World Tourism Market. Status and prospects of product development in the world tourism market

1. World Tourism Market Winter semester 2017 TR – B5SE/01 3. 1. Status and prospects of product development in the world tourism

market.
Addendum
Henryk F. Handszuh, M.Ec.Sc.
Former Director Market Department
World Tourism Organization (UNWTO)
Member, UNWTO Knowledge Nertwork

2. Status and prospects of product development in the world tourism market. Addendum

A variety of niche and not so niche tourism products on the global market
• Adventure travel
• Black tourism
• Medical tourism
• Youth tourism
Human dimension of the world tourism market: international movements of
consumers
Passenger air transport

3. . Adventure travel

• All types of adventures can help people to cope with their fast-paced lives,
as well as being ways to get out and explore nature, home or away.
• A rise in adventure travel today is attributed to the consumer shift away
from material possessions towards an interest in actual experiences.
• The adventure travel of today mirrors the past experience of original
touring wilderness of the 19th century where “visitors from the areas of
industrial civilization” (J. Urry) “opened their eyes and senses to the
scenery, landscape, and fresh air, which so far had been hidden by
terrifying wilderness” (J. Kurowicki).
• Adventure travel has picked up again, in particular towards Africa, Asia and
South America, as well as the Middle East – in the form of hiking.

4. Time factor in adventure tourism

• Adventure tourism requires sufficient time in order to practice it in the real
sense.
• Time is becoming crucial in a world where everything moves fast, so a safari in
the middle of nowhere, or a walk in a national park with loved ones is the
ultimate form of wellness travel.
• Time spent with love ones, including oneself, is constantly ranked as most
important by respondents in surveys:
• Time with partner or spouse, with children, with parents, with friends,
with extended family or for myself.

5. . Microadventure travel boom in Europe

However, many busy Europeans do not have time for traditional
adventuring and so are opting instead for a microadventure, either
stand-alone or added to a holiday.
Sometimes known as soft adventure, these types of activities tend to
be low risk and are usually achievable with minimum previous
experience. They tie in with an increasing drive for healthier lifestyles.
• Microadventure travel is largely practiced by those who weekly
exercise (walk, hike) or participate in intensive physical activities (e.g.
practicing sports, fitness).

6. Adventure tourism ramifications

• Today´s adventure travel represents a dynamic resurgence of the
phenomenon and lends itself to practicing renewed concepts of
nature admiration and contemplation under the new labels of
meditation, mindfulness, wellness or even practicing yoga in the
natural environment.
• Travellers’ concern with health and wellness while seeking unique and
authentic experiences is resulting in a demand for spiritual travel with
an adventure component.

7. Adventure tourism ramifications (2)

• Adventure travel shows strong linkages with cultural and rural
tourism, as well as ecotourism.
• Worldwide, the activity is successfully promoted by the Adventure
Travel Trade Association (ATTA) headquartered in Seattle, US. Year by
year, it gets more and more adherents. Its success is explained not
only by the fashion of adventure tourism, but also the ATTA ability to
communicate responsible adventure tourism standards (Adventure
Travel Guide Qualification and Performance Standard).

8. Adventure travel in Asia

• Adventure tourism continues to be practiced largely by Europeans and
“Neo – Europeans”, but is now getting adherence in other world regions, in
particular in Asia.
• Due to the reborn interest in adventure tourism and its great potential
requiring travel trade governance, the Adventure Tour Operators
Association of India (ATOAI) has come into being.
• 2015 saw its big participation for the first time in an Adventure Tourism
Pavilion comprising operators specializing in adventure tourism during
Outbound Travel Mart (OTM) of TTF Travel & Tourism Fair held in Mumbai.

9. The new face of adventure tourism in Africa

• In Africa, this has been seen in a rise in the concept of “wellness in the
wilderness”, where a traditional safari break is accompanied by meditation,
yoga and spa services.
• Typically, consumers of these types of breaks are relatively older and
wealthy holidaymakers, often female, who are looking for more than just a
typical African getaway.
• One aim for many clients is to gain life-enhancing skills through mindful
activities that can be applied to everyday life, offering a richer holiday
experience.

