2014 Aviation Benefits Beyond Borders

8/20/2019 2014 Aviation Benefits Beyond Borders

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Powering global economic growth,employment, trade links, tourism

and support for sustainabledevelopment through air transport

April 2014

AVIATION

BENEFITSBEYONDBORDERS


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The air transport industry is the global network ocommercial aircra t operators, airports, air navigationservice providers and the manu acturers o aircra t a ndtheir components. It is responsible or connecting the globaleconomy, providing millions o jobs and making modernquality o li e possible. The A ir Transport Action Group(ATAG), based in Geneva, Switzerland, represents the ullspectrum o this global business. ATAG brings the industrytogether to orm a strategic perspective on commercialaviation’s sustainable development and the role that airtransport can play in supporting the sustainability oother sectors o the economy. ATAG’s Board o Directorsincludes: Airports Council International (ACI), Airbus,

ATR, Bo eing, Bombar dier, Civ il Ai r Navi gation Service sOrganisation (CANSO), CFM International, Embraer, GE Aviation, Honeywel l Aero space, Interna tional Air Tra nsport Assoc iation (IATA), Prat t & Whi tney, Rolls -Royce a nd Sa ran.

www.atag.org

This publication is or in ormation purposes only. Whilstevery e ort has been made to ensure the quality andaccuracy o in ormation in this publication, it is madeavailable without any warranty o any kind. All currency is inUnited States Dollars at 2012 prices, unless otherwise stated.Forecasts and orward-looking statements in this publicationare attributed to those organisations re erenced, or the AirTransport Action Group.


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Introduction

In 2014, over three billion passengers will

board an aircraft somewhere on earth. Some will be heading off on holiday, some will betravelling for business and others will beying to see friends and relatives. However,every passenger we y tells a much broadereconomic story. They will stay in hotels andrent cars, visit national parks and buy foodfrom restaurants.

Tourism is fast becoming the world’snumber one industry and it is one thataviation is proud to help facilitate. The growth in the middle classes in the emerging

economies of the world is being met with asimilar boom in air transport, most keenlyfelt in the Asia-Pacic region. We urge governments in these high growth economiesnot only to create the environment for growth with liberalised traffic rules and by easingtravel restrictions, but also to be mindful ofthe impact that a lack of planning can have for growth decades from now.

The role of air transport in world tradeis also momentous. The high value andperishable goods being transported by cargo

airlines are of great importance for the jobs

they support globally. And nearly all of ushave personal electronic devices that were built using a global supply chain linked byair. Where would today’s internet retailers be without the rapid delivery of their productsto customers?

This is a tting moment to pay tribute toall the men and women around the world who make aviation the industry what it is— from the ight crews who probably havethe best view of any office in the world,to the ground teams and the mechanics

and engineers who build and maintain themarvels of technolo y which passengers takefor granted — air transport is a business thatreally gets into the blood.

When you look behind the scenes of ourindustry, the logistics and planning involvedis mind-boggling. You only need to take alook at an airport baggage handling system,or a ramp controller’s desk, or a cabin crewschedule to understand just how much of amultidimensional ballet plays out every day.Throw in adverse weather, political unrest and

the incredibly sophisticated technolo y we use

and the collaboration that allows the industryto operate is all the more impressive.

And that’s just the day-to-day. At the AirTransport Action Group, our mission is to bring the industry together to keep one eyeon the future of aviation as well. Sustainabilityis all about protecting what we have for generations to come. We can be proud thatour industry has such a proactive future vision. Whilst it has taken us 100 years toserve 65 billion passengers, another 65 billionpassengers will take ight in the next 15 years.

That is a stunning amount of growth, not justfor the industry but for the economies we support.

The Air Transport Action Group’smembers are working in partnership toensure that growth can take place efficiently,economically, environmentally and with aslittle congestion as possible. This will not be aneasy task, but you can rest assured that thereare people already working on it.

Here’s to the next 100 years of ight!

This year marks the centenary o thecommercial aviation industry. On 1 January1914, when Abram C. Pheil, ormer mayor oSt. Petersburg, Florida became the world’srst are-paying airline passenger, little would

he know that 100 years and some 65 billionpassengers later, air transport would playa leading role in shaping the lives o peopleall over the planet.

Michael Gill ATAG Executive Director

Geneva, April 2014

02


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03

Executive

summary Key acts and gures romthe world o air transport


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21st

3.6x

This report provides a global view of one ofthe most global industries. Oxford Economicsanalysed the economic and social benets ofaviation at a national level in over 50 countriesand used the results of that assessment to build the most comprehensive global pictureof air transport’s many benets. Working with partners across the industry, the AirTransport Action Group (ATAG) has expandedthe analysis to build a unique view of the airtransport system that provides jobs, trade,connectivity, tourism, vital lifelines tomany remote communities and rapiddisaster response.

Every day… » 8.6 million passengers » 99,700 ights » $17.5 billion worth of goods carried

Air transport is a major contributor to globaleconomic prosperity.

Aviation provides the only rapid worldwidetransportation network, which makes itessential for global business and tourism.

It plays a vital role in facilitating economic growth, particularly in developing countries.

Airlines transport over three billionpassengers annually with revenue passengerkilometres (RPK) totalling nearly 5.5 trillionin 2012.

Nearly 50 million tonnes of freight werecarried by air in 2012, amounting to 185 billionfreight tonne kilometres (FTK).

Air transport facilitates world trade, helpingcountries participate in the global economy byincreasing access to international markets and

allowing globalisation of production. The total value of goods transported by air represents35% of all international trade.

Aviation is indispensable for tourism, which is a major engine of economic growth,particularly in developing economies.Globally, 52% of international tourists travel by air.

Connectivity contributes to improvedproductivity by encouraging investment andinnovation; improving business operationsand efficiency; and allowing companies toattract high quality employees.

jobs supported by aviation worldwide 1

Direct employment:

million58.1

Executive summary Key acts and gures rom the world o air transport

Beyond the industryAviation’s global employment andGDP impact 2

GDP ($billion)

1,627

2,434

1,303

606 8.7 18.6 23.2 58.1 +

+

E m

pl o

y m ent

( m

i l l i on

s )

Aviationdirect

+ Indirect

+ Induced

+ Other catalytic

+ Tourism catalytic

Aviation’s global economic impact(including direct, indirect, inducedand tourism catalytic) 8

These gures represent the benets thataviation activities deliver to the globaleconomy. They do not include othereconomic benets of aviation, such asthe jobs or economic activity generated when companies or whole industries exist because air travel makes them possible,or the intrinsic values that the speed andconnectivity of air travel provides. Nordo they include domestic tourism andtrade. Including these would increase theemployment and global economic impactnumbers several-fold 10.

is supported by aviation 9

If aviation were a country,it would rank 21st in size by GDP11

Aviation jobs are, onaverage, 3.6 times more

productive than other jobs 12. By openingmarkets, enabling knowledge transfer andother catalytic effects, aviation also makes jobs in other sectors more productive.

trillion

of global GDP

$2.4

3.4%

470,000Airport operators 3(work for the airport operator)

4,602,000Other on-airport 4(retail, car rental, government agencies such as customs

and immigration, freight forwarders and some catering)

2,272,000Airline staff 5(flight and cabin crews, executives, ground services,check-in, training, maintenance staff)

1,203,000Civil aerospace staff 6(engineers and designers of civil aircraft, engines andcomponents)

195,000Air navigation service providers 7(air traffic controllers, executives)

All igur es a re or 2 012, unless otherwi se s tate d, to give a si ngle set o data or one year. W here available, the latest igures are also noted.

04 / AVIATIONBENEFITS BEYOND BORDERS


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Aviation’s global economic impact (direct,indirect, induced and tourism catalytic) isestimated at $2.4 trillion, equivalent to 3.4%of world gross domestic product (GDP).

These gures do not include othereconomic benets of aviation, such as the

jobs or economic activity that occur whencompanies or industries exist because airtravel makes them possible, or the intrinsic value that the speed and connectivity ofair travel provides. Nor do they includedomestic tourism and trade. Including these would increase the employment and globaleconomic impact numbers several-fold.

Nearly 1,400 airlines operate a total eetof over 25,000 aircraft. They serve almost4,000 airports through a route network ofseveral million kilometres managed by 173air navigation service providers.

Air transport is a major global employerThe air transport industry generates a totalof 58.1 million jobs globally.

It provides 8.7 million direct jobs:airlines, air navigation service providers

and airports directly employ nearly threemillion people and the civil aerospacesector (manufacture of aircraft systems,frames and engines) employs 1.2 millionpeople. A further 4.6 million work in otheron-airport positions.

