77963 AIR TRANSPORT ANNUAL REPORT 2012 THE WORLD BANK GROUP IBRD , IDA, IFC AND MIGA 1 Cover page: The World Bank finances a variety of projects and studies across its five regions focusing on ins tu onal strengthening, capacity building and infrastructure. Cover Page Picture: ATR 42 flying over South Pacific Islands where the WBG has recently approved a US$125 Mio grant for improving Avia on Safety and Security. OFV19FEB12 AIR TRANSPORT ANNUAL REPORT 2012 ABBREVIATIONS ADS B / C Automa c Dependent Surveillance – Broadcast /– Contract AGL Aeronau cal Ground Lights ATC Air Tra c Control ATM Air Tra c Management BOT Build Operate Transfer BOO Build Own Operate BOOT Build Own Operate Transfer BTO Build Transfer Operate CAA Civil Avia on Authority CASDR IFC Advisory Services Department (WBG) CES Charles E. Schlumberger, Lead Air Transport Specialist (WBG) CINTS IFC Infrastructure Department, Transport Division (WBG) COCESNA Central American Air Tra c Control Organiza on DME Distance Measuring Equipment GNSS Global Naviga on Satellite System EASA European Avia on Safety Agency (agency of the European Union) EC European Commission ESW Economic Sector Work FAA Federal Avia on Administra on of the United States of America IATA Interna onal Air Transport Associa on IASA Interna onal Avia on Safety Assessment (FAA) IBRD Interna onal Bank for Reconstruc on and Development (WBG) ICAO Interna onal Civil Avia on Organiza on (UN Agency) IDA Interna onal Development Associa on (WBG) IFC Interna onal Finance Corpora on (WBG) ILS Instrument Landing System IOSA IATA Opera onal Safety Audit MIGA Mul lateral Investment Guarantee Agency (WBG) PPPA Public Private Partnership Agreement PPP Public Private Partnership SARPS Standards and Recommended Prac ces TA Technical Assistance TWITR Transport Unit of the Energy Transport Water Department (WBG) US DOT US Department of Transporta on USOAP Universal Safety and Security Oversight Audits Program (ICAO) VOR VHF Omni direc onal Radio Range WBG World Bank Group WRDSS World Routes Development Strategy Summit TABLE OF CONTENTS Execu ve Summary …………………………………………………………………………………………….. 1 Acknowledgements …………………………………………………………………………………………….. 2 Foreword ……………………………………………………………………………………………………………... 3 World Bank Group Air Transport Por olio ………………………………………………………….. 4 IBRD and IDA ……………………………………………………………………………………………………... 5 IBRD and IDA Project Overview ………………………………………………………………... 5 IBRD and IDA Project Highlights ……………………………………………………………….. 12 Africa …………………………………………………………………………………………………. 12 Middle East and North Africa …………………………………………………………….. 17 La n America and Caribbean ………………………………………………………………. 18 East Asia and Pacific ……………………………………………………………………………. 20 South Asia Region ……………………………………………………………………………….. 22 Europe and Central Asia …………………………………………………………………….. 23 IFC ……………………………………………………………………………………………………………………….. 24 IFC Project Overview …………………………………………………………………………………. 24 IFC Project Highlights ……………………………………………………………………………….. 27 IFC Advisory Services (CASDR) …………………………………………………………………… 31 MIGA ……………………………………………………………………………………………………………………. 35 External Rela ons ……………………………………………………………………………………………….. 37 Internal Dissemina on …………………………………………………………………………………………. 40 Research and Internal Services ……………………………………………………………………………. 41 Outlook for Fiscal Year 2013 ………………………………………………………………………………… 43 EXECUTIVE SUMMARY The World Bank Group (WBG) fiscal year 2012 The IFC Air Transport Por olio decreased Air Transport Por olio includes nearly 30 pro slightly in FY12, by 7.7% percent in ac ve pro jects or project components in all six World ject commitments to US$632.9 million. IFC Ad Bank regions, as well as 20 ac ve IFC invest visory expanded its por olio services however, ments and several advisory mandates. having ini ated several airport mandates dur ing FY11 with follow up in FY12. FY12 has been a successful year for air