10. Adventure tourism offers to be found everywhere

• The vast majority of mindful safaris are in South Africa or Keya, but
destinations such as Botswana and Tanzania could offer differing
attractions such as animal migration.
• Other locations and activities that could match well with mindfulness
holidays include exploring flora and fauna in South America, or Canada’s
wild nature offering.
• While current consumers are mainly international leisure holidaymakers,
there is much scope to develop for “bleisure” tourists as well as diaspora
and regional visitors.
• Links with schools who are increasingly using mindfulness to assist students
with their busy lives could also prove a successful future direction for these
types of holidays.

11. Adventure tourism and sustainability

• The Global Wellness Summit found that in 2014, wellness travel (travel
with a purpose of improving health and wellbeing) was growing 74% more
than regular global travel.
• The mindfulness trend also combines well with travellers` increasing
interest in sustainable and reduced-footprint holidays, hence ecotourism.
• It helps accommodation providers offer to their guests a service which is
considered a luxury.
• The product of sustainable and safe adventure tourism is supported by a
great body of national and international standards (ISO).

12. Another face of wellbeing: medical tourism. Asia

• Disparity in healthcare costs between developed and emerging countries,
coupled with advanced healthcare infrastructure in emerging economies is
helping to drive medical tourism in emerging countries.
• Asia continues to be the top medical destination in medical travel with
countries such as India, Malaysia, and Thailand already being wellestablished medical tourism destinations.
• Asian medical destinations continue to offer more and better medical
procedures and care than most other medical destinations. Several
hospitals in Asia have carved such outstanding reputation for themselves
that medical tourism has become a major money-spinner.

13. Another face of wellbeing: medical tourism Thailand followed by others.

• The Indian government has removed many visa restrictions and
introduced a visa-on-arrival scheme for medical tourists from selected
countries; this allows foreign nationals to stay in India for 30 days for
medical reasons and can even get a visa of up to 1 year depending
upon treatment requirements.
• Thailand accounts for maximum share of the Asia medical tourism
market, being followed by India and Singapore. South Korea stands at
the fourth spot in the year 2016 and is likely to almost double its
market share by the year 2022, while Malaysia is holding the last
spot.

14. Another face of wellbeing: medical tourism. Sri lanka

• Sri Lanka is amongst the emerging markets in South Asia to be
favourably positioned to attract increasing international patients, with
countries such as India, Malaysia, and Thailand already being wellestablished medical tourism destinations.
• Medical tourism (not only ayerveda) is only at a nascent stage in Sri
Lanka; factors such as cost competitiveness, a booming private
healthcare industry, internationally trained workers, and so on should
help the development of Sri Lanka's medical tourism industry.

15. The dubious face of “fertility tourism”

• Fertility Tourism is a global tourism industry, bringing in over USD400
million a year in India alone.
• For the right price, people can buy IVF treatments, donated eggs and
sperm along with surrogate mother. The clients are often white and rich.
The suppliers pressed into service are often neither.
• Based on the UN`s definition of human trafficking, fertility tourism often
results in human trafficking by recrcuiting people by coerción, twisting
power and vulnerability and given payments that result in physical
exploitation.

16. The dubious face of medical tourism when it comes to transplants

• The most transplanted organs: kidney (67.85%), liver (20.91) , heart
(5.17), lung (3.80), pancrea (2.11%) …
• Typical fees offered, by countries:
South Africa - USD 700
India
- USD 1000
Egypt
- USD 2000
Moldova
- USD 2700
Turkey
- USD 10 000
US
- USD 30 000
• Data by Coalition for Organ-Failure Solutions (USA, Egypt)

17. The case of suicide tourists

• More than 600 people travelled to Switzerland for help taking their lives
between 2008 and 2012, at one of four clinics which permit non-Swiss
nationals.
• Assisted dying clinics can operate legally in Switzerland, and have attracted
large number of people with terminal illnesses and debilitating medical
condition, with neurological conditions the most common reason for
seking euthanasia, followed by cancer and rheumatic diseases.
• The rise of suicide tourism has been a major factor in prompting debates
over the ethics of euthanasia.

18. Black tourism – visting atrocity and macabre sites

• As travellers embrace experiences, rather than just heading to the
pool, visits to „dark tourism” sites have risen in tandem.
• The former Nazi extermination camp Auschwitz (UNESCO World
Heritage of 1978) heads the list.
• Torture museums have been commonplace for some time
• The Salem Bitch Museum (Massachusetts, US)
• New spectacular additions include Cambodia`s Killing Fields,
Chernobyl (CHERNOBYL.wel.come – enjoy Chernobyl, die later),
Fukushima Dai-ichi nuclear power plant.
• There is an Institute for Dark Tourism Research at the University of
Central Lancashire. Death sells.

