Aviation Economic

Benefits
IATA ECONOMICS BRIEFING No 8
Measuring the economic rate
of return on investment in the
aviation industry
IATA Economics Briefing No 8:
AVIATION ECONOMIC BENEFITS

Mark Smyth
Brian Pearce

IATA, July 2007

Contents
00 Foreword by Giovanni Bisignani
page 03

01 Executive Summary
page 04

02 Report Outline
page 10

03 Productivity and Economic Growth

page 12

04 Aviation Connectivity
page 16

05 Connectivity and Economic Growth

page 20

06 Investment Examples
page 26

07 Policy Implications
page 30

08 Summary
page 32

ANNEX A: THE ECONOMETRIC MODEL

00 Foreword

Investment in aviation helps

to open a countrys economy
to global markets and op-
portunities. It can lead to an
improvement in its long-term
economic performance.
The aviation industry facilitates greater global travel, IATA and the aviation industry are committed to meeting
economic links and trade. It is a key factor in connecting current and future demand for air passenger and cargo
a country to the global economy. It provides greater traffic in a sustainable and environmentally responsible
opportunities for travel and tourism. It connects firms to manner. We are fully engaged in the development
larger potential sales markets, to more efficient supply and implementation of technological, operational and
chains and to greater investment opportunities. It helps to economic processes to meet this. But we must not lose
improve productivity levels, to the benefit of the national sight of the substantial benefits that the aviation industry
economy. offers to the global economy. Sustainable growth not
artificial constraints is the best way to maximise the
This report demonstrates how investment in the aviation benefits for all countries while continuing to meet our
industry can create a significant economic return environmental responsibilities.
over and above the returns received directly by users.
In particular, it shows how the incremental benefits
of aviation investment are greatest for developing
economies. It can offer them significant and speedy
economic return, providing an important step in their
economic development and integration into the global Giovanni Bisignani - Director General & CEO, IATA
economy.

The wider economic returns must not be ignored in debates

about future aviation development and investment. They
represent the additional social and economic value of air
transport that would be lost completely if future aviation
growth was constrained or prevented. Consideration of
aviation investment projects will rightly take into account
the wider environmental costs involved. However, a
balanced approach must ensure that the wider economic
benefits are included too.
01 Executive

Summary
Air transport can play a key role in
economic development and in supporting
long-term economic growth. It facilitates
a countrys integration into the global
economy, providing direct benefits for users
and wider economic benefits through its
positive impact on productivity and growth.
Economic growth is determined by the resources available to a nation in the
form of labour, energy, materials and capital and the productive way in which
these resources are used. Productivity can vary according to a number of factors,
the most important of which are generally considered to be education, research and
development and the level of capital assets available to each worker. However, this
report provides new evidence that connections to the global air transport network
and the advantages these provide for businesses create a key infrastructure asset
that enhances productivity, and improves economic performance.

Scope of the report

A previous report by IATA1 highlighted the significant wider economic benefits that
are created through improved links to the global air transport network. Its survey of
firms in five different countries showed the importance of good air transport links for a
firms sales, efficiency and investment. It also included a high-level statistical analysis
of the links between connections to the global network and economic growth in the
European Union. This report takes the previous analysis a step further.

IATA worked closely with InterVISTAS Consulting to develop a detailed statistical

analysis of the relationship between a countrys connectivity to the global air transport
network and its level of productivity. The analysis encompasses a wide range of 48
countries including both developed and developing economies and across a ten-
year period, 1996 to 2005. The results are applied to specific investment examples
to show the significant wider economic returns that can be created through the
development of aviation infrastructure.

1 IATA (2006), Airline Network Benefits, available at www.iata.org/economics.

 01 - Aviation Economic Benefits 05

CONNECTIVITY AND PRODUCTIVITY

Global economic growth is a key driver of growth in air This report analyses the relationship between connectivity
traffic demand. However, while air traffic demand has and productivity. Aviation connectivity is a measure
increased as economies have grown, air transportation which reflects the range and economic importance of
itself can be a key cause and facilitator of economic destinations, the frequency of service and the number
growth. Not only is the aviation industry a major industry of onward connections available through each countrys
in its own right, employing large numbers of highly skilled aviation network. Based on an analysis of 48 countries
workers, but more importantly it an essential input into the over nine years, there appears to be a strong positive link
rapidly growing global economy. Greater connections to between higher connectivity to the global network as a
the global air transport network can boost the productivity proportion of GDP and labour productivity (see Chart 1).
and growth of economies by providing better access to Developing or transition economies are typically at the
markets, enhancing links within and between businesses bottom left of the chart. They have low connectivity relative
and providing greater access to resources and to to their GDP and also relatively low labour productivity. At
international capital markets. the top right of the chart are the developed Asian, North
American and European economies with high levels of
connectivity and labour productivity.

Chart 1: Labour Productivity vs Connectivity/GDP

Among developing economies there appears to be a clear
positive relationship between higher levels of connectivity
and higher levels of labour productivity, and hence higher
GDP and living standards. For developed countries, there
appears to still be a positive relationship, but with smaller
incremental impacts once a threshold level of connectivity
as a proportion of GDP is reached.

The economic rate of

return of aviation investment
The report uses statistical results to estimate the economic (significantly higher than for Canada). Kenya, with the
rate of return of a few examples of aviation investment highest increase in connectivity and a larger economy
projects. These examples demonstrate that investment in than the other examples, enjoys the highest annual
aviation can create a significant economic rate of return. economic rate of return of 59%. For the other developing
These returns are in addition to the direct returns earned economies the annual economic rates of return range
by investors and users. from 16% to 28%. These are still strong rates of return,
but are more comparable with the rate of return in Canada
For example, an investment of C$1,805 million at (19.3%).
Vancouver airport was estimated to have led to a 5.4%
increase in connectivity for Canada as a whole. As such, Developing countries face capital costs, especially for
this raised Canadas long-term productivity by 0.04%. new aircraft, that are similar to those faced by developed
Assuming that the number of hours worked remains countries. As such, though the boost to GDP is higher
constant, this implies an annual boost to Canadian GDP of in proportional terms for developing economies, the
C$348 million (an economic rate of return of 19.3%). economic rates of return on investment for some of the
examples are similar to that of Canada because the size
The economic rate of return can also be estimated for of their GDP is relatively low and capital costs are still
aviation investment examples in several developing high. Nevertheless, the available economic return is still
economies (see Table 1). The estimated long-term boost high and provides a strong justification for investment in
to productivity and GDP ranged from 0.2% to 0.42% the aviation industry.

