Expansion of an efficient civil aviation sector is important for India as it becomes increasingly linked to global commerce and tourism. The National Council of Applied Economic Research (NCAER) undertook a study on the economic impact of Emirates Airline’s operations on the Indian economy. The study highlights the inter-linkages between the civil aviation sector with other sectors in the economy and generation of income and employment through these linkages. Dr Pronab Sen, Principal Advisor in the planning Commission released the study titled ‘Emirates in India – Assessment of Economic Impact and Regional Benefits’ at a function organized by NCAER on 3 September. The findings of the study are based on the data obtained from Emirates and sources from India’s official statistics.
Major findings of the study:
Emirates has contributed US$596 million to the Indian Economy by way of US$274 million in the Air Transport sector; US$76 million in the Petroleum and Chemicals sector; US$62 million in the Manufacturing sector; US$39 million in the Trade, Banking and Insurance sector and US$145 million in other sectors of the economy.
Emirates directly employs 1045 employees and supports a total of 72323 jobs in India through its operations – with 9304 jobs being direct employment impact and 63019 jobs being indirect employment impact.
On the tourism front, Emirates has brought in 529928 foreign tourists into the country in FY 2010-11, as a result of which, US$1153 million has been contributed to the economy as Foreign Exchange Earning (FEE).
For every $1 that Emirates contributes in the Indian air transport sector, it generates an additional $ 1.176 in the Indian economy. This means that the output multiplier for Emirates’ contribution in the Indian economy is 2.176.
The study points out that Emirates connects non-hub airports to a significant number of points in India which would otherwise not be directly linked to these airports. This highlights the connectivity Emirates provides, as well as emphasizing their role in enhancing air transport and tourism.
The study also suggests that Emirates’ expansion to four additional points: Amritsar, Pune, Mangalore and Trichy would benefit the Indian economy by US$ 106 million and would also lead to the creation of 13,011 jobs.
In the financial year 2010-11, 65 per cent of the expenditure has been spent on relatively small airports whereas only 35 per cent of Emirates’ direct contribution went to three big airports – Mumbai, Delhi and Chennai (in terms of passenger share). This indicates Emirates’ role in developing economic activities at non-hub points.
According to Dr Shekhar Shah, Director General, NCAER, “A well-managed civil aviation infrastructure and efficiently-run, competitive airlines are a must in today’s globalized world. The presence of such infrastructure and airlines in India can bring down transport and communication costs, promote commercial and cultural activity, create jobs, and ultimately unify people and markets. The new NCAER study we are releasing today that was done for Emirates Airline quantifies the airlines’ impact on the economy. This is the first comprehensive study of its kind. We’ve studied four impacts: first, the direct contribution of airline operations on the Indian economy; second, the indirect contribution of aviation to other sectors through multiplier effects; third, the generation of jobs in India; and fourth, contributions through the tourist dollars earned. We’ve also looked at the regional benefits that accrue to smaller cities when they are linked to India’s major air hubs.”
Dr Shah further added “I am grateful to the NCAER team, led by Tushar Nandi, for the tremendous work that has gone into doing this study and to Emirates for sponsoring the work. I am sure the work will help in improving our understanding of India’s civil aviation sector and how its expansion can play a role in the faster growth of the Indian economy”.
“India is a central pillar in Emirate’s global network, last year Emirates carried over 4.7 million passengers on its flights to Indian cities. NCAER’s report quantifies the US$596 million injected into the Indian economy as a result of this traffic; substantiating Emirates' contribution towards economic growth, foreign investment and trade in India”, said Andrew Parker, Emirates Senior Vice President of Public, Industry, International & Environmental Affairs. “Emirates is committed to further investment and growth in the Indian market with the deployment of the latest generation aircraft and launching new routes over the medium term."