19. Youth and trends in travel and tourism

• Human progress has always, through centuries, been possible just
thanks to people`s travels.
• In tourism, youth is the principal agent of change and innovation
among other generational segments.
• Inasmuch as youth represents the future in general, it equally
represents the future of tourism.
• It is hence the principal trendsetter of tourism.

20. Characteristics of Chinese Young Adults impacting on tourism (Source: The power of youth travel, AM Reports: Volume 2, UNWTO)

China Eldest Child:´70s
China’s Middle Child: ‘80s China’s Youngest Child:
‘90s
Key focus in life
Responsibility and Happiness
Fun
Excitement
Core Values
Family
Friends
Self
Internet Value
Time Saver
Social Arena
Extension of Self
Outlook on Trends
Follow Trends
Choose Trends
Create Trends
Online Content
Collecting information
Sharing Information
Creating Information
Communications Strategy
Nothing overwhelming
Accessible and trendy
High level of interaction
Engagement Strategy
Information
Peer involvement
Self expression
Friends
Make friends with those that
have power and influence
Make Friends with those that
share the same interests
Make Friends with those that
have tattoos
Money
Have savings
Have debt
Have Daddies
Financial pressure
Demands from children,
spouses and parents
Ignoring pressure and live in
the now
Pampered by parents and
grand parents
Discussion topics
Topics that relate to everyday
Topics that make one get
Exciting topics to be shared:

21. World market dimension of international movements of people

• Unstopable and growing trend of international movements of people
(movements of consumers).
• Principal protagonists and beneficiaries of international tourism.
• Regional diversification in distribution and trends.
• Some conclusions.

22. Tourist arrivals at national frontiers according to UNWTO. Numerical growth estimate until 2020

23. International tourist arrivals (2010- 2011, UNWTO data) The first 10 actors of globalization by movements of people

1.
2.
3.
4.
5.
6.
7.
8.
9.
10
Million
Million
Change
(%)
Change
(%)
Country
series
2010
2011*
10/09
11/10
France
USA
China
Spain
Italy
Turkey
United Kingdom
Germany
Malaysia
Mexico
Poland
TF
TF
TF
TF
TF
TF
TF
TCE
TF
TF
TF
77.1
59.8
55.7
52.7
43.6
27.0
28.3
26.9
24.6
23.3
12.470
79.5
62.3
57.6
56.7
46.1
29.3
29.2
28.4
24.7
23.4
13.350
0.5
8.8
9.4
1.0
0.9
5.9
0.3
10.9
3.9
4.2
4.9
3.0
4.2
3.4
7.6
5.7
8.7
3.2
5.5
0.6
0.5
7.1

24. International tourist arrivals (2015-2016 UNWTO data) The first 10 actors of globalization by movements of people

1.
2.
3.
4.
5.
6.
7.
8.
9.
10
Million
Million
Change
(%)
Change
(%)
Country
series
2015
2016*
15/14
11/10
France
USA
Spain
China
Italy
United Kingdom
Germany
Mexico
Thailand
Turkey
Poland
TF
TF
TF
TF
TF
TF
TCE
TF
TF
TF
TF
84.5
77.5
68.5
56.9
50.7
34.3
35.0
32.1
29.9
39.5
16.7
82.6
75.6
75.6
59.3
52.4
35.8
35.6
35.0
32.6
n.a.
17.4
0.9
3.3
5.5
2.3
4.4
5.6
6.0
9.4
20.6
0.8
-2.2
-2.4
10.3
4.2
3.2
4.0
1.7
8.9
8.9
n.a

25.

