Aviation a lynchpin for growth

Tourists walk out of Phnom Penh International Airport earlier this year. Heng Chivoan

Wed, 27 September 2017

Cam McGrath and Cheng Sokhorng

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A new report by the world’s most prominent aviation industry organisations underscores the far-reaching economic benefits of aviation and the symbiotic links between air connectivity and tourism, estimating that aviation contributes $2.7 trillion to the world economy and provides 63 million jobs.

According to the Aviation Benefits 2017 report, airlines worldwide carried around 3.8 billion passengers and 53 million tonnes of freight last year. If current forecasts hold, characterised by 4.6 percent annual growth for passenger traffic and 4.4 percent for freight, air traffic volumes will double by 2032.

“By spurring tourism and trade as it continues to grow, aviation contributes to increasing consumer benefits and choices, creating jobs and generating numerous socio-spin-offs,” it said.

The report said a steady decrease in the real cost of air travel – which has fallen by 60 percent since 1970 – has been a key driver in the growth of passenger traffic.

“Air travel is no longer a luxury commodity. It is becoming increasingly accessible in the developing world, with various low-cost travel options available to more and more people,” the report said.

The Asia-Pacific remains the largest region in terms of activity, recording a third of all world air traffic last year and about 40 percent of world freight. It is also expected to be the fastest growing region for passenger traffic growth, expanding at an annual rate of 6.4 percent a year through 2032, while freight is projected to grow at 5.1 percent annually.

Cambodia is among the fastest growing travel and tourism markets in the Asia-Pacific region, recording an 8.5 percent increase in air passenger traffic and a 19 percent increase in air cargo volume last year. Regional tourism trends, increased air connectivity and falling fare prices are key drivers of passenger growth, while cargo volumes are rising on higher factory output, particularly in the garment sector.

A total of 43 commercial airlines operate scheduled flights in Cambodia, contributing to an impressive 25 percent year-on-year increase in passenger traffic during the first eight months of the year. Freight volume has also grown sharply, with seven freight carriers now operating and cargo throughput up 34 percent year-on-year during the first half of 2017.

Airports are engines for economic growth, according to Khek Norinda, spokesman for Cambodia Airports, the company that operates the Kingdom’s three international airports in Phnom Penh, Siem Reap and Sihanoukville.

“Basically, the socio-economic footprint or impact of the three airports represents $2.7 billion – about 17 percent of Cambodia’s total GDP,” he said, adding that the aviation sector directly and indirectly supports 1.7 million jobs – or about a fifth of the country’s working population.

The biggest spillover is into the tourism industry, which has grown in lockstep with the aviation sector as more carriers add Cambodia to their route maps.

“Air travel plays an important role in both promoting and attracting domestic and international tourists,” said Men Phearom, director of planning at the Ministry of Tourism. “As we keep increasing the amount of direct flight connections the total number of tourist arrivals keeps growing year by year.”

Cambodia received over 5 million foreign tourists last year, with the tourism industry generating $3.4 billion, or about 13 percent of GDP, and providing 600,000 jobs. With 54 percent of foreign tourists arriving by air, the Kingdom’s airports play a crucial role in the nation’s tourism economy.

“If Cambodia had no airports, our tourism economy would lose a whole lot of benefits,” Phearom said. “So it is important that we expand and attract more investors to develop our airports.”

He said aviation infrastructure was a priority area for the government, which wants to ensure that there is sufficient capacity to handle an expected 7 million international arrivals a year by 2020.

“More capacity is needed because our airports are not yet big enough to handle larger aircraft, or heavier flight traffic, and investment is still limited,” he said.

The Aviation Benefits 2017 report was jointly produced by the Airports Council International (ACI), the Civil Air Navigation Services Organisation (CANSO), International Air Transport Association (IATA), International Civil Aviation Organization (ICAO) and the International Coordinating Council of Aerospace Industries Associations (ICCAIA).