There are 9.8 million indirect jobs generated through purchases of goods andservices from companies in its supply chain.

Industry employees support 4.6 millioninduced jobs through spending.

Aviation-enabled tourism generatesaround 35 million jobs globally.

Air transport invests substantiallyin vital infrastructureUnlike other transport modes, the airtransport industry pays for a vast majorityof its own infrastructure costs (runways,airport terminals, air traffic control), rather

than being nanced through taxation andpublic investment or subsidy (as is typicallythe case for road and railways).

In 2012, airports invested $19.3 billionin construction projects, creating jobs and building new infrastructure.

The benets to society of research anddevelopment spending by the aerospaceindustry are estimated to be much higherthan in manufacturing as a whole — every$100 million of spending on researcheventually generates additional GDP benets of $70 million year after year.

trillion kilometres million hours

Going placesGlobal passenger split, international /domestic, billions 19

Asia-Pacic in frontRegional passenger traffic split 20

own by passengers (in 2013, it was5.7 trillion) 17

37.4millioncommercial ights worldwide 16 (in 2013,there were 36.4 million). Counting justscheduled airlines, there were 31 millionights in 2012 35

own by IATA airlines in 2012 18 billion passengerscarried by airlines 14 (in 2013, it was3.1 billion 15)

2.97 5.4 45

Domesticpassengers

Internationalpassengers

1,159

1,818

31.8%

Latin America & CaribbeanAfricaAsia-PacificEurope

Middle EastNorth America

2.3%

26.2%

7.6%

4.8%

27.1%

routesserved globally 1349,871

EXECUTIVE SUMMARY AND KEY FACTS / 05


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Air transport provides signicantsocial benetsAir transport contributes to sustainabledevelopment. By facilitating tourism andtrade, it generates economic growth, provides jobs, improves living standards, alleviatespoverty and increases revenues from taxes.

Increasing cross-border travel is a reectionof the closer relationships developing betweencountries, both from an individual perspectiveand at a country level. In the same way,eased restrictions on the movement of goodsand people across borders facilitates thedevelopment of social and economicnetworks that will have long-lasting effects.This improved ow of people and goods benets both the host and the originatingcountries, encouraging increased social andeconomic integration.

Air transport offers a vital lifeline tocommunities that lack adequate road or railnetworks. In many remote communities andsmall islands, access to the rest of the world —

and to essential services such as health care —is often only possible by air.

Aviation’s speed and reliability areperhaps most immediately apparent in thedelivery of urgently needed assistance duringemergencies caused by natural disaster,famine and war. Air services are particularlyimportant in situations where physical accessis problematic.

Air transport is working to mitigateits environmental impact

Airline operations produced 689 milliontonnes of carbon dioxide (CO ) in 2012 (and705 million tonnes in 2013), just under 2% ofthe total human carbon emissions of over 36 billion tonnes.

The aviation industry agreed in 2008 tothe world’s rst set of sector-specic climatechange targets. The industry is alreadydelivering on the rst target — to continue toimprove eet fuel efficiency by 1.5% per yearuntil 2020. From 2020, aviation will cap its netcarbon emissions while continuing to grow tomeet the needs of passengers and economies.

By 2050, the industry has committed toreduce its net carbon footprint to 50% below what it was in 2005.

Companies across the sector arecollaborating to reduce emissions using a four-pillar strate y of new technolo y, efficientoperations, improved infrastructure andmarket-based measures to ll the remainingemissions gap.

Modern jet aircraft are 75% quieter thanthe rst models that entered into service andeach new generation of aircraft continues thisdownward trend.

Over 1,500 passenger ights operatingpartially on sustainable biofuels have takenplace so far. It is expected that carbonreduction from moving to alternative fuelscould be up to 80% compared with traditional jet fuel.

Air transport will continue toprovide jobsForecasts suggest that, in 2032, there will be

over 6.5 billion passengers and aviation willsupport 103 million jobs and $5.8 trillion ineconomic activity.

However, if growth were to slow by just1%, the total number of jobs supported by theair transport sector (including air transportsupported tourism) would be over 12.4million lower than the base forecasts and thecontribution of the air transport sector to world GDP would be $661 billion (2012 prices)lower, with an additional $352 billion lostthrough lower tourism activity.

3,864

Commercial airlines 21

Air navigation service providers 24

Number of commercial aircraft in service 25

Airports with scheduled commercial ights 22 (there are 41,821 airelds in the world,including military and general aviation 23)

1,397

173

25,332Jetting offAircraft in commercial service, by type 2012 26

TurbopropsJets

5,231

20,101

Executive summary



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High occupancyAirlines utilise more of their seats thanother modes 31

C a r

C o a c

h T r

a i n

A i r c

r a f t

5.0

40%

60%

30%

79%

6.1

0

10

20

30

40

50

60

70

80

of jet fuel used by commercial operators.This equates to 72.2 billion gallons, oraround 220 million tonnes of Jet A 1 27

273

billion

billion litres

tonnes of carbon dioxide (CO )

Amount the world’s airlines paid for fuel(in 2013, it was $211 billion) 28

emitted by airlines (in 2013, it was 705 million tonnes) 29. This is 2% of the global human emissionsof 36 billion tonnes. Around 80% of aviation CO is emitted from ights over 1,500 kilometres inlength, for which there is no practical alternative form of transport

Improve 1.5%Aviation will improve its eet fuel efficiency by an average of 1.5% per annum between2009 and 2020.

StabiliseFrom 2020, net carbon emissions fromaviation will be capped through carbon-neutral growth.

Reduce 50%By 2050, net aviation carbon emissions will be half of what they were in 2005.

The air transport industry has madesignicant progress in reducing itsenvironmental impact:

CO emissions per seat kilometre

70%+ since rst jet aircraft.

Perceived noise

75%+ since rst jets. » Over ve billion tonnes of CO avoided

since 1990 through airlines spending $3trillion on 25,000 new aircraft.

» The industry has invested in newtechnolo y, better operations andinfrastructure improvements.

» Civil aerospace spends $20 billion peryear on R&D, 70% for fuel reductiontechnolo y.

» Sustainable aviation fuels could reduceCO footprint by 80%, over 1,500commercial ights have taken placeso far.

» Air traffic management modernisationcould save millions of tonnes of CO .

$210

Average aircraft occupancy (in 2013,it was 80%) 30, much higher than otherforms of transport79%

688,739,000

Climatetargets

Environmentalprogress

EXECUTIVE SUMMARY AND KEY FACTS / 07


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Air transport carries around 35% of worldtrade by value and only 0.5% by volume 32

High value, time sensitiveProportion of global trade transported by air 33

Landing zoneTop 10 airports by passenger movements, millions, 2012 38

By value

34.6%

0.5%

By volume

of freight handled by air in 2012 (in 2013,49.8 million tonnes were handled) 34

Scheduled freight tonne kilometres 35

Value of cargo handled by air in 2012 36

of international tourists travel by air 37

million tonnes

billion

trillion49.2

185

$6.4

52%

35%

Rank Airport Passengers Change

1 Hartseld-Jackson Atlanta International Airport 95.5 3.4%

2 Beijing Capital International Airport 81.9 4.1%

3 Heathrow Airport 70.0 0.9%

4 Tokyo International (Haneda) Airport 66.8 6.7%

5 O'Hare International Airport 66.6 -0.1%

6 Los Angeles International Airport 63.7 3.0%

7 Charles de Gaulle 61.6 1.1%

8 Dallas Fort Worth International Airport 58.6 1.4%

9 Soekarno-Hatta (Jakarta) International Airport 57.8 12.9%

10 Dubai International Airport 57.7 13.2%

Executive summary



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09

A globalindustry Aviation’s global economic, socialand environmental prole in 2012


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An economic engineAviation is a vital part of the increasingly globalised world economy, facilitating the growth of international trade, tourism andinternational investment, and connectingpeople across continents.

Direct impactsThe aviation industry itself is a major direct generator of employment and economic

activity — in airline and airport operations,aircraft maintenance, air traffic management,head offices and activities directly servingair passengers, such as check-in, baggagehandling, on-site retail, cargo and cateringfacilities. Direct impacts also include theactivities of civil aerospace manufacturersselling aircraft and components to airlines andrelated businesses.

The world’s airlines carry over three billionpassengers a year and 50 million tonnes offreight. Providing these services generates8.7 million direct jobs within the air transportindustry and contributes $606 billion to global GDP39.

