The International Aviation Policy Term Paper Example | Topics and Well Written Essays - 2750 words

The International Aviation Policy - Term Paper Example Air transportation is one of the leading industries across the globe and it also wields significant influences on the larger social, political, and economic mechanisms. For instance, air transport can positively contribute to a region’s economic growth, but there has to be an underlying demand. This essay is divided into two parts. Part one discusses the social, political, economic, geographical, infrastructure, and demographic influences on air transportation. Part two addresses the impact of air transportation liberalization on market, traffic patterns, and fares; carrier’s financial performance; and future prospects of carriers based in a global environment. Part I: International Regulatory and Oversight The absence of air transport, just like with any other operations in the economy, can confound economic progress. Where there have been more or less complete stiffening of regulations that interfere with or oppose the liberalization of markets, have been ‘socia l regulation’ (Wald, Fay, & Gleich, 2010). This involves issues like labor and consumer security, defense, safety, and environment. These are domains that have been usually addressed at the global arena by the International Civil Aviation Organization (ICAO) together with a number of unusual international agreements like the Warsaw Convention (MacKenzie, 2010). Of late, national or regional programs have also acquired global importance such as the US’s launching of more rigid security strategies (e.g. passenger information requirements), and the expansion of carbon trading inside the European Union (EU) to include all air transport. International air transport is currently a leading partner of globalization and is persistently redesigning itself to deal with the pressures of the social and economic integration that the process of globalization brings about. In economic terms, globalization takes place to foster a deepened division of labor and helps economies take adva ntage of their comparative advantage more fully (Wensveen, 2011). Possibly, though, more essentially, globalization promotes workforce and technology transfers and facilitates the energy that goes with entrepreneurial ventures to encourage the growth of new technologies and mechanisms that boost international interests. Another group of factors to be taken into account in evaluating international aviation policy are political and economic settings. The five basic known catalysts of stable international air transport are trade expansion, developments in the quality of service, cost adjustments, political disorder, and GDP rate. Political disorder would involve terrorist activities and protectionism. Although protectionism weakens trade expansion it seems as well to reduce foreign direct investment (FDI) (Wensveen, 2011). These restrictions weaken trade and boost capital costs eventually. Political disorder also boosts costs through regulation and defense. Such costs put service provi ders and shippers into a more disadvantaged position and reduce air travel. Changes in costs, specifically the costs of fuel, are a continuing hazard; increases in the costs of actual fuel before was zero (Wald et al., 2010). In the coming years this will cease to be the case as actual fuel costs will escalate. This kind of changes severely affects international aviation policy. The third group of factors is geographical, infrastructural, and demographical. Geography affects international aviation policy because cargo airlines choose to carry out their operations from airport near to their target markets. Some researchers studied