This document summarizes the contribution of the air transport industry to macroeconomic stability. It discusses how aviation contributes significantly to global GDP and employment, facilitating over 3 billion passengers and 50 million tons of freight annually. This supports over 8.7 million direct jobs and generates $606 billion for the global economy. Aviation also stimulates tourism, which contributes $2 trillion to world GDP and over 101 million jobs globally. The document then discusses the air transport industry in Pakistan, how passenger traffic has grown significantly in recent years, and projections that transit traffic in Pakistan will continue growing rapidly through 2022.

1. Presented by
Noman Khan
57154
Course: Macro Economics
MBA / MS (Aviation Mgt.)
PAF KIET
A brief on
Air Transport Industry
(Contribution in Macroeconomics Stability)

2.  Introduction
 Aviation / air transport:
 as an economic Engine
 as Contributor to the global GDP
 as a generator of employment
 as a tourism facilitator
 Threat to aviation industry
 Background / history
 Pakistan CAA / air transport industry
Sequence

3.  Aviation is the practical aspect or art of aeronautics,
including:
design, development, production,
operation and use of aircraft,
especially heavier-than-air aircraft
What is Aviation
Ref: Wikipedia.com

4. ◦ Military Aviation
◦ Civil Aviation
What is Aviation

5. Civil Aviation :
 Scheduled Air Transport:
◦ including all passenger and cargo flights operating on
regularly scheduled routes; and
 General Aviation:
◦ includes all non-scheduled civil flying,
both private and commercial.
◦ may include business flights, air charter, private
aviation, flight
training, ballooning, parachuting, gliding, hang
gliding, aerial photography, air ambulance, crop
dusting, police air patrols and forest fire fighting.
Civil Aviation
Ref: Wikipedia.com

6. Air transport industry
a major contributor in global GDP

7. Air Transport vs. Employment
Direct impacts:
 The world’s airlines carry:
over 03 Billion Pax. / year &
50 Million tones of freight.
Causing:
8.7 million
Direct jobs generating within the
air transport industry
$606 Billion
Contributing to global economy
Air transport system that provides jobs, trade, connectivity, tourism,
vital lifelines to many remote communities and rapid disaster response.
Ref: www.atag.org (aviation benefits beyond borders April 2014 report)

8. Other contributor to World GDP
Pharmaceuticals $451 billion
Textiles: $223 billion
Automobile $555 billion
chemicals: $1,282 billion
Ref: www.atag.org
(aviation benefits beyond borders April 2014 report)
Air Transport vs. Employment

9. Passenger Traffic is outperforming GDP Growth:
Ref: int’l air traffic association (IATA)

10. Passenger Traffic Growth Various by Regions
Ref: int’l air traffic association (IATA)

11. Employments:
The aviation industry itself is a major direct generator of employment and
economic activity in:
 airline and airport operations,
 aircraft maintenance,
 ATM / ANS providers
 head offices and activities directly serving air passengers,
 civil aerospace manufacturers, selling aircraft and
components to airlines and related businesses
Air Transport vs. Employment
Ref: www.atag.org
(aviation benefits beyond borders April 2014 report)

12. Ref: www.atag.org (aviation benefits beyond borders April 2014 report)
Civil Aviation & the World Economic
 Airlines or GHAs: 2.3 million people (26%of the total)
(flight crew, check-in staff, maintenance crew, reservations and head office staff)
 Airport Operators: 470,000 people (5%of the total)
(airport management, maintenance and operations)
 Other non- aviation groups: 4.6 million jobs (53%)
(at retail outlets, restaurants, hotels, government agencies, etc.)
 Manufacturer: 1.2 million jobs (14%) of civil aircraft
 ANS providers: 195,000people (2%)
Air transport industry worldwide directly generated 8.7 million
Direct jobs generating within the
air transport industry

13. Ref: www.atag.org (aviation benefits beyond borders April 2014 report)

14. Civil Aviation & the World Economic
Indirect impacts on employment:
 Air transport Industry indirectly employment and activities
of suppliers to the air transport industry — for example,
 Aviation fuel suppliers
 construction companies that build airport facilities
 suppliers of sub-components used in aircraft
 manufacturers of goods sold in airport retail outlets
are supported through the purchase of G&S
by companies in the air transport industry..
over
9.8 Million
Indirect Jobs globally
Approx.
$697 Billion
to global GDP in 2012-13
Ref: www.atag.org (aviation benefits beyond borders April 2014 report)

