ECONOMIC BENEFITS FROM AIR TRANSPORT IN BOLIVIA - IATA

More documents

Recommendations

Info

Adding the demand-side contributions from air transport to those facilitated in tourism gives a total demand-side valueadded of $302 million, equivalent to 2.9% of Bolivia’s GDP (see Table 7). It also makes a contribution of between 2.4% and 3.1% of Chile’s employment, wage income and tax receipts, as well as a strong 5.1% contribution to exports. The demand-side contributions have all increased in absolute terms since 2001. However, their proportionate impact has declined in some cases. This reflects the rationalisation of the air transport industry within Bolivia and the strong growth in the Bolivian economy as a whole over the period, rather than any major decline in the importance of the air transport or tourism sectors. Looking forward, the suspension of services by LAB is likely to see a reduction in the economic contribution in 2007. However, the air transport and tourism sectors remain key potential drivers of future growth in the Bolivian economy. With underlying demand for air transport services still expected to grow, we would expect investment in new and replacement air transport services to increase and the contribution of the sector to the economy to grow over the medium to long term. Table 7: Demand-side Contributions from Air Transport and Tourism GDP Employment Wages Taxes Exports 2001 220 79,544 81 40 78 2002 208 81,586 77 38 86 2003 243 97,535 86 42 145 2004 266 103,684 83 52 167 2005 300 111,532 85 66 204 2006 302 107,747 92 64 186 Contribution to Bolivia’s Totals GDP Employment Wages Taxes Exports 2001 2.7% 2.0% 2.8% 2.7% 5.1% 2002 2.6% 2.1% 2.8% 2.7% 5.5% 2003 3.0% 2.4% 3.1% 2.9% 7.4% 2004 3.1% 2.4% 3.1% 2.9% 6.5% 2005 3.2% 2.5% 3.2% 2.8% 6.5% 2006 2.9% 2.4% 3.1% 2.8% 5.1% Source: Oxford Economics IATA Economics - www.iata.org/economics - ECONOMIC BENEFITS FROM AIR TRANSPORT IN BOLIVIA October 2007 10
ESTIMATING THE BENEFITS FROM NEW SERVICES There have been significant rationalisation and reduction in routes from Bolivia in recent years, many involving secondary routes within South America. However, several of the key routes to major hub airports have been retained, helping to minimise any reductions in overall connectivity levels. In addition, a new direct route has been established from Santa Cruz to Madrid. The route started in mid-2006 and has quickly expanded capacity. It accounts for over 20% of Bolivia’s current overall level of connectivity in 2007. It provides a significant economic contribution, even with just a half-year contribution in 2006 (see Table 8). This contribution will increase even further in 2007 Table 8: The Economic Contribution in 2006 of the VVI – MAD Route 2006 Estimated contribution of the VVI-MAD route in 2006 Departing passengers 990,000 16,924 Economic benefits to passengers (US$m) 196 3 Boost to GDP (US$m) 133 2 Boost to Employment 29,033 500 Boost to Wage Income (US$m) 40 1 Boost to Tax Revenues (US$m) 27 0.5 Source: Oxford Economics, IATA In 2006, based on only a half-year of operation, the route from Santa Cruz to Madrid was estimated to have nearly 17,000 departing passengers (with a similar number on the MAD-VVI leg), representing around 1.7% of the overall total of departing passengers from and within Bolivia. As an important route, the benefits of this service are likely to be proportionately greater than an average service. However, in the absence of more detailed estimates, assuming a linear impact for a change in passengers can provide an indication of the minimum benefits associated with the route. Table 8 shows that the MAD-VVI route creates at least US$3 million of consumer surplus for passengers, $2 million for GDP and boosts employment by at least 500 jobs. It also creates wage income of at least $1 million and $0.5 million of additional tax revenue for the government. However, these figures are based on only half a year of operations, with the contribution provided by the route expected to more than double in 2007. IATA Economics - www.iata.org/economics - ECONOMIC BENEFITS FROM AIR TRANSPORT IN BOLIVIA October 2007 11
Page 1: ECONOMIC BENEFITS FROM AIR TRANSPOR
Page 4 and 5: • The connectivity of Bolivia (as
Page 6 and 7: AVIATION PROVIDES AN ESSENTIAL GLOB
Page 8 and 9: With the suspension of LAB services
Page 10 and 11: Table 4: Bolivia Air Services: Econ
Page 14: ESTIMATING THE ECONOMIC COST OF CHA

ECONOMIC BENEFITS FROM AIR TRANSPORT IN BOLIVIA - IATA

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?