Abstract
The intuitive concept of strong economic effects of aviation and air transport has been unexceptionally supported by the abundantly clear evidence. Hence, formulation of a dynamic and sustainable policy, based on massive evidence, is considered as mandatory. Innovative policies would internalize major components of the existing positive externalities to enhance the success, efficiency, and viability of the industry, which would be conducive to economic development. This study applies an inductive method: Some evidence and empirically measured economic effects would lead to the formulation of an integrative economic policy framework that can be applied accordingly in the future.
Highlights
The economic impact of transportation, in general, and air transportation, in specific, has been clear and addressed appropriately at all times
Technology allows the carriage of much larger cargo pay-loads in a more reliable way. These strategic functions were used to pursue internal national policies of social, political, and economic integration within large countries such as Canada, the US, and Australia, and took on international significance from the 1930s within the Imperial geopolitical systems centered mainly on the UK, France, Germany, and other European countries when technology allowed for intercontinental services to be developed. (p.7)
Button (2008) has highlighted the airlines’ attempts in covering their costs through many ways, including subsidies, service bundling, and even vertical integration. He refers to some example of historical experiences such as American Airlines initiating the computer reservation systems (CRS)
Summary
The economic impact of transportation, in general, and air transportation, in specific, has been clear and addressed appropriately at all times. The opportunity costs of any less than optimal and most efficient economic policy that would incorporate all the infrastructural growth potential into actual fruition would be too large. While in both of the following two tables, the economic contributions of civil aviation are demonstrated, in TABLE 2, billions of dollars of aviation-related manufacturing income are reported both for 2012. TABLE 1: 2012 Economic Impact of Civil Aviation (Percent of Top Ten States’ GDP).
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