Aviation sector: Connecting people and economies
Local governments play a vital role in the expansion and performance of an airline in a country or state. The industry also plays a vital role in a country or a state’s economic development.
In its latest 2017 mid-year economic performance of the airline industry, IATA highlighted the importance a strong partnership between local governments and the aviation industry.
“This wider economic benefit is being generated by increasing connections between cities - enabling the flow of goods, people, capital, technology and ideas - and falling air transport costs,” it said.
It expected that the number of unique city-pair connections could reach more than 19,000 this year, almost double the connectivity by air twenty years ago.
“The price of air transport for users continues to fall, after adjusting for inflation. Compared to twenty years ago real transport costs have more than halved,” it added.
“Governments have also gained substantially from the good performance of the airline industry. Airlines and their customers are forecast to generate US$124 billion in tax revenues next year.
“That’s the equivalent of 45 per cent of the industry’s gross value added (GVA), paid to governments in payroll, social security, corporate and product taxes. In addition the industry continues to create high value added jobs,” it said, noting that that charges for services are excluded.
Similarly, MAVCOM highlighted, “Improved connectivity may promote tourism by making more destinations easily accessible and may also support mobility between countries, allowing businesses to access a wider pool of labour.”
It noted, in terms of the number of destinations served by Malaysian airports, Malaysia’s connectivity has improved from being connected to 107 destinations in 2010 to 116 destinations in 2016.
“These numbers - an increase of 8.4 per cent - represent the total destinations that can be reached via both direct and indirect flights from Malaysia,” it added in its ‘Waypoint’ report.
In Sarawak, the state government is pushing to increase air connectivity and frequencies of direct flights to and fro Sarawak to other states as well as major cities in foreign countries such China.
The state government recently said that the Ministry of Tourism, Arts and Culture would continue to focus on direct routes to China, Taiwan, Singapore, Korea and Japan.
The Ministry had also pointed out that so far, AirAsia has increased its direct flights to Sarawak over the last few months.
With direct flights to Pontianak-Kuching, there are also plans to establish direct flights to China via Vietnam.
Meanwhile, AirAsia reiterated its commitment in developing Sarawak’s air connectivity. During the launch of the KuchingLangkawi route last month, AirAsia head of Commercial Spencer Lee said, ““We are committed to continue growing this hub as Sarawak has a lot to offer beyond a tourism destination.
“Increasing connectivity into Sarawak is important for us as it is also one of the top preferred investment destinations in Malaysia with Sarawak Corridor of Renewable Energy (SCORE) attracting investors to set up manufacturing plants on ICT, agriculture, industrial and many more.”
“Last year, we have flown about 3.2 million guests in and out of our Kuching hub and we believe the introduction of the two new routes to and from Kuching namely Pontianak recently and Langkawi today, echoes our commitment in Sarawak.
“We would also like to thank the state government for their continuous support and guidance and we look forward to strengthen this hub with further connectivity in the future.”
Lee believed the time was right for the airline to have the Kuching- Langkawi route, as well as having a strengthened partnership with the state government and STB.
“We are very focused on improving this route and keeping it, but we alone cannot provide the air connectivity.
“So we need a close partnership from the tourism sector including hotels to assist us,” Lee said, while expressing confidence that the route would grow.