Infrastructure for Air Transportation

The air transport industry is only about a hundred years old. Due to the very particular requirements associated with the air cargo business it has developed methods of operation that are unique in the world of logistics.

National governments have always taken a large and keen interest in the way that the airline business is organized. This has led to international treaties regarding how the business should be operated. For example, the Convention for the Unification of Certain Rules Relating to International Carriage by Air (oft en referred to as the Warsaw Convention) was signed in 1929. This international agreement lays out the rules relating to the conditions for international transport by air, establishes the liabilities of international air carriers and sets limits for their financial liability for damage, delay or loss.

International Air Transport Association (IATA)

Along with its US equivalent, the Air Transport Association of America (ATA), these two trade associations set many of the standards of operation for the industry; examples include standards related to safety, security, training, unit load devices (ULD) and many others. They also provide services to their members such as the Cargo Accounts Settlement Systems (CASS), which is a web-based system that allows airlines and freight forwarders to make only one payment to, or receive one payment from, airlines or cargo agents. This has significantly reduced the burden of paperwork and in 2008 18 million air way bills were processed through the system (source: www.iata.org).

Airlines

These are the companies that own (or lease) and operate the aircraft used to carry both passengers and cargo. The national airlines of some countries are still owned by the respective governments of the countries the airline represents and are known as flag carriers. Some airlines specialize in providing certain services only. For example, the so-called budget airlines specialize in no-frills cheap air transport for passengers. Others concentrate solely on air cargo and a few offer only heavy-lift air cargo options. It should always be remembered that passenger aircraft oft en carry cargo in their holds along with passenger baggage.

Cargo agents

These are freight forwarders who are licensed by IATA to handle freight on behalf of customers who wish to send cargo by air. IATA sets standards of operation, ensures that the agents are insured, and allows the agent to issue their own air way bills known as house air way bills (HAWB).

Airport authorities

Airport authorities own (or lease) and operate the airport infrastructure.

Together with telecommunications, air transport represents the sectors that epitomize globalization in an economic as well as in a socio-political sense worldwide. A well-functioning air transport sector offers significant economic development benefits, particularly for landlocked, isolated, and low population- density countries.

Air transport, compared with other infrastructure sectors such as roads, water, and sanitation, has the opportunity to develop commercially, with minimal fiscal requirements. This has been made possible due to,

• rapid technological change,
• falling real unit costs,
• industry consolidation,
• the low-cost carrier (LCC) business model,
• the existence of adequate pricing mechanisms, and
• consumer willingness to pay for safe, cost-effective services,

The implication is that the development and implementation of the best possible air transport policies will be an important part of a successful economic development and poverty alleviation strategy. The efficiency and effectiveness of a country’s air transport system, together with the rest of its transport network, are a crucial part of its investment climate. Improving these services encourages investment by business, which fosters economic development and growth.