Table 1: Economic Rates of Return from Aviation Investment

Kenya Cambodia Jordan El Salvador Jamaica

Investment 351 538 360 488 168
(US$ million)
Increase in national 59% 46% 55% 35% 28%
connectivity / GDP
Impact on GDP (%) 0.42% 0.32% 0.39% 0.25% 0.20%
Impact on GDP (US$ million) 209 100 100 85 26
Annual Economic Rate 59% 19% 28% 16% 16%
of Return (%)
 01 - Aviation Economic Benefits 07

Estimating the relationship between

connectivity and PRODUCTIVITY growth
An econometric model was used to derive the rela-
tionship between connectivity and labour productivity
(see Annex A). The model identifies and quantifies the
relationship between connectivity and productivity while
controlling for other factors that may influence pro-
ductivity, such as education levels, research and devel-
opment, capital spending, institutional and regulatory
factors. Assuming input levels remain fixed, a 1%
increase in productivity translates into a 1% increase in
long-run GDP

The key results derived from the statistical model are:

A positive link between connectivity and A positive impact from R&D. A higher level of
productivity. The model shows that connectivity expenditure on research and development is shown
has a statistically significant relationship with to have a positive impact on productivity. R&D helps
labour productivity levels. It shows that a 10% to develop new production methods and knowledge,
rise in connectivity, relative to a countrys GDP, allowing more output to be produced from a similar
will boost labour productivity levels by 0.07%. level of inputs.

A greater impact for developing countries. Other factors can constrain productivity in
The relationship between connectivity and productivity some countries. For developed countries (e.g. the
is logarithmic (i.e. based on percentage changes in US and UK) there is little difference in productivity
both values), rather than linear. This suggests that levels beyond those that are explained by differences
investments in air transport capacity in developing in capital spending, education, R&D and connectivity.
or transition countries, where connectivity is currently However, for some developing countries (e.g. India)
relatively low, will have a much larger impact on their the country specific indicator highlights other factors
productivity and economic success than a similar level (i.e. institutional or social) that can act as a constraint
of investment in a relatively developed country. on productivity.

Capital investment has the greatest impact

on productivity. Investments in the overall capital
stock are shown to have a strong positive impact
on productivity levels. A 1% rise in capital spending
per worker is found to increase labour productivity
by 0.37%.

The results are consistent with previous studies undertaken for the telecoms and IT industries. Air transportation
has a smaller impact on productivity than the Information and Communications Technology (ICT) sector, where a
10% increase in ICT investment can lead to a 0.5-1.2% increase in productivity2 . However, this is to be expected, as
investment in ICT has been substantial and has acted as a key driver of productivity growth over the last 25 years. The
impact of investment in aviation is lower, but is still high and can provide significant additional economic benefits.

The estimated impact for aviation connectivity is lower than estimated in the previous IATA report on Airline Network
Benefits. This analysis looked just at EU economies and found a 10% rise in connectivity, relative to a countrys GDP,
boosted total factor productivity by 0.9%. By adopting a high-level, top-down approach, the estimates in the previous
study may have picked-up some of the additional impacts associated with wider investment or country-specific factors.
The analysis adopted in this report uses a more comprehensive database across a wider range of countries, allowing
for a bottom-up approach that can more closely identify the impact of each individual variable. Nevertheless, it shows
investment in aviation can deliver economic rates of return that are much higher than for many other public or private
investments.

2 T.M.
Harchaoui and F. Tarkhani (2004), Whatever Happened to U.S.-Canada Economic Growth and Productivity Performance in the Information
Age?, Statistics Canada Research Paper.
Key policy implications
This report provides new evidence that greater con-
nections to the global air transport network can boost a
countrys productivity and economic performance. These
results lead to the following key implications for aviation
policy makers:

1. Investment in aviation can generate significant 3. Liberalisation can also help to support
wider economic benefits greater connectivity
There are significant and positive benefits generated Airline liberalisation can further increase demand
by investment in aviation, particularly in developing and ensure that the services providing increased
economies. By increasing a countrys connections to connectivity are sustainable over the long-term.
the global air transport network, investment in aviation It provides the commercial freedom necessary for
can boost productivity and economic growth. airlines to adjust capacity appropriately to meet changes
in market demand. By way of example, the growth in air
2. Wider economic benefits must be included services between Poland and the UK since 2003 has
in policy appraisals increased connectivity as a proportion of GDP by 27%
The wider economic benefits available from for Poland, whereas the increase in the already well-
investment in aviation infrastructure and services served UK was a much smaller 0.5%. These changes
should be included in any project appraisal. If these provide an estimated long-term boost to Polands
benefits are excluded, it will underestimate the potential productivity of US$634 million per annum. The UK
social and economic gains from a project and could see also benefited, with an estimated boost to its GDP
much-needed investment projects either delayed or not of US$45 million per annum.
undertaken. The wider social and environmental costs
4. The wider economic benefits help to boost
of aviation investment are rightly included in a project
competitiveness
appraisal but the wider economic benefits also need
to be included if the appraisal is to be balanced Greater aviation connectivity and the improvements
and comprehensive. in productivity and GDP growth it can provide can
also help to boost a countrys competitiveness. By way
of illustration, the World Economic Forum (WEF) has
developed a Global Competitiveness Index for the travel
and tourism sector3. The WEFs index incorporates many
of the factors necessary to develop connectivity and
create wider economic benefits in terms of productivity
and economic growth. There is a clear positive relationship
between a countrys connectivity and its performance in
the WEF index.

3 See WEF (2007), The Travel & Tourism Competitiveness Report 2007: Furthering the Process of Economic Development
02 Report Outline

Access to the global air transport network

is a key infrastructure asset for any country.
It has a positive influence on economic
development and growth.
 02 - Aviation Economic Benefits 11

This report provides new evidence of the positive impact

that greater connections to the global air transport
network can have on a countrys economic performance.
IATA worked closely with InterVISTAS Consulting to
develop a detailed statistical analysis of the relationship
between a countrys connectivity to the global air
transport network and its level of productivity. The
analysis is across a wide range of countries including
both developed and developing economies and across
a ten-year period, 1996 to 2005. The results are applied
to specific investment examples to show the significant
wider economic returns that can be created through the
development of aviation infrastructure.

