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McCarthy: Sept/October 07

A lever for every other industry


October 15, 2007
Stacy Bradshaw

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Speaking in July at the CBAA convention in Calgary, Merlin Preuss, director general, Civil Aviation, Transport Canada offered this insightful counsel: In response to some of the challenges facing aviation, Preuss suggests that aviation position itself less as an “industry unto itself” and more as “a lever for every other industry.”

As Preuss points out, aviation is currently operating in a fishbowl. He predicts that more and more, those working in aviation will find themselves forced into a defensive posture, particularly on issues relating to security and the environment.  There is a risk that aviation will be singled out for unfair treatment. That is why it is so important to demonstrate aviation’s integral role in the economy.

Consider the Conference Board of Canada’s recently published annual summer report on Canada’s air transport industry.  The report reflects the good news-bad news scenario in which the air transport segment currently operates.
Overall, on the commercial side, demand for domestic travel continues to grow. The report shows that real demand rose 9.9 percent in 2006 and passenger counts at Canada’s largest airports were up 6.4 percent in the first four months of 2007. In spite of these numbers, air transport profits fell by 47 percent in 2006, due primarily to escalating fuel costs.

So with demand up but margins down, air transport continues to expand. The Conference Board report points to two significant contributing factors: healthy income growth and strong corporate profitability. The former drives personal travel and the latter business travel. The impact of these factors is predicted to continue until at least 2011.

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In each of these cases, aviation represents an integral part of the success of other industries. Imagine the tourism industry without aviation.  Now, think about what tourism entails: hotels, restaurants, theme parks, art galleries, festivals, historic properties, concerts, sporting events … the list goes on and on. Aviation is essential to all of this commercial activity with all of its products, services and employment.

In the corporate/business world, aviation is every bit as important. The Conference Board report indicates that, “Strong (corporate) profitability … is translating into increased travel budgets and higher spending on business travel.”  One could easily argue the converse: Higher spending on business travel translates into stronger profitability.

And it amounts to much more than sending managers to meetings. Imagine the oilpatch without aviation. The enormous increase in air traffic throughout the region is not a result of strong profitability; it is one of the reasons why there is strong profitability. Non-commercial business aviation plays just as important a role, often bringing the right people, equipment or services into regions where commercial services are not available or convenient.

Aviation is a crucial part of our economic infrastructure and as Preuss suggests, pointing that out to the wider audience is a strategy that everyone involved in aviation should embrace.


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