The Airport Operators Association released a report this week, which details the contribution of aviation to the UK economy.
The aviation industry itself is calculated as accounting for 141,000 jobs in the UK – which increases to 234,000 jobs when considering supply chain employment. What’s more, the labour productivity is around 35% per employee higher than the UK average: £62,000 GVA per employee versus the £46,000 average.
But what does this mean for the economy? In terms of direct benefits, the aviation sector generates £8.8 billion of UK economic output (measured as GVA), or 0.7% of the total GVA of the UK economy. This figure increases to 18.4 billion (1.5%) when the economic activity needed to supply the inputs purchased by the sector is taken into account. The sector also contributes directly around £4.8 billion of revenue to the Exchequer, (0.9% of UK overall tax revenue in 2007/08), with an additional £3 billion via its supply chain.
The report also takes time to look into benefits brought from further afield, by considering the codependency between aviation and other sectors such as trade and tourism. These sectors are evidently of great importance to aviation, but equally, without air travel, these sectors would also suffer!
However, analyses within the report demonstrate that the industry has been unfairly targeted in the UK with regards to the punitive measures it has received. Calculations show that in fact aviation is paying more than its fair share in ‘green taxes’ when compared with its environmental impact, and this is set to increase even further. In 2007, the annual tax and regulatory burden on the aviation sector exceeded the amount aviation should have been paying due to any impacts the industry may have on the environment (measured through carbon emissions costs, noise and local air quality) by up to £0.6 billion. This is expected to rise to £0.7 – £1.1 billion by 2012 as a result of the hike in Air Passenger Duty planned by the UK government.
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