15. Air transport stimulates tourism
Economic
 Tourism makes a major contribution to
the global economy. It directly
contributed
$2 trillion to world GDP in 2012-13
and provided
over 101 million jobs globally,
3.4%of total employment.
Ref: World Travel & Tourism Council

16. Air transport stimulates tourism
Economic
 Aviation plays a central role in supporting tourism. Over
52% of international tourists travel by air.
 Tourism is particularly important in many developing
countries, Island states:
 In Africa, 2.5 million people (approx.) directly employed in
tourism are supported by overseas visitors arriving by air,
representing 30% of all tourism jobs in Africa.
 In island states, 25.9 % of economy & ¼ of its Jobs relay
on Tourism
Ref: World Travel & Tourism Council

17. Contribution to world trade:
Indirect impacts: Contribution to world trade
 Air transport is a vital component of many industries global supply chain for
its fast & reliable over great distance
 for the transfer of time sensitive goods.
 .Rapid & urgent delivery of spare parts for machinery and
equipment
 .High value, lightweight and sensitive electrical
components.
 Exporters of perishable products

18. Civil Aviation & the World Economic
South of Southern China’s
Ref: www.aviationbenefitsbeyondborders.org

19. Threats to air transport industry viability
(what means to world economy)

20. Threats to air transport – Selected Cases
The most safest mode of transportation has Few big threat
are:
 Aviation security / terrorism etc..
 Aviation safety / Flight Failure etc..
 Natural disaster (volcano ashes)

21. Threats to air transport
MH17 shout down in east Ukraine:
 Eastern Ukraine airspace over almost shut off
 Bearing loss of $20 million /year
(on account of overflying aeronautical revenue)
 Ukraine shares gain for Rumania, Bulgaria , Poland
& turkey etc.
Malaysian airlines loses of third quarter
reached to $167.4 million (Sept. 2014)
Ref: http://worldairlinenews.com/2014/12/02

22. Threats to air transport
Icelandic Volcano Ashs 2010: On 14 April 2010, Iceland’s Eyjafjallajokull volcano
erupted with an ash plume that rose over 3km and, with the help of winds,
blew across much of Europe’s airspace. It provides a useful study of how
modern life might be impacted without aviation. A week-long disruptions of ATS in
EU
 over 100,000 flights cancelled
 10 million passengers affected,
 cost of $5 billion lost to global GDP
(15 April and 24 May 2010)

23. Threats to air transport
Icelandic Volcano Ashes 2010

24. Social Benefits of air Transport
 Contributes to sustainable development by:
 Facilitating tourism and trade
 Generating economic growth
 Creating jobs
 Increasing tax revenues
 Facilitates the delivery of emergency and humanitarian aid
relief
 Swift delivery of medical supplies, organs for transplantation

25. Pakistan Civil Aviation / air transport industry
Aviation Growth contribution to the country GDP

26.  Pakistan aviation industry started when Orient Airways
merged with PIAC to become the national flag carrier
called PIA
 PIA remained the only operator for many years,
Pakistan Civil Aviation starts

27. Early 90s:
 Major growth in Pakistan aviation industry & 4 new private
airlines launching operations
 Competition started with Govt. controlled PIA
 UN Economics Sanctions:
◦ adversely affected local aviation mkt.
◦ 2 of 4 airlines closed their operation
Pakistan Civil Aviation starts

28. Early 2000s:
 Entrance of M/s. Airblue with new state of art aircrafts.
Pakistan Civil Aviation starts

29. Pakistan Air Transport Industry is regulated by Pakistan
CAA, three main functions of the authority are:
 Regulatory
 Air Navigation Services
 Airport Services
Pakistan Civil Aviation Authority

30. Pakistan CAA – Airports & Installations
Kohat

Parachinar
Muzaffarabad
 Rawalakot
 Mangla

Sibi
 Bhagtanwala
 Bahawalpur
 Jacobabad

Khuzdar
 Mirpurkhas
 Talhar

Dalbandin

Mianwali

Chitral
Gilgit

Skardu
Saidu Sharif


Bannu

D. I. Khan
 R.Y. Khan
 Sukkur

Moenjodaro
 Nawabshah
 Hyderabad
 Panjgur

Ormara

Jiwani

Peshawar

Islamabad
 Lahore
 Faisalabad

Multan
 Karachi

Quetta
 Turbat

Gawadar

Pasni

Zhob

D.G.Khan
 Sehwan Sharif
 Walton
Total Airports : 44
Total Operational : 27
International : 15
Domestic : 12
Scaled down : 06
Closed : 10
Under Const. : 01
A R A B I A N S E A
I R A N
C H I N A
 Sialkot

