The catalytic effects of air transport in Europe

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The catalytic effects of air transport in Europe

Presentation by Adrian Cooper Oxford Economic
Forecasting in association with Mott MacDonald
28 October 2004

• Tel [phone]
• Email acooper_at_oef.co.uk

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Overview

• Aims of the study
• Definition of economic catalytic effects of air
  transport
• Transmission channels
• Methodology for quantifying economic catalytic
  effects
• Preliminary results
• Conclusions and next steps

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Aims of the study

• Discussions of the environmental impact of air
  transport need to be placed in the context of the
  wide range of economic and social benefits
  generated by the aviation industry.

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Aims of the study

• Discussions of the environmental impact of air
  transport need to be placed in the context of the
  wide range of economic and social benefits
  generated by the aviation industry.
• Many studies look at direct, indirect and induced
  economic impacts for particular airports or
  countries.

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Aims of the study

• Discussions of the environmental impact of air
  transport need to be placed in the context of the
  wide range of economic and social benefits
  generated by the aviation industry.
• Many studies look at direct, indirect and induced
  economic impacts for particular airports or
  countries.
• The aim of this study is to develop a robust
  methodology for quantifying the so-called
  economic catalytic impacts.

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Aims of the study

• Discussions of the environmental impact of air
  transport need to be placed in the context of the
  wide range of economic and social benefits
  generated by the aviation industry.
• Many studies look at direct, indirect and induced
  economic impacts for particular airports or
  countries.
• The aim of this study is to develop a robust
  methodology for quantifying the so-called
  economic catalytic impacts.
• An indicative estimate of the importance of the
  economic catalytic impacts of air transport for
  the EU as a whole is also provided.

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Direct, Indirect, Induced and Catalytic Impacts
of Air Transport
Use of air services (Business passengers, leisure
passengers, freight, express etc)
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Direct, Indirect, Induced and Catalytic Impacts
of Air Transport
Use of air services (Business passengers, leisure
passengers, freight, express etc)
Revenues for companies in air transport industry
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Direct, Indirect, Induced and Catalytic Impacts
of Air Transport
Use of air services (Business passengers, leisure
passengers, freight, express etc)
Revenues for companies in air transport industry
Employ own staff
Earn profits, pay taxes
Buy goods and services from suppliers
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Direct, Indirect, Induced and Catalytic Impacts
of Air Transport
Use of air services (Business passengers, leisure
passengers, freight, express etc)
Revenues for companies in air transport industry
Employ own staff
Earn profits, pay taxes
Buy goods and services from suppliers
Direct Impact
Indirect Impact
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Direct, Indirect, Induced and Catalytic Impacts
of Air Transport
Use of air services (Business passengers, leisure
passengers, freight, express etc)
Revenues for companies in air transport industry
Employ own staff
Earn profits, pay taxes
Buy goods and services from suppliers
Direct Impact
Indirect Impact
Spending by employees on other goods and services
Induced Impact
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Direct, Indirect, Induced and Catalytic Impacts
of Air Transport
Use of air services (Business passengers, leisure
passengers, freight, express etc)
Revenues for companies in air transport industry
Catalytic Impact
Employ own staff
Earn profits, pay taxes
Buy goods and services from suppliers
Direct Impact
Indirect Impact
Spending by employees on other goods and services
Induced Impact
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Direct, Indirect, Induced and Catalytic Impacts
of Air Transport
Use of air services (Business passengers, leisure
passengers, freight, express etc)
Revenues for companies in air transport industry
Catalytic Impact
Employ own staff
Environ- mental and social impacts
Earn profits, pay taxes
Buy goods and services from suppliers
Consumer surplus of users
Economic spillovers Economic Catalytic
Impacts
Direct Impact
Indirect Impact
Spending by employees on other goods and services
Induced Impact
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Definition of catalytic effects

• Economic catalytic impacts
• Net economic effects resulting from the
  contribution of air transport to tourism, trade
  and the supply-side performance of the economy

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Definition of catalytic effects

• Economic catalytic impacts
• Net economic effects resulting from the
  contribution of air transport to tourism, trade
  and the supply-side performance of the economy
• We also find that it is useful to distinguish
  between
• Demand-side catalytic effects, which operate
  through the use of air services to transport
  tourists and goods

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Definition of catalytic effects

• Economic catalytic impacts
• Net economic effects resulting from the
  contribution of air transport to tourism, trade
  and the supply-side performance of the economy
• We also find that it is useful to distinguish
  between
• Demand-side catalytic effects, which operate
  through the use of air services to transport
  tourists and goods
• Supply-side catalytic impacts, which represent
  the net effects of air transport on the
  supply-side performance of the economy and so
  have long-run implications for productivity and
  living standards

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Quantifying catalytic effects
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Quantifying catalytic effects
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Quantifying catalytic effects
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Quantifying catalytic effects
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Quantifying catalytic effects
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Quantifying catalytic effects
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Preliminary results demand-side
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Preliminary results demand-side
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Preliminary results demand-side
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Preliminary results demand-side

• Tourism and trade bring a number of other
  benefits
• Foreign travel enriches the lives of those who
  undertake it
• Some international travellers are on business
• Tourism and trade support the direct jobs in
  the aviation industry
• and also in travel agents, tour operators etc

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Preliminary results supply-side
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Preliminary results supply-side
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Preliminary results supply-side
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Conclusions and next steps

• Air transport generates significant catalytic
  economic impacts in Europe, in addition to the
  employment the industry generates directly and
  through its supply chain.

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Conclusions and next steps

• Air transport generates significant catalytic
  economic impacts in Europe, in addition to the
  employment the industry generates directly and
  through its supply chain.
• These economic impacts need to be weighed against
  environmental and other considerations when
  formulating aviation policy.

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Conclusions and next steps

• Air transport generates significant catalytic
  economic impacts in Europe, in addition to the
  employment the industry generates directly and
  through its supply chain.
• These economic impacts need to be weighed against
  environmental and other considerations when
  formulating aviation policy.
• Stage 2 of this research will
• Extend analysis to all significant airports in
  EU25
• Refine econometric analysis of impacts of air
  transport on investment and total factor
  productivity
• Develop procedure for forecasting catalytic
  impacts looking 20 years ahead