Transportation has played a significant role in the distribution chain and has played important role in global supply chain. Development of extensive transportation medium has facilitated industrial development by improving the supply of manufactured goods. Good transport systems have enabled companies and entire manufacturing industry to adopt demand-driven or demand – pull distribution chain. Low cost of transportation, coupled with alternative medium of transportation, for instance water transport- availability large capacity ships, land transport-railway and high capacity airplanes has led to increased profits in industries (Coyle, 2011). Development in transportation systems has increased output in production sector; raw materials are easily transported to industries and manufactured commodities are easily transported to market.
Despite above benefits transport sector has faced constraints as the service providers are facing dilemma. Some of the problems are soaring fuel prices, high cost of hiring skilled workers and they have received accusations that they are contributing to environmental degradation. Also, poor infrastructure has led to high cost of transportation. In some countries, roads, ports, highways and canals are poor.
Air transport is important in transportation of perishable commodities over long distance. Development of air planes has impacted positively to chain of distribution and the market for industrial products expanded greatly. This translated to high profitability. In the following work I will outline role of air transport.
Role of air transport
Air transportation has provided global transportation network. Unlike land transport which is affected by physical factors, air transport has enabled intercontinental movement of people and goods. Air transport has eased movement of manufactured commodities from manufacturing base to market; raw material produced in interior parts of Africa can be delivered to industries. Tourism has been improved by development of air transport as tourists are able to move from one continent to another. This has earned foreign revenues to countries that receive high number of tourists. Generally, air transport has played significant role in contributing to economic growth in third world countries. It contributes to sustainable development by facilitating tourism and trade, generating economic growth, providing jobs, increasing revenues from taxes, and fostering the conservation of protected areas (Daley 2010).
It is air transport and other sectors of the economy that has led to creation of job opportunities. Many people have been employed in transport sector as pilots, air hostesses, engineers, and people working in airports. This has led to improved living standard because the employed people are able to provide themselves basic necessities ad provide the same to their dependants. Statistics done has shown that air transport has created up to 5 million direct jobs. Among this number, it is known that 4.3 million jobs are created in airlines and airports. Those employed in air transport are thought to contribute about $275 billion worldwide; this has impacted on the Gross Domestic Product (GDP) of developing countries (Baines, 2008). More than 2 million people are working as maintenances, flight crews, and other staff, it has been established that more than 300000 people work as airport operators, airport maintenance and security.
The air transport has indirect benefits which have contributed immensely to the economy. The indirect impacts include creation of jobs and activities of suppliers to the air transport industry, for instance, there are thousands of people working as aviation fuel suppliers. There are companies that provide construction services; these companies build crucial facilities for example runaways. The businesses that flourish within the airports has created job opportunities, there are manufactured commodities that are sold in airport retail outlets, there are other job opportunities that are created in offices within the airports for instance accountants, IT operators and customer care service providers. Support companies to the airline industry are many and have been offering employment opportunities to citizens within a particular country. The statistics done shows that more than 5.8 million indirect jobs are have been created and sustain through purchases of goods and services by companies in the air transport sector. Indirect employed has also contributed huge Gross Domestic Product (GDP). Indirect jobs These jobs have contributed more than 375 billion dollars, this huge amount has been obtain from jobs in the energy sector, generated through the purchase of aircraft fuel; employment in the IT sector providing computer systems for the air transport industry. This huge benefit obtained from indirect employment has led to growth of economy especially in third world countries (Baines, 2008)
The impact of air transport is phenomenal business as operations in commercial sector has been immensely impacted. Air transport enables production companies to reach their clients and meet their demands as they are able to know client questions so that they tailor their goods and services to the needs clients and this promotes of production. It can also be argued that air transport allow manufacturers to serve customers in better way. This is achieved because air services allow manufacturers to access better contact with their customers. Importantly, air transport contributes to better and effective communication between buyers and sellers and this will lead to creation of extra market and will contribute to company’s new sales. When the manufacturers meet needs of their customers, they build customer loyalty and consolidate the existing customers.
Air transport has positively contributed to efficiency in production of goods and services. Statistics show that half of businesses existing in the world either direct or indirectly rely on air services for production and distribution efficiency. Air transport contributes to efficiency in production by enabling managers and corporate business leaders to visit other countries and strengthen their businesses in those countries. Air transport aid movement of people, who are business oriented, and this enables spread of new technology and new method of production Indeed, this enables companies produce high quality commodities using efficient ways. Spread of new technology leads to production of high quality goods.
Development of efficient air transport leads to improved investment and productivity. Good airline transport network influence on investment in different sectors of the economy. It follows that air transport system influence where potential investors want to invest. According to statistics, more than half of companies deliberate on international transport links before they choose place to invest. Investors need efficient air transport to enable transportation of products to international market. In Europe, potential investors consider air transport as pertinent factor for choosing a location for setting up their businesses. Daley (2010) has shown that 18% of businesses that have been established in the past, decisions were made considering availability of air transport. The decisions were directly affected by the absence of good air transport links. Investors in various sectors of the economy believe that innovation and, productivity is highly hampered if the air transport is affected or ineffective. Researchers believe that air transport has facilitated research development since free movement of people has enable dissemination of information and ideas.
Air transport has contributed improved and sustainable development in the world since it makes significant impact by promoting sustainable development. Development of efficient air systems has aided economy by supporting and promoting international tourism. Tourism helps reduce poverty by generating economic growth by improving on incomes and savings hence leading to more investment. Tourism leads to provision of jobs and open employment opportunities. Creation of extensive jobs leads to increased tax collection and, the revenue collected can be used to foster the improvement and conservation of protected areas and the environment. Tourism is improved when there is conservation of protected areas and environment. This will in turn provide finances that will aid in the protection of nature and cultural heritage. The improvement of tourism based on natural phenomena is convincing method of ensuring that the nature has been conserved properly. Air transport enhances tourism which has profited communities in remote areas. This compels them to understand importance of conserving nature.
Another important aspect of air transport is delivering humanitarian aid to people in emergency areas. There are some areas in the world which are faced by natural disasters, for instance famine and war. In such situation, air transport enables provision of aid through deliveries of food, clothing, evacuation of people from dangers zones and transferring of refugees from dangerous areas to safe grounds. Air transport is particularly important in times of crisis, humanitarian assistance in such situation can only be provided immediately to those in trouble through the use of airports and air services.
Air transport system has impacted the world positive. Nearly all sectors of economy depend directly or indirectly to the efficient and effectiveness of air transport. It is important to develop this sector of transport to foster business relationships within the countries and reliogs involved in business.