Compared with the GDP contribution ofother sectors, the global air transport industryis larger than the pharmaceuticals ($451 billion), textiles ($223 billion) or automotiveindustries ($555 billion) and around half as big as the global chemicals ($1,282 billion) and

food and beverage ($984 billion) sectors 40.In fact, if air transport were a country, its GDP would rank it 21st in the world, roughly equalto that of Switzerland and more than twice aslarge as Chile or Singapore.

The air transport industry worldwidedirectly generated an estimated 8.7 million jobs in 2012.

» 2.3 million of those people (26% of thetotal) were in jobs for airlines or handlingagents (for example, ight crew, check-instaff, maintenance crew, reservations andhead office staff ).

» Another 470,000 people (5% of thetotal) worked for airport operators(for example, in airport management,maintenance and operations).

» 4.6 million jobs (53%) were on-site inairports, at retail outlets, restaurants,hotels, government agencies, etc.

» A further 1.2 million jobs (14%) wereemployed in the manufacture of civilaircraft (including airframes, engines,

systems and components). » Air navigation service providers

employed an additional 195,000people (2%).

Air transport also has important ‘multiplier’effects, which mean that its overallcontribution to global employment and GDP ismuch larger than its direct impact alone.

Indirect impactsThese include employment and activities ofsuppliers to the air transport industry —

for example, aviation fuel suppliers;construction companies that build airportfacilities; suppliers of sub-components usedin aircraft; manufacturers of goods sold inairport retail outlets; and a wide variety ofactivities in the business services sector (suchas call centres, information technolo y andaccountancy). Over 9.8 million indirect jobs globally are supported through the purchaseof goods and services by companies in theair transport industry. These indirect jobscontributed approximately $697 billion to global GDP in 2012.

Induced impactsThe spending of those directly or indirectlyemployed in the air transport sector supports jobs in industries such as retail outlets,companies producing consumer goods and arange of service industries (such as banks andrestaurants). Worldwide, nearly 4.6 millioninduced jobs globally are supported throughemployees in the air transport industry

A global industry Aviation’s global economic, socialand environmental prole in 2012

The global airtransport industrysupports 58.1 million jobs worldwideand contributes$2.4 trillion (3.4%)to global GDP

What we doDirect employment by air transport by segment, 2012 41

Civil aerospaceAir navigationservice providers

AirportsOther on-airportAirlines

53%

5%14%

2%

26%

Where we workDirect employment by air transport by region, millions, 2012 42

1.8

Latin America and CaribbeanAfricaAsia-PacificEurope

Middle EastNorth America

0.4

2.60.8

0.4

2.7



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(whether direct or indirect) using their incometo purchase goods and services for their ownconsumption. The induced contribution to global GDP is estimated at $324 billion in 2012.

It’s not just who’s on boardAir transport’s most far-reaching economiccontribution is via its contribution to theperformance of other industries and as afacilitator of their growth. These ‘catalytic’or ‘spin-off’ benets of aviation affectindustries across the whole spectrum ofeconomic activity. » Air transport is indispensable for

tourism, which is a major engine ofeconomic growth globally, particularly in

developing economies. » Air transport facilitates world trade,helping countries participate in the global market by increasing access tointernational markets and allowing globalisation of production.

» Air transport increases a country’sconnectivity which can help raiseproductivity, by encouraging investmentand innovation; improving businessoperations and efficiency; andallowing companies to attract high-quality employees.

» Air transport plays an especially pivotalrole in just-in-time global manufacturingproduction and in speeding freshproduce from agricultural communities indeveloping economies to markets in theindustrialised world.

These wider catalytic impacts are not includedin this fairly conservative analysis, due to thedifficulty of extracting the gures related toaviation from those relating to other sectors.The exception is the tourism industry, wherereliable data exist on the ow-on impacts andthese are explored below. However, thereare a range of businesses outside of tourism whose economic models rely on the speedand reliability of air transport — Amazon.comand other e-commerce websites rely on theexpress delivery services made possible byaviation. Further examples are explored inthis report.

Air transport stimulates tourismTourism makes a major contribution to the

global economy. It directly contributed$2 trillion to world GDP in 2012 and providedover 101 million jobs globally — 3.4% of totalemployment 43. By 2024, the World Travel &Tourism Council expects direct employmentin the tourism industry to be more than126 million people globally 44. When lookingat the jobs and GDP supported through theindirect and induced impacts of tourism, thegures are a magnitude higher at 261 million jobs (8.7% of employment) and $6.6 trillion,or 9.3% of the global economy 45. By 2024,

tourism could support some 347 million jobsand $11 trillion in GDP 46.Aviation plays a central role in supporting

tourism. Over 52% of international touristsnow travel by air. Tourism is particularlyimportant in many developing countries, where it is a key part of economicdevelopment strategies. In Africa, forexample, the jobs of an estimated 2.5 millionpeople directly employed in tourism aresupported by overseas visitors arriving byair, representing 30% of all tourism jobs inAfrica 47. In some island states, tourism can

Beyond the industryAviation’s global employment andGDP impact 2

GDP ($billion)

1,627

2,434

1,303

606 8.7 18.6 23.2 58.1 +

+

E m

pl o y m ent

( mi l l i on

s )

Aviationdirect

+ Indirect

+ Induced

+ Other catalytic

+ Tourism catalytic

A GLOBAL INDUSTRY / 11

Global aircraftprogrammes boostAsian high-techindustriesToday’s commercial aircraft are a vitalcatalyst to high-tech skills developmentthroughout the world. The Asia-Pacicregion, which leads global air trafcgrowth, has also been particularly

boosted by investment from major aircraftmanufacturers.

Boeing’s industrial footprint spansmajor Asia-Pacic economies and isexpanding to meet increases in thecompany’s commercial production.

More than 65 Japanese companiessupport Boeing programmes, accountingfor more than 40% — about 22,000 directand indirect jobs — of Japan’s aerospaceemployment. Japan builds 35% of the 787Dreamliner airframe and more than 20% ofthe 777. Boeing collaborates with Japaneseindustry and universities to developadvanced manufacturing technologies and

other innovations that will benet Japan’scurrent and future workforce.

Chinese companies supply every Boeingcommercial programme, from the verticaln and horizontal stabiliser for Boeing’sNext-Generation 737 and 747-8 to therudder, wing-to-body fairing panels andother components for the 787. Meanwhile,the aircraft maker has trained more than50,000 pilots, technicians, factory workersand other professionals in China’s fast-growing aviation industry.

The US manufacturer continues toexpand its South-east Asia supply chain.In 2013, Boeing and Hexcel Corporationexpanded their joint venture AerospaceComposites Malaysia (ACM) by 40%. ACM,which makes ight surfaces for Boeingcommercial aircraft, is expected togrow its workforce beyond the current950 employees.

Boeing has a global logistics hub inSingapore for spares distribution, andsupply chain management and technicalsupport teams throughout South-eastAsia. The plane maker also partners withIndonesia on commercial aviation safety,efciency and industry development.

INVESTMENT


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have an overwhelming inuence on thenational economy. St Kitts and Nevis, for

example, relies on the industry for 25.9% ofthe economy and a quarter of its jobs. In someCaribbean countries, tourism provides one ofthe few means of economic growth 48.

The contribution of air transport to tourismemployment and GDP: » Direct: 14.6 million direct jobs in tourism

globally are estimated to be supported bythe spending of foreign visitors arriving by air. This includes jobs in industriessuch as hotels, restaurants, visitorattractions, local transport and car rental, but it excludes air transport industry jobs.

» Indirect: A further 13.4 million indirect jobs in industries supplying the tourismindustry are supported by visitorsarriving by air.

» Induced: These direct and indirecttourism jobs supported by air transport generate a further 6.9 million jobs inother parts of the economy, throughemployees spending their earnings onother goods and services.

Including direct, indirect, and induced effects,air transport supports 35 million jobs withintourism, contributing around $807 billion ayear to world GDP.

Contribution to world tradeAs an important facilitator of internationaltrade, aviation promotes global economic growth and development. Forecasts suggestthat the world’s economies will become evenmore dependent on international trade overthe next decade. World trade is expected tonearly double, rising at more than twice the

rate of global GDP growth, with China, Indiaand other emerging markets leading the way.

Compared to other modes of transport,air freight is fast and reliable over greatdistances. However, these benets comeat a cost. Consequently, air freight is mostlyused to deliver goods that are light, compact,perishable and have a high unit value.

Today, air transport is a vital componentof many industries’ global supply chains,

used primarily for the transfer of time-sensitive goods. Rapid delivery is particularlyimportant to businesses whose customers arerunning streamlined production processesor who need urgent delivery of spareparts for machinery and equipment. High- value, lightweight and sensitive electricalcomponents are transported by air frommanufacturing facilities all over the world to be assembled.