transport despite a small decline in the ac ve MIGA has been involved in air transport with air transport por olio volume of the WBG of the issuance of guarantees for two airport pro 4.5% from US$1,304.8 to $US1,245.6 due to jects in Ecuador and Peru. the comple on of several projects. A par cular Safety and Security and Environmental Chal highlight of this year has been the approval of lenges remain the core focus of External Rela a US$125 million regional avia on project in ons with the Interna onal Civil Avia on Or the South Pacific. ganiza on (ICAO). The WBG, ICAO, and Routes The majority of projects in the IDA and IBRD Air (represen ng the airline industry) also held Transport Por olio are being implemented in their 7th Global Avia on Strategy Summit in the Africa Region, with new and addi onal Berlin, Germany in October 2011. commitments in Tanzania and Sierra Leone ap In line with the objec ve of its external rela proved this year. The focus of these projects is ons, the focus internally has also be on envi par cularly on infrastructure rehabilita on, in ronmental issues. The Air Transport Unit there s tu onal strengthening, and capacity building. fore organized a Brown Bag Lunch this year on Most new ac vity has been recorded in the the controversial inclusion of avia on in to the East Asia and Pacific Region with the launch of EU Emission Trading Scheme (ETS) with a rep the Pacific Avia on Investment Program (PAIP). resenta ve of the EU invited as a presenter. The implementa on of IBRD and IDA financed projects in La n America and the Caribbean Finally, industry relevant Research by the WBG and the Middle East and North Africa this year was focused on low cost airlines ana progressed sa sfactorily in FY12. lyzing opportuni es and impact of business model in developing countries. This research is planned to be completed in FY13. 1 AKNOWLEDGEMENTS This report benefited from the knowledge and exper se of air transport sta across the World Bank Group. We especially wish to acknowledge the contribu ons of Chris Benne , Fernando Blanco, Sylvia Michele Diez, Ibou Diouf, Amer Zafar Durrani, Fabio Galli, Harsh Gupta, Layne Hill, Negede Lewi, Jus n Taylor Locke, Yoans Elisikia Mchovu, Gylfie Palsson, Noroarisoa Rabefaniraka, Jus n Runji, Kavitah Sethi, Evelina Stanoeva and Adam Stone Diehl. We would also like to thank Jose Luis Irigoyen, Director of Transport, Water, and In forma on and Communica ons Technology, and Marc Juhel, Sector Manager, Transport, for their con nued guidance and support, and Nora Weisskopf for her assistance with the research and compila on of this report. 2 FOREWORD Air transporta on around the globe con nued to re passenger tra c is expected to grow by 7 8 percent cover in fiscal year 2012, which resulted in the airline per year. sector expec ng a collec ve profit for 2012. However, Despite the posi ve outlook, growing concern about profits for 2012 are expected to be less than half the the sustainable development of the industry is being US$8.4 billion that the industry earned in 2011. voiced due to its dependence on a ordable fuel Growth, nevertheless, varies greatly between regions. costs, its challenge to reduce greenhouse gas emis Nega ve or flat growth, resul ng in losses for airlines, sions, and its vulnerability to recessions that hamper has been experienced in Europe, while North Ameri global trade. Behind this uncertainty, many large in can shows signs of recovery. In emerging markets, the frastructure investments in airports or air tra c con Middle East and La n America con nue their solid trol systems must be launched early to meet an un expansion, followed by a good development in China, certain future demand. If necessary investments are and overall Asia Pacific. Africa recovered from its de not made, future economic development may be im cline in 2009, and shows modest but sustained