Contribution of aviation to the UK economy
The aviation industry has brought many benefits to society in both economic and social terms. The relative affordability and speed of air transport today have made international travel accessible to many people and it has become an integral part of their lifestyle. In economic terms, aviation contributes to a country´s growth in two ways. First, the growth of the aviation industry itself generates employment, production, exports, value added, investment and contributions to the Exchequer. Secondly, air transport facilitates trade in goods, industrial developments and economic services. Contribution to GDP: Aviation accounts for 1.2% of national GDP. By including retailing and catering at airports it makes up 1.4% of GDP. The official Oxford Economic Forecasting study1 estimated that over the last 10 years aviation growth had increased output in the UK economy by £550 million per year.2
Exports: One third of the UK exports now go by air. Exports of services, which depend on the ability to travel by air, make up a further 8% of the national income.3 Tourism: Today, UK residents make around 60 million visits overseas each year, compared to just 13 million in 1978. Around 80 % of these are made by air due to the fact that they have little alternative to air travel for long-haul, and many short-haul, destinations. This outbound tourism contributes significantly to the economy through revenue earned, for instance, by tour operators. Another source of earnings is foreign visitors, two thirds of whom (ca. 55 million out of 80 million) come by air. In-bound tourism accounted for an estimated 4.4 % of GDP in 2002, and more than 2 million direct jobs.4
...
---
1 The report was produced in 1999 for a consortium of UK’s major airlines and operators and the Department the Environment, Transport and the Regions.
2 Whitelegg, J., Whilliams, N., „The Plane Truth: Aviation and the Environment“ 2000 www. aef.org.uk/PDFs/5389SainsburyDoc.pdf
3 Department for Transport, „The Future of air Transport“ 2003, www.dft.gov.uk/aviation/whitepaper
4 Department for Transport...
Table of Contents
1. Air transport key facts
a) contribution of aviation to the UK economy
b) current trends in air traffic
2. Organization of the air transport industry
a) airlines
b) commercial operators of airports
c) other players
3. Air traffic growth versus airports capacity
a) need for additional capacity
b) where to build
4. The impact of aviation on the environment
a) global warming and climate change
b) threat to human health
c) diminishing countryside and traffic congestion
5. Future of air transport in the UK
a) future demand
b) internalisation of “externalities”
Objectives and Research Scope
This paper examines the current state, economic significance, and future challenges of the aviation industry in the United Kingdom, specifically analyzing the tension between continuous air traffic growth and environmental sustainability. It explores the central research question of how to balance the industry's economic benefits with the necessity of mitigating its environmental impact.
- Economic contribution of aviation to the UK economy.
- Transformation of the airline market through low-cost operating models.
- Infrastructure challenges regarding airport capacity and expansion.
- Environmental consequences, including climate change and health impacts.
- Strategies for the internalisation of external costs and policy management.
Excerpt from the Book
1.a. Contribution of aviation to the UK economy
The aviation industry has brought many benefits to society in both economic and social terms. The relative affordability and speed of air transport today have made international travel accessible to many people and it has become an integral part of their lifestyle. In economic terms, aviation contributes to a country´s growth in two ways. First, the growth of the aviation industry itself generates employment, production, exports, value added, investment and contributions to the Exchequer. Secondly, air transport facilitates trade in goods, industrial developments and economic services.
Contribution to GDP: Aviation accounts for 1.2% of national GDP. By including retail ing and catering at airports it makes up 1.4% of GDP. The official Oxford Economic Fore casting study estimated that over the last 10 years aviation growth had increased output in the UK economy by £550 million per year.
Exports: One third of the UK exports now go by air. Exports of services, which depend on the ability to travel by air, make up a further 8% of the national income.
Summary of Chapters
1. Air transport key facts: This chapter outlines the economic significance of the aviation sector in the UK, highlighting its role in GDP growth, exports, tourism, and job creation.
2. Organization of the air transport industry: This section details the market structure, focusing on the rise of low-cost carriers versus traditional flag carriers and the role of commercial airport operators.
3. Air traffic growth versus airports capacity: This chapter analyzes the physical constraints of UK airports and the debate regarding the necessity and location of additional infrastructure.
4. The impact of aviation on the environment: This part addresses the environmental footprint of aviation, covering global warming, health hazards, and urban sprawl caused by airport development.
5. Future of air transport in the UK: The final chapter discusses long-term demand forecasts and strategies for managing the industry through the internalisation of external costs.
Keywords
Aviation, UK economy, Air traffic, Low-cost airlines, Airport capacity, Environmental impact, Climate change, Sustainability, Externalities, Fuel tax, Emissions levy, Infrastructure, Economic growth, Globalisation, Public policy.
Frequently Asked Questions
What is the primary focus of this paper?
The paper provides a comprehensive overview of the aviation sector in the UK, evaluating its economic role and the environmental pressures caused by its rapid growth.
What are the central themes discussed?
Key themes include the economic contributions of aviation, the evolution of airline business models, infrastructure capacity constraints, and environmental policy.
What is the main research question regarding policy?
The study investigates whether the economic gains from aviation can be balanced with necessary environmental regulations, such as the internalisation of external costs.
Which scientific approach does the author use?
The work employs a descriptive analytical approach, utilizing industry reports, economic studies, and government white papers to support its arguments.
What does the main body address in terms of industry shifts?
It highlights the shift from traditional national flag carriers to more efficient, high-growth low-cost airline models.
What are the defining keywords for this research?
The research is characterized by terms like aviation, airport capacity, internalisation of externalities, low-cost carriers, and environmental sustainability.
How does the paper propose handling the 'hidden costs' of flying?
The author discusses policies such as fuel taxes, emissions levies, and emission trading systems as mechanisms to make the industry pay for its environmental impact.
What is the significance of the South East of England in this context?
The South East is highlighted as the most congested region where critical decisions about new runway construction and capacity expansions are currently being debated.
- Quote paper
- Irina Romanova (Author), 2004, Air Transport in the UK: Current Trends and Future Scenarios, Munich, GRIN Verlag, https://www.grin.com/document/36306