Exporters of perishable products such asfood and owers (many of whom are locatedin developing countries) can only reach export

$6.4 trillion o goods were transportedinternationally by airin 2012.

Mobile partsApple’s global supply chain for the iPhone is made possible by air transport 52

A global industry

12

3 4

567

8

1011

9

1

2

3

4

Memory, Portland

Camera and compass, Santa Clara

GPS, WiFi and Bluetooth, Irvine

Audio codec, Austin andtouch screen, Dallas

5 Radio frequency, Woburn

6 Accelerometer, Geneva

7 Power management, Naburn andradio frequencey, Neubiberg

8

9

Display, Seoul

Radio modules, Kyoto

10 Assembly of screen and othercomponents, Chinese Taipei

11 Final assembly, Shenzhen

Global distributionfrom Hong Kong



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markets by air, providing steady employmentand economic growth to regions that benetfrom such trade. For example, it is estimatedthat 1.5 million livelihoods in Africa dependon such exports to the UK market alone 49.In Kenya, 90,000 jobs (and 500,000livelihoods) depend on the cut ower industry, which supports 1.6% of the national economy,

generating around $1 billion in foreignexchange each year 50. The pharmaceuticalindustry also relies on air transport fordelivery of time-sensitive medical supplies,particularly vaccines 51.

These key characteristics of air freightare most apparent in the data on the modesof transport used in world trade. Whileaccounting for less than 0.5% of the tonnage of global trade, air freight makes up over a thirdof the value of international trade.

Passenger air services’ rolein international tradePassenger air services are also vital forinternational trade development. Whiletechnologies such as videoconferencingcan be very helpful, many companies stillconsider face-to-face meetings essential for winning new business and developing clientrelationships. A recent survey 53 of over 2,200 business people found that 87% rate face-to-face meetings as essential for ‘sealing the deal,’and nearly all (95%) agreed that such meetingsare key to success in building long-term

relationships. More than half (52%) said thatrestrictions on the numbers of ights theytake for work would hurt their business.

In other recent surveys, corporateexecutives estimated that 28% of current business would be lost without in-personmeetings. Further, they estimate that roughly40% of prospective customers are converted

to new customers with an in-person meetingcompared to 16% without 54.

Paying our way Unlike other transport modes, the airtransport industry pays a vast majority of itsown infrastructure costs (runways, airportterminals and air traffic control), rather thanthese being nanced through taxation andpublic investment or subsidies (as is typicallythe case for road and railways). In addition,companies in the air transport industry

make signicant tax payments to nationaltreasuries. Aviation infrastructure costs arefunded through user charges (passengers andairlines) and airport commercial revenue.User charges, which totalled $92.3 billion in201156, are generally included in the price ofthe airline ticket or paid by passengers.

User charges are designed and appliedspecically to recover the costs of providingfacilities and services for civil aviation 57. Theseinclude the costs of providing airports and airnavigation services, including appropriateamounts for cost of capital and depreciation

Emerging fastProjected annual growth rate for international traffic by region, 2012 – 2032 55

0

1

2

3

4

5

6

7

8

W o r l d

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D e v e l

o p i n g

C o u n

t r i e s

S m a l l

I s l a n

d

S t a t e s

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e a n U n i o n

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5.4

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5.55.1


New aircraft: more jobs and cleanerproductionEvery time a new aircraft programme isannounced, the economic and industrialripples spread throughout the world.

As production ramps up for the latestaircraft from Airbus, the A350 XWB whichrst ew in June 2013, the number ofpeople joining the programme worldwide asdirect and indirect suppliers grows almostdaily. When it reaches its full productionrate, this single aircraft will account globallyfor 34,000 direct and 68,000 indirect jobs, or102,000 in total.

At the start of 2014, 12,000 peoplewere already working full-time on theproject even though the rst deliveriesare not scheduled until the end of 2014.Around 1,500 will be employed on the nalassembly line in Toulouse once productionreaches peak levels. But this is the nalstage in a vast production chain whichstretches around the world. The aircraft,like all modern planes, is a truly globalproduct — so even though the companyis headquartered in France for example,40% of Airbus procurement spendingon components and materials for allprogrammes goes to companies in the USA.

As well as adding jobs, skills andinvestments, the new aircraft will also boostcleaner production methods. Environmentalcriteria are important elements whenselecting suppliers and environmentalrequirements are introduced in contractualagreements. This means more compositeand fewer aluminium structures —advanced materials account for 53% of the

aircraft — new paint with fewer solventsand more energy-efcient manufacturingprocesses. At the A350 XWB nal assembly,22,000m 2 of solar panels will produce theequivalent of 55% of the total energy needsto power the production processes.

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of assets, as well as the costs of maintenance,operation, management and administration.In some cases, airport user charges areoffset by airport commercial revenues thatresult from the provision of airport facilities.

In 2012, airports worldwide spent around$19.3 billion on capital expenditure on newinfrastructure 58, building new capacity tomeet demand growth, improving existingfacilities to increase efficiency and buildingener y-efficient terminals. For example,the Port Authority of New York andNew Jersey has announced infrastructure works at two of its airports, La Guardia andNewark, which between them will generate2,000 construction jobs and over $500million in regional economic activity in the

16-month projects59

.In contrast, while road users pay fuelduties and vehicle excise taxes, most governments invest in new highways and inroad maintenance. While some countrieshave different approaches, user charges aretypically not applied except in the form of atoll charge on some highways.

In many parts of the world, rail services arealso heavily subsidised by national, regional orlocal governments. Between 2007 and 2009in Europe, state aid for rail services amountedto nearly $58 billion a year, compared to $440

million for aviation (funds used in most casesfor commercially unviable services to remotecommunities) 60. The cost of rail infrastructureis also state funded. For example, the latesthigh speed rail line in the UK is expected to

cost taxpayers some $67 billion when fullycompleted 61.

Whilst high-speed rail provides a veryefficient replacement for air services betweenheavily populated cities within four hourstravel time, the need to connect mid-sizedcities that cannot support high-cost high-speed rail infrastructure will mean airtransport always has a role to play. Highlyefficient turboprop aircraft can be ideal forsuch scenarios and in fact, 83% of turbopropights are between destinations less than 500

kilometres apart62

. Of course, for distancesover 1,500 kilometres, air travel becomes a vital link.

Stimulus for greater productivity Arguably, the largest economic benet ofincreased connectivity comes through itsimpact on the long-term performance of the wider economy through enhancing the overalllevel of productivity. A rise in productivityin rms outside the aviation sector comesthrough two main channels: through theeffects on domestic rms of increased access

to foreign markets and increased foreigncompetition in the home market; and throughthe freer movement of investment capital and workers between countries.Improved connectivity:» opens up new markets, boosts exports

and at the same time increasescompetition and choice in the homemarket from foreign-based producers,encouraging rms to specialise in areas where they possess a comparativeadvantage;

» can drive down costs and prices for rmsthat have a comparative advantage (suchas innovative products and services), beneting domestic consumers inthe process;

»

opens domestic markets to foreigncompetitors, which can also be animportant driver for reducing unitproduction costs, either by forcingdomestic rms to adopt best internationalpractices in production and managementmethods or by encouraging innovation;

» can benet domestic customers throughcompetition by reducing the mark-upover cost that rms charge theircustomers, especially where domesticrms have hitherto enjoyed some shelterfrom competition.

Working connectionsConnectivity and labour productivity 65

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Improved connectivity can further enhance aneconomy’s performance by making it easierfor rms to invest outside their home country, which is known as foreign direct investment(FDI). FDI necessarily entails some movement

of staff: whether for technical know-how,management oversight, or servicing andmeeting customers. Increased connectivityalso allows rms to exploit the speed andreliability of air transport to ship components between plants in distant locations, withoutthe need to hold expensive stocks of inventoryas a buffer.

Less tangibly, but just as important,improved connectivity increases passengertraffic and trade. This, in turn, can lead toa more favourable environment for foreign

rms to operate in — greater links to theoutside world often drive a more conducive global business environment. In a survey of625 businesses in ve countries, respondentsconsidered the absence of good air transportlinks to be one of the major determiningfactors in not making an investment. Onaverage, 18% of rms reported that the lackof good air transport links had affected theirpast investment decisions. Of the investmentsthat were affected, 59% were made in otherlocations with better air services, 18% wentahead anyway, but with signicantly higher

costs, while in 23% of cases no investment was made 63.

