An Intervention Analysis Regarding the Impact of the Introduction of Budget Airline Routes to Maltese Tourism Demographics

Abstract

Intervention analysis is an important method for analysing temporary or long-lasting effects of sudden events on time series data. We use monthly data of the National Statistics Office’s Tourstat survey covering the years 2003 up to 2012. This contains a number of time series regarding tourist demographics, the type of tourism, and other variables of economic relevance. We apply intervention analysis to determine the impact of the introduction of budget airline routes to Maltese tourism related time series. We consider two main interventions. The first is the introduction of Italy and UK bound routes in October 2006. The second is the introduction of a considerable number of routes in March 2010, in particular the Marseille route. In addition to the standard types of intervention introduced by Box and Tiao (1975), the step and the pulse intervention, we also use a periodic pulse intervention which allows us to cater for any seasonality in the intervention effect, with the corresponding transfer function possibilities. We conclude with a critique of this method for this data.