Economic Effects of the Globalisation of Civil Aviation

This article discusses the economic effects of the globalisation of civil aviation. Globalisation may be perceived as the process of world integration through the integration of economies, cultures, technologies, and the governance of the world nations. Globalisation can narrowly be viewed as the international integration of markets in goods, services and capital. It involves the spread of economic transactions across borders; the organisation of economic activities at national borders; and the flow of financial markets around the world. Civil aviation is simply viewed as activities that are directly dependent upon transporting people and goods by air to, from or within a country, region or a continent. These activities include airline and airport operations and these operations cover scheduled and charter flights for passengers and freight, general aviation, airport maintenance, air traffic control and regulation. The existing body of empirical research on the globalisation of civil aviation indicates that the interaction between globalisation and civil aviation has had positive effects. For example, a study by Button (2008) on the United States showed that in 1978 the US airlines carried 275 million passengers; and in 2009, the airlines carried 770 million passengers. On the other hand, the advent of the globalisation of civil aviation has made airlines, airports and other aviation businesses become relatively borderless. Eventually, this has created stiff competition among civil aviation businesses. Accordingly, the survival of civil aviation firms depends on how the firms respond to the competition. For example, other firms have responded by establishing strategic alliances, relocating businesses, re-engineering business processes, diversifying product portfolios, and initiating research and development for competitive advantage.