Measuring the impact on productivity A number of recent studies have attempted to

quantify the long-term impact on a country’sGDP that results from an improvement inconnectivity. This is not straightforward. Giventhat the supply-side benets of connectivitycome through promoting internationaltrade and inward investment, any impact islikely to manifest itself gradually over time.This protracted adjustment makes it verychallenging to disentangle the contributionthat improved connectivity has had on long-term growth from the many other factorsthat affect an economy’s performance. This

issue is reected, however, in the wide rangeof estimates that studies have reached forconnectivity’s impact on long-term growth.

Based on a conservative estimate 64, a 10%improvement in global connectivity (relativeto GDP) would see a 0.07% per annumincrease in long-run GDP. Given the increasein global connectivity due to air transport overthe last couple of decades, Oxford Economicsestimates this impact to be worth over $200 billion to global GDP.

Analysis shows a strong positiverelationship between higher connectivity

Who’s on board?Propensity to travel, 2012 70

Niger

IndiaSlovenia

Estonia

Indonesia ChinaBrazil

Russia KuwaitThailand

FinlandNetherlands

IsraelSaudi ArabiaMalaysia Austria

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Seychelles BahrainHong Kong

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GE makes majorskills investmentin IndiaDeveloping ever-more fuel-efcient aircraftis one of the most competitive technicalchallenges in today’s aerospace world.Companies are searching the globe forthe most talented engineers and researchscientists to give them that vital competitiveedge which will translate into billions ofdollars of new orders.

Some are doing more than searching.The John F. Welch Technology Centerin Bangalore, India, is aircraft enginemanufacturer GE’s rst and largestintegrated, multidisciplinary research anddevelopment centre outside the UnitedStates. Over 4,500 scientists, researchersand engineers are working there ondeveloping a range of new concepts withinthe aviation, energy and related businesses.

GE opened the $175 million researchcentre in 2000. Since then, the centre’sresearch scientists have produced anumber of vital technology breakthroughs.They have made a major contribution todeveloping an advanced combustor systemwhich reduces emissions of oxides ofnitrogen and improves fuel burn efciencyby 20% over legacy designs. The newcombustor features in the GEnx engine,which powers the new Boeing 787.

The centre has benetted greatly fromlocal access to India’s huge resource ofhighly-trained personnel and now has over1,000 patent applications to its credit. Thecentre works closely with the four other GEfacilities that form the GE Global Researchnetwork, comprising facilities in the US,

Germany, China and Brazil. In addition,GE is also investing in a $200 millionmanufacturing plant due to be openedat Chakan, near Pune, in 2014 to build arange of aviation and turbo machinerycomponents for the global market.

SKILLS DEVELOPMENT


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to the global network — as a proportion ofGDP — and labour productivity. Developingand transitional economies typically havelow connectivity relative to their GDP andalso relatively low labour productivity. At the

top right of the chart on the previous pageare the developed Asian, North Americanand European economies with high levels ofconnectivity and labour productivity 65.

InnovationAir transport is a technolo y-advancedindustry heavily involved in the productionof high-specication products which drivesresearch and development in a number ofareas. This focus on research and innovationacross the sector not only leads to more

efficient aircraft technolo y and operationalpractices — with associated environmental benets — but also helps build researchcapacity at universities and skills acrosssociety. The benets to society of researchand development spending by the aerospaceindustry are estimated to be much higher thanin manufacturing as a whole — every $100million of investment into research eventually generates additional $70 million in GDP yearafter year 66.

There is concern from aerospace industryleaders about the future threat of a lack

of science, technolo y, engineering andmathematics graduates entering the labourpool. This is prompting resources to befocused on encouraging the next generationof engineers.

Research conducted for the AerospaceIndustries Association (AIA) suggests thataerospace contributes almost $100 billion inexport sales to the USA’s economy and everydollar invested in aerospace yields an extra$1.50 to $3 in economic activity. The inuencethat aerospace has on the rest of the USA’shigh-tech economy is also considerable.

This explains why organisations such asAIA actively highlight initiatives to recruit andretain high quality workers, both to createnew aerospace-centric jobs and maintain the

current levels of activity.

The cost of air travelA key driver in the growth of passenger traffichas been the steady decrease in the real costof air travel. Since 1970, the real cost of airtravel has been reduced by over 60%, throughderegulation of the aviation market in the1980s, the development of more fuel-efficientaerospace technologies and the introductionof low cost carriers. It is now more affordablefor more of the population to travel by air.

In the United States, for example, the cost

of a return ight from Boston to Los Angelesfell by 89% between 1941 and 2012, whilstthe ight time is nine hours (and 11 stops)shorter 67.

Supporting socialdevelopmentPeople and businesses use air transportfor many reasons. Individuals rely on it forholidays and visiting friends and family; while businesses use air transport for meeting clientsand for the speedy and reliable delivery ofmail and goods, often over great distances.

One of the most important economic benets generated by air transport is theintrinsic value generated for its consumers,

passengers and shippers. With its speed,reliability and reach, there is no closealternative to air transport for many of itscustomers. This means that many are likely to value air services more highly than simply theprice they are willing to pay for the ticket. Butthis added value will vary from ight to ightand from consumer to consumer, making itdifficult to measure 69.

A conservative estimate from OxfordEconomics shows this additional benet to beabout a third of a passenger’s typical airfare.The additional benets are even higher for

A global industry

Peanuts for peanutsWorld airfare in real terms, 1970 — 2012 70

201220092006200320001997199419911988198519821979197619731970

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$ p e r t o n n e k i l o m e t r e s

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air freight shippers, reecting the lack ofalternatives to the speed and reliability ofair transport.

Visiting friends and relatives

A measured rise in the number of travellers visiting friends and relatives reects modernfamily demographics (with families spreadover the world) and an increasingly globalised workforce. It further indicates strongercross-border ties at both the individual andcountry level.

This is particularly visible within theEuropean Union, where the free movement of goods and people between its member stateshas developed social and economic networksthat have long-lasting effects. It also brings

benets to both the host and originatingcountries in the form of increased social andeconomic integration. The free movementof goods and people has also helped providethe cohesion and links needed to develop aregional identity and ensure the continueddevelopment of the European Union.

Labour mobility, which is a key contributorto long-term economic performance, isenhanced by air travel as it allows migrants toreturn home more often and allows friendsand family to visit them in their new home.Also, once migrants return home, they have

established new social (or family) networksin their country of stay, which will be moreeasily maintained via air travel. Diasporascan be an important source of trade, capital,technolo y, and knowledge for countries

of origin and destination. According to theUnited Nations, more than 230 million peoplelive outside their country of birth 71.

One specic way in which air travel benets economies is by strengtheningthe contact between migrants and theircountry of origin. Labour mobility is likelyto encourage migrants to send money homeand even to use trips home as an opportunityto take money across borders. For somecountries, particularly in the developing world, these so-called ‘remittances’ are an

important source of revenue.Although remittances are sometimesinterpreted as a sign of large emigration froma country, with possible negative effects suchas a ‘brain drain’, studies that attempt tolook at the overall effects of remittances ndthat they signicantly benet the recipienteconomies: » According to the World Bank, in 2012

official remittances were up to threetimes the level of official developmentassistance ows to developing countries 72,reaching an estimated $401 billion 73.

Sustainabletourism revitalisesCape VerdeeconomyFor many years, life for the 500,000inhabitants of Cape Verde, a chain of 15volcanic islands situated in the AtlanticOcean 460 kilometres west of Senegal,was tough. Droughts, soil erosion, poor

agricultural conditions and a lack ofdrinking water forced many inhabitantsto earn their living abroad. Even today,more than 80% of the country’s food hasto be imported.

But thanks to the efforts of the hoteland aviation industries, Cape Verde’seconomy has been turned around in thelast few years. The islands have invested insustainable tourism projects and this hasrevitalised the previously fragile economy.According to an African DevelopmentBank report in 2013, tourism and ancillaryactivities remained the driving force of theeconomy in 2012, accounting for around

30% of GDP and 90% of total exports.Tourism, the main driver for economicgrowth, has successfully tapped into naturalresources such as biodiversity, landscapeand the environment. The growth continues:in 2013 tourism revenues were up 27% overthe previous year.

Major enhancements to Sal and PraiaAirports on the largest islands, plus newairports in Boa Vista and Sao Vicente, havehelped make the islands an exciting newtourist destination for visitors from Americaand Europe; and have allowed thousandsof Cape Verdeans to stay on the islands toearn a decent wage, rather than having totravel overseas.

The islands have also become someof the global leaders in renewable energy,working towards generating at least 50% ofelectricity from renewable sources by 2020.