Thar

31. List of Pakistan registered airlines
As on April 2005:
Airline Call sign Hubs Destinations
Fleet Size
Current Orders
Airblue Airblue JIAP Karachi 11 9 0
Air Indus Air Indus JIAP Karachi 8 3 0
Pakistan
International
Airlines
Pakistan
International
JIAP Karachi 66 49 29
Shaheen Air Shaheen Air JIAP Karachi 23 21 4

32. Pakistan Economy Overview 2012-13
 Economic crises in the country recent history.
 Economy grew to only 3.6% as compared to 4.4%
in the previous FY2012 (-0.8 % downfall in
FY2013-14)
 Power shortage become so severe that it wiped
out 2%from out GDP,
 Agriculture, Manufacturing, Service
sector performed below their capacity.
Despite the difficult economic conditions,

33. Key Financial highlights: Pak. CAA
 Authority revenue grew by 46% to Rs 39.7 billion
(highest ever) (Rs 27.1 Billion in FY2012)
 Surplus before tax. 2012-13 Rs 18.4 billion as
compared to Rs 11.7 Billion on 2011-12 (due to rev. of aeronautical
charges)

34. Key Financial highlights: Pak. CAA
Liquidity position:
 Authority enjoying Rs. 4.97 Billion of liquid assets.
(vital to external borrowing to finance the several mega
projects for its growth in the years to come)

35. Pak. Civil Aviation Vs. Country Economy
0
5000
10000
15000
20000
25000
30000
35000
40000
2009 2010 2011 2012 2013
11139 12794 13863
22117
34548
3108
3032
3333
3587
4094
16007 17733 18897
27178
39716
Pak CAA - 5 year at a glance
aeronautical revenue non aeronautical revenue totla income
millions

36. Passenger Flow in Pakistan
FY 2013-14:
 Int’l Traffic increased by 11%to 10.87 million pax.
 Domestic pax. increased up to 3.5% as 7 million,
over the previous year.
 Fastest growth in passenger traffic in the last 3
years.

37. Aircraft & Pax. Movements FY 2012-13
0
5000
10000
15000
20000
25000
30000
JIAP BBIAP AIIAP BKIP QIAP other
Airports
25520
14953 15440
5648
2745
11676
23870
14384 15444
5431
1649
8997
Aircraft Movements (Dom & Int'l) to & from Pak
2012 2013
0
0.5
1
1.5
2
2.5
3
3.5
JIAP BBIAP AIIAP BKIP QIAP other
Airports
3.078742
1.888687
1.983082
0.587057
0.149398
0.421201
3.071217
2.001758
2.163126
0.647622
0.153717
0.357424
Millions
Passenger movements (Dom & Int'l)
2012 2013
Pax Mov 2012 2013
Int’l 4,962,357 5,150,864
Dom. 3,145,810 3,244,000
total 8,108,167 8,394,864
A/C. Mov 2012 2013
Int’l 33034 31613
Dom. 42948 38162
Total 75,982 69,775

38. Air transport market share in Pakistan

39.  Pakistan has strategic location
for traffic overflying between
Far-East and Europe/America.
 The growth in aviation industry
during last decade also
witnessed by Pakistan.
Air Transport growth in Pakistan (2002-2012)
2002: 62276flights,
2012: 200,000flights
More than 200% Increased in
Traffic overflying Pakistan
Ref: Pakistan CAA Data

40. Projected Transit Traffic Growth in Pak. (2013-2022)
Ref: Pakistan CAA Data

41. Passenger Traffic is outperforming GDP Growth:
Ref: World Bank Data
Passenger Traffic flow in Pakistan
Pakistan GDP
Billions of US Dollars

42. Comparison with neighboring country

43. Comparison with neighboring country

44. Research, Compiled & presented by
Noman Khan
MBA / MS (Aviation Mgt.)
Cell; 92-333-3274654
Air Transport Industry
(Contribution in Macroeconomics Stability)