Air Connectivity in Tourism

Air transport is vital for the modern economy. It provides the city-pair connections that serve as virtual bridges supporting the flows of key economic activities between markets. As the only rapid global transportation network, it facilitates links between businesses, governments and people – enabling world trade, investment, tourism and travel among other key economic activities.   

While this report focuses on the important role that air connectivity plays in promoting global economic prosperity, we acknowledge and discuss the disruptive impact that the COVID-19 pandemic has had on air connectivity around the globe. We provide a snapshot of global and regional air connectivity before and during the pandemic, discussing the importance of restoring air connectivity to support economic recovery. In a way, the outbreak and spread of COVID-19 proved to be a natural experiment to examine the interplay between the levels of connectivity and key economic flows, such as tourism, trade and investment.  

Air connectivity enables cross-border trade Air connectivity facilitates world trade. It enables countries’ participation in the global economy by increasing access to international markets and facilitating globalisation of production and supply chains. Nearly 61 million tonnes of freight was carried by air in 2019. The total value of goods transported by air is $6.5 trillion, representing 35% of all international trade.   Air connectivity supports tourism flows Aviation is indispensable for tourism, a major engine of economic growth, particularly in many emerging economies. Globally, 54% of international tourists travel by air. Aviation spurs innovation by facilitating the exchange of goods, services, knowledge and ideas. It widens markets and provides greater access to international capital, human resources and investment. Aviation’s global economic footprint (direct, indirect, induced and tourism catalytic benefits) is estimated at $3.5 trillion, contributing 4.1% to the global gross domestic product (GDP) and supporting 87.7 million jobs. 

Air connectivity enables cross-border investment and knowledge exchange Air connectivity enabled through regular and speedy air service unlocks a wide range of economic benefits. Therefore, improving air connectivity can generate a substantial boost to economic growth. Air connectivity contributes to improved economic productivity by encouraging investment and innovation, improving business operations and efficiency, and allowing companies to attract high-quality employees and share knowledge. 

Air connectivity is an important policy concept, which is becoming increasingly relevant in various international fora. Policy makers in the air transport sector need a rigorous measure to understand how air connectivity is evolving over time in order to compare the level of air connectivity across different cities, countries and regions. The IATA air connectivity measure captures important aspects of air connectivity – such as the economic importance of the destination city and onward connections to the rest of the global air transport network – while at the same time providing a simple and intuitive way to measure and report air connectivity.  

The onset of the global pandemic has led to significant disruptions in air connectivity across all regions. According to the IATA connectivity measure, all regions sustained sharp declines in air connectivity levels relative to the previous year. Connectivity in some regions such as Asia Pacific and North America proved to be more resilient due to the presence of sizable domestic aviation markets. Domestic markets have been more resilient to disruptions in air connectivity and are expected to recover faster than international air travel. Other regions, such as Africa, Europe, Latin America and the Middle East experienced drops in connectivity levels close to 90% at the lowest point.

While connectivity has been recovering as this report is being published, several challenges for restoring connectivity to pre COVID-19 levels remain in the short and medium term. Firstly, ongoing restrictions on international travel and quarantine requirements continue to suppress leisure and business travel, posing a challenge for the recovery in air connectivity. Secondly, the timing of restoring passenger confidence in flying will continue to shape the recovery in air transport service and air connectivity. Thirdly, economic recovery will play an important role in supporting recovery in air travel demand and air connectivity once border restrictions are lifted. It is important to point out that recovery in air connectivity itself will contribute to economic recovery around the globe.  In the past five years, economic development worldwide has been getting a significant boost from improved air transport linkages. 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. Before the COVID-19 pandemic, the number of unique city-pair connections was set to exceed 23,000 in 2020, more than 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. Air connectivity is essential for trade flows; trade itself has resulted from globalized supply chains and associated inv estment. Air transport is vital for manufactures’ trade, particularly trade in components which is a major part of cross border trade today. Air connectivity is also vital for supporting tourism flows, particularly for many emerging and island economies de pendent on tourism spend as an economic engine.

Source: IATA