Text 16. Problems of equipment ani) infrastructure associated with international tourism development

Aircraft, equipment and infrastructure have to be constantly updated to сорe with the growth of the international tourism industry.

As a result, many problems arise:

Adapting the fleet to the strong demand for tourism during the high season.

Adding jumbo jets to the fleet does not solve the difficulties caused by too rigid a supply and a very elastic demand. One solution to this problem is to hire and use aircraft from companies in other countries, even in other regions of the world. This is, however, a very expensive option and can raise survival problems. For instance, the welcome and the in-flight service are not always consistent with what the tourist expect from the company he had bought the services from. For example, you can imagine a German airline hiring an aircraft from a French or Spanish company which provides a non-German-speaking cabin crew for the flight.

Ground and station equipment and hospitality services.

Many Third World countries cannot accept night flights because they lack ground and station equipment or staff.

Aircraft maintenance and insufficient infrastructure.

Certain airline companies and certain airports are not able to provide adequate guarantees of security to satisfy insurance companies and, consequently, they are not insured. In these circumstances, they are not used by tourism organisations and do not contribute to international tourism development.

Air fare tariffs.

The fares charged by airline companies directly influence international tourism flows. International tourism development is hampered because airlines in some areas in the world (Africa, for instance) suffer from high operating costs resulting from their low productivity. In contrast, South East Asian airline companies have very high productivity and succeed in keeping their prices low.

While some countries and regions apply protectionist policies which keep the prices high, others have an Open Skies policy to encourage competition and keep prices low. Several countries allow a certain amount of competition but still regulate the industry to ensure that prices remain relatively high. This is normally to prevent the arrival of too many tourists, particularly if their presence is resented by the local population. Available and efficient transport structures are key conditions for the development of international tourism. Air transport is vital to countries far from generating markets, the medium and long-haul destinations. Restrictive regulation of the market has in many cases impeded tourism development.

The deregulation of the air transport industry has created considerable upheaval, first in the United States and on routes to North America, then on all international routes. By focusing the process of deregulation on free access to the market, the industry has become very competitive with many new companies entering the market. As a result, prices have substantially fallen and many countries now have the opportunity of becoming important tourism destinations. It is important to find ways of encouraging cooperation between the tourism sector and the air transport sector.

In particular, issues associated with the commercialization and the computerised distribution of tourism products and flights must be studied in detail. For instance, will the development of global distribution systems (GDS) bring opportunities for the tourism sector or will hotel and tourism companies become dependent on the strategic aim of the airline companies?

These concerns determine the sales and marketing strategies of companies selling tourism products.

Task 1. Answer the questions.

1. Why is transport significant to the growth of international tourism?

2. What makes air transport so vital for the creation of new tourism markets?

3. What are the three conditions which characterised air transport in the 1990s?

4. What are the main features of each of them?

5. What does the economic analysis of air transport reveal?

6. Why are cost structures different for scheduled and nonscheduled airlines?

7. What do direct operating costs include?

8. What costs are considered indirect operating costs?

9. What kinds of indirect operating costs does the text mention ?

10. Why are labour costs increasing?

11. What problems of air transport are associated with international tourism development?

12. What are the ways of solving them?

Task 2. Sum up the information you've learned from the text.

Task 3. Think and answer:

1. What do you know about cooperation of air transport and tourism sector in Ukraine?

2. What are the advantages and disadvantages of travelling by air in Ukraine?

3. Is there any competition between Ukrainian and Western airlines? What do you know about it?

4. Does Ukraine participate in any international agreements on air transport? What do you know about such agreements?

5. What are the main problems facing Ukrainian airlines?

6. What are the ways of solving these problems?

Text 17. Read and translate the text.