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Aviation an extraordinary opportunity for Austria as economic location

Profile Photo By: H L
September 25, 2012

Aviation an extraordinary opportunity for Austria as economic location

? Aviation sector employs a total of 75,000 people, and generates 4.6 billion euros, or 1.7 percent of total GDP
? Forecast: demand for air transport services to double by 2030

The renowned consulting and analysis company, Oxford Economics, has carried out a survey into the economic importance of the aviation industry to national economies, including Austria, on behalf of IATA (International Air Transport Association). The survey has found that, in Austria, the sector (which includes airlines, airports and ground infrastructure, as well as their suppliers), and factoring in its importance to the tourism sector, provides around 75,000 jobs directly and indirectly, and added value of 4.6 billion euros, or 1.7 percent of Austrian GDP. Annually, the aviation industry and those employed by it pay around 1.6 billion euros in taxes and social security contributions to the treasury, not including the ticket surcharge introduced in 2011.

?What particularly needs to be highlighted is the above-average productivity in the aviation industry due to competitive pressure. At 87,909 euros per employee, this is something like 45 percent higher than the average for the economy as a whole,? IATA Chief Economist Brian Pearce said at the survey presentation, which was held at the Sky Lounge of the Austrian Chamber of Commerce last night.

The aviation sector transported a total of 25.8 million passengers into, out of and within Austria in 2011. That represents a rise in passenger figures of over 60 percent since 2000. The increase in air cargo over the same period was even higher, at around 80 percent. Overall, around 250,000 tons of cargo was transported in 2010. This is the equivalent of around 8,300 fully-laden trucks, or around half the total value of Austrian exports.

Air traffic to keep rising
The European air safety organisation, Eurocontrol, is forecasting a doubling in demand for air transport services by 2030 (compared to 2007). Already now, 140,000 international flights take off from Austria for 165 airports in 61 countries every year. 14 of these routes are to cities of more than 10 million people, and 73 routes are to international conurbations. Thanks to Vienna?s geographically advantageous location for travel to Eastern Europe and the Far East, many of the routes can only be served by bundling traffic at the capital?s hub airport. Of the 40 most important airports within the EU, Vienna Airport was placed ninth measured by volume of flight movements in 2008.

?In the past ten years, passenger volume at Vienna Airport has risen by nearly ten million people, and we are anticipating passenger rises of around four percent year-on-year until 2020. If this strong growth is to be maintained, to the clear benefit of the Austrian economy, the third runway will be necessary,? Vienna Airport?s Chief Executive, Julian J?ger, said.

Capacity bottlenecks are not just happening at the airports, however, but also in the air. That?s why Heinz Sommerbauer, Chief Executive of Austro Control, is pushing for cross-border collaborations and implementation of the Single European Sky (SES) project. Sommerbauer: ?A Europe-wide, common airspace with functional airspace blocks where routing is done irrespective of national borders and subject to operational requirements saves time, money and fuel. Passengers and airlines benefit from shorter flight and waiting times, and the significant reduction in carbon dioxide emissions this produces helps the environment.? As a member of FAB CE (Functional Airspace Central Europe), Austro Control makes an important contribution to the successful implementation of the Single European Sky project.

Strategy of the Federal Government until 2020
The Federal Government laid out the strategy it believes will be most important for Austria as a location for aviation and the wider economy in its recent white paper, ?Road Map Luftfahrt 2020? (?Road Map for Aviation to 2020?).

In the document, Transport Minister Doris Bures commits herself to maintaining productive and competitive air transport infrastructure. According to the Road Map, the aviation industry should be supported through attractive cost and fee structures, and become even more competitive than it already is. Bures also wants to link domestic airports even more efficiently to intermodal transport systems on the ground. From December 2014, for instance, Vienna Airport will be directly linked to the high-ranking Westbahn and S?dbahn rail networks via the capital?s Hauptbahnhof central station. That will cut journey times from St. P?lten or Wiener Neustadt to Vienna Airport to well under an hour, while passengers will be able to reach the airport from Linz in an hour and 35 minutes. Technological development is particularly important to the Transport Minister. With its technology and research development programme TAKE OFF, the Transport Ministry has been supporting innovation in the fast-growing domestic aviation industry since 2002. 122 projects have been supported with 51 million euros to date, with total project spend eventually set to reach 112 million euros. As the Minister emphasises, technological development holds the key to reducing noise-related and environmental pollution.

AUA warns against distortion of competition by national surcharges
Against the background of growing passenger volumes (up 6.7 percent in the first half-year of 2012), Austrian Airlines will also continue to invest in the improvement of product quality. In the second half-year of 2012, Austrian Airlines has planned in total investment of over 90 million euros. Austrian Airlines Chief Executive Officer Jaan Albrecht: ?The survey has presented in detail the overwhelming importance of air transport to the Austrian economy, but it also emphasises the intense nature of competition in the sector. Ill-considered external cost factors such as the ticket surcharge make flying more expensive unnecessarily, and distort competition to the detriment of domestic airlines and airports. For that reason, it is imperative that the ticket surcharge be abolished.?

Source: Austrian Airlines

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