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» There is evidence that remittances riseduring crises, natural disasters andconicts, thereby contributing to thestability of the home economy. Forinstance, remittances to Indonesia rose

during the 1997 Asian nancial crisis 74. » International remittances reduce the

level and depth of poverty. Accordingto World Bank research, a 10% increasein international remittances from eachindividual migrant will lead to a 3.5%decline in the share of people livingin poverty 75.

» Each dollar of remittances generates$3 or more additional economicactivity as money is spent to build orimprove housing, on locally produced

goods or invested in equipment andsmall businesses 76.

Highly skilled workforce Jobs in air transport cover a wide range ofactivities and skills. These include: » skilled work by technicians building and

maintaining aircraft; » a diversity of technical engineering

jobs from aircraft and engine design tocomponent production;

» air traffic control and airspacedesign planning;

» logistics for airlines and airports; » complex information technolo y systems

on board aircraft and in areas such as baggage handling systems design;

» service industry support jobs such as

chefs in catering companies; » creative positions in design and

marketing; » customer services occupations in airline

ticketing, check-in, cabin crew and retail; » manual labour on airelds; » air traffic controllers and pilots; » emergency response personnel at

airports; and » leadership, management and

executive roles.As this list indicates, many roles in the air

transport sector require a highly qualied workforce and a signicant amount oftraining. Value-added per employee in theair transport sector (direct employees,excluding non-airside activity at airports) generates 3.6 times as much value-addedper employee than the economy as a whole —indicating a more productive workforce.This is particularly true for the largepopulations of Asia-Pacic, Africa andLatin America. In addition, growth in theaerospace sector is helping to driveinnovation and skills development in

countries that have not normally beenassociated with aircraft manufacturing.

Such investment by companies across the world is vital to help grow the industry, as well as for customer service. For example,

aircraft engine maker CFM Internationalmust support an ever-growing eet that todayincludes more than 26,000 engines deliveredto airlines and the company has investedin training locations around the world. Justin China, the Aircraft Engine MaintenanceTraining Center, Guanghan City, has trainedmore than 10,000 mechanics since it openedin 1996. Through this school, CFM not onlysupports a highly skilled Chinese workforceenhancing the country’s aviation safety, butalso demonstrates that sustainability goes

beyond just products and technolo y.CFM also provides a showcase with SichuanServices Aero Engines Maintenance Company(based in Chengdu, China) a world-classengine overhaul facility, in partnership withAir China, on how an aircraft engine businesscan be a catalyst for global growth. In additionto a highly skilled 300-person workforce, thefacility also supports a network of Chinesesub-contractors.

With the projected growth in air trafficand in order to replace industry professionalsretiring over the next decades, there will be

Thanks, Western UnionTop 10 countries by totalremittances, 2012 75

Reliant on familyTop 10 countries by remittancesas a % of GDP, 2012 77

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A global industry

Sign upPilot and technician requirements,20-year forecast 80

Region Pilots Technicians

Africa 16,500 15,900

Asia-Pacic 192,300 215,300

Europe 99,700 108,200

Latin America 48,600 47,600

Middle East 40,000 53,100

North America 85,700 97,900

CIS81 15,200 18,000

World 498,000 556,000



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a need to recruit and train thousands of newstaff for jobs across the sector. Whilst someon-airport occupations are not specialistaviation jobs (such as retail), there are anumber of positions across the sector that

require skill sets specic to aviation. AirportsCouncil International (ACI) is working withthe International Air Transport Association(IATA) and International Civil AviationOrganization (ICAO), as well as a numberof universities to build professional skillsin the industry. Importantly, through theACI Fund and Developing Nations AirportsAssistance Programme, they are also workingon developing skills in emerging economies,training over 1,500 staff members who canpass on those skills to colleagues at their

home airports79

.Airlines project a need for more staff,particularly in highly skilled roles such aspilots and maintenance technicians. Civilaerospace companies are working to developscience, technolo y, engineering and mathsskills in the education system, as they forecasta need for the future engineers and designersof aircraft.

As part of an investment drive in educationin Brazil, aircraft maker Embraer’s specialistEducation and Research Institute inaugurateda new unit of the Embraer High School in

2013, a model school focused on academicexcellence for students coming from thepublic school system. In 2014, the second classof 120 students entered the school, totalling240 students during this second successful

year of operation. The Colégio Embraer —Casimiro Montenegro Filho Unit was built inthe city of Botucatu, where Embraer also hasa plant in Brazil. The new school, with a $2.5million investment from Embraer, functionslike the rst unit in São José dos Campos, which has already graduated 2000 studentssince its inception in 2002 and has remainedamong the best in São Paulo state rankings.The school’s pupils have regularly achieved100% approval in Brazilian college entranceexams, with more than 80% of them going to

top ranking public universities.

A lifeline to communitiesFor areas of the world with non-existentor poor road infrastructure, aviation is thecommunity’s lifeline. In the Russian, Canadianand Scandinavian far north, and in manyother remote communities and small islands,access to the rest of the world and to essentialservices such as health care is often onlypossible by air.

Over 1,000 communities in northernRussia are inaccessible by road; the number

Getting paidWages and benets for USA scheduled airlines, 2011 78

US average annual basepay, all occupations: $43k

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$63,000$81,000 $58,000 $56,000 $52,000 $64,000

Aviation communitysupports TyphoonHaiyan victimsWhen Typhoon Haiyan hit the centralPhilippine islands in November 2013,almost 13 million people’s lives werechanged overnight. Vast quantities ofemergency supplies were urgently neededin locations which were cut off from landlinks or scattered across some of thecountry’s 7,100 islands.

Some things only aviation can do.The United Nations maintains a networkof Humanitarian Response Depots with aglobal hub at Dubai International Airportand regional hubs around the world,including Subang in Malaysia. Within a fewdays, more than 1,000 tonnes of relief andsupport supplies – tents, kits for newbornbabies, hygiene kits and mobile storageunits – had been own to the Philippinesby the World Food Programme from Dubai,Malaysia and Italy.

Meanwhile the global aviationcommunity also moved quickly to supportthe relief effort.

Japan Airlines made an immediate$100,000 donation and provided freetransport of relief goods and aid personnelfrom Japan to Philippines. Air Asia tooprovided free ights for relief workers.FedEx ew tonnes of supplies on itsfreighter aircraft. British Airways sent a 747full of aid to the area. United Airlines set upa partnership with AmeriCares, AmericanRed Cross and Operation USA, offeringan immediate donation and a one-timemileage bonus to airline customers whodonated to the relief.

The Airbus Corporate Foundationorganised a series of relief ights fromToulouse. One of these, a mission withPhilippine Airlines, used the delivery ightof the airline’s new aircraft, loaded with 19tonnes of water sanitation equipment andfood from Action Contre la Faim.

After the hurricane, Philippines Airlinespartnered with Boeing and World Vision toferry 18,000 kilograms of tarpaulins andrope on a 777-300ER delivery ight fromSeattle to the Philippines. The supplies,including 69 kilometres of rope and 3,000tarpaulins, lled about 75% of the cargohold on the aircraft.

AID LIFELINES



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An economic

engine...

...that supports socialdevelopment

A global industry A global industry



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Apprenticeshipscheme capturesyoung talentBritish Airways (BA) recruits between 120and 200 apprentices each year and over thecoming decade plans for 1,400 new youngapprentices to join the airline. Throughthe scheme, BA offers apprentices theopportunity to be paid to work while gainingand rening the essential skills they needto launch their careers. Apprentices enterdisciplines such as engineering, businesssupport, world cargo, operations, nancialservices, information technology, projectmanagement and at the head ofce,gaining nationally-recognised qualicationsand workplace training in a dynamic andchallenging industrial environment.

In 2012, a total of 120 apprenticesentered the engineering industrialprogramme, a three year apprenticeshipwhich is run in conjunction with fourcolleges – Brooklands, Farnborough,Kingston and Uxbridge. The rst year,in full-time college, is spent gainingtheoretical and practical skills in aircraftmaintenance, with four weeks experienceat Heathrow. Fixed term contracts are thenawarded to successful applicants, in whichthey will work four days a week at Heathrowand spend one day per week in continuingcollege work.

In partnership with Uxbridge College,BA launched two IT apprenticeship coursesin 2012, one in software engineering and asecond in IT operations, aimed at nding‘the IT talent of the future’.

In addition to the apprenticeshipinitiative, BA’s Community Investment

Team has welcomed more than 80,000 localschool children through its CommunityLearning Centre. The centre helps toprepare children for the workplace inmany ways, including language training,developing customer service, IT skills,general workplace behaviours and anunderstanding of the environment.

