turkish air transportation to have a structural change in its product.

Transportation economics, Demand Elasticity, Turkey, Air Transportation, Luxury goods. R40, L93, C93

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