Chapter 3: Sector Overview 3.0 Sector Overview Air travel is one of the largest and growing industries in the world. It is a critical section of global economy which supports 57 million jobs and $2.2 trillion in economic activity (IATA 72th press release, December 2013). Air transport provides important inputs into wider economic, political and social processes. It has many benefits such as it promotes economic growth, overseas investment, world trade and tourism as well. In other words, the airline industry allows globalisation to take place. 3.1 International Air Transport Association (IATA) The International Air Transport Association (IATA) is responsible for the world’s airlines. It is the main vehicle for inter-airline collaboration and encourages secure, reliable, and economical air services to the world’s consumers. It has supported many areas of aviation activity and has helped in formulating industry policy on critical aviation issues. IATA was established in Havana, Cuba, in April 1945. At start, IATA had 57 members from 31 nations which were mostly from Europe and North America. Today it has some 240 members (representing 84% of total air traffic) from 118 nations in every part of the globe. The modern IATA took over the International Air Traffic Association which was founded in Hague in 1919 which was the year of the world’s first international scheduled services. 3.1.1 Growth and Development International air transport grew twice its capacity from its earliest post-1945 days until the first oil crisis in 1973 and this progress was due to technical innovation. The main innovations were the introduction of turbo-propeller aircraft in the early 1950s, transatlantic jets in 1958, wide-bodied aircraft and high by-pass engines in 1970 and later, advanced avionics (electronic systems). During the 1960s, automation took the lead in the airline opeations. These brought higher speeds, greater size and better unit cost control and this resulted in lower real fares and rates. With a rise in real income and leisure time, demand for air travel grew significantly. According to the 72th press release dated 31 December 2013 Of the IATA, on average, more than 8 million people travel by plane every day. In 2013, the total number of passengers exceeded 3 billion for the first time ever, reaching 3.1 billion. Coming to cargo, approximately 50 million tonnes of cargo is being carried by planes each year. This equals to 140, 000 tonnes daily. The annual worth of these goods is estimated to be $6.4 trillion or in other words, equals to 35% of the value of products traded internationally. Furthermore, the aviation sector employs more than 57 million people and supply $2.2 trillion for economic activities.
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