This chapter describes the basic features of international air transport. It opens with a historical perspective from the 1930s to modern day. The modern air transport industry is one that increasingly operates within a liberal market context. While government controls over fares, market entry and capacity continue in many smaller countries, they are gradually and almost universally being removed or relaxed. The chapter explains why the air transport industry is now large - it accounts for about 1% of the GDP of both the EU and the United States. It is an important transporter of high-value, low-bulk cargoes. International aviation moves about 40% of world trade by value, although far less in physical terms. The chapter explores the effects of globalisation on airlines, not just on the demand side - where the scale, nature and geography of demand in global markets has led to significant shifts - but also on the supply side, where government policies (e.g. regarding safety, security and the environment) require international co-ordination. It examines technological developments. Two major innovations in air transport were the introduction of jet engines, which considerably shortened travel times, and the introduction of wide-bodied aircraft, which gave airlines the opportunity to reduce the cost per seat. Both developments reduced the generalised cost of travel, so that they had a positive impact on demand. And in closing, the chapter explores changing industrial needs.
|Title of host publication||Globalisation, Transport and the Environment|
|Publisher||Organisation for Economic Cooperation and Development (OECD)|
|Number of pages||40|
|ISBN (Print)||972010021P, 9789264079199|
|Publication status||Published - 1 Jan 2010|