Productivity and economic growth The links between connectivity and economic growth
Chapter 3 discusses the importance of productivity Chapter 5 shows the key results from the statistical
improvements for long-term economic performance. It analysis of the relationship between connectivity,
outlines how improvements in productivity (i.e. using less productivity and long-term economic growth. It shows
resources to produce the same output or producing more how increasing connectivity can have a positive effect
output with the same level of resources) are central to the on productivity and growth, with the greatest potential
long-term competitiveness and expansion in productive impact among developing economies.
potential of an economy.
The economic return on aviation investment
Measuring connectivity
Chapter 6 applies the key results to examples of
Chapter 4 outlines how a countrys connections to investment in aviation infrastructure in several countries.
the global air transport network can be defined and It demonstrates how a positive and significant economic
measured. It compares the level of connectivity across rate of return over and above that earned by direct
a range of countries, both in absolute terms and as a users can be generated through investment.
proportion of GDP levels.
Policy implications
Chapter 7 discusses how aviation investment and
other policies can be used as a central part of a
countrys economic development strategy. Greater
connectivity can provide significant benefits, for users,
firms and the wider economy.

Chapter 8 provides a summary and conclusions.

03 Productivity and

Economic Growth
Increases in labour and total factor
productivity are key components of long-
term improvements in economic standards
and growth. They allow an economy to use
existing resources more effectively and
to expand its productive potential.
 03 - Aviation Economic Benefits 13

The importance of productivity

Productivity is a general term referring to the amount Therefore, factors that contribute to an improvement
of economic output (i.e. goods and services) generated in productivity levels also have a direct impact in terms
by a given quantity of inputs. These inputs, or factors of increasing the long-run productive potential of
of production, can include labour, capital, energy and an economy, to the benefit of all stakeholders in the
materials. Productivity growth refers to the ability to economy. For example, if increased air service levels
produce the same amount of output using fewer inputs, increase productivity by 1% then, assuming input levels
or to produce more output using the same amount of remain fixed, long-run economic output (GDP) will also
inputs. increase by 1%.

Economic growth and living standards are strongly

driven by a countrys productivity. Knowledge, institutions
and assets that enable a nation to produce more from
Measuring productivity
its own supply of labour, energy, materials and past Productivity can be measured in several ways, though
savings will directly raise living standards and economic the most cited and widely recognised measure is labour
growth. Improved productivity is the key to sustaining and productivity. This is the ratio of output produced to
improving higher standards of living. For example, Paul the amount of labour input used in its production. It is
Krugman, professor of economics at Princeton University, calculated as:
argues that:
Labour productivity
Productivity isnt everything, but in the long run it is =
almost everything. A countrys ability to improve its Output level / Number of labour hours
standard of living over time depends almost entirely on
its ability to raise its output per worker. In the US, World
War II veterans came home to an economy that doubled For an individual country, output is typically measured
its productivity over the next 25 years; as a result, they by its level of GDP. If data on the total number of labour
found themselves achieving living standards their parents hours worked is not available, the total number of people
had never imagined. Vietnam veterans came home to an in employment is used instead.
economy that raised its productivity less than 10 percent Labour productivity has its strengths and weaknesses as
in 15 years; as a result, they found themselves living no a performance measure. At the national, macroeconomic
better - and in many cases worse - than their parents.4 level, labour productivity is a key driver of higher per capita
Productivity growth is also the key to long-term economic incomes. It is viewed as the critical measure of economic
growth. It is the means by which countries can be lifted performance. However, at the level of an individual firm,
out of poverty and generate wealth and economic security, the maximisation of labour productivity may not always be
for example: the optimal approach. For example, by making enormous
and expensive investments in technology, firms can
Over long periods of time, small differences in rates of achieve higher levels of labour productivity (e.g. by
productivity growth compound, like interest in a bank replacing labour with capital, but still delivering the same
account, and can make an enormous difference to a level of output). But if the higher annual capital costs are
societys prosperity. Nothing contributes more to reduction greater than the cost savings achieved from lower labour
of poverty, to increases in leisure, and to the countrys levels, the firm may be worse off overall.
ability to finance education, public health, environment
and the arts.5

4 Paul Krugman 1992, The Age of Diminished Expectations: US Economic Policy in the 1980s, MIT Press, Cambridge, p. 9.
5 Alan Blinder and William Baumol 1993, Economics: Principles and Policy, Harcourt Brace Jovanovich, San Diego, p. 778.
Therefore, an alternative productivity measure can be used, As a result, many governments (or their statistical
called Total Factor Productivity (TFP), that considers not agencies) only collect and report data on labour
only the productivity of labour but also the use of capital, productivity and other productivity measures based on a
energy and other materials. It is the ratio of output to a single input factor.
measure of the total inputs used in producing an amount
of output. It is calculated as:
The relationship between labour
Total Factor Productivity (TFP)
=
productivity and TFP
Output level / Aggregate input quantity index For the purposes of the analysis in this report, a standard
measure of productivity was required across a range
of countries. Given that several of these countries did
The aggregate input quantity index adds up all of the
not report TFP measures, a national labour productivity
factors of production that are used to produce the level
measure was chosen instead. While not as broad as TFP,
of output. However, while TFP is a more comprehensive
it is still a critical measure of economic performance.
measure, it is more difficult to measure. As such, only a
However, to ensure that any results derived from the
few countries regularly report TFP calculations, with no
analysis were still valid, it was important to prove that
estimates available for the level of TFP in many countries.
labour productivity and TFP are closely related and move
There are two main reasons for this:
in similar directions.
Firstly, the process for calculating TFP is fairly
Measures of both labour productivity and TFP are available
complex. Labour productivity can be measured by a
for fourteen developed economies through the IMF and
simple ratio of output to labour hours. However, TFP
OECD (consisting of countries in Western Europe, North
requires greater data requirements across a wide
America, Japan, Australia and New Zealand. Using this
range of input values, several of which can be
sample over the period 1996 to 2005, Chart 2 shows
difficult to measure.
that the measures of TFP and labour productivity are
Secondly, economists and accountants differ strongly and positively correlated (i.e. when TFP is higher
significantly in how they measure capital inputs. labour productivity is higher and vice versa). Indeed, the
Accountants adopt a depreciation policy and record correlation coefficient between the two measures is 0.86
interest payments and capital rentals. Economists (a measure of 1 reflects a perfect correlation). Therefore,
believe that this under-represents the amount of over time, changes in productivity captured by the labour
capital actually used by a firm or by an economy. productivity measure will be very similar to those captured
The depreciation policy (e.g. straight-line depreciation) by the TFP measure.
may reflect the level of depreciation across the asset
life, but may not accurately reflect the actual amount
of depreciation at a point in time. In addition, accoun- Chart 2: Labour productivity and TFP
tants do not measure the cost of equity capital or
how taxation can affect the cost of capital.
03 - Aviation Economic Benefits 15
04 Aviation

Connectivity
Connectivity measures the access
available from a countrys major airports
to the global air transport network. It is
a qualitative measure of a countrys air
transport services, from the point of view
of its businesses. The higher the level
of connectivity the greater the level of
access to the global economy.

