Under the economic doctrine of price elasticity, higher prices of goods or services reduces demand. In the air travel sector, this has come to bear in various jurisdictions globally where an increase in ticket prices through taxation suppressed bookings as customers travelled to cheaper destinations or cancelled their plans altogether.
Additionally, higher ticket costs led to a reduction in flight routes, job losses, and missed revenue targets by governments following the negative impact on employment-derived taxes and the broader economy, including the tourism sector.
