This chapter covers three areas of institutional changes in the European aviation sector that may significantly affect the dynamics of the tourism industry. Further to the introduction, airlines are discussed in section two; airports are analysed in section three; and air navigation service provision are presented in section four. The dynamics of these three pillars and the interrelationship with the tourism industry is explored in section five. Among others, the chapter argues that when a proper systemic approach is followed any smart relaxation of regulatory and infrastructural constraints will have positive repercussions on tourism growth and development not only of central places but also of more peripheral regions. Finally, section six concludes and discusses the way forward.
Top1. Introduction
According to the United Nations World Tourism Organization (UNWTO, 2015) international tourism accounts for 9% of world’s GDP, 1 in 11 jobs is tourism related, generating over $1.5 trillion in exports. These figures refer to direct, indirect and induced impacts of tourism. International tourists have reached 1.13 billion with forecasts to reach 1.8 billion by 2030. In 2014 Europe received 582 million international tourists (51% of the world market) who generated $509 billion tourism receipts (42% of the world). Globally, 54% of international tourists travelled to their destination by air; that is over 550 million tourists. The remainder (46%) travelled by surface transport, mostly by road (cars, coaches, buses). The trend over time indicates that air transport as a means of transport for tourists grows faster compared to other means of transport.
In fact, aviation is a major contributor into supporting tourism and has a strategic importance for the development of tourism, which results in economic growth and provision of economic and social benefits. The Air Transport Action Group (ATAG, 2014) estimates the aviation’s global economic impact (direct, indirect, induced, and tourism catalytic) at US$2.2 trillion, equivalent to 3.5 percent of world gross domestic product (GDP). It also suggests that the air transport industry generates a total of 56.6 million jobs globally (8.4 million direct jobs in the airlines, airports, Air Navigation Service Providers and the civil aerospace sectors; 9.3 million indirect jobs through purchases of goods and services from companies in its supply chain; 4.4 million induced jobs through spending; and 34.5 million jobs globally through tourism). According to the International Air Transport Association (IATA, 2013) air transportation enables foreign direct investment (FDI), business cluster development, specialisation, and other spill-over effects. Air transportation is by far the most effective means of transportation for many destinations to be reached, offering speed, convenience and affordability at the same time (UNWTO, 2012). Aviation has contributed significantly to international tourism development by the smooth transport of passengers, who arrive at their selected destinations based on the enhanced connectivity through air (ICAO, 2006; World Economic Forum, 2013; ATAG, 2014).
The prevailing institutional framework and the emerging dynamics in terms of market regulation, deregulation and liberalization (the last two terms will be used interchangeably in the text in spite of some differences) may be regarded as the catalyst for the effectiveness of the air transportation system (Papatheodorou, 2002). The system per se comprises many components but its most important pillars are related to the airlines (with the aircraft, crew and services); the airports (with the infrastructure and ancillary services), the providers of air navigation services, i.e. ANSPs (with the en route and terminal Air Traffic Control in terms of both infrastructure and services); and the regulatory bodies oversighting the system. As expected these system components are structurally interrelated. Due to the fact that airlines often overfly more than one state, these are related to a number of service providers where regulation in several cases is less intrusive. ANSPs are associated with the area they cover and in the majority of cases they operate at a national level. Similarly, airlines are associated with the airports from which they take-off and land.
This chapter discusses the interrelations among the three main subsystems of the air transport sector and also their implications for the tourism industry. It is noteworthy that several air transport subsystems have been already liberalised, whereas others are in the process or even not yet subject to market liberalisation. This potential conundrum poses important challenges. On these grounds, this chapter covers three areas of institutional changes in the European aviation sector that may significantly affect the tourism industry. Airlines are discussed in section two of this chapter; airports are analysed in section three; and air navigation service provision are presented in section four. Building on Bieger and Witmer (2006) the dynamics of these three pillars and the interrelationship with the tourism industry is explored in section five, while section six concludes and discusses the way forward.