Measuring connectivity
IATA has developed a connectivity indicator to measure the degree of integration a
country has within the global air transport network. It is a measure of the number
and economic importance of the destinations served from a countrys major airports,
the frequency of service to each destination and the number of onward connections
available from each destination. Connectivity increases as the range of destinations
increases, the frequency of service increases and/or larger hub airport destinations
are served.
 04 - Aviation Economic Benefits 17

A connectivity indicator was developed for a range of For example, Atlanta airport, as the worlds largest airport,
countries using the SRS Analyser and OAG databases is given a weighting of 1 while Paris CDG airport, which
of scheduled airline flights. The countries chosen cover handles 61% of the number of passengers handled by
different regions and levels of economic development, Atlanta, is given a weighting of 0.61. Therefore, if an
split into one of the following categories: airport has 1000 seats available to Atlanta it is given
a weighted total of 1000. But if also has 1000 seats
North America and Western Europe: available to Paris CDG, these are given a weighted total
Austria, Belgium, Canada, Cyprus, Denmark, Finland, of 610.
France, Germany, Greece, Ireland, Italy, Luxembourg,
Malta, Netherlands,Norway, Portugal, Spain, Sweden, The weighted totals are then summed for all destinations
Switzerland, United Kingdom, United States. (and divided by a scalar factor of 1000) to determine the
connectivity indicator. Therefore, the connectivity indicator
Developed Asia: can be represented as:
Australia, Japan, New Zealand.
(Frequency * Available Seats per Flight *
Emerging Europe: Weighting of destination airport) / 1000
Bulgaria, Czech Republic, Estonia, Hungary, Latvia,
Lithuania, Poland, Romania, Russia, Slovakia, Slovenia, A higher figure for the connectivity indicator represents a
Turkey. greater degree of access to the global air transport network.
It is a qualitative indicator, reflecting the importance of not
Transitioning Asia and South America: just serving a large number of destinations, but serving
Argentina, Brazil, Chile, Hong Kong, Israel, Korea, those destinations that have a high economic importance
Mexico, Singapore. and the ability to access a large number of onward
connections for the business passenger. For example,
Emerging Asia and Africa:
as shown in Table 2, in 2005 London Heathrow served
China, Egypt, India, South Africa. around twice as many destinations as Johannesburg
airport and five times as many destinations as Nairobi
The connectivity indicator is based on the number of
airport. However, Heathrow served a larger number of
available seats to each destination served for the first
major airports, also with higher frequencies, giving the
week in July in each year between 1996 and 2005.
UK significantly greater access to the global air transport
The number of available seats to each destination are
network than South Africa and Kenya. This is reflected
then weighted by the size of the destination airport (in
in the connectivity indicator, with the value for London
terms of number of passengers handled in each year).
Heathrow over 7 times greater than for Johannesburg
The weighting for each destination gives an indication
and over 26 times greater than that for Nairobi.
of the economic importance of the destination airport
and the number of onward connections it can provide.

Table 2: A Measure of Connectivity to the Global Air Transport Network, 2005

Number of Destinations Number of Available Connectivity Indicator

Served Seats per week

Chicago OHare 222 1,056,350 290.9

London Heathrow 197 988,056 267.3
Beijing 145 595,908 106.4
Copenhagen 128 297,489 63.9
Johannesburg 97 221,540 34.9
Budapest 89 119,645 28.6
Nairobi 37 51,477 10.1
Connectivity by LOCATION
The level of connectivity will depend to some extent on By way of illustration, Chart 3 shows the connectivity
the size of a countrys economy and by the number and indicator in 2005 for each country within the sample. The
size of the businesses that are served by its air transport United States has by far the highest connectivity, at over
infrastructure. Large economies will naturally have more five times larger than next most connected country, due
destinations and available seats, but quantity is not in part to the high economic importance of connections
necessarily a measure of quality. A given level of available within its domestic air network and its strong economic
seats and connectivity will provide a larger opportunity and ties and trade links with other regions. In general, large
stimulus to productivity if it is supporting a smaller rather developed countries have the highest connectivity
than larger number of businesses. Ten new destinations values, while small developing countries have the lowest
to economically significant countries are likely to bring connectivity values.
more benefit to the business served by Nairobi airport
than those already well served by London Heathrow By contrast, Chart 4 shows the connectivity indicator
airport. As such, it is the level of connectivity relative to in 2005 for each country, divided by its level of GDP.
Gross Domestic Product (GDP) is the key measure to be Singapore, Malta, Cyprus and Hong Kong have highest
examined in this report in terms of its relationship with connectivity levels, relative to the size of their economies.
productivity and economic growth. The United States, which had the highest absolute
connectivity indicator, ranks 26th after adjusting for GDP.

Chart 3: Connectivity by location, 2005.

Chart 4: Connectivity per $billion of GDP, 2005.

It is connectivity relative to the size of

the economy that matters
04 - Aviation Economic Benefits 19
05 Connectivity

and Economic
Growth
Greater connectivity to the global air
transport network is a key driver of
economic development and growth.
It connects businesses and people to
the global economy, opening up a wider
range of economic opportunities.
 05 - Aviation Economic Benefits 21

The wider economic benefits

of connectivity
The wider economic benefits available from air transport than be lost completely. For developing economies, the
are often overlooked in policy and investment appraisals. argument is weaker as many resources are underutilised
The benefits of the air transport sector to a countrys and would not be substituted to other industries in the
economy are often measured in terms of its direct absence of aviation.
contribution to GDP, through profits and the payments
made by airlines for wages and for other inputs. In Nevertheless, the traditional approach to appraisal
addition, several appraisals consider the direct and does not identify and quantify the significant additional
indirect output and employment benefits created along economic benefits created by aviation, those that clearly
the industrys supply chain, as well as indirect benefits cannot be replicated by other industries in the absence of
in other industries from additional expenditure (e.g. the air transport. These wider benefits relate to the global air
benefits for tourism). transport network and access to it (see Chart 5). Aviation
is a key infrastructure asset. It takes business travellers
However, in a developed economy close to full to meet existing and new customers, expanding markets
employment it could be argued that in the absence of the and generating economies of scale and scope. It enables
aviation industry, many of the benefits it creates would be businesses to access the best sources of supply around
substituted to another industry that would also employ the world for high value-added materials, components,
resources and buy other goods and services rather skills and ideas.

