Button, K. (2006) The Effects of Air Transportation on Economic Development: The Potential Impacts on the Europe Economy of Further Liberalization of the Transatlantic Air Market, Paper for the National Conference on Transportation and Economic Development, March 29th – 30th, 2006

The potential impacts on the Europe economy of further liberalization of the transatlantic air marketÂ

There has been a large body of work completed looking at the implications of surface transportation on location patterns of industry. With the exception of a number of local impact studies rather less has been done on air transportation impacts on industrial behavior. Air transport, however, carriers a significant amount of trade by value, is an important input into attracting and retaining the "creative classes" in locations, and is extremely spatially flexible. This paper looks at the work that has been completed on the role of air transport in affecting local economic performance, and offers a critical assessment of what is actually known and the extent to which many of the studies conducted have been excessively narrow in their orientation. It also seeks to add to the body of knowledge by looking at the potential implications of further freeing the economic regulations governing transatlantic air travel. The recent provisional agreement involving the European Union Commission to move towards greater liberalization of the transatlantic aviation market by late 2006 represents a continuation of the regulatory reforms in the sector. While considerable effort has gone into looking at the implications of the regulatory changes to-date, much of this work has looked at the implications of "deregulation" on the air transport sector rather than on the wider economic benefits to the national and regional economies involved. This paper examines the potential effects of the opening-up of the transatlantic market in a wider economic context.