Impact of Air Services Liberalization on Tourism in APEC Region

Transcription

1 2012/TMM7/011 Agenda Item: 9 Impact of Air Services Liberalization on Tourism in APEC Region Purpose: Consideration Submitted by: IATA 7 th Tourism Ministerial Meeting Khabarovsk, Russia 24 July 2012

2 Impact of Air Services Liberalization on Tourism in APEC Region (Presented by Vinoop Goel of International Air Transport Association (IATA) during the 7 th TMM. IATA represents some 240 airlines comprising 84% of global air traffic. It represents, leads and serves the airline industry) Globally, air transport: Connects the world s cities with over 36,000 routes Flies over 2.7 billion passengers annually Flies 50 million tonnes of freight worth $5.3 trillion (35% of world trade) annually Generates a total of 56.6 million jobs globally with direct employment of over 8.4 million Economic footprint (direct, indirect, induced and tourism catalytic) estimated at $2.2 trillion, equivalent to 3.5% of world GDP Air transport brings tremendous benefit to the world - connecting people and businesses. Aviation provides the only rapid worldwide transportation network, which makes it essential for global business and tourism. It provides critical connections to overseas markets, facilitating the flow of Trade, Tourists, Investment and Productivity-enhancing ideas. Businesses can access global supply chains, direct investment, new expertise, and achieve economies of scale. Jobs are created, GDP is boosted and tax revenues are paid by the industry s activities. The Economic foot print of Air Transport includes GDP, jobs, tax revenue and catalytic impacts from tourism. In addition, there are Consumer benefits and Benefits from improved air transport links. IATA commissioned studies by Oxford Economics, to demonstrate the impact of a healthy aviation sector on national economies. It is estimated that the benefits of air transport to the APEC economies exceed 26.1 million jobs and $1,236 billion in GDP (does not include Vietnam, Indonesia, Papua New Guinea and Brunei Darussalam). Air links have facilitated the success of many businesses and there is a direct correlation between FDI and connectivity and also Labor productivity and connectivity. Conversely, the absence of good air transport links has impacted investment decisions. Restrictions to global aviation remain evident in: 1. Market access - Number of airlines, frequency and fares 2. Foreign Ownership and control of airlines Aviation is a key enabler of tourism with 51% of international tourist arrivals using air transport. Liberalization will allow economies to harness the benefits from aviation and tourism growth. Liberalization can bring considerable benefits to economies for both consumers and firms. Studies have shown that the combined median impact of market access and ownership liberalization is a 53% increase in international traffic. This is particularly important for the APEC region, an area encompassing the fringes of the Pacific Ocean covering 145,200 square kilometer. APEC Tourism Ministers should recognize the role and benefits of air transport to national economies. Liberalization can further foster aviation growth and facilitate increased tourism thus contributing positively to GDP and job creation. APEC Tourism Ministers, through the TWG, should work with Transport Working Group to facilitate the air liberalization process towards achieving the APEC objective in promoting efficiency and integration.

3 Impact of Air Services Liberalization on Tourism in APEC Region Air transport Connects the world s cities with over 36,000 routes Flies over 2.7 billion passengers Flies 50 million tonnes of freight annually worth $5.3 trillion (35% of world trade) Generates a total of 56.6 million jobs globally with direct employment of over 8.4 million Economic footprint (direct, indirect, induced and tourism catalytic) estimated at $2.2 trillion, equivalent to 3.5% of world GDP. 2 1

4 Air Transport economic footprint in APEC 26.1 million jobs and $1,236 billion in GDP (does not include Vietnam, Indonesia, Papua New Guinea and Brunei Darussalam) 3 Benefits of air transport 1. Economic footprint GDP, jobs, tax revenue and catalytic impacts from tourism 2. Consumer benefits 3. Benefits from air transport links (connectivity) 4 2

5 Consumer benefits 5 Benefits of air transport links (connectivity) Broadens the Available Market Higher revenues Higher potential returns from investment Facilitates Efficiency Improvements Access to a wider base of suppliers Access to new production techniques Fosters Greater Competitiveness Increases inward and outward investment Ability to expoit economies of scale 6 3

6 Restrictions to global aviation Market access liberalization restrictions Restrictions on number of airlines and frequency Restrictions on fares Ownership (capital market) restrictions Limits on foreign ownership Restrictions on control of airlines 7 Impact of liberalization Source: InterVISTAS Will lead to 53% increase in international traffic 8 4

7 Liberalization benefits Consumers Lower prices Increased output and choice Improved product and service quality Firms Improved productivity Foreign direct investment Agile business models Wider product markets Global supply chains 9 Connectivity has facilitated the success of many businesses e.g. Dell Businesses can setupmuchmore more efficient global supply chains Dell manufacturing plant Austin, Texas Mexico Keyboards France Soundcards China Power supplies Malaysia Floppy Drives Japan RAM Chips CD-ROM Drives Chinese Taipei Network Cards Monitors Cooling Fans Singapore SCSI Cards Disk Devices 10 Hong Kong, China Video Cards Microprocessors 5

8 FDI and connectivity Source: Oxford Economics 11 Labor productivity and connectivity/gdp 12 6

9 Impact of Liberalization on Tourism Liberalisation New air services / lower fares Traffic growth Economic growth Job growth 13 Aviation and tourism 500 million international tourists arrive by air And this share is growing Source: World Tourism Organization (UNWTO) 14 7

10 Key recommendations APEC Tourism Ministers are invited to recognize the role and benefits of air transport to national economies. Liberalization can further foster aviation growth and facilitate increased tourism thus contributing positively to GDP and job creation. APEC Tourism Ministers, through the TWG, should work with Transport Working Group to facilitate the air liberalization process towards achieving the APEC objective in promoting efficiency and integration. 15 8