Abstract

Jennifer C. H. Min*, Hsien-Hung Kung and Hsiang Hsi Liu

All around the world, air travel has become a vital element in people’s lives, one that stimulates national economies, global trade and tourism. Nevertheless, the airline industry is highly vulnerable to exogenous shocks. The objectives of this study, therefore, are to apply Autoregressive Integrated Moving Average (ARIMA) with intervention model (also known as intervention analysis) to evaluate the impact of different local, regional and global incidents of a man-made, natural and health character, in Taiwan over the last decade. The incidents used in this study are the Asian financial crisis starting in mid-1997, the September 21st earthquake in 1999, the September 11th terrorist attacks in 2001, and the outbreak of Severe Acute Respiratory Syndrome (SARS) in 2003. Empirical results revealed that the SARS illness had a significant impact, whereas the Asian economic crisis, the September 21st earthquake, and the September 11th terrorist attacks showed no significant effect on air movements. Based on the results, implications and recommendations are provided, and future research possibilities are also noted.