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in Alaska is more than 200. ThroughoutNorway, thanks to an extensive network ofregional airports and airline services, 99.5%of the remote population is able to travelto Oslo and back on the same day; around

400,000 patients are transported annually onscheduled ights between their homes andhospitals. Small island states across the worldrely on air transport to do business, connectto education and healthcare and provideaccess beyond the sporadic and infrequent boat services that would otherwise be theironly connection with the world. In countriessuch as Indonesia, spread across 6,000inhabited islands, air transport is reliedupon for contact between communitiesand business links.

Helping in times of needAviation’s speed and reliability is perhapsmost immediately apparent during timesof natural or humanitarian emergency. Airservices play an essential role in assistanceto regions facing natural disasters, famineand war. They are particularly importantin situations where access is a problem,delivering aid, search and rescue servicesand medical supplies. Whilst some ofthese efforts are undertaken by military orspecialist air services, a great deal of the

support is provided by the commercial airtransport system. Airports become stagingpoints for rescuers and relief supplies, cargodeliveries and refugee transfers. Airlines alsoassist with the evacuation of people stranded

by natural disasters.

Environmental leadershipSustainable growth calls for us to meettoday’s needs without depleting theresources needed for future generations,or causing undue environmentaldegradation. The industry is conscious ofaviation’s environmental impacts and itscontribution to climate change. Efforts tominimise these play an important role in

aircraft design and engine manufacturing.Furthermore, every aspect of currentoperations both in the air and on the ground is being examined to see how theindustry can be made cleaner, quieter andmore carbon-efficient.

Airline operations produced 689 milliontonnes of carbon dioxide in 2012 (and705 million tonnes in 2013 82), 2% of thetotal human carbon emissions of over 36 billion tonnes 83. Around 80% of all aviationemissions are from ights over 1,500kilometres, for which there is no

practical alternative transport mode.All industries, governments and individualshave a responsibility to reduce their carbonoutput and with aviation, the incentive istwo-fold. Not only can aviation reduce its

environmental footprint, but with airlinesspending $210 billion on fuel in 2012(31% of an airline’s operating cost 84), theindustry has a very good reason to reducefuel consumption and has very aggressiveprogrammes in place to do just that.

It was with condence that the aviationindustry collectively agreed in 2008 to the world’s rst set of sector-specic climatechange targets. The industry is alreadydelivering on the rst target — to continue toimprove eet fuel efficiency by an average

of 1.5% per year until 2020. From 2020,aviation will cap its net carbon emissions while air traffic continues to grow to meetthe needs of passengers and economies.By 2050, the industry has committed toreduce its net carbon footprint to 50% below what it was in 2005.

These targets will be reached using arange of different efficiency opportunitiesand by working collaboratively with thesupport of governments. The industry hasa collective four pillar strate y for reducingits climate change impact:

Planning aheadMapping out the industry commitments

A global industry

No action

Known technology, operationsand infrastructure measuresBiofuels and additionalnew-generation technologiesEconomic measuresNet emissions trajectory‘No actions’ trajectory

C O 2 e m i s s o n s i n d e x e d t o 2 0 0 5

Carbon-neutralgrowth

-50% by 2050

2005 2010 2020 2030 2040 2050

1. improve fleetfuel efficient by1.5% per yearfrom nowuntil 2020

2. cap netemissions from2020 throughcarbon-neutralgrowth

3. by 2050,net aviationcarbon emissionswill be half whatthey were in 2005.



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01 Technolo y Air travel has always relied on advances inefficiency. The very nature of ight dictatesthat aircraft must be as light as possible;and fuel is heavy. Airline economics dictate

that costs have to be reduced; and fuel isexpensive. Since the beginning of the jet age,aircraft have reduced fuel use per passengerkilometre by well over 70% and these effortscontinue. In fact, compared to those rst jets,aircraft can now either carry two and a halftimes as many passengers or y two and ahalf times further for the same aircraft take-off weight. Of the estimated $20 billion spenteach year on research by aircraft and enginemanufacturers 85, more than 70% is used formeasures that will improve fuel efficiency.

This research and technolo y includes newaircraft construction materials, aerodynamiccomponents and new airframe designs. Theseefforts are most dramatically displayed in thestep-change improvements made when new generations of aircraft enter service — typicallyeach new aircraft is between 15% and 25%more fuel-efficient than the model it replaces.Airframe manufacturers are currently at apeak of new aircraft model introductions, working with engine makers to deliver newultra-efficient models such as the Boeing 787Dreamliner and 747 8, Bombardier CSeries,

ATR600, Embraer E2 Jet and Airbus A380 andA350 XWB already, or due to enter service inthe next few years.

But it is not just brand new models thatcan reduce fuel burn — aircraft types in

service already are routinely modied toincrease efficiency. The two largest aircraftmanufacturers have model upgrades dueto enter service, with Airbus’ A320neo andBoeing’s 737 MAX set to provide furtherstep-changes in performance. In March2014, Embraer rolled out the rst E175aircraft featuring a range of aerodynamicimprovements that reduce fuel burncompared to the previous production aircraft.The modications include the introductionof new wingtips, systems optimisation and

streamlining of aerodynamic surfaces. Themodied E175 aircraft recorded impressiveresults during several months of performancetrials, with fuel consumption on a typical ight6.4% lower than the original E175.

Sustainable alternative fuelsThe industry is also making signicantprogress to develop sustainable alternativefuels for aviation. From a virtual dream in2007, to regulatory approval being grantedfor passenger ights in 2011, the developmentof alternative aviation fuels has shown

Widening gapEfficiency increases in air transport, indexed to 1990 84

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CO2 emissionsDistance flown (RTK’s)

5 billion tonnesof CO 2 avoided


Airlines – keylinks in thepharmaceuticalsupply chainFor the global pharmaceutical industry,transporting vaccines and medicinesto where they are needed is a delicateprocess. Many drugs, particularly life-saving vaccines, need to be used quickly

and transported in a strict temperature-controlled environment. In fact, over$250-billion worth of temperature-sensitivemedicine is sold each year.

According to the Seabury Group, 0.5million tonnes of pharmaceutical productsare transported by air every year — against3.5 million tonnes by sea. But the value ofthis air freight is around $213 billion againstthe $56 billion value of sea freight —and it is increasing every year by around6% a year.

Aviation is often the only choice todeliver these supplies where they areneeded. The World Health Organisation

(WHO) estimates that over 20 millionchildren are under-vaccinated and remainat risk of being infected by vaccine-preventable diseases, but by 2015, some 4-5million child deaths a year will be preventedby immunisation programmes.

According to WHO in its GlobalVaccine Action Plan 2011–2020: As newvaccines (for example, against dengueand malaria) become available andunderutilised vaccines (for example, thoseagainst cholera, human papillomavirus,rabies, rotavirus, rubella and typhoid) areadministered more widely, supply andlogistics systems — already burdened —will face an even greater needfor innovations.

Cargo airlines and logistics companiescontinue to invest heavily in temperature-controlled air-freight depots at airportsso these life-saving vaccines and medicinescan be sped swiftly to the point ofgreatest need.

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remarkable progress in recent years. Over1,500 passenger ights have taken place so farand the consensus is that the lifecycle carbonsaving from moving to alternative fuels could be up to 80% over that of traditional jet fuel.

The types of feedstock being investigatedfor alternative aviation fuels include non-foodcrops that can be grown in areas which do notimpact food crops or water use, innovativeuse of by-products such as household waste,excess gases from industrial processes andthe waste from agriculture and forestry, andmicro-algae. The aviation industry took carefulnote of the negative impacts that came about when the rst generation of biofuels wasdeployed in road transport, and is determinednot to repeat those mistakes.

The major challenge now remains theproduction of large quantities of sustainably-produced alternative fuels at a commercially-competitive cost to airlines. Current pricesindicate these cost around three times asmuch as conventional jet fuel. This is expected

to fall as production capacity is increased beyond the current small-scale projects.

02 OperationsThose aircraft already in the eet can also be made more efficient as new technologiesand materials are developed. Adding wingtip devices to the end of an aircraft’s wingshas saved over 15 billion litres of jet fuel sofar, with the devices being retro-tted to over5,000 aircraft 86. New generations of winglet— the ‘split scimitar’ 87 from Aviation Partners

Boeing and the ‘sharklet’88

from Airbus —have between them sold over 2,500 pairs forinstallation on new aircraft. On one airlinealone, the introduction of these devices isexpected to reduce emissions by 645,000tonnes of CO 89.

