THE IMPACT OF FUEL PRICE FLUCTUATIONS ON AIR FREIGHT DEMAND IN ASIA PACIFIC COUNTRIES
| dc.contributor.author | YEW JUNISA | |
| dc.date.accessioned | 2026-08-26T07:38:51Z | |
| dc.date.issued | 2025 | |
| dc.description | This study investigates the relationship between fuel price fluctuations and air freight demand in Asia Pacific countries, focusing on the moderating effects of political stability and trade volume. The increasing volatility of global oil prices presents a serious challenge to the air freight industry, especially in trade-dependent regions like Asia Pacific, where logistics resilience is vital for economic stability. The main objective of this research is to examine how changes in crude oil prices influence air freight demand and to determine whether political stability and trade volume strengthen or weaken this relationship. A panel data set covering 30 Asia Pacific countries from 2012 to 2021 was used. Econometric methods including Pooled Ordinary Least Squares (Pooled OLS), Fixed Effects (FE), Random Effects (RE), and the Generalized Method of Moments (GMM) were employed to test the relationships. The findings reveal that crude oil prices significantly affect air freight demand, with a positive and robust relationship observed across most models. Political stability also shows a positive impact, suggesting that governance quality enhances logistics performance. However, the interaction between fuel prices and political stability produces a negative effect, indicating that politically stable countries are more sensitive to rising fuel costs due to transparent cost pass-through mechanisms. The lagged dependent variable in the GMM model is significant, confirming demand persistence over time. The study concludes that GMM is the most suitable estimator for dynamic air freight modeling and recommends that governments, airlines, and regional institutions adopt fuel risk management strategies, promote sustainable aviation policies, and strengthen political and economic governance to enhance sector resilience. This research contributes to transport economics literature by highlighting the complex interplay between energy markets, governance, and air logistics in a dynamic and globally connected region. | |
| dc.identifier.uri | https://scholarhub.unimas.my/handle/123456789/1830 | |
| dc.language.iso | English | |
| dc.publisher | Universiti Malaysia Sarawak (UNIMAS) | |
| dc.relation.ispartofseries | Faculty of Economics and Business | |
| dc.subject | Air freight demand, fuel price volatility, political stability, panel data, Asia Pacific | |
| dc.title | THE IMPACT OF FUEL PRICE FLUCTUATIONS ON AIR FREIGHT DEMAND IN ASIA PACIFIC COUNTRIES | |
| dc.type | Final Year Project |