Keflavik Airport is Iceland’s largest airport that serves its capital Reykjavik with a population of around 130,000 people. However, the airport annually serves more than 50 times that population, and its traffic is growing drastically every year. You might be asking, why is this the case? Are Icelandic people rich? Is Iceland’s economy growing and so large in size?
Well, many possible causes could come up to your head, and that is where it becomes more interesting. Thus, in this blog I will explore the possible causes of the “Big Traffic Boom” at Keflavik Airport in the last three years.
Keflavik Airport has been growing at a staggering rate in the last three years. The passenger traffic has more than doubled between 2013 and 2016, increasing by 113%! How could this happen in a small country such as Iceland? Well, let’s investigate.
Internal possible causes: Expansions, New Good Transportation system, New Airport…
None of the above are the causes of recent growth because there were no expansions, no new or improved transport systems, and no new airports.
Maybe transfer passengers?
This is difficult to assess right away unless you look up the statistics on the airport’s website.
In 2013, Keflavik Airport served 3,209,848 passengers, 927,880 of whom were transit passengers connecting to their flight. Let us calculate the ratio (the percentage) of the transit passengers to the total number of passengers. It turns out that 28.9% of the total passengers in 2013 were connecting to their flights to a different destination.
Now let us see what happened in 2016. Keflavik Airport has welcomed 6,821,358 passengers that year, more than twice that number in 2013, and 2,198,804 of all passengers were transit passengers. Hence, the transit passengers represented 32.2% in 2016. All the data comes from https://www.kefairport.is/English/About-us/Passengers-Statistics/2016/.
It is fascinating to calculate and see the statistical difference between the two periods. But what can we actually draw from it? Well, we can for sure say that the proportion of transit passengers at Keflavik Airport has somewhat increased, so the transit passenger proportion became larger by 3.3%.
But this — even without calculating the actual impact it could have had on the overall passenger traffic — likely did not have a meaningful impact on the overall growth cause. We are looking for a more reasonable and measurable cause that could have affected the passenger traffic by significant amount. Therefore, it is nice that we have made this interesting calculation, but it is unfortunately not that helpful.
Ok, let us dig into the external causes
By external causes, I mean the causes that do not involve the airport itself directly. Clearly, I am not able to explore and evaluate all possible external causes. The main two that I will consider are Icelandair and Tourism in Iceland.
Icelandair’s passenger traffic change could clearly affect the Airport’s passenger traffic. If it does, then this could be the meaningful cause — Icelandair’s passenger traffic growth could have caused the passenger traffic growth at Keflavik Airport because it is its main carrier. Furthermore, most of Icelandair’s passenger traffic is based on Keflavik Airport as its hub. Then we would know that the airport traffic growth is more about Icelandair, be it its promotions, new destinations, or other improvements the airline has made recently.
Icelandair served roughly 2.26 million passengers in 2013 (data is from http://www.icelandairgroup.is/investors/traffic-data/), and in 2016 it served 3.67 million passengers. We can calculate the increase — it is 62.4%. Therefore, we observe that it is Icelandair, and not a foreign airline, that played a major role in the Keflavik Airport’s passenger increase.
Furthermore, the Icelandair factor could also be affected by the tourism growth in Iceland. Therefore, tourism could be the source or overlapping factor.
Tourism in Iceland
During my research, I stumbled upon this resource on tourism in Iceland: http://www.ferdamalastofa.is/static/files/ferdamalastofa/Frettamyndir/2016/juni/tourism_-in_iceland_in_figures_may2016.pdf
Generally, it is reasonable to presume that tourism is the reason for passenger growth, especially pertinent to the air travel growth. When it comes to Iceland, tourists would predominantly come by air. Realistically, it is not possible for the native population of Iceland (around 350,000 people) to account for the most of traffic growth, since the average person would travel about 20 times a year (even accounting for a reasonable economic growth).
Therefore, tourists make up most of the passenger traffic outside of the transit traffic. And therefore, the airport traffic growth is directly linked to the growth of tourism given the self-perpetuating “popularity” of Iceland as a tourist destination. According to the tourism data source above, the number of tourists visiting Iceland has almost doubled between 2013 and 2015 (the conclusion in this case is evident despite the absence of 2016 data).
The key aspect of this post is to describe the steps for a statistical investigation when something changes abnormally, which in this case is the passenger traffic at Keflavik Airport. The steps involved are like in any scientific method — you make an observation, you hypothesize, and then you make the experimental investigation, this time being the research on causes.