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Policy tailwinds for whom? Unilateral air deregulation and its segmented impact on island tourism

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  • Xue, Wenjing
  • Wu, Chuntao
  • Zhang, Yahua

Abstract

International aviation commonly engages in two types of liberalization: bilateral and unilateral. In pursuit of tourism benefits, destinations may turn to unilateral aviation deregulation. However, the effect of individual unilateral deregulation measures remains unclear. Using monthly data on inbound visitors from April 2010 to December 2023, this study investigates whether tourists traveling for business, leisure, and visiting-friends-and-relatives purposes exhibit heterogeneous responses to low-cost carrier promotion, charter promotion, and some economic and non-economic factors, such as income, prices, and distance. The results indicate that low-cost carrier promotion has a significant positive impact only on leisure travelers. Charter promotion mainly stimulates business travel in the full sample, while its effects on leisure and VFR travelers are more segment- and market-dependent. This study addresses a gap in the literature on low-cost carrier service attributes in Asia. Practically, it underscores how destination managers and policymakers can shift from a generalized liberalization approach to a regionally differentiated, synergistic planning framework.

Suggested Citation

  • Xue, Wenjing & Wu, Chuntao & Zhang, Yahua, 2026. "Policy tailwinds for whom? Unilateral air deregulation and its segmented impact on island tourism," Transport Policy, Elsevier, vol. 185(C).
    • Handle: RePEc:eee:trapol:v:185:y:2026:i:c:s0967070x26002209
    DOI: 10.1016/j.tranpol.2026.104210
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