The Aviation Industry: Benefits Beyond Borders January 1, 2014 marked 100 years of commercial aviation in the world, when the first scheduled flight with a paying passenger happened on January 1, 1914. Ever since, aviation has transformed the world. People now have the freedom to make connections on a global level. Undeniably, the Aviation Industry plays a critical role in creating an enabling environment for economic growth and development in Guyana and around the world. It is a large and growing industry that supports travel, trade, investment and tourism via a rapid transportation network. By 2026, it is forecast that aviation will contribute approximately US $1 trillion to world gross domestic product (GDP). More so, the economic value created by this sector is enormous and transcends its contribution to GDP and the provision of jobs for the people. More specifically, it allows for foreign direct investment (FDI), business cluster development, specialization, and other spillover effects. Economic activity is also stimulated across the country, especially, in isolated areas. The socio-economic development of hinterland population is dependent on the ability of hinterland regions to access markets in the coastal region of Guyana and abroad. Aviation also plays a vital role in emergencies like air ambulance and medical evacuation for seriously injured or unconscious persons, especially in isolated areas. Over the years, we have witnessed the increase of business travel due to the international investments of companies to boost their production supply and, customers. Ultimately, this has led to the rapid growth of world trade in goods and services among countries. With the opening of foreign markets to exports, lowering long-distance transport times and costs are critical to trade. Therefore, the aviation industry will always be a relevant and important sector that facilitates economic growth, word trade, international investment and tourism. It is the center of the globalization within other industries. Ever since the inaugural flight in Guyana, when a German-American man took off from the Cannon race course, now known as Bel Air Park, and flew around the capital city of Georgetown, there has been propagation within the industry. Locally, the industry links the densely populated Coastal Region with remote areas such as the hinterland region and other areas that are inaccessible by any other means of transportation. Internationally speaking, because of the connectivity provided by the industry, doing business is no longer local but also regional and global. Therefore, it is an important infrastructure asset that facilitates activities that enhance a nations productivity and is central to the globalization taking place in many other industries. In Guyana, the aviation industry contributes significantly to the Gross Domestic Product (GDP). The provision of reliable transport system is a necessary precondition for the full participation of remote communities to benefit national development. As a nation develops, so does the aviation sector, and, as the aviation sector develops, economic activity and living standards are improved. Because investment decisions are determined by the quality of infrastructure and support services, there has been increased commitment by the Government of Guyana to improve aviation infrastructure across the country. Travelling around Guyana is usually done by road and water. Although the roadways have undergone tremendous development, especially, the Linden-Lethem road, sections remain inaccessible due to inclement weather. This particular road, the Linden-Lethem road, is vital to providing the linkage with a number of mining and forestry communities, the more developed coastal areas and enhancing trade with Brazil. Thus, it is helping to reduce the trade deficit between Guyana and Brazil. Until now, most of Guyana’s exports and imports are transported by sea. Development plans are underway to enhance the operational efficiency of the Georgetown port. The necessity and importance of the aviation industry in providing an efficient and alternative mode of transportation cannot be underscored. In recent years, the CheddiJagan International Airport (CJIA) and the Ogle Airport, have both been upgraded and expanded. The Ogle Airport is now an international airport that can accommodate larger aircraft, and is presently serving Brazilian traffic to Lethem and to Suriname. The expansion now enables the airport to increase its accommodation of incoming and out-going flights. The CJIA has undergone significant improvement and is still in the process of being further modernized. These modernizations will leave CJIA comparable to those of any world class airport and include tripling the size of the airport, expanding the present runway by 3,300 feet and installing cold storage facilities to increase the export of agricultural produce from Guyana. The US$150M project is funded by the Government of China through the Chinese Exim Bank. According to reports, the backfilling of a test section for the CJIA runway has been completed. It is estimated that approximately 14 air carriers fly from CJIA to serve the domestic, regional and intercontinental destinations. Local destinations include Annai, Karanambu, Lethem, Karasabi, Aishalton, Mahdia, Orinduik, Monkey Mountain, Kaieteur, Imbaimadai, Kamarang, Mabaruma, Matthew Ridge, Bemichi and Baramita. There are 54 airstrips in the hinterland region. These serve isolated communities in the interior, allow for scheduled flights for tourism and general aviation associated with gold mining. Air infrastructure is seen as a key ingredient to productivity and growth, boosting international competitiveness and the flow of foreign investment and stimulating a wide range of economic activities. As markets and economic activities are linked, business efficiency and productivity and easy access to suppliers and customers over long distances are made possible by airports. Air infrastructure and human development occur simultaneously. The industry helps to improve the living standards of people and reduce poverty through the generation of job opportunities, increased revenues from taxes and the conservation of protected areas. The exposure to higher competition, efficiency and growth forces businesses to develop and maintain a