FEATURED

Global Strategy Summit Beijing, China Sept. 14-15, 2009  World Bank Air Transport Annual Report (Fiscal Year 2008) (PDF, 917 KB) ICAO and the World Bank Development Forum - Kuala Lumpur, Malaysia, October 14 & 15, 2008 World Bank Air Transport Annual Report (Fiscal Year 2007) (PDF, 917 KB) Forum on Air Transport ir Africa - Addis Ababa, April 23 - 25, 2007 The PRAL Air Transport Office Fiscal Year 2006 Annual Report  (PDF, 509 KB)

Air transport has become an essential economic and social conduit throughout the world. Beyond the benefits of fast and inexpensive transcontinental travel, air transport also has become a vital form of shipping for high-valued items that need to come to market quickly, such as agricultural products subject to spoilage. Modern jet aircraft 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 tonnes to the recently introduced Airbus 380 with a seating capacity of 555 and a maximum load of 338 tonnes for the freight version.

The facts below highlight air transport's impact worldwide:

• In 2007, close to 2.3 billion passengers were transported by the world’s airlines for the first time, approx. 30% of the world’s population.
• Air cargo has become the essential mode of transportation for high value and perishable goods. 40% of all goods by value worldwide are transported by air. Many developing countries depend heavily on air cargo for their exports as other modes are unreliable or non-existent.
• Worldwide growth of air travel in revenue passenger kilometers (RPK) traveled is expected to grow 4.9 % in the next 20 years (2005-2025) and growth in air freight is expected to be over 6% in the same period.
• In Africa alone RPKs have grown 12.1% in 2005. South America has seen a growth rate of 8.0%, and the Middle East 13.6%. These figures in part far exceed overall economic growth rates for these regions.

• By 2010, the worldwide number of people traveling by air could exceed 2.3 billion

• 41 million tons of freight are transported by air annually, up from 30.4 million in 2000.

• Air transport worldwide employs 4 million people

Yet by the same token, air transport now faces a fresh set of challenges, much endangering the more optimistic growth forecasts. Fuel costs have risen substantially, from an annually US$ 46 billion in 2000 to an astounding US$136 billion in 2007, when crude oil  prices were at $73 per barrel – still just above half of the US$ 140 per barrel seen more recently in mid 2008.

In addition, the industry, in particular because of its consistent growth over time, is becoming more and more of a target of environmental concerns. Though only a very small fraction of overall emissions today (estimates are in the 3 to 4% range), the recent rapid growth of air transport has caused such concerns that it is now becoming the target of new tradable carbon rights rules being applied in Europe, with discussions of similar legislation (Lieberman-Warner proposal) occurring in the United States.

In the early days, the World Bank has financed equipment for state owned airlines, such as aircraft and infrastructure projects. With the liberalization of the air transport sector worldwide, and the privatization of many state-owned airlines, the WB 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, the IFC has engaged in financing private air carriers in developing countries.

Certain regions of the Bank have continued to support client countries in AT related projects, specifically the Africa region, 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. However, in many countries the air transport infrastructure, regulatory framework, and safety and security oversight systems are inefficient. The traveling public's demand for high safety and the events of September 11 have put the 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 at the transport division has established a thematic group which is internally called PRAL (Ports, Railroads, Air Transport, and Logistics). The Air Transport office 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.