National destinations increasingly more diversified
World's Top Tourism Destinations by International Tourist Arrivals
Rank
1
2
3
4
5
World
Share
1950
United States
Canada
Italy
France
Switzerland
6
7
8
9
10
Ireland
Aus tria
Spain
Germ any
United Kingdom
11
12
13
14
15
Norway
Argentina
Mexico
Netherlands
Denm ark
Others
Total
World
Share
1980
71%
France
United States
Spain
Italy
Aus tria
17%
Mexico
Canada
United Kingdom
Germ any
Belgium
World
Share
2005
40%
France
Spain
United States
China
Italy
33%
20%
United Kingdom
Mexico
Germ any
Turkey
Aus tria
14%
9%
Switzerland
Yugos lav SFR
Poland
10%
Form er Czechos lavakia
Greece
Rus s ian Federation
Canada
Malays ia
11%
Ukraine
Poland
3%
Others
Others
25 million
Source: World Tourism Organization (UNWTO) ©
30%
278 million
42%
80625million

26. Inbound tourism by month (UNWTO)

Marked seasonality continues throughout years (2008 – 2011)

27. Inbound tourism by purpose of visit (share), 2016 Source: UNWTO

VRF, health,
religion, other
27%
Leisure,
recreation
and holidays
51%
Business and
professional
15%

28. International tourism receipts First ten recipients in 2010 - 2011 (Source: UNWTO)

US$
billion
US$
billion
Change
%
Change
%
Change
(%)
National
currency
Country
2010
1. USA
2. Spain
3. France
4. China
5. Italy
6. Germany
7.United Kingdom
8. Australia
9. Macau (China)
10. Hong Kong
(China)
Poland
Change
(%)
National
currency
2011
10/09
11/10
10/09
11/10
103.5
52.5
46.6
45.8
38.8
34.7
32.4
29.8
27.8
116.3
59.9
53.8
48.05
43.0
38.8
35.9
31.4
n.a.
9.9
-1.2
-6.0
15.5
-3.6
0.1
7.5
17.4
-
12.3
14.0
15.8
5.8
10.9
12.0
10.9
5.5
-
9.9
3.9
-1.1
???
1.4
5.3
8.4
-0.2
53.05
12.3
8.6
10.1
???
5.6
6.7
6.9
-6.2
-
22.2
9.0
27.7
9.5
35.3
24.7
35.6
25.0

29. International tourism receipts First ten recipients in 2015 - 2016 (Source: UNWTO)

US$
billion
US$
billion
Change
%
Change
%
Change
(%)
National
currency
Country
2015
1. USA
2. Spain
3. Thailand
4. China
5. France
6. Italy
7.United Kingdom
8. Germany
9. Hong Kong (China)
10. Australia
Poland
205.4
56.5
45.0
44.9
44.9
39.4
45.5
36.9
36.2
28.9
10.5
Change
(%)
National
currency
2016
15/14
16/15
15/14
16/15
205.9
60.3
49.9
44.4
42.5
40.2
39.6
37.4
32.9
32.4
11.0
7.0
-13.3
16.9
2.1
-22.9
-13.3
-2.3
-14.8
- 5.8
-8.2
0.3
6.0
11.0
-1.2
-5.3
2.0
- 12.9
1.4
- 9.1
12.3
7.0
3.8
23.0
3.6
-7.6
3.8
5.2
2.0
-5.8
10.2
0.3
7.1
14.7
5.3
- 5.1
2.3
- 1.4
1.7
-9.0
13.5

30.

Regional shares of international tourism in 2007
Arrivals, receipts and market share (%)
International Tourist Arrivals (ITA)
908 million
International Tourism Receipts (ITR)
US$ 856 billion
Europe
ITA: 484 million (54%)
ITR: US$ 433 billion
(51%)
Middle East
ITA: 46 million
(5%)
Africa
ITR: US$ 34 bn
ITA: 44 million
(4%)(5%)
ITR: US$ 28 billion
(3%)
Asia and the Pacific
ITA: 184 million (20%)
ITR: US$ 189 billion
(22%)
UNWTO Market Department - Market Trends, Competitiveness and Trade in Tourism
30
Services

31. International tourism market share in 2012 (UNWTO)

Region
Arrivals
million
Arrivals
share
Receipts
billion US $
Receipts
share
Africa
53
5%
34
3%
Americas
163
16%
215
20%
Asia &
Pacific
Europe
234
22%
323
30%
534
52%
457
43%
Middle
East
52
5%
47
4%

32.

