Abstract:
Analyzing air cargo market is an integral part of air transport industry and form part of
corporate planning process. This paper seeks to assess the macroeconomic determinants of air
cargo demand by Ethiopian airlines. The vector error correction model with the aid of
stata14software package methodology used involved collection of data for international cargo
movements in Ethiopia for the period 1980– 2022 to determine the pattern of air cargo transport
demand which measured by Available tone Kilometer. Secondary data collected from different
sources including World Bank (WB), National Bank of Ethiopia (NBE) data on macroeconomic
variables considered to affect demand for air cargo transport were also collected. Multiple
regression method was then used to develop models of demand in respect of air cargo movement.
An attempt was made to develop models for international air cargo demand in the country with
different combinations of explanatory variables utilizing a stepwise regression technique. The
model, which has the real gross domestic product, foreign exchange rate, foreign trade volume
and foreign direct investments as the explanatory variables, is the most appropriate model to
represent the demand for air cargotransportinEthiopia.
