Preface

Statement from the Minister of Transport

It is my greatest pleasure to welcome you all to the "First International Civil Aviation Symposium – ICAS” on Investigating Regional Opportunity, Global Sustainability and Innovation in the Aviation Sector" hosted by the German University in Cairo. Today activities related to culture, society, and economy in our life are closely associated with active interactions with foreign countries. International air transport is necessary for worldwide mobilization of persons and goods. Civil aviation provides an important means of transport, especially to a country as central as Egypt. This makes it necessary to promote the smooth exchange of people and goods in order to stimulate the society and economy and to improve international competitiveness. The civil aviation industry plays a vital role in both regional and international transport, trading, and tourism. An important issue for civil aviation is to make sure international routes and capacity effectively meet the users' needs. There is a continuous need to further expand the international aviation network and promote competition based on equitable opportunities. Development to the overall transport sector in Egypt is crucial. This development should also address the aviation industry and its players in terms of aircrafts, airports, operators, pilots, flights operation, and aviation management. Future trends in aviation should also compromise sustainable development in terms of reduction of the environmental impacts attributed to aircraft operations. The sky agreements and trade zones should be immensely developed. In the First International Civil Aviation Symposium on Regional Opportunity; innovative solutions related to the aviation sector on the regional scale are presented, paving the road towards sustainable aviation. We welcome you all to this important event.

Prof. Dr.-Ing. Ibrahim ElDimeery

A word from the Symposium Organizer The German University in Cairo (GUC) is hosting the 1st International Aviation Symposium (IAS) entitled “Investigating Regional Opportunity, Global Sustainability and Innovation in the Civil Aviation Sector” to enhance the cooperation between German & Egyptian experts in this important field of economic and business development as well as research and policy making. The event is hosted by the German University in Cairo (GUC) and jointly organized by the Faculty of Management Technology & Faculty of Engineering and Material Science- Civil Engineering Program. The symposium owes special thanks to the German Academic Exchange Service (DAAD) who is the main sponsor of the event. The symposium focuses on contributions that investigate regional opportunities, sustainability challenges (at the global and local level) and innovative solutions in the aviation sector with a particular focus on Egypt and the MENA region. Invited speakers include, researchers, policy makers, industry representatives and educators from the aviation industry. The event brings together stakeholders and experts in the field of aviation from Germany, Egypt and beyond. The goal is to provide a platform for intellectual exchange and to foster future research cooperation. Apart from fostering academic exchange and research between the GUC and German institutions, the symposium aims at developing recommendations for Egyptian policy makers with a special emphasis on opportunities and constraints in developing Cairo International Airport into an international aviation hub.

Description of thematic focus

Despite economic crises, terrorism, pandemics and natural disasters the aviation sector has seen an impressive growth in the last decade with the Middle East and North Africa (MENA) among the fastest growing regions in the world. This growth not only heralds new opportunities for the airline industry but for wider regional development and economic growth. Tourism, trade, cargo & logistics hubs and related employment opportunities are but a few examples of regional opportunities that go hand in hand with a flourishing aviation sector. In Egypt, for example, around 80% of tourist traffic comes through airports with tourism estimated to provide about 2.5 million jobs directly and indirectly (World Bank, 2012). The Dubai aviation model also demonstrates how the aviation sector can become a major driver of economic growth in a region with the entire sector contributing to about 19% of total employment in Dubai and 28% of the Emirate’s GDP (Oxford Economics, 2011). At the same time, there are severe regional disparities as not all countries in the MENA region have been equally able to seize growth opportunities through the aviation sector. Amongst others, infrastructure, human capital and regulatory conditions at the national and international levels have been identified as major developmental constraints (AACO, 2011; ICAO, 2011). To address such infrastructural constraints the World Bank has supported in Egypt, for example, the Cairo Airport Development Project. At the international level, there are continued deregulation initiatives calling for the removal of restrictions from market access, ownership and control. In the MENA region, deregulation initiatives have recently, culminated in the Damascus Convention of 2004 involving a timetable for the implementation of a liberal Arab regulatory framework in air transport. The latter has been connected to calls for a reformulation of Arab-European aviation relations (e.g. EURMED Agreements) with the goal of achieving a balance between the air transport sectors in both regions (AACO, 2011). One aspect of this initiative also involved the severe lobbying against the European Emissions Trading Scheme (ETS), which was not only seen in breach of the Chicago Convention of 1944, but also as a policy that puts players from developing countries at a competitive disadvantage with adverse growth effects for their home economies. While the growth and development of the aviation sector involves clear opportunities for different national economies in the MENA region and beyond, it also poses substantial sustainability challenges on a global scale. These involve first and foremost environmental challenges such as noise and emission prevention (CO₂, NOx, Methane, condensation trails, and cirrus clouds). Air traffic, for example, contributes currently to only 2-3 % of global CO₂ emissions, projections are that these will rise to more than 20% by 2050 (Wit, Boon, van Velzen, Cames , Deuber and Lee, 2005; Scheelhaase und Grimme, 2007). Indeed, the need to respond to these challenges has been generally acknowledged. At the same time, global agreements (e.g. Kyoto, ICAO) to curb greenhouse emission largely failed giving rise fragmented and halfhearted solutions, involving for the most part unilateral or regional caps and trade schemes such as the EU ETS, Chinese ETS or South African or the Australian Carbon Tax. Yet, not only environmental issues related to growth pose sustainability challenges. Growing competition in the sector severely challenges existing business models and labor standards. For instance, while some new players have seized the opportunities offered by market growth and deregulation and developed new successful business models, as in the case of Ryanair or Emirates Airlines, the business models of traditional national flagship carriers have come under increasing pressure for change. For many small players, a stand-alone business strategy has proven unsustainable and for some joining strategic alliances has become the only survival option. However, such memberships may lead to further marginalization and excessive dependence. Importantly, alliances membership may even affect wider regional development as just a few mainly European players dominate global alliances which account for almost 70% of the total share of international air traffic. By the same token, as competition intensifies and becomes increasingly cost based, prevalent employment relations and labor standards come under pressure for change. Plehwe (2012) argues in this context that the increased adoption of low cost strategies in the airline industry has contributed to a substantial increase in labor conflict across Europe. On the whole, an ever more pressing question for the industry and its individual players is how to develop innovative solutions that are at the same time environmentally, socially and economically sustainable. For example, low cost and full service carriers alike, are faced with the continuous challenge to develop or leverage innovations that satisfy requirements for reducing their environmental footprint (e.g. better performing airframes and engines, bio-fuel) while improving their performance in the competitive game (e.g. cost reduction through fuel saving). To respond to the above calls, a better understanding of the enabling and constraining conditions for innovation in the aviation sector in general and in airline business models in particular are clearly needed.

 

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