Regional shares of international tourism in 2016
Arrivals, receipts and market share (%)
International Tourist Arrivals (ITA)
1.235 million
International Tourism Receipts (ITR)
US$ 1.220 billion
Europe
ITA: 615 million (50%)
ITR: US$ 447 billion
(37%)
Africa
ITA: 58 million
(5%)
ITR: US$ 35
billion (3%)
Middle East
ITA: 54million (4%)
ITR: US$ 34 bn
(5%)
Asia and the Pacific
ITA: 308 million (25%)
ITR: US$ 367 billion
(30%)
UNWTO Market Department - Market Trends, Competitiveness and Trade in Tourism
32
Services

33. Africa’s case: from 2007 to 2012 to 2030 - conveying an optimistic tourism message to Africa from UNWTO

34. International tourist arrivals by region of origin (outbound) (million, source: UNWTO)

Destina 1990
tions
1995
World
526
674
809
953
1,138
1,189
1,235
100
303.5
86.3
390.3
114.1
452.3
152.8
496.7
206.0
567.6
272.0
583.8
293.6
596.1
316.5
48.3
25.6
108.1
8.5
130.6
12.8
135.5
21.4
155.6
33.5
188.6
37.6
200.2
37.4
209.5
34.8
17.0
2.8
11.5
14.9
19.3
28.3
36.0
39.2
39.2
3.2
8.1
11.0
26.8
33.0
37.8
38.5
38.8
3.1
422.6
532.9
632.3
728.3
867.7
907.0
948.8
76.6
95.3
129.9
149.9
232.3
232.3
244.0
249.7
20.2
435
From:
Europe
251.2
Asia
58.7
Pacific
Americas 99.3
Middle
8.2
East
Africa
9.8
Origin not
specified
Same
region
Other
regions
7.4
349.6
77.7
2000
2005
2010
2014
2015
2016
2016
Market
Share
%

35. The international tourism market interpreted in terms of connecting transport links. Inbound tourism by mode of transport, 2016

(Source: UNWTO)
Air
55%
Road
39%
Rail 2%
Water 4%

36. Some conclusions

• Developed economies, in particular EU countries and „Neo – Europe”
(USA...) are the principal actors and beneficiaries (recipients) of
international movements of consumers, both inbound and outbound.
• Diversification of main tourism destinations, as well as travel generating
regions, with respect to ranking, is also taking place.
• Numerical growth of trips considered international picked up after 1990
due to the fragmentation of states (USSR, Yugoslavia, Czechoslovakia).
• The share of Europe and the Americas in international travel is being
reduced in favour of Asia (in particular due to China).

37. Some conclusions (2)

• The absolute volume of traffic, both inbound and outbound, is due
not only to the economic prowess, the purchasing power, disposable
income and attractiveness in the countries concerned, but also to the
volume of their population and territory.
• There is a majority and increasing share of international travellers
carried by air.
• Africa`s share in international tourism, in terms of arrivals (inbound),
departures (outbound) and receipts, remains low and stagnant.

38. Some conclusions (3)

• The economic, sociological and environmental value of international
tourism statistics is relative and far from satisfactory for tourism policies at
world level.
• From the demand side, world or global tourism is a combination of both
international and domestic movements of people or consumers.
• Short-distance travel among European countries is reported as
international; long-distance travel between mainland US and its Pacific
states and islands is reported domestic; trips within China, but to its
territories (Macau, Hong Kong) is reported as international.
• Environmental impact of air, road and maritime transport carrying
passengers, hence tourists, does not respect administrative or political
borders, hence travel considered domestic should be included, as a
rule, in the count of world tourism.

39. Air Transport

• By Tourism Satellite Account (TSA) definition, passenger air transport is a
characteristic tourism activity. During recent years, it has become an even more
powerful agent of globalization by intensive linking and networking the material and
intangible supply of tourism with consumer demand on a global scale by means of:
• Increasing transport of passengers as consumers or tourists in the broad sense of
the term (including domestic flights and consumption abroad in both ways:
outbound and inbound),
as well as
• Increasing carriage of goods (cargo) and mail.
• Air transport is also globalizing or integrating within its own ranks
.
• The global market is both a platform of both fierce competition and
cooperation among world airlines.

