REGIONAL SEMINAR SATISFYING INCREASED DEMAND FOR CAPACITY WHILE MAINTAINING SAFETY SPECIAL CHALLENGES FOR E. MEDITERRANEAN AND M.EAST REGIONS CLEOPATRA HOTEL NICOSIA - CYPRUS - 13 APRIL 2018 The Role of Aviation in International Relations and Regional Cooperation Dimitrios J. DIMITRIOU Planning, Management & Economics in Air Transport Dr./Professor Asst., Dept. of Economics, DUTh, Greece
2 2 Profile Dimitrios J. DIMITRIOU Dimitriou holds Doctorate in Air Transport demand forecasting; MSc in Infrastructures Environmental Planning; MSc in Transport Planning & Management; and Diploma (equivalent to 4 years BA & 1 year MSc) in Civil Engineering (sector of transportation). He has long experience (22 years) in field of transportation, delivered many projects in planning, operation, management, business development and economics. He is Professor Assistant in Management and Quantitative Analysis in Transport Infrastructures Development, providing dedicated courses and research in fields of transport economics, decision making and risk assessment (Dept. of Economics, Democritus University of Thrace, Greece). He published over 200 papers in referred journals, editions, international conferences and he has elected in executive positions in professional associations and committees of expert. He is the Chairman of the BoD in Athens International Airport (since 2016).
Outline 3 3 Air transports and connectivity Effects on regional development Aviation business environment international relation interactions Key challenges Aviation decision making Drivers for action Assessment framework Discussion issues to meet the aviation growth benefits
Case studies and highlight on Economic contribution of air connectivity in various regions %national 4 4 Contribution of Air Connectivity in European Countries as share of 11 10 9 8 7 6 5 4 3 2 1 0 (ACI, 2016)
CYPRUS MALTA GREECE LUXEMBURG PORTUGAL SPAIN IRELAND DENMARK NETHERLANDS CROATIA SWEDEN FINLAND UK FRANCE 5 5 BULGARIA BELGIUM POLAND GERMANY ITALY AUSTRIA SLOVENIA CZECH LATVIA ROMANIA SLOVAKIA LITHUANIA ESTONIA HUNGARY Air connectivity contribution in EU-28 members 8 7 6 5 Contribution of Air Connectivity in European Countries as share of DIRECT/INDIRECT/INDUCED CATALYTIC 4 3 2 1 0 (source: ACI 2016)
Case study I-Mediterranean countries Dr./Professor Asst. in Planning Management and Economics in Transport - Dept. of Economics, DUTh, 6 6 Greece Employment Direct, Indirect and Induced I T A L Y Direct/ Indirect Induced 311,800 568,900 17.59 39.09 1.1% (Billions) 2.5% Dimitriou 2016; ACI: Investing in Airports; Goa, India S P A I N Direct/ Indirect Induced 438,900 895,800 (source: ACI, 2016) Direct, Indirect and Induced 20.68 2.0% (Billions) 39.65 3.9%
Case study II- Remote tourist islands Employment Direct, Indirect and Induced C Y P R U S Direct/ Indirect Induced 17,700 35,000 0.65 1.18 3.9% (Billions) 7.1% Dimitriou 2016; ACI: Investing in Airports; Goa, India M A L T A Direct/ Indirect Induced 8,200 7,100 (source: ACI, 2016) Direct, Indirect and Induced 0.37 0.29 5.1% (Billions) Dr./Professor Asst. in Planning Management and Economics in Transport - Dept. of Economics, DUTh, 7 7 Greece 4.1%
Case study III- Remote tourist destinations Dr./Professor Asst. in Planning Management and Economics in Transport - Dept. of Economics, DUTh, 8 8 Greece Employment Direct, Indirect and Induced G R E E C E Direct/ Indirect Induced 88,700 271,700 3.94 9.94 2.2% (Billions) 5.5% Dimitriou 2016; ACI: Investing in Airports; Goa, India P O R T U G A L Direct/ Indirect Induced 84,200 204,100 (source: ACI, 2016) Direct, Indirect and Induced 3.11 1.9% (Billions) 7.46 4.5%