Chart 5: The wider economic impacts of connectivity

Greater Access to the

Global Air Transport
Network

Widens the Facilitates efficiency Fosters greater

available market improvements competitiveness

Higher Higher potential Access to Access to new Increases Ability to exploit

Revenues returns from a wider base production inward and economies
investment of suppliers techniques outward of scale
investment
 Connectivity and labour
productivity
A previous report by IATA6 highlighted the significant IATA worked closely with InterVISTAS Consulting to
wider economic benefits that are created through improved develop a detailed statistical analysis of the relationship
links to the global air transport network. Its survey of between a countrys connectivity to the global air transport
firms in five different countries showed the importance of network and its level of productivity. The analysis is across
good air transport links for a firms sales, efficiency and a wide range of countries, as listed in Chapter 4, and
investment. In particular, greater connections to the air across a ten-year period, 1996 to 2005.
transport network provided potential benefits through:
Based on our sample, there appears to be a strong positive
Facilitating world trade. link between higher connectivity to the global network as
Air transport connects businesses to a wide a proportion of GDP and labour productivity (see Chart
range of global markets, providing a significantly 6). Developing or transition economies are typically at the
larger customer base for their products than would bottom left of the chart. They have low connectivity relative
be accessible otherwise. It is particularly important to their GDP and also relatively low labour productivity. At
for high-tech and knowledge-based sectors, and the top right of the chart are the developed Asian, North
suppliers of time-sensitive goods. American and European economies with high levels of
connectivity and labour productivity. Cyprus, Hong Kong,
Boosting productivity across the economy. Malta and Singapore have been excluded from the
By expanding the customer base, air transport chart because their geographic circumstances (i.e. small
allows companies to exploit economies of scale and island or city states) lead them to have very high levels
to reduce unit costs. By exposing domestic companies of connectivity relative to the size of their economies
to increased foreign competition, it also helps to drive and their populations. The reasons for their high level
efficiency improvements among domestic firms in of connectivity may depend on other factors, such as a
order to remain competitive. strong dependency on international trade (particularly
Singapore and Hong Kong), tourism (Malta and Cyprus)
Improving the efficiency of the supply chain.
or political reasons (Cyprus).
Several industries rely on air transport to operate their
just-in-time production operations, providing greater Above a certain level of productivity (US$20 of GDP
flexibility within the supply chain and reducing costs per labour hour worked) there is a wide spread of
by minimising the need to hold stocks of supplies. connectivity levels. This may well be due to a wider
variation in these nations in other factors determining
Enabling inward and outward investment.
the level of labour productivity. It may also signal that
Access to extensive air transport links allows domestic
there is a threshold effect above which an increase in
firms to identify and manage investments in foreign-
the connectivity of already well-connected developed
based assets and encourages foreign firms to invest
economies has a smaller marginal impact on productivity
in the domestic economy.
than it does for developing countries. As such, among
Acting as a spur to innovation. developing economies there appears to be a clear
Extensive air transport links facilitate effective positive relationship between higher levels of connectivity
networking and collaboration between companies and higher levels of labour productivity, and hence higher
located in different parts of the globe. Access to a GDP and living standards. For developed countries, there
greater number of markets also encourages greater appears to still be a positive relationship, but with smaller
spending on research and development by companies, incremental impacts once a threshold level of connectivity
given the increased size of the potential market for as a proportion of GDP is reached.
future sales.

These wider supply-side benefits can have a positive

impact on labour productivity and, therefore, on long-term
economic growth. If they are sufficiently significant in size
it should be possible to observe a positive relationship
between rising economic connectivity and rising labour
productivity.

6 IATA (2006), Airline Network Benefits, available at www.iata.org/economics.

 05 - Aviation Economic Benefits 23

Chart 6: Connectivity and labour productivity

Quantifying the relationship

As a next step, InterVISTAS undertook an econometric i) Determining the statistical relationship
analysis of the data to assess the causal link between
A model was developed to determine the relationship
connectivity and productivity and its level of magnitude.
between labour productivity and key potential causal
Other factors that have an important influence on labour
factors (capital investment, research and development,
productivity are built in to the analysis to ensure that
education expenditure and connectivity as a proportion of
the additional causal impact of connectivity can be
GDP). The model used the data for all countries within our
identified and quantified. The econometric analysis
sample, across the period 1996 to 2005. The statistical
uses the same type of model as that used by earlier
function of the model and its key results are outlined in
studies investigating the impact of investment in the ICT
Annex A.
(information and communications technology) industry
on national productivity and economic growth7.

7 See InterVISTAS (2005), Enabling Canadas Economic Potential: ICT and National Economic Performance.
The key results derived from the statistical model are: ii) Determining the causality of the relationship

A positive link between connectivity and The next step of the analysis was to determine that,
productivity. The model shows that connectivity though there is a positive link between connectivity and
has a statistically significant relationship with productivity, it is greater connectivity that causes greater
labour productivity levels. It shows that a 10% productivity and not vice versa. A Granger causality test
rise in connectivity, relative to a countrys GDP, was undertaken, details of which are outlined in Annex A.
will boost labour productivity levels by 0.07%.
The analysis found that there was no evidence that
A greater impact for developing countries. changes in productivity directly cause changes in
The relationship between connectivity and productivity connectivity, a finding that would undermine the statistical
is logarithmic (i.e. based on percentage changes in relationship found above. However, it was also unable to
both values), rather than linear. This suggests that provide conclusive evidence that the direction of causality
investments in air transport capacity in developing is solely from changes in connectivity directly causing
or transition countries, where connectivity is currently changes in productivity. To some extent, the test may be
relatively low, will have a much larger impact on their affected by the connectivity indicator being expressed
productivity and economic success than a similar level as a proportion of GDP in other words changes in
of investment in a relatively developed country. productivity and GDP are already reflected in the indicator
itself.
Capital investment has the greatest impact
on productivity. In line with economic theory, However, the results of the test may also demonstrate
investments in the overall capital stock are shown the dynamic, virtuous cycle benefits available from higher
to have a strong positive impact on productivity levels. connectivity. As such, an increase in connectivity can
Higher levels of capital per worker reflect a greater initially lead to improved productivity and higher GDP.
use of technology, allowing a higher level of output to As the economy grows, it is able to support a larger air
be produced. A 1% rise in capital spending per worker transport sector, which itself encourages further increases
is found to increase labour productivity by 0.37%. in connectivity, providing a second round of positive
effects for productivity and GDP. Increasing air transport
A positive impact from R&D. Also in line with links can therefore not only provide an initial benefit but
economic theory, a higher level of expenditure on can also act as a catalyst for further productivity and
research and development is shown to have a positive economic growth.
impact on productivity. R&D helps to develop new
production methods and knowledge, allowing more
output to be produced from a similar level of inputs.
An increase in R&D spending equivalent to 1%
of GDP is found to increase productivity by 0.1%.
The indicator for education was also shown to have
a positive impact on productivity. However, the
indicator was statistically weak, suggesting that
its impacts may also be picked up in the R&D
and country-specific indicators.