40. Air transport (2)

• Air transport market globalization by means of, and within, air transport
is taking place due to the processes of:
• Expansion of air carriers destinations
• Broadening the outreach of open skies
• Mergers of air carriers, to form transnational companies (eg. British
Airways and Iberia)
• Alliances of varying scope of integration and cooperation (such as
codesharing)

41. Air transport recent history and forecast

42. Major air carriers Source: Forbes, May 2017

• By revenue (billion USD)
American Airlines Group(40.99)
Delta Air Airlines (40.5)
United Continental Holdings (37.5)
Lufthansa Group (35.5)
Air France – KLM (28.9)
International Airlines Group
(BA+Iberia) (25.3)
Southwest Airlines (20.2)
China Southern Airlines (17.7)
China Eastern Airlines (14.9)
All Nippon Airways (14.7)
• By passengers carried
(million)
American Airlines (198.7)
Delta Air Lines (183.7)
Southwest Airlines (151.8)
United Airlines (143.2)
Ryanair (119.8)
China Southern Airlines
(84.9)
China Eastern Airlines
(80.9)
Turkish Airlines (62.8)
easyJet (73.1)
Lufthansa (62.4)

43. Major air carriers (2)

• By number of airports served (2013):
United Airlines – 374
Grupa American Airlines – 344
Delta Airlines – 333
Turkish Airlines – 274
Lufthansa – 218
British Airways – 212
China Eastern Airlines – 217
Air Canada – 194
Air France – 191
China Southern Airlines (190)

44. Major air carriers

• By number of countries served (2016):
1.
2
3
3
5
6
7
8
8
10
Turkish Airlines, Turkey
Lufthansa, Germany
Air France, France
British Airways, United Kingdom
Qatar Airways Qatar
Delta Air Lines, United States
Emirates, United Arab Emirates
KLM, Netherlands
Egyptair, Egypt
United Airlines, United States
120 (as of Februrary 2017)
83
78
78
73
71
70
66
66
60

45. Air Transport (3)

• It was first deregulation, leading to liberalization of air transport, taking place
in the US in 1978 (Airline Deregulation Act), which can conventionally be
considered as a beginning of the new wave of market globalization in this
area. From national and bilateral dimension (an agreement between US and
the Netherlands) it extended to the international (multilateral) arena.
• At the time, it was an international NGO, IATA (International Air Transport
Association) which played a role of commercial regulator settling accounts
(bank settlement plan) for air carriers belonging to the association. It was
therefore considered a sort of an air carriers` cartel. It did not deal, however,
with the issues of “freedoms of the air” conducive to globalization.

46. From the Chicago convention (Convention on International Civil Aviation) to the „open sky”

• The Chicago convention (1944) provides that “every State has
complete and exclusive sovereignty over the airspace above its
territory”.
• Attached to the Chicago Convention is the International Air Services
Transport Agreement (IASTA) which provides for five freedoms in the
air also called traffic rights.
• Said freedoms are not tacitly available to the signatories of the Chicago
convention, but they need to be negotiated by means of bilateral air
agreements between governments of two countries on behalf of the air
carriers established in their territories.
• Traffic rights are not covered by the General Agreement on Trade in
Services (GATS) of 1995 of the World Trade Organization (WTO), even
though GATS deals with air transport services, but these are limited
only to the services suppied in airports and to aircraft.

47. From the Chicago convention (Convention on International Civil Aviation) to the „open sky”(2)

• The ability to make use of all the freedoms of the air
would amount to an entirely open sky, hence a global air
transport market.
• In practice every country engages on behalf of its
carriers in bilateral air transport agreements (also called
air service agreements, ASAs) agreements of varying
coverage.
• According to ICAO, in October 2012 there were as many
as 400 such agreements with 145 countries involved.

48. The first five Freedoms of the Air referred to in IASTA

First Freedom of the Air - the right or privilege, in respect of scheduled international air services, granted by
one State to another State or States to fly across its territory without landing
Second Freedom of the Air - the right or privilege, in respect of scheduled international air services, granted by
one State to another State or States to land in its territory for non-traffic purposes
Third Freedom of The Air - the right or privilege, in respect of scheduled international air services, granted by
one State to another State to put down, in the territory of the first State, traffic coming from the home State of
the carrier
Fourth Freedom of The Air - the right or privilege, in respect of scheduled international air services, granted by
one State to another State to take on, in the territory of the first State, traffic destined for the home State of the
carrier.
Fifth Freedom of The Air - the right or privilege, in respect of scheduled international air services, granted by
one State to another State to put down and to take on, in the territory of the first State, traffic coming from or
destined to a third State

49. Additional freedoms of the air identified in ASAs

Sixth Freedom of The Air - the right or privilege, in respect of scheduled international air services, of
transporting, via the home State of the carrier, traffic moving between two other States
Seventh Freedom of The Air - the right or privilege, in respect of scheduled international air services, granted
by one State to another State, of transporting traffic between the territory of the granting State and any third
State with no requirement to include on such operation any point in the territory of the recipient State, i.e. the
service need not connect to or be an extension of any service to/from the home State of the carrier.
Eighth Freedom of The Air - the right or privilege, in respect of scheduled international air services, of
transporting cabotage traffic between two points in the territory of the granting State on a service which
originates or terminates in the home country of the foreign carrier or (in connection with the Seventh Freedom
of the Air) outside the territory of the granting State (also known as a “consecutive cabotage”).
Ninth Freedom of The Air - the right or privilege of transporting cabotage traffic of the granting State on a
service performed entirely within the territory of the granting State (also known as a “stand alone "cabotage”).

