REGIONAL COOPERATION AND ECONOMIC INTEGRATION
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REGIONAL COOPERATION AND ECONOMIC INTEGRATION

REGIONAL COOPERATION AND ECONOMIC INTEGRATION REGIONAL COOPERATION AND ECONOMIC INTEGRATION

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25.12.2014 Views

CEFTA-2006 AND ANHANCING COMPETITIVENESS OF THE REGION - SOME SECTORAL ASPECTS Dr. sc. Ivan Mišetić Dr. sc. Mirko Tatalović Jasmin Bajić, B sc. Croatia Airlines, Zagreb, Croatia PUBLIC SERVICE OBLIGATION MODEL ON EUROPEAN SOUTHEAST AIR TRANSPORT MARKET Abstract Air traffic market of the Southeast Europe has the above average dynamics of growth, conditioned however by the undeveloped market and insufficient traffic connection. Paper will consider the different levels of achievements in traffic results of air carriers and airports of the Southeast Europe including macroeconomic analyses of 11 countries belonging to this the region. following by analysis and categorization of the airports according to European Union documents and directives. The future development under the new economic circumstances means adjustments of business models that have been implemented. Connections with main European destinations are dominant and all leading European air carriers are already present in the region. Low Cost Carriers (LCC) are more and more coming - forming bases with two or three aircraft, but with dominant connections to the most developed European markets. In the expansion financing of LCC carriers in Europe some airports have taken part with various concessions, regions with direct or indirect “subventions” and other subjects obtaining through the so increased transport effects level some positive economic and social benefit. Due to demand level, connection within the region is possible with regional aircraft (approx. 50-100 seats), with indispensable relationship of national air carriers, as a first step to provide and realize privatization process for some of the most successful air carriers. The undeveloped network within the region is real fact. The best air connections within the region are via Vienna. The paper will also consider the air traffic forecasts of the Southeast Europe region, which will follow expected implementation of improved model and benefits for the population and economy of eleven countries. It also means necessity to cooperate and find out efficient mode of integration which will follow air traffic and legal framework of the European Union. Positive example can be implementation of PSO (Public Service Obligation) for air carriers of the Southeast Europe network. Implementation of PSO within the region would increase economic activities level among the regional countries, economic development and progress, political stability and continuation of the European integrations. Keywords: Air Transport Market of Southeast Europe, Cooperation, Competition, PSO (Public Service Obligation), Traffic Forecast, Economic Development 251

PART IV: INTRODUCTION Air transport plays a vital role in the European economy and for international trade. This industry generates €120 billion in annual revenues, employs 3 million people and accounts for more than 30% of worldwide air transport. Including indirect and induced impacts the air transport industry generates about 4.2 million jobs in Europe and contributes more than USD 331 billion to European GDP. If catalytic impacts are included, the number of jobs increases to 7.6 million and GDP to over USD 1,226 billion, representing 24% of the total jobs and 34% of the GDP worldwide. (www.eu.int). It is an opportunity for industry and consumers, especially because tourism is a major growth area in the coastal regions. Forecasts for aircraft movements and passenger traffic (Southeast Europe) are above the average growth rates for rest of the Europe and worldwide. There are potentially 414 european airports at which different air carriers can operate; therefore, there is an opportunity for further growth. Consequently, the affordable air travel will be increasingly available to a greater number of people. Creating a single European market more than 58 million people and 30 airports of the Southeast Europe region would be fully integrated consisting thus market for 500 million people in total. Air traffic market of the Southeast Europe has the above average dynamics of growth, conditioned however by the undeveloped market and insufficient traffic connection. This specially refers to the city pairs within eleven countries belonging to this market. Herein below there are fundamental economic indicators for countries of the Southeast Europe region and appertaining indicators of air traffic and infrastructure development degree in air transport. This paper initiates the need and justification for introduction and application of “Public Service Obligation” (PSO) model that would considerably improve traffic connection. In such a case the invested funds into application of the inter-regional air traffic are several times more economical and lower when compared with high investments in railway and road infrastructures. New air routes within the region would considerably improve and increase economic integrations and cooperation, being of special interest having in mind the undeveloped degree of the region as a whole. 1. Macroeconomic analysis of the region Countries in the region over the last twenty years have passed violently through a period marked by war events, and transition processes. Relative political stability has created the conditions of faster economic growth within the region in the last five years. Slovenia, Bulgaria and Romania entered the European Union, and all the other countries are moving in the direction of the euro integration processes. 252

CEFTA-2006 <strong>AND</strong> ANHANCING COMPETITIVENESS OF THE REGION - SOME SECTORAL ASPECTS<br />

Dr. sc. Ivan Mišetić<br />

Dr. sc. Mirko Tatalović<br />

Jasmin Bajić, B sc.<br />

Croatia Airlines, Zagreb,<br />

Croatia<br />

PUBLIC SERVICE OBLIGATION MODEL ON EUROPEAN<br />

SOUTHEAST AIR TRANSPORT MARKET<br />

Abstract<br />

Air traffic market of the Southeast Europe has the above average dynamics of growth,<br />

conditioned however by the undeveloped market and insufficient traffic connection.<br />

Paper will consider the different levels of achievements in traffic results of air carriers<br />

and airports of the Southeast Europe including macroeconomic analyses of 11 countries<br />

belonging to this the region. following by analysis and categorization of the airports<br />

according to European Union documents and directives. The future development under<br />

the new economic circumstances means adjustments of business models that have been<br />

implemented. Connections with main European destinations are dominant and all leading<br />

European air carriers are already present in the region. Low Cost Carriers (LCC) are more<br />

and more coming - forming bases with two or three aircraft, but with dominant connections<br />

to the most developed European markets. In the expansion financing of LCC carriers in<br />

Europe some airports have taken part with various concessions, regions with direct or<br />

indirect “subventions” and other subjects obtaining through the so increased transport<br />

effects level some positive economic and social benefit. Due to demand level,<br />

connection within the region is possible with regional aircraft (approx. 50-100 seats), with<br />

indispensable relationship of national air carriers, as a first step to provide and realize<br />

privatization process for some of the most successful air carriers. The undeveloped network<br />

within the region is real fact. The best air connections within the region are via Vienna.<br />

The paper will also consider the air traffic forecasts of the Southeast Europe region, which<br />

will follow expected implementation of improved model and benefits for the population<br />

and economy of eleven countries. It also means necessity to cooperate and find out efficient<br />

mode of integration which will follow air traffic and legal framework of the European<br />

Union. Positive example can be implementation of PSO (Public Service Obligation) for air<br />

carriers of the Southeast Europe network. Implementation of PSO within the region would<br />

increase economic activities level among the regional countries, economic development<br />

and progress, political stability and continuation of the European integrations.<br />

Keywords: Air Transport Market of Southeast Europe, Cooperation, Competition, PSO<br />

(Public Service Obligation), Traffic Forecast, Economic Development<br />

251

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