Air connectivity is vital for the proper functioning of a modern economy. It links markets and people through city-pair connections that serve as virtual bridges, supporting the flows of key economic activities across markets.
Air connectivity through direct and efficient connections between cities enables cross-border trade and supports tourism flows.
But Covid-19 has literally robbed the world of decades of progress in shrinking distances and bringing people together through connectivity. Prior to Covid-19, the growth in air connectivity was a global success story.
The pandemic-induced crisis has had a devastating impact on international connectivity, shaking up the rankings of the world’s most connected cities.
For example, London – the world’s number one most connected city in September 2019 – has seen a 67% decline in connectivity in the same period this year. By September 2020, it had fallen to the eighth position, globally.
In the Middle East, with the exception of Qatar, connectivity levels reduced by more than 85% for the five most connected countries in the region. Despite border closures, Qatar allowed passengers to transit between flights. Doha is also an important hub for air cargo.
Before the Covid-19 pandemic, economic development worldwide was getting a significant boost from air transport and improved connections between cities.
The number of unique city-pair connections with scheduled air services was set to exceed 23,000 in 2020, more than double the connectivity by air some 20 years ago, points out the International Air Transport Association.
The price of air transport continued to decrease, after adjusting for inflation. Compared to 20 years ago, real transport costs have more than halved.
The disruptions brought about by the Covid-19 pandemic have caused a significant loss in city-pair connectivity, IATA data show.
At the lowest point in April, the number of unique city pairs connected by regular air service declined by 65%, relative to the same period last year, with less than 7,000 city-pair connections remaining.
As of end-October, the number of unique city-pairs was 36% lower than its level at the beginning of this year. Industry experts do not expect connectivity to recover in the remaining part of the year.
Hence, unique city-pair connectivity will decline for the first time since the global financial crisis, experts point out. There is also a risk that the number of unique city-pair connections is not fully recovered, which would undo some of the gains of recent years.
Air connectivity facilitates world trade and is critical for global supply chains. It enables countries’ participation in the global economy by increasing access to international markets and facilitating globalisation of production and supply chains.
Nearly 61mn tonnes of freight were carried by air in 2019, an IATA research indicates. The total value of goods transported by air is $6.5tn, representing 35% of all international trade.
Aviation is indispensable for tourism, a major engine of economic growth, particularly in many emerging economies. Globally, 54% of international tourists travel by air.
It spurs innovation by facilitating the exchange of goods, services, knowledge and ideas. Aviation 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 $3.5tn, contributing 4.1% to the global gross domestic product (GDP) and supporting 87.7mn jobs.
More than half of this employment and economic value is said to be at risk from the collapse in global air travel demand.
“Governments must realise that there are major consequences for peoples’ lives and livelihoods. At least 46mn jobs supported by air transport are in peril. And the strength of the economic recovery from Covid-19 will be severely compromised without the support of a functioning air transport network,” noted Sebastian Mikosz, IATA’s senior vice president for Member External Relations.
Air connectivity enabled through regular and speedy air service unlocks a wide range of economic benefits. Therefore, improving air connectivity can give a substantial boost to economic growth.
It 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.
Undoubtedly, 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 sizeable 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.
IATA research has shown that a 10% rise in connectivity, relative to a country’s GDP, will boost labour productivity levels by 0.07%.
The recently concluded 76th Annual General Meeting of the global trade body of airlines called on governments to safely re-open borders using testing.
“The systematic testing of travellers is the immediate solution to rebuilding the connectivity that we have lost. The technology exists. The guidelines for implementation have been developed. Now we need to implement, before the damage to the global air transport network becomes irreparable,” Mikosz said.
Clearly, air connectivity serves as a vital lifeline for many remote and peripheral communities. Worth remembering, no connectivity means no economic growth.
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