Ticket taxes and visa requirements “discourage” inbound tourism and business travel globally, according to the International Air Transport Association.
Airlines and their customers are forecast to generate $136bn in tax revenues next year, IATA said in a report presented at the Global Media Day here on Thursday.
That is the equivalent of 45% of the industry’s GVA (Gross Value Added, which is the firm-level equivalent to GDP). In addition, the industry continues to create high value added jobs.
As for visa requirements, IATA said these “discourage” inbound tourism and business travel.
“Encouragingly, visa openness levels are improving. But the number of individual ticket taxes has risen to 241, while the level of many existing taxes continues to ratchet upwards,” IATA said.
Air transport is vital for manufactures’ trade, particularly trade in components, which is a major part of cross border trade today. IATA forecasts that the value of international trade shipped by air next year will be $7.1tn. Tourists travelling by air in 2020 are forecast to spend $968bn.
Another impact on the wider economy comes through the influence that increased airline activity has on jobs in the sector, in its supply chain, and the jobs generated as spending ripples through the economy.
These ‘supply chain’ jobs around the world are estimated to rise to 72mn in 2020, more than the population of the 20th most populous country in the world.
“But in many countries the value that aviation generates is not well understood. The commercial activities of the industry remain highly constrained by bilateral and other regulations. Moreover, regulation is far from ‘smart’, leading to unnecessarily high costs,” IATA said.
Consumers will see a substantial increase in the value they derive from air transport in 2020 including stability in what they pay airlines, after allowing for inflation.
The average return fare (before surcharges and tax) of $293 in 2020 is forecast to be 64% lower than in 1998, after adjusting for inflation. The number of new destinations is forecast to rise further this year, with trip frequencies up too; both boosting consumer benefits.
“We expect 1% of world GDP to be spent on air transport in 2020, totalling $908bn. RPK growth is forecast to remain stable close to the average of this year in 2020 on the back of moderate global economic backdrop. On the other hand, world trade is expected to rebound in 2020 following a weak year. This should support a small rebound in air cargo volumes,” IATA noted.
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