pacted. growth. The main challenges of the industry con nue to be the high oil price and a slow global recovery. The World Bank Group (WBG) will con nue to sup Airlines are focusing on reducing costs and increasing port its client countries in developing a sustainable air e ciency. Air cargo experienced con nued declining transport sector. The development focus will remain freight volumes, sugges ng a slowdown in global on the provision of safe, secure, and a ordable air trade paired with some possible modal shi in trans transport services, which secure global sustainability porta on services. of the industry through green growth of avia on. The instruments of the WBG to support this growth are The outlook for the industry, on the other hand, con investment projects in public or private air transport nues to remain posi ve for the medium and long projects, investments guarantees, policy advice to term. The air transport industry collec vely sees governments, advisory services and technical assis strong con nued growth over the next two decades tance, and research projects. resul ng in a doubling of passenger tra c by 2030. World passenger tra c is forecast to grow by about 4.5 percent in that period, which is well over the ex pected growth in world GDP of an average 3 percent. The strongest development is forecast to occur in the Dr. Charles E. Schlumberger emerging markets of China and India, where Lead Air Transport Specialist 3 Air Transport Por olio The WBG FY12 air transport por olio is composed of various lending and non lending (Technical assistance and Economic Sector Work) projects in the six regions as defined by the World Bank (IDA and IBRD). In addi on, the IFC has a current por olio of pro posed and ac ve lending or investment financing throughout the avia on sector. Ac ve Projects IBRD IDA IFC TOTAL (in millions USD) FY12 FY11 change FY12 FY11 change FY12 FY11 change FY12 FY11 change WB Group Total 105,134 102,305 2.8% 68,573 69,450 1.3% 45,275 42,777 5.8% 218,981 214,532 2.1% Ac ve Por olio WB Group Ac ve 26,755 26,005 2.9% 11,718 13,156 10.9% 2690 2,695 0.2% 41,163 41,856 1.7% Por olio Transport % of Total Ac ve 25.4% 25.4% 0.0% 17.09% 18.9% 1.9% 5.9% 6.3% 0.4% 18.8% 19.5% 0.7% 4 Por olio Air Transport Ac ve 277.2 285.0 2.8% 335.5 334.2 0.4% 632.9 685.5 7.7% 1,245.6 1,304.8 4.5% Projects % of Total Ac ve 0.3% 0.3% 0.5% 0.5% 1.4% 1.6% 0.2% 0.57% 0.6% Por olio % of Total Transport 1.0% 1.1% 2.9% 2.5% 23.5% 25.4% 1.9% 3.03% 3.1% Por olio The overview above summarizes the WBG’s most important projects WBG. Several smaller scale projects, project components or projects in early stages of development are not included. Excluding the Mul lateral Investment Guarantee Agency (MIGA) WORLD BANK AIR TRANSPORT PORTFOLIO IBRD & IDA PROJECTS OVERVIEW IBRD and IDA contribute to almost 30 projects worldwide focusing on regulatory reform, capacity building and some infrastructure investments. 5 WGB Commitment (Million US$) Status as Project ID Descrip on Country Project Full Name Project Product Line of end Code (Avia on Component) Avia on Com June 2012 Total ponent Ins tu on capacity building, Burkina Faso, Ca West and Central Africa safety and security Improve IDA grant, IDA meroon, Guinea, P083751 Air Transport Safety & 35.76 31.6 Ac ve ments at main interna onal credit Mali Security Project airport Transport connec vity im Congo, Democra c DRC Mul modal P092537 provement and na onal eco 255 25.5 IDA grant Ac ve Republic of Transport nomic integra on P129594 DRC Mul Modal Transport connec vity im Congo, Democra c 6 Transport Addi onal Fi provement and na onal eco 180 9 IDA Grant Pipeline Republic of nancing nomic integra on Feasibility study of a new air TA (Non Burkina Faso P114911 Donsin Airport 0.307 0.307 Ac ve port lending) Burkina Faso Donsin IDA Specific Technical Assistances for new Burkina Faso P120960 Transport