Another area providing signicant savingsis weight reduction through new cabincongurations, lightweight seats and newequipment. By replacing its cargo containers with new lightweight versions, one SouthAmerican airline will cut CO emissions by10,000 tonnes a year 90. At least eight airlines

have given their pilots iPads which can replaceheavy paper charts. On one airline alone, this will reduce emissions by 3,600 tonnes a year 91.

A number of airports and airlines aretrialling the use of ‘green departures’, allowingpilots to take-off and climb to the optimalcruising altitude in one smooth, continuousascent. This is in contrast to the traditionalmethod of climbing to the cruising altitudein several steps. By using this new departuremethod at Copenhagen Airport, some 10,000tonnes of fuel and 32,000 tonnes of CO weresaved in one year alone 92. And airlines arealso working on new procedures for movingaircraft on the ground — either taxiing tothe runway on one engine, or utilising newdevices to drive the aircraft using electricpower, rather than engine power.

New fuel-saving procedures for approachroutes into airports are being trialled,especially continuous descent operations(CDO), where an aircraft undertakes a gradual,continuous, approach with minimum thrust

— rather than via the conventional series ofstepped descents. Savings of up to 150,000tonnes of fuel a year, or 500,000 tonnes ofCO , could be made in Europe alone if CDOapproaches were more widely adopted 93. Thenoise footprint of a CDO is also smaller thanconventional approach procedures.

03 InfrastructureThe next generation of air trafficmanagement (ATM) network-enabledtechnologies are based on the Single

European Sky ATM Research programme(SESAR) in Europe and the Next GenerationAir Transportation System (NextGen)programme in the USA. They will imposeefficiency by maturing and implementingATM technologies and procedures.

Satellite-based and on-board precisionnavigation systems allow air navigationproviders to re-design airspace andprocedures. These allow aircraft to yoptimal fuel- and time-saving routes, nolonger needing to zig-zag over land-basednavigational aids into and out of airports.

These new departure and arrival routes havereduced departure delays by more than2.5 minutes per ight at Atlanta HartseldAirport 94 since their introduction. Annualfuel savings are estimated at $34 million, with cumulative savings of $105 million from2006 through 2008 95.

The €2.1 billion 96 investment in theSingle European Sky could deliver a 12%reduction 97 in environmental impact aloneas it saves between 8 and 14 minutes ofight time, 300 500 kilograms of fuel, and948 1,575 kilograms of CO per ight 98. TheUSA’s Federal Aviation Administration (FAA)estimates that NextGen will reduce delays by 35 40% in 2018 compared with today’ssystems 99. And every minute of delay savedalso means a reduction in fuel use. SESARand NextGen will enable air traffic controlto evolve further, freeing the aircraft to yat its most efficient prole possible whileachieving new levels of safety in the air andon the ground.

By working together with airlines,airports and manufacturers, air navigationservice providers are developing commonprocedures to ensure aircraft are yingthe most efficient route through take-off,cruise and landing. As part of the SESARprogramme, a project called TOPFLIGHThas demonstrated that using all the toolsavailable to ANSPs, including continuousclimb and exible airspace, can save aroundhalf a tonne of CO per ight 100. On thesame routes, Canadian ANSP NavCanada

has recently launched a joint venture withsatellite provider Iridium to use data signalsfor surveillance of ights over the busyNorth Atlantic. This will be a major step inallowing more active management of thisairspace which sees 1,200 ights a day, with NavCanada estimating savings of some328,000 tonnes of CO annually, through being able to use the most optimal routesand altitudes 101.

Flexible routes can also be deployed,allowing pilots and airline operations teamsto take advantage of the very latest weather

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and wind data to plot the most efficientight path, sometimes altering course mid-

ight to save even more fuel. The iFlexproject led by IATA reduced ight-time by upto 17 minutes when deployed on the Atlantato Johannesburg route, saving up to seventonnes of CO per ight.

The challenge now is to take the resultsof these various projects and make them aneveryday occurrence across the network.

04 Market-based measuresDespite progress by the industry on reducingits emissions through the rst three pillars,

they will not be sufficient to meet the goal of carbon-neutral growth from 2020.Therefore, at least for a period of time, there will be a need to turn to a market-basedmeasure to meet that cap on aviation’s COemissions. The industry has argued since2008 that any market-based measure for airtransport must be global in scope, to reectthe global nature of the industry.

The standard approach for dealing with greenhouse gas emissions from most partsof the global economy is enshrined in theUnited Nations Framework Convention on

Climate Change (UNFCCC) 102, of which theKyoto Protocol is a subsidiary mechanism.

The Kyoto Protocol provided for limits onemissions to be placed on the developed world, while the developing world is notsubject to such restrictions, in order forthese economies to develop. This approach,known as common but differentiatedresponsibilities, is not the most appropriatetreatment for a global and homogenousindustry such as aviation, where airlinescompete on the same routes using the sameequipment. Different approaches appliedto different carriers could very quickly

lead to market distortion and a lack ofenvironmental integrity.The industry has been urging

governments to back the industry plan forreducing emissions and to agree to develop asingle, global market-based measure for theaviation sector. At the 38th ICAO Assemblyin 2013, despite political challenges,the industry’s suggestion was taken upand agreement was reached amongst governments to develop a global measure,to be settled at the next ICAO Assembly in2016 and be ready for implementation from

Running on greenIt may not grab the headlines as much theannouncement of a new aircraft but ‘theelectric green’ aircraft taxiing system underdevelopment by Honeywell and Safran willsignicantly improve an airline’s operationalefciency by reducing fuel and other taxirelated costs, while providing environmentalbenets by slashing the carbon and otheremissions created during taxi operations.

The two companies have set up a jointventure, EGTS International, to developan autonomous electric pushback andtaxiing system for the Airbus A320 familyof aircraft. The new company has signedan agreement with aircraft maker to offerthe new system as the ‘eTaxi’ option on theaircraft. e-Taxi would allow the aircraft’spilots to push-back from the gate withouta tug, taxi-out to the runway and return tothe gate after landing without operating themain engines, using the aircraft’s auxiliarypower unit to power electric motors tted tothe main landing gear wheels.

By tting this new system aircraft

operators will cut their fuel bill — andCO2 emissions — by up to 4% per trip andspeed up airport operations, according toEGTS International, as they will no longerhave to rely on pushback tractors to movethe aircraft from the airport terminal gateon to the taxiways. Taxiing-related carbonand nitrogen oxide emissions will be cut bymore than half. Pilots will keep full controlof their aircraft’s speed and direction duringtaxi operations.

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2020 103. The work to design such a scheme isnow taking place through the ICAO process.

These advances in environmentalperformance illustrate the concerted effortsthe aviation industry is making to reduce itsenvironmental impact in the skies. However,it is also important to recognise the progressmade on the ground.

Ener y-efficient terminal building designoften takes advantage of sophisticatedenvironmental control technolo y to regulatelighting, cooling and heating within the

airport. Most new airports are built usingLEED certication 104 and a number of airportshave installed on-site renewable ener ysources such as wind turbines, photovoltaicpanels and ground heat pumps. The solarpanels being installed at Kuala LumpurInternational Airport will cut CO emissions by 18,000 tonnes per year 105. As majortransportation hubs, many airports also havesignicant intermodal transport exchanges.Heathrow Airport in London, for example,has extensive public transport links, with

over 40% of passengers arriving by publictransport 106. Many airports also encourage on-airport staff to either take public transport orhave organised carpooling schemes.

A large number of airports now providexed electrical ground power units. Theseplug the aircraft directly into the mainspower so they do not use fuel to run on- board systems such as air conditioning whilesitting at the airport gate. At Zurich Airportalone, installing these units on 50 gates hasresulted in 33,000 tonnes of CO reducedannually. Furthermore, many airports are

taking advantage of hybrid, natural gas orelectric vehicles for use by ground crews.

NoiseModern jet aircraft are 75% quieter thanthe rst models and each new generationcontinues this downward trend. Whileeach new model has reduced its noisefootprint signicantly, the number of aircraftmovements has grown and the sensitivity ofpeople living under ight paths to perceivednoise has also increased. However, according

to the FAA, the number of people negativelyimpacted by aircraft noise in the UnitedStates decreased from seven million in 1975to fewer than 300,000 in 2009, despite the volume of ights more than doubling duringthat time 107. This trend is being replicatedaround the world: not only do aircraft get quieter, but airports and air trafficcontrollers work to provide operationalnoise mitigation measures and local governments work with the aviation industryto more appr

2014 Aviation Benefits Beyond Borders

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