competitive edge in the market. The aviation industry also augurs well for the tourism sector, which in recent years has witnessed exponential growth, especially in the hinterland region. The industry is also an efficient and cost-effective medium to transport perishable goods and other products over long distances to customers. This serves as an incentive for both foreign and local companies to invest in Guyana and set up business in any location. Only recently, an action plan for the domestic aviation industry, which was fashioned by local airline owners, operatives and other stakeholders, was approved by the National Competitiveness Council headed by the President of Guyana, H.E. Donald Ramotar. Over a three-year period, the plan intends to ensure that the Ogle International Airport and the operations of local airlines at Ogle are in full compliance with the International Civil Aviation Organisation (ICAO) Standards and recommended practices. Eventually, this will lead to the enhancement of the sector by ensuring a high level of development, regulation and safety within the industry. With this, the Guyana Civil Aviation Authority (GCAA) plans to secure Category One status for the country, which will allow carriers from Guyana to fly directly to the United States of America. The Aircraft Owners’ Association of Guyana has indicated that the industry will also benefit from $80M for navigational aid upgrade. Presently, an Automatic Dependent Surveillance – Broadcast (ADS-B) programme has been introduced, with the implementation of a six-month pilot. The ADS-B will allow Guyana’s airspace to accommodate four times the present volume of traffic or aircraft operations and will allow each aircraft to broadcast its own GPS position, along with other information including heading, ground track, ground speed and altitude. The local industry has similarly attracted much investment from foreign airlines including CompañíaPanameña de Aviación, S.A., (COPA) Airlines which is based in Panama City, Panama. This airline will provide affordable airlift from Guyana to Panama twice weekly from July 11, 2014; ConsorcioVenezolano de IndustriasAeronáuticas y ServiciosAéreos, S.A., (Conviasa) which is based in Maiquetía, Venezuela that will provide direct service from Puerto Ordaz to Georgetown, Guyana from February 2014; Surinam Airways; Fly Jamaica and TravelSpan. These investments generate many benefits in aviation infrastructure and services, particularly in developing economies such as Guyana, boosting their long-term productivity and economic growth. A productive and efficient aviation industry supports the development of the globalized economy. The industry provides the only worldwide transportation system which makes it essential for global business and tourism. Aviation broadens people’s leisure and cultural experiences via wide choice and/or affordable access to destinations across the globe and often serves as the only means of transportation to remote areas promoting social inclusion. The aviation industry has a strong economic impact, through its own activities, which serves as an enabler of other industries. Its contribution includes direct, indirect and induced impacts, which are related to the total revenues of the aviation industry. The catalytic impacts of the industry are considered “spin-off” effects on other industries. “Spin-off” effects of the aviation industry on other industries include: 1. Air transport facilitates world trade 2. Air transport is indispensable for tourism 3. Air transport boosts productivity across the global economy 4. Air transport improves the efficiency of the supply chain 5. Air transport is an enabler of investment both into and out of countries and regions 6. Air transport can act as a spur to innovation 7. Air transport provides consumer welfare benefits to individuals Air transport is crucial to the easy and efficient trade and marketing of goods and services on a global level. This enables companies to service and meet clients, and promotes the efficient organisation of production. Air transport’s impact on business operations: 1. Servicing and meeting customers: air services allow better contact and more effective communication between buyers and sellers. This contributes to: companies making new sales; and to meeting the needs of their existing customers. 2. Increasing the range of product markets: the development of e-business helps companies identify low-cost suppliers and air transport helps connect buyers and suppliers. 3. Production efficiency: Businesses rely on air services for production efficiency. Passenger services enable managers to visit overseas sites and other sub-sections of their business in other countries; enable a choice of the best suppliers from a range of competitors; facilitate the spread of new production techniques; and make it easier for companies to attract high quality employees. 4. Facilitating the development of e-commerce: enabling, for example, companies to transport online shopping orders quickly and reliably between countries, allowing products to be stored in large warehouses reducing retail and distribution costs. 5. Providing fast and reliable delivery of high-value products: especially relevant to modern dynamic industries, such as the pharmaceutical/ biotechnology and telecommunication equipment sectors 6. Facilitating improved stock management and production techniques: reducing companies’ storage costs, losses due to stock outages and disruption caused by failure of machinery on production lines. 7. Facilitating the development of the express carrier industry: which provides guaranteed, rapid, door-to-door delivery services and increasingly offers logistics support for companies. The aviation industry is the world’s only rapid worldwide transportation network which supports international business and tourism, enables economic growth and provides various social benefits. The aviation sector has an enormous global impact on jobs and GDP, and contributes to other industries by enabling their growth and supporting their operations. The global connectivity that air transport facilitates, has positively impacted Guyana, and has boosted the country’s overall productivity and economic growth in the long run.
Posted on: Mon, 02 Jun 2014 14:41:45 +0000
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