50. Nine freedoms of the air in international air transport

51. From the Chicago convention (Convention on International Civil Aviation) to the „open sky”(3) Europe (EU)

• A rule-based “open sky”, or a common market of air transport
services, is enjoyed by the European Union in view of its single
European market.
• The rule of open skies is gradually introduced between the European
Union and other areas, including USA.
• The current arrengement in place is considered asymetric: it
concedes more rights to US carriers at the expense of the European
ones.
– Allowing Norwegian flights in USA was problematic.

52. Air transport liberalization in the European Union

• A rule-based “open sky”, or a common market of air transport services, is
enjoyed by the European Union in view of its of the European single
market. It is technically based on three-four measures or packages and
supported by a regulation of 2008.
• The first measure, passed in 1987, addressed fares and limited each
government’s ability to regulate fares. It also allowed some airlines to
begin sharing capacity on routes.
• In 1990, the second round provided even more flexibility on fares
and capacity sharing and eliminated capacity controls on routes from
carriers’ home countries to other EU nations.

53. Air transport liberalization in the European Union (2)

• Finally, in 1993, the “third package” opened up the EU aviation market considerably. The third
package allowed any EU -based airline to operate services anywhere within the EU, and in
1997 (fourth measure), this was extended to provide for cabotage, defined in this situation as
flights within another member state’s sovereign territory.
– The third package allowed airlines to fly anywhere they wanted in the EU (and later, via treaties, in Iceland,
Norway, and Switzerland) and to establish their own capacity and fares.
• The system is further supported by Regulation (EC) No 1008/2008 of the European Parliament and of
the Council of 24 September 2008 on common rules for the operation of air services in the
Community.
• The issue of air traffic control in European air space is on the agenda and competence of
EUROCONTROL.

54. Elements of Airline Alliances, based on the extent of integration and cooperation

Coordination of route networks and schedules;
Coordination of prices, inventory and yield management;
Revenue, cost and profit pooling and sharing;
Code sharing;
Joint marketing, advertising and distribution networks;
Joint procurement (purchase of fuel, catering, etc.)

55. Elements of Airline Alliances, based on the extent of integration and cooperation

• Reciprocal access to frequent flyer programs;
• Sharing of airport facilities;
• Coordination of IT platforms (ticket reservation and distribution
systems, financial and accounting reporting, etc.);
• Coordination of cargo operations;
• Standardization of accounting, financial, product development and other
practices.

56. Flight information display system code-shared flights, at Warasw Chopin Airport (photo in Wikipedia)

57. The international tourism market interpreted in terms of connecting transport links. Inbound tourism by mode of transport, 2016

(Source: UNWTO)
Air
55%
Road
39%
Rail 2%
Water 4%

58. The “ignored” part of the air transport market

• Aircraft industry
• Airports

59. Some conclusions

• According to UNWTO, there is a majority and increasing share of
international travellers which are carried by air.
• ICAO data show both world (including domestic traffic) and
international travel by air, which better represent the wholeness
and complexity of the air travel market.
• ICAO figures on international traffic (number of passengers) exceed
and tend to double the UNWTO figures regarding international
tourist arrivals. This is partially explained by the fact that ICAO data
cover both outbound and inbound traffic (return trips).

60. Some conclusions (2)

• US-based airlines top the rankings, which is explained by the fact that they serve
in principle the enormous US domestic market.
• Year by year there are changes in the rankings putting up airlines originating in
China and welcoming successful newcomes, such as Turkish airlines.
• Low-cost airlines, in particular Ryanair, exert competitive, price-based pressure
on flagship airlines.
• Air transport appears as a powerful agent of globalization of the world tourism
market

61. World tourism market 3. Status and prospects of product development in the world tourism market. Addendum

End of chapter 3. Addendum
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