- March 2016
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- This research investigates the presence of nonlinear dependence and low-dimensional chaos in the Spanish airline industry's service demand. Design: Using monthly aggregate data for the period 1969 to 2012, a new conceptual and methodological framework which encompasses a large number of techniques, including those that deal with noise is applied. Main findings: Although there is strong evidence of the presence of a nonlinear structure, a chaotic and, therefore, deterministic behavior cannot be assumed in the underlying process of air transportation. Rather, the findings indicate that ARCH-type processes generally explain the nonlinearities in the data. Originality/value: This is the first study that considers such important issues as chaos and nonlinear dynamics in the demand for air transport services in Spain Overall, this work sheds additional light on the underlying dynamics of these important variables.