The impact of globalization on international

air transport activity - past trends and future

perspective

Kenneth Button

University Professor,

George Mason University

OECD and ITF Global Forum on Transport and Environment

in a Globalizing World

Guadalajara, 10-12 November, 2008

“Only the psychologically disturbed or

inadequate want transport for its own sake.”

Denys Munby, 1968

Air transport is a major industry

• 1,600 million passengers a year

• 3.9 million jobs

• $260 billion turnover

• 18,000 aircraft

• 15 million kilometer network

• 10,000 airports

• 130 billion revenue ton kilometers

• 30 million tons of freight

Further features of the global market

• Large industry in its own right (1% of Western European GDP,

more than 1% of US GDP)

• Important for key modern industries (high-tech management

flies 60% more than traditional industries)

• Important for long term economic/political integration

• Lubricant for the economic system

• Half of tourists outside of Europe travel by air

The ten largest international airlines by

scheduled passenger-kilometers

Airline Scheduled passe nger-kilometers (mill ion)

Air France 112,689 British Airways 111,336 Lufthansa 109,384 Singapore Airlines 87,646 American Airlines 81,129 United Airlines 74,578

Emirates Airline 74,578 KLM 71,761 Cathay Pacific 71,124 Japan Airlines 59,913

The 20 largest international airports by

passengers (2007)

Airport International passe ngers

London Heathrow Airport 62,099,530 Charles de Gaulle International Airport 54,901,564 Amsterdam Airport Schiphol Haarlemmermeer 47,677,570 Frankfurt Airport 47,087,699 Hong Kong International Airport New Territories 46,281,000 Singapore Changi Airport Changi, East Region 35,221,203

Narita International Airport 34,289,064 Dubai International Airport 33,481,257 Suvarnabhumi Airport 31,632,716 London Gatwick Airport 31,139,116 Incheon International Airport 30,753,225 Madrid Barajas International Airport 29,339,784 Kuala Lumpur International Airport 26,938,970 Chatrapati Shivaji International Airport 25,360,860 Munich Airport 23,988,612

Dublin Airport 22,339,673 John F. Kennedy International Airport 21,521,711 London Stansted Airport 21,201,543 Taiwan Taoyuan International Airport 20,855,186 Malpensa International Airport 20,627,846

Short-term links between world trade in

manufactures and air freight volumes

A „dog-bone‟ or „dumb-bell‟ international

air transport network

A B

a

b

c

i

x

y

z

j

The implications of globalization on the

various air transport markets

Operating margins of airlines

(1988-2006)

Airline profitability by global region

European lccs that ceased to exist (2003

to 2005)

Aeris BuzzAway Hellas Jet

Agent Dream Air Hop

Air Bosnia Duo Jet Magic

Air Andalucia Europe DutchBird Jetgreen

Air Catalunya EastJet JetsSky

Europe Air Exel EU Jet JetX

Air Freedom Europe Exel Aviation Group Low Fare Jet

Europe Air Fairline Aust ria Maersk Air

Air Littoral Fly Eco Now

Air Luxor Fly West Silesian Air

Air Madrid Flying Finn Skynet Airlines

Air Polonia Free Airways Spirit Of Balkan

Air Wales Fresh Aer Swedline Express

Airlib Express Germania Express V Bird

BasiqAir GetJet Poland VolareWeb

BerlinJet Go Fly White Eagle

Bexx Air Goodjet Windjet

Strategic Airline Alliances Star Alliance SkyTeam Oneworld

Passe ngers per yea© ̂ 455.5 million 428 million 319.7 million

Destinations 975 841 692 Global market share 25.1% 20.8% 14.9% Participants Adria Airways Aeroflot American Airlines Air Canada Aeromˇ xico British Airways Air China Air Europa Cathay Pacific Air New Zealand Air France Finnair

ANA Alitalia Iberia Asiana Airlines China Southern Japan Airlines Austrian Airlines Continental LAN Blue1 Copa Airlines Malˇv BMI Czech Airlines Qantas Croatia Airlines Delta Royal Jordanian EgyptAir Kenya Airways LOT Polish Airlines KLM

Lufthansa Korean Air SAS Northwest Shanghai Airl ines Singapore Airlines South African Airways Spanair Swiss International Air Lines TAP Portugal

Thai Airways International Turkish Airlines United Airlines US Airways American Airlines

The alternative views of the implications

of migration

The notion of gateways

Impacts of opening more gateways on

international and domestic air transport

networks and flows

Air travel between the UK and selected

transition economies

0

0.5

1

1.5

2

2.5

3

3.5

4

2002 2003 2004 2005 2006

Year

Mill

ion p

assengers

Poland Hungary Slov akia Lithuania

Enlargement

Selected Indices of Mainland China‟s civil

air transportation system, 1980–2005

1980 1985 1990 1995 2000 2005

Number of airports 77 80 92 116 139 142 Passe nger traffic (million persons) 3.4 7.5 16.6 51.2 67.2 138.3 Passe nger traffic turnover (million person-km) 39.6 116.7 230.5 681.3 970.5 2044.9 Freight traffic (thousand tons) 90 200 370 1010 1970 3070 Freight traffic turnover (mill ion ton-km) 140.6 415.1 818.2 2229.8 5026.8 7889.5

Growth in cargo at China‟s main airports