supply change factors Demand change factors Key variables influence air transport business Privatization and ownership Economic downturns Regulatory framework Deregulation Environmental and safety restrictions Geopolitical and safety restrictions Exogenous demand shocks Political and Economic Sanctions Competition Other Transportation Modes Airport capacity expansion Geopolitical and safety restrictions Infrastructure capability New airports construction Macroeconomic conditions Air Traffic management Airline hubs /national carriers Indirect factors New infrastructures investments Airline strategy Airline alliances Low-Cost Carriers Demand Stimulation Dimitriou, 2017; IJESRT, 6(1) Excange rates fluctuations 9 9
Agent theory to set international connections INPUT DECISION MAKING OUTPUT Socio-economic characteristics for ORIGINs (pax) SET OF CONNECTIONS Business Sustainability Airlines (load factors) Airport (profits) Capacity / Efficiency Demand scaling and morphing factors Travel Demand Generator Airport & Carriers Performance Regulatory and Policy maker framework ACT DECIDE AGENTS Network formulated through interaction between agents Regional Authorities Tourist Agents Institutions Suppliers BELIEFS OBJECTIVES OBSERVE UPDATE Network Evaluation Competition (fares) Robustness (seasonal vs scheduled) Saturation (new routes) Economic Productivity Demand volume ( total expenditure) Transfer pax Spill over effects to regional economy Dimitriou et al. 2016, IJSBEEBIE, 10(11) Dr./Professor Asst. in Planning Management and Economics in Transport - Dept. of Economics, DUTh, 10 Greece
11 11 Key questions in management and decision making Strategy Development of market Revenues - Profitability Funding - new investments Socioeconomic effects Corporate Planning Innovation Infrastructures (CAPEX) Level of service (OPEX) Business planning (Risks) supply demand Products - services ITS Smart business Social benefits return (CSR) Research Dimitriou, 2017, IJESRT, 6(1) Competitiveness Regulatory framework - protection Monitoring and review annual performance Analysis of the competition
Key question in strategic planning and decision making Equilibrium?? Financial analysis Economic effects Added value to CAPEX Public Interest - Attention Private Dimitriou 2017; IJRSM, 4(3) 12 12
CAPEX Impact Assessment - General Framework Financial analysis Socio economic Analysis Project Infra Condition Analysis Multivariable Assessment MCA Dimitriou, 2017; IJRSM, 4(3) Dimitriou, 2017; IJESRT, 6(1) Dr./Professor Asst. in Planning Management and Economics in Transport - Dept. of Economics, DUTh, 13 Greece
Case: Air transport Socioeconomic impact in Greece 14 14 SARTZETAKI, DIMITRIOU, 8th Biennial PhD Symposium, London School of Economics, 2017 Welfare impact for large transport infrastructure in Greece Education 8 6 4 European Union(28 countries) 2 Greece Health 0 PPPs Nuts 2 region (Attiki) Case Study Transport Infrastructure (Athens Airport) Income
Discussion issues Increase of traffic (passengers and cargo) Take the benefits of GEOGRAPHICAL position promoting air connectivity to North Europe and MENA Promotion of transit (hubing) Operations Provide new services and introduce new technologies (ITS) Upgrade knowledge and promote knowhow CAA needs to define role and strategy ATC is a key weakness for today and near future Workforce and Skilled employees is a major threat for near future 15 15
Save the day ATHENS - GREECE Athens Greece 3 9 November 2018
REGIONAL SEMINAR SATISFYING INCREASED DEMAND FOR CAPACITY WHILE MAINTAINING SAFETY SPECIAL CHALLENGES FOR E. MEDITERRANEAN AND M.EAST REGIONS Thank you ddimitri@econ.duth.gr CLEOPATRA HOTEL NICOSIA - CYPRUS - 13 APRIL 2018 Dimitrios J. DIMITRIOU Planning, Management & Economics in Air Transport Dr./Professor Asst., Dept. of Economics, DUTh, Greece