Today, industry, individuals and governments are united in the desire for global connectivity, however, Tony Tyler, director general, International Air Transport Association (IATA) said that the industry is nowhere near its potentials in the connectivity drive.
Today the air transport industry operates a network of some 40,000 routes over which 3.3 billion people and 50 million tonnes of cargo will be carried in 2014.
“Our world is more connected than ever, but we are also nowhere near our potential. If the propensity to travel in Asia matches the level seen in developed markets, we would expect a market four-times the current size,” said Tyler at a world aviation leadership summit.
Tyler noted that the expanding middle class in developing markets is the biggest growth opportunity for aviation. However, he warned that the opportunity would only be realized if governments understand aviation’s role as an economic catalyst and actively build a policy environment in which it can be successful. He highlighted taxation and infrastructure as two specific areas of concern:
On taxation, he said: “Aviation should pay its fair share of tax. But taxing aviation at levels equal to the ‘sin’ taxes applied to alcohol and tobacco makes no sense. Connectivity stimulates business that provides tax revenues, but a draconian tax like the UK Air Passenger Duty (APD) hurts the UK economy.
Every family that forfeits a long-haul vacation because of the APD also impacts jobs in the destination countries. It may be a UK tax, but the impact is global,” said Tyler, who also highlighted the high fuel taxes in India, and proliferation of facility fees for substandard facilities and occasional over-built facilities across Africa.
Infrastructure wise, he noted that efficient infrastructure in sufficient supply is a critical building block for connectivity.
This is largely understood in Asia which noted for its many world-leading airports. The region is also moving forward with a Seamless Asian Sky initiative aimed at ensuring sufficient airspace capacity to accommodate growth efficiently.
“But there are challenges. The potential markets of Manila, Jakarta, Mumbai lack the infrastructure to support the economic benefits that aviation can deliver. In Europe, airports in general cannot be expanded fast enough, with the onerous approvals process often leading to projects being abandoned. And the advancement in the much needed Single European Sky is being prevented by state governments mired in a web of vested interests,” said Tyler.