Other factors can constrain productivity in

some countries. The model also includes specific
indicators for each country that can pick-up any other
factors that may have a significant, though localised,
impact on productivity. This shows that for developed
countries e.g. the US and UK) there is little difference
in productivity levels beyond those that are explained
by differences in capital spending, education, R&D and
connectivity. However, for some developing countries
(e.g. India) the country specific indicator highlights
other factors (i.e. institutional or social) that can act
as a constraint on productivity. In other words, actual
productivity is less than would be expected from
the current level of capital spending, R&D, education
and connectivity due to other constraining factors.
 05 - Aviation Economic Benefits 25

Comparing the results

The analysis estimates that a 10% increase in the level
of connectivity to the global air transport network (relative
to GDP) can produce a long-term increase in productivity
and ultimately GDP of 0.07% per annum. Therefore,
for many countries, especially developing economies,
investment in air transport infrastructure and services
can offer a significant and sustainable boost to economic
growth and development.

The results are consistent with similar studies for other

industries. They suggest that air transportation has a
smaller impact on productivity than the Information and
Communications Technology (ICT) sector, at least over
the last 20-25 years. For example, a study by Statistics
Canada8 estimates that each 10% increase in ICT
investment led to 0.5-1.2% increase in productivity
between 1981 and 2000. However, this is to be expected.
Investment in ICT has been substantial over the last 25
years and has acted as a key driver of productivity growth.
Its impact is picked-up in our statistical model through the
capital investment and country specific indicators.

However, the estimated impact of the econometric model

in this report is lower than the higher-level statistical
analysis undertaken in the previous IATA report on Airline
Network Benefits. This estimated that, for European
countries, a 10% increase in connectivity could lead to
a boost to long-term growth of up to 0.9%. This previous
analysis highlighted the positive impact that connectivity
can have, but may have over-estimated its impact due
to constraints on the available data. By adopting a high-
level, top-down approach, the estimates in the previous
study may have picked-up some of the additional
impacts associated with wider investment or country-
specific factors. The analysis adopted in this report uses
a more comprehensive database across a wider range
of countries, allowing for a bottom-up approach that can
more closely identify the impact of each individual variable.
Nevertheless, it shows investment in aviation can deliver
economic rates of return that are much higher than for
many other public or private investments.

There is a statistically significant and positive link between

connectivity, productivity and long-term economic growth.

8 T.M.
Harchaoui and F. Tarkhani (2004), Whatever Happened to U.S.-Canada Economic Growth and Productivity Performance in the Information
Age?, Statistics Canada Research Paper.
06 Investment

Examples
Investment in aviation infrastructure
and services can provide a significant
economic rate of return. These returns
benefit the performance and growth of
the national economy.
 06 - Aviation Economic Benefits 27

This chapter applies the estimated impact of connectivity The investment of C$1,805 million was associated with a
on productivity and GDP to a few investment examples. It 25% rise in the connectivity of YVR, relative to GDP, and
shows that investment in aviation can create a significant a 5.4% increase in connectivity for Canada as a whole.
economic rate of return. These returns are in addition to Using the results from chapter 5, where a 10% increase
the direct returns earned by investors and users. Individual in the connectivity indicator leads to a 0.07% increase
investment projects will also have separate rates of return in productivity, meant that the investment at Vancouver
to air carriers and airports through increased profitability raised Canadas long-term productivity by 0.04%.
(e.g. reduced engine idling time due to fewer delays at Assuming that the number of hours worked remains
the airport, lower unit operating costs at the airport from constant, this percentage can be applied to the level of
the application of new technologies). GDP in Canada to derive an annual return. Canadas GDP
in 2005 was C$969 billion, implying a long-term boost to
Canadian GDP of C$348 million per annum (i.e. C$969
Vancouver International Airport billion multiplied by 0.04%).

The expansion of Vancouver International Airport (YVR) Therefore, the investment at YVR produced a significant
in Canada provides a practical example of the positive annual economic rate of return of 19.3% (i.e. C$348
economic rate of return available from investing in air million divided by the investment of C$1,805 million).
transport infrastructure. This represents a significant and positive wider economic
benefit from the investment. In addition, the rate of return
Between 1995 and 2000 the airport authority at YVR does not include the direct benefits to passengers of the
made substantial investments in terminals, runways and added services or any increase in profits for the airport
other infrastructure in order to increase the capacity of or airlines. The total economic rate of return of the
the airport. The investment in capacity helped to stimulate investment would be considerably higher.
demand and to facilitate and support additional traffic
arising from the liberalisation of air services between
Canada and the US in 1995. Examples from developing
The total investment in new infrastructure and services economies
was C$1,805 million (at 2005 prices) consisting of:
Applying a similar methodology, the economic rate of
A net investment in YVRs airport infrastructure return can also be estimated for aviation investment
after allowing for some replacement investment examples in several developing economies (see Table
of C$506 million. 3). These estimates are based on capital investment
programmes at the major international airport (sourced
An estimated investment in new aircraft of C$1,280 from the Airports Council International) of each country
million. To handle the increase in passenger demand between 2000 and 2005 and estimates have been made
(an additional 4 million passengers per annum) airlines of the new aircraft required, based on the increase in seat
needed to invest in new aircraft. It is difficult to isolate capacity at the airport between 2000 and 2005, using
the specific airline investment, but assuming a 5% 200-seat aircraft with a list price of US$150 million.
increase in load factors, the increase in passengers
would need to be supported by an extra 8 aircraft Between 2000 and 2005, connectivity relative to GDP
(with an average of 200 seats) flying an average of increased by between 28% and 59% across the five
4 flights a day. countries. As such, the estimated long-term boost to
productivity and GDP ranged from 0.2% to 0.42%. This
An investment by the Canadian federal government of impact is substantially larger than that of the Canadian
C$19 million on a new air traffic control tower in 1996. example (0.04%), demonstrating the higher marginal
effects that are available from increased connectivity in
developing economies.
Kenya, with the highest increase in connectivity and a
larger economy than the other examples, enjoys the
highest annual economic rate of return of 59%. For
the other developing economies the annual economic
rates of return range from 16% to 28%. These are still
strong rates of return, but are more comparable with the
rate of return in Canada (19.3%). These returns also
do not include the direct benefits to passengers or any
improvement in the profits of the airport and airlines.