Infrastructure 65 6.5 Investment Pipeline Ouagadougou Airport Project Loan Opera onal, financial and ca Republic of Cape 7th Poverty Reduc on P127411 pacity improvements of Cape 12 1.2 IDA credit Ac ve Verde Support Credit Verde Airlines AFRICA AFRICA WBG Commitment ( Million US$) Status as Project Full Descrip on (Avia on Product Country Project ID Code of end Name Component) Project Avia on Compo Line June 2012 Total nent Kenya P082615 Northern Corri Enhance avia on safety 207 41.5 IDA Credit Ac ve dor Transport and security, Inst. Improvement Strengthening and Capaci Project ty Building Kenya P106200 Northern Corri Cargo Handling at Nairobi 253 48.1 IDA credit Ac ve dor Transport Airport, Kenya Airways Improvement Priva za on Project (Addi onal Fi nancing) 7 Kenya P124109 Kenya Transport Inst. Strengthening and 300 27 IDA credit Ac ve Sector Support Capacity Building Project Madagascar P082806 Transport Infra Airport Safety and Security structure Invest Improvements, TA to the 150 8.3 IDA credit Closed ment Project Establishment of PPPs in the Airport Sector Transport Sector Inst. Dev. And Airport Master Plan, ins Mauritania P089672 4.5 0.65 IDA credit Closed Technical Assis tu on capacity plan tance Project WGB Commitment (Million US$) Status as Descrip on Country Project ID Code Project Full Name Avia on Com Product Line of end (Avia on Component) Project Total June 2011 ponent West and Central Africa Inst. Strengthening, Safety and Air Transport Safety & Nigeria P100785 Security Improvements at 46.65 46.65 IDA credit Ac ve Security Project (Phase Main Airports II) Infrastructure Develop Infrastructure Rehabilita on at Sierra Leone P078389 44 13.8 IDA credit Ac ve ment Project Freetown Airport Infrastructure Develop Infrastructure Rehabilita on at IDA credit, IDA Sierra Leone P110968 ment Project (Addi onal 11 2.75 Ac ve Freetown Airport grant financing) Transport Sector Support Rehabilita on and extension of 8 Tanzania P055120 270 69.2 IDA credit Ac ve Project regional airports Transport Sector Support Rehabilita on and extension of Tanzania P126206 Project (Addi onal fi the taxi ways and apron at the 59 57.23 IDA credit Ac ve nancing) Zanzibar airport Second Central Transport Tanzania P103633 Zanzibar Airport improvement 190 17.1 IDA credit Ac ve Corridor West and Central Africa Benin, Maurita Air Transport Safety & Avia on Safety and Security IDA grant, IDA P108583 16.57 16.57 Ac ve nia, Senegal Security Project (Phase II Improvements credit B) AFRICA MIDDLE EAST AND NORTH AFRICA & LATIN AMERICA AND CARIBBEAN Descrip on WGB Commitment (Million US$) Product Status as of Country Project ID Code Project Full Name Avia on Com (Avia on Component) Project Total Line end June 2011 ponent Cairo Airport Develop Rehabilita on and expansion of IBRD Egypt P101201 280 280 Ac ve ment Project TB 2 Terminal Building 2 loan Port Ci es Development Rehabilita on/ extension of IDA Yemen P088435 35 6 Ac ve II Project Mukalla airport Grant Descrip on WGB Commitment (Million US$) Status as of Product 9 Country Project ID Code Project Full Name end June (Avia on Component) Avia on Com Line Project Total 2011 ponent Na onal Roads and Air Regional integra on strength Bolivia P122007 port Infrastructure Pro ening and airport infrastruc 109.5 6.0 IDA credit Ac ve ject ture development Grenada, Regional Disaster Vulner Improvement of emergency St. Vincent & P117871 20.92 5 IDA loan Ac ve ability Reduc on APL1 response capability Grenadines Infrastructure and Ins tu Repair of Port au Prince air Hai P120895 ons Emergency Recov 65 3 IDA grant Ac ve port’s departure terminal ery Project WGB Commitment (Million US$) Status as Descrip on (Avia on Compo Country Project ID Code Project Full Name Avia on Com Product Line of end nent) Project Total ponent June 2011 Transport Sector Consoli Tonga P096931 Technical Assistance to CAA 5.4 2.4 IDA grant Ac ve