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Overview

AIR TRANSPORT AND THE WORLD BANK

Context

Air transport has become an essential economic and social conduit throughout the world. Beyond the benefits of fast and inexpensive transcontinental travel, air transport has also become a vital form of shipping for high value items that need to come to market quickly, such as agricultural products subject to spoilage. Modern jet aircrafts are capable of crossing vast distances at high speeds. Their main infrastructure needs are at the beginning and end of their destinations, and can be built to create large economies of scale. Airliner capacity has grown significantly over the last 60 years, from the Douglas DC-3 capable of carrying 32 passengers and a maximum load of 4.6 tons to the recently introduced Airbus 380 with a seating capacity of 525 and a maximum load of 338 tons for the freight version.

Strategies

In the early days, the World Bank has financed equipment such as aircraft for state-owned airlines, and infrastructure projects. With the liberalization of the air transport sector worldwide, and the privatization of many state-owned airlines, the World Bank has shifted its pure investment focus to a more policy and regulatory support function. While the World Bank is still occasionally financing some large airport projects, such as Egypt's Terminal III, IFC has engaged in financing private air carriers in developing countries.

Certain regions of the Bank have continued to support client countries in air transport-related projects, specifically Africa, where the Bank's main focus in the last 10 years was the gradual liberalization of the air transport sector continent-wide.
Increased focus on trade facilitation and the development of the private sector, which in many countries includes the tourism industry as a significant player, has identified air transport as a crucial element of development. However, in many countries the air transport infrastructure, regulatory frameworks, and safety and security oversight systems are inefficient. The traveling public's demand for high safety and the events of September 11 have put significant pressure on regulatory agencies to establish and maintain acceptable global standards for aviation safety and security. Countries which do not comply with these standards will become isolated from the international air transport network. This would have serious negative implications for development.

To assist clients in establishing a safe, secure, cost efficient, available and reliable air transport network, the Bank's transport division is mandated to provide the following services:

  • Operations work and support on transport related projects of the Bank;
  • Economic sector work and support on air transport related matters;
  • Bank internal knowledge dissemination and capacity building;
  • External relations with international air transport related organizations;
  • Definition of priorities and policy advice on air transport of the Bank.

Results

Over the years of Bank operation, the air transport sector has provided various services to client countries, including air transport policy advice, sector analysis and master planning, capacity building for regulatory oversight, infrastructure investment for airports and air traffic control systems, as well as air carrier restructuring or privatization.

Research projects being conducted by the air transport sector includes liberalization of air transport in Africa, evaluation of new technologies such as Automatic Depedent Surveillance-Broadcast(ADS-B), air transport and energy, climate change and aviation, and Bank internal air travel advisory service.

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PARTNERSHIPS

International Civil Aviation Association (ICAO)         
International Air Transport Association (IATA)
US Federal Aviation Administration (FAA)
More Partners... 




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