IATA stresses on using aviation as a strategic asset

The representative body of the global airline industry has asked the governments of countries like India, which have huge unrealised potential in aviation, to use the sector as a strategic asset and devise policies that spur competitiveness.

“When the relationship between industry and government works, the results are brilliant. Policies that support aviation’s competitiveness deliver wide-ranging benefits across economies by connecting business to markets,” Mr Tony Tyler, Director-General and CEO of the International Air Transport Association (IATA), said.

In Singapore, where the government has supported aviation as a strategic industry, it contributes 119,000 quality jobs and 5.4 per cent of GDP, according to Oxford Economics studies commissioned by IATA to demonstrate to governments the catalytic impact of a healthy aviation sector.

“The connectivity that aviation provides to Singapore has enabled it to develop as a successful regional hub for sectors as diverse as finance, healthcare, culture and education,” Mr Tyler said in a keynote address to the Singapore Airshow Aviation Leadership Summit.

He said not all governments have the same positive approach and India is one market that is missing out on aviation’s potential as a result of a policy framework that does not support aviation’s competitiveness.

For example, high taxes, a lack of capacity in Mumbai and increasing infrastructure costs in Delhi are holding back India’s aviation’s potential.

“The stunted growth of India’s aviation comes with an economic cost. India’s population is about 240 times the size of Singapore’s. But the number of aviation jobs is just about 14 times larger at 1.7 million.

“And the economic contribution of aviation is still only 0.5 per cent of the Indian economy. It is an important 0.5 per cent. But even considering the differential in GDP/capita between Singapore and India, these numbers tell us that there is tremendous unrealised potential in India,” said Mr Tyler.

Asia is driving growth and shifting aviation’s centre of gravity eastward. In 2010, about 33 per cent of passengers travelled on routes to, from or within Asia-Pacific. For North America and Europe the equivalent number was 31 per cent.

By 2015, IATA’s passenger forecast anticipates that Asia-Pacific will represent 37 per cent, while traffic associated with Europe and North America will fall to 29 per cent.

Over that same 2010-2015 period, total passengers worldwide are expected to rise to 3.55 billion. Of the 877 million additional passengers that will be generated, 212 million are expected to fly on routes associated with China.

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