Developing countries face capital costs, especially for

new aircraft, that are similar to those faced by developed
countries. As such, though the boost to GDP is higher
in proportional terms for developing economies, the
economic rates of return on investment for some of the
examples are similar to that of Canada because the size
of their GDP is relatively low and capital costs are still
high. Nevertheless, the economic rates of return are still
high. Indeed, above a certain size of economy (e.g. the
Kenya example) the larger boost to productivity will more
than offset high US$ capital costs and generate very
substantial rates of returns for developing nations. For
small economies, high capital costs may constrain rates
of return to developed country levels.

Table 3: Economic Rates of Return from Aviation Investment

Kenya Cambodia Jordan El Salvador Jamaica

Airport Investment(US$ million) 61 248 26 256 23

Aircraft Investment(US$ million) 290 290 334 232 145
Increase in airport connectivity 85% 61% 76% 43% 34%
Increase in national connectivity / GDP 59% 46% 55% 35% 28%
Impact on GDP (%) 0.417% 0.323% 0.385% 0.245% 0.199%
GDP in 2000 (US$ million) 50,007 31,085 26,048 34,592 13,123
GDP Increase (US$ million) 209 100 100 85 26
Annual Economic Rate of Return (%) 59% 19% 28% 16% 16%
07 Policy

Implications
An increase in connectivity can create
substantial long-term economic benefits,
for both developed and developing
economies. Delivering these benefits
requires investment and other policy
support, such as market liberalisation.

Connectivity and Investment Appraisal

The wider economic benefits available from investment in aviation infrastructure and
services should be included in any project appraisal. If these benefits are excluded, it
will underestimate the potential social and economic gains from a project and could
see several much-needed investment projects either delayed or not undertaken. The
wider social and environmental costs of aviation investment are rightly included in a
project appraisal but the wider economic benefits also need to be included if the
appraisal is to be balanced and comprehensive.

This report sets out a framework for wider economic benefits to be included, based
upon the impact that improvements in connectivity can have on productivity and
economic growth. It demonstrates the significant and positive benefits that can be
associated with investment in aviation, particularly in developing economies. It provides
a statistically significant estimate of the impact of connectivity on productivity. Further
research in this area can help to develop the analysis.
 07 - Aviation Economic Benefits 31

Connectivity and Liberalisation Connectivity and Competitiveness

Investment in aviation infrastructure and services can Greater aviation connectivity and the improvements
increase connectivity and help to stimulate traffic in productivity and GDP growth it can provide can
demand. However, other policies may also be required to also help to boost a countrys competitiveness. By way
further increase demand and to ensure that the services of illustration, the World Economic Forum (WEF) has
providing increased connectivity are sustainable over developed a Global Competitiveness Index for the travel
the long-term. In particular, liberalisation of operational and tourism sector10. It provides an important insight on
and ownership constraints on the airline industry can the range of how friendly a countrys business, regulatory
generate demand and provide the commercial freedom and natural environment is for the development of its
necessary for airlines to adjust capacity appropriately to travel and tourism industry.
meet changes in market demand.
The WEFs index incorporates many of the factors
A recent report by IATA highlighted the potential benefits necessary to develop connectivity and create wider
available from further liberalisation of international economic benefits in terms of productivity and economic
aviation9. Governments and industry stakeholders must growth. The index provides individual countries with
work together to reform the outdated rules that continue a measure of how they rank on each factor and how
to constrain the airline industry. Greater commercial far away they are from similar countries that they may
freedom will allow airlines to offer new services and seek to benchmark themselves against. There is a clear
routes, boosting both the overall air transport network and positive relationship between a countrys connectivity and
the connections of individual countries to this network. its performance in the WEF index (see Chart 7).

By way of example, the accession of Poland to the EU in Investment in a countrys air transport sector is important
2004 provided access to the liberalised EU Open Aviation for its economic development. The WEF index shows
Area. One result of this was an increase in the number of how it can benefit the travel and tourism industry, but
air connections between Poland and the UK. This provided improved connectivity can also improve the productivity
positive wider economic benefits to both countries, with and growth of the economy as a whole. Improvements
particular benefits for the emerging economy, Poland. in connectivity help to serve a countrys business sector
Between June 2003 and June 2006 the number of in a better and more comprehensive fashion. Investment
flights a week between the two countries increased in aviation helps to deliver improvements in connectivity
from 58 to 250 (and available seats rose from 7,000 to and to generate the significant wider economic benefits
40,000). In terms of connectivity as a proportion of GDP, it can provide.
this represented a 27% increase for Poland, whereas the
increase in the already well-served UK was a much smaller
0.5%. Applying the results from the statistical analysis, Chart 7: WEF Competitiveness Score
the estimated long-term boost to Polands productivity and Connectivity
and GDP was 0.19% (US$634 million per annum). The
UK also benefited, with an estimated 0.004% boost to its
GDP (US$45 million per annum).

