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Special Report - Breaking the Bottlenecks

Special Report - Infrastructure

The tremendous demand for air transport in the coming decades is adding to the pressure for effective aviation infrastructure development

A January 2011 report by the New York-based Regional Plan Association (RPA) makes plain aviation’s importance to the global economy, and the world’s social and cultural structures. “Without the ability to efficiently transport business and leisure travelers and time-sensitive cargo, both domestic and international business would grind to a halt. The leading economic sectors—financial and business services, tourism, pharmaceuticals, media and communications, higher education, and research and development—all rely on frequent air travel to many destinations. Having too few flights to handle demand will prevent millions from flying and cost the region thousands of jobs and billions of dollars.”

China would doubtless agree with the assessment that airport capacity is essential to economic success. The country has built 45 new airports in the past five years and is planning another 52 by 2020. In Asia-Pacific in general—now the world’s largest aviation market—new airports have been a response to, and driver of, economic growth. It is no coincidence that three of the world’s five largest airlines by market value are from the region. By 2030, the region will handle 80% more traffic than Europe according to Airports Council International.

Indeed, the world will look very different in 2030 as Asia’s booming middle class demands new connections and frequencies. Meeting that demand cannot be isolated to one region, however. Capacity has to be built in all parts of the network to avoid bottlenecks that could limit potential growth.

Paul Griffiths, CEO of Dubai Airports, says building airports early is necessary to avoid artificial constraints on growth. “We are not putting the cart before the horse by expanding Dubai International now and building Dubai World Central,” he notes. “Dubai had consistent growth until 2005 but, from 2005–2010, traffic doubled. The Dubai model not only shows the positive effects of aviation on the economy but has also provided the traveler with more choice, better service, and a cheaper price.”

It is a different situation in Latin America. Brazil is the powerhouse economy. Aviation-backed travel and tourism support 9.1% of Brazilian GDP and more than eight million jobs. But problems with São Paulo have led IATA to warn that the country will never fulfill its potential with the current infrastructure. São Paulo handles 25% of Brazil’s total traffic and is creaking at the seams with old and inefficient terminals.

An airport such as São Paulo will be vital to future aviation links. Significant investment in airports is never easy to come by, though, especially in such austere times. Privatization is becoming commonplace as cash-strapped governments look to refill their coffers. Private ownership of airports isn’t a problem as long as a strong regulator enforces efficiency and transparent costs.

There are other issues with supplying additional capacity. An obvious concern—most associated with Europe and the United States—is the environment, with many people equating a bigger airport with more emissions. This isn’t necessarily the case and extra capacity can often mitigate overall environmental impact by easing congestion. Diversifying flight patterns by adding runways can certainly ease noise concerns. Neither is the environment the whole argument given the economic stimulus. 

Other factors affecting potential airport construction include the advent of high-speed rail, the growth of secondary gateways, and slot management. For example, manipulation of slots can ensure current facilities eke out available operational efficiency. But ultimately, slot management cannot address congestion. It is about managing, not eliminating, scarcity. IATA remains opposed to the concept of slot auctions.

Perhaps the biggest problem ahead for the industry, though, is the airspace above airports. Big ticket items, such as the Single European Sky and NextGen in the United States—along with solutions for regional ‘hotspots’—must be implemented quickly. Otherwise, even with the current difficulties, the capacity of airports will soon outstrip capacity in the sky.

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