... the capability and willingness to buy specific quantities of a good or service, at different prices in a given time period. Demand function is the most important aspect for all business that exists, as sales is the reason for their existence. In the airline industry the demand is assessed in terms of the number of passengers, revenue passenger miles. In airlines an increase in price results in decrease of demand. Determinants of Demand:> Prices of Substitutes ( Such as Travel by rail or car or bus )> Prices of Compliments ( Hotels or rental cars )> Seasonal factors ( for example, demand for air travel during the holidays)> Terrorism or Natural disasters Any change in these determinants that make consumers willing to fly more for a given price will trigger an increase in demand. Market Supply - The supply for any good is based on the production cost. Supply in airlines refers to, airlines ...

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