9 See IATA Economic Briefing (2007), Airline Liberalisation, available at www.iata.org/economics.

10 See WEF (2007), The Travel & Tourism Competitiveness Report 2007: Furthering the Process of Economic Development
08 Summary

Greater connections to the global air

transport network can produce a virtuous
cycle for a countrys economy. Improved
links can stimulate higher productivity and
GDP, which in turn further helps to support
a countrys aviation industry.
 08 - Aviation Economic Benefits 33

This report provides new statistical evidence on the

relationship between the quality of a countrys air links (as
represented by its connections to the global network) and
its economic performance. It shows that:

Investment in aviation can generate a significant Increases in connectivity can have a higher marginal
economic rate of return. This return is in addition impact for developing countries. Investment in air
to the direct returns received by investors and users. transport capacity in developing or transition countries,
High annual economic returns of around 20% are where connectivity is currently relatively low, will have
estimated for several examples, implying a full a much larger impact on their productivity and economic
economic return on investment within five to six success than a similar level of investment in a
years. For larger developing economies the relatively developed country.
economic rate of return can be even higher.
Improvements in connectivity can potentially
There is a statisticallly significant and positive link create a virtuous cycle for an economy. An increase
between connectivity and productivity. A 10% increase in connectivity can initially lead to improved productivity
in connectivity, relative to GDP, can increase long-term and higher GDP. As the economy grows, it is able
productivity levels by 0.07%. to support a larger air transport sector, which itself
encourages further increases in connectivity, providing
a second round of positive effects for productivity
and GDP.

The report highlights the wider economic benefits that are available through investment in air transport infrastructure
and other policies that enable the industry to grow in a sustainable and environmentally responsible manner
Governments and other stakeholders should recognise these additional benefits and account for them within aviation
policy appraisals.

Sustainable growth
not artificial constraints
is the best way to maximise
the benefits of the aviation
industry for all countries.
ANNEX A: THE ECONOMETRIC MODEL

InterVISTAS developed an econometric model to estimate The results of the model are shown in Table A1. Of the main
the impact of changes in connectivity and in other factors variables, only the %Education variable is not statistically
on labour productivity levels within the sample database. significant at a 95% confidence level. This may be due,
The statistical form of the model, estimated from data in part, to its impact being partly captured by the country
covering the period 1996 to 2005, is: specific variables. The largest impact on productivity
comes from GFCF/Worker. A 1% rise in capital spending
per worker will increase labour productivity by 0.37%.
Ln(Labour Productivity)
The connectivity indicator is both statistically significant
= and positive. A 10% increase in connectivity will increase
Constant labour productivity by 0.07%.

+ a1 * Ln(Connectivity/GDP) A Granger causality test was also undertaken on the

relationship between connectivity and labour productivity.
+ a2 * %R&D This is a technique for determining whether one time-
+ a3 * %Education series causes changes in another or vice versa. A time
series X is said to Granger-cause Y if it can be shown,
+ a4 * Ln(GFCF/Worker) through a series of F-tests on lagged values of X (and
+ a5 * Country dummy variables with lagged values of Y also known), that those Y values
provide statistically significant information on future
values of X.
where:
The test was unable to clearly determine that connectivity
Ln refers to a loge functional form in which parameters granger-causes productivity growth, nor that productivity
ai can be read as elasticities granger-causes connectivity. In other words, no causality
was detected in either direction between these two
Labour productivity is measured by GDP divided
variables. While inconclusive, the results are interesting
by total hours worked, in constant US$ converted at
in that this test does not indicate that productivity
purchasing power parity
growth (economic growth) causes connectivity growth, a
%R&D is the amount of research and development finding that would put into doubt the findings from the
expenditure in a country as a percentage of GDP previous regression analysis. Indeed, the tests findings
are consistent with the view that there is a synergistic
%Education is the amount of public spending on relationship between a nations air transport and its
education as a percentage of GDP economy. Increases in connectivity can boost economic
growth. However, as an economy grows, it supports a
GFCF/Worker is gross fixed capital investment larger air transport sector, which in turn leads to a need
per worker. It is a measure of the change of capital for further improvements in connectivity. Increases in
deepening in a country, measuring the flow rather connectivity can initiate improvements in economic growth,
than the stock of investment. while also increasing as a result of that economic growth.
Country dummy variables are relative to the
US, capturing any remaining structural reasons
for productivity differences across countries.
Table A1: Statistical Results

Coefficient (ai) Standard error T-statistic

Constant -0.37 0.23 -1.62
Connectivity/GDP (a1) 0.0068 0.0029 2.31
%R&D (a2) 0.0997 0.0192 5.19
%Education (a3) 0.0191 0.0218 0.87
GFCF/Worker (a4) 0.3733 0.0216 17.29
Country dummies (a5)
Argentina -0.01 0.06 -0.09
Australia -0.17 0.04 -4.43
Austria 0.08 0.03 2.45
Belgium 0.13 0.03 4.04
Brazil -0.34 0.06 -5.57
Bulgaria -0.38 0.07 -5.61
Canada -0.03 0.03 -0.83
Chile -0.37 0.06 -6.61
China -1.08 0.09 -12.66
Cyprus -0.07 0.06 -1.05
Czech Republic -0.12 0.05 -2.26
Denmark -0.07 0.04 -1.75
Egypt -0.92 0.08 -11.65
Estonia -0.43 0.06 -7.71
Finland -0.22 0.03 -6.71
France 0.13 0.03 4.09
Germany 0.11 0.03 3.57
Greece -0.03 0.05 -0.59
Hong Kong -0.24 0.06 -4.19
Hungary 0.02 0.05 0.42
India -1.23 0.09 -13.33
Ireland 0.02 0.04 0.35
Israel -0.42 0.04 -9.91
Italy 0.16 0.04 3.67
Japan -0.40 0.04 -10.30
Korea -0.80 0.03 -23.10
Latvia -0.36 0.07 -5.09
Lithuania -0.23 0.07 -3.25
Luxembourg 0.26 0.04 6.16
Malta -0.11 0.06 -1.67
Mexico -0.41 0.06 -6.48
Netherlands 0.15 0.03 4.36
New Zealand -0.13 0.05 -2.78
Norway 0.25 0.04 6.26
Poland -0.09 0.07 -1.38
Portugal -0.16 0.05 -3.25
Romania -0.59 0.07 -7.90
Russia -0.10 0.08 -1.16
Singapore -0.28 0.05 -5.75
Slovakia -0.05 0.09 -0.62
Slovenia -0.36 0.04 -8.94
South Africa -0.39 0.06 -6.26
Spain 0.00 0.04 0.00
Sweden -0.32 0.04 -8.05
Switzerland -0.37 0.04 -9.85
Turkey -0.44 0.06 -7.38
United Kingdom 0.01 0.03 0.25
Air Transport can play a key
role in economic development
and in enhancing long-term
economic growth
www.iata.org
PRINTED IN SWITZERLAND