Air cargo traffic forecasting model: An empirical study in Vietnam using the SARIMA-X/(E)GARCH model

Abstract

Modelling and forecasting air cargo traffic is an extremely necessary issue for air transport management. This study uses the combined model SARIMA-X/EGARCH to model and forecast Vietnam's air cargo traffic. Using quarterly data spanning 1999 to 2022 and key socio-economic factors affecting air cargo traffic, the empirical models reveal that international trade plays a more important positive role than GDP in explaining the volatility of air cargo traffic in Vietnam. In addition, the serious negative impact of the COVID-19 pandemic on the volatility of air cargo transport in Vietnam is also explained by the models. However, convincing evidence of the negative impact of crude oil prices on air cargo traffic in Vietnam has not been found. Different scenarios forecasting Vietnam's air cargo traffic to 2030 have also been proposed from the estimation results. These findings are the basis to support decision-making and policies to develop air cargo transport in Vietnam.