da on Project Infrastructure Investment, Sec Pacific Avia on Invest tor Reform and Training, Tonga P128939 27.21 27.21 IDA grant Ac ve ment Program (Phase 1) Strengthening Airport Opera ons and Management Capacity Infrastructure Investment, Sec Pacific Avia on Invest tor Reform and Training, Kiriba P128938 22.91 22.91 IDA grant Ac ve ment Program (Phase 1) Strengthening Airport Opera ons and Management Capacity 10 Infrastructure Investment, Sec tor Reform and Training, Tuvalu P128940 Pacific Avia on Invest Strengthening Airport Opera 11.85 11.85 IDA grant Ac ve ment Program (Phase 1) ons and Management Capacity Samoa, Vanuatu Infrastructure Investment, Sec and Solomon tor Reform and Training, P143408, Pacific Avia on Invest IDA grant/loan Islands Strengthening Airport Opera TBD TBD Pipeline P133454, ment Program (Phase 2 ons and Management Capacity P143906 and 3) IBRD loan Development and opera on of Jiangxi Shangrao San the Shangrao Sanqingshan China P123729 50 50 Pipeline qingshan Airport Project Airport EAST ASIA PACIFIC SOUTH ASIA REGION, EUROPE AND CENTRAL ASIA & GLOBAL WGB Commitment (Million US$) Status as Project ID Descrip on (Avia on Com Product Country Project Full Name of end Code ponent) Avia on Compo Line Project Total June 2011 nent Trade and Transport Restructuring and moderniza Pakistan P101684 25 2 IDA credit Ac ve Facilita on II on WGB Commitment (Million US$) Status as Descrip on (Avia on Compo Product Country Project ID Code Project Full Name of end nent) Project Avia on Compo Line June 2011 Total nent 11 Programma c Develop Tajikistan P126042 Modernizing Avia on Services 20 4.8 IDA grant Pipeline ment Policy Grant 6 Descrip on WGB Commitment (Million US$) Status as Product Project ID Code Project Full Name of end Country (Avia on Component) Avia on Compo Line Project Total June 2012 nent Low Cost Carriers: Oppor Global P132939 tuni es and Impact in De Low Cost Airlines Analysis 0.02 0.02 ESW Ac ve veloping Countries PROJECT HIGHLIGHTS AFRICA West and Central Africa Safety Project ( P108583, P083751, P100785) In FY12 the implementa on of the Air Western or Central African country not includ Transport Safety and Security Project in West ed in the ini al phase is able to join during and Central Africa progressed successfully. subsequent phases, under the same eligibility The project’s objec ve is to (i) improve the criteria. Phase I included Burkina Faso, Came Civil Avia on Authority's (CAA) compliance roon, Guinea and Mali, with an overall alloca with Interna onal Civil Avia on Organiza on on of US$35.67million. Phase II A of the Pro (ICAO) safety standards; (ii) increase CAA's gram was ini ated in FY08 and included Ni compliance with ICAO's security standard; and geria’s par cipa on in the program for an (iii) enhance the main interna onal airports' amount of US$46.65 million. In FY09 and compliance with ICAO's security standards. FY10, Benin and Senegal joined the Program under Phase II B, and were allocated a total The program focuses on a variety of ac vi es, amount of US$16.57 million. from capacity building to procurement of safety and security equipment. Due to the Through sustained training of technical sta in small size of the air transport industry and the air transport safety and security issues, ins limited resources in each country, regional tu onal reforms and regulatory framework coopera on is key. The establishment of Re updates, Phase I countries have already gional Avia on Safety Oversight Agencies achieved or even surpassed the project's most (RASOAs) has therefore been an important significant monitoring indicators (e.g. compli enabler for airports to reach compliance. The ance with ICAO safety and security standards; project team is also monitoring progress un number of technical sta trained). der ICAO’s Coopera ve Development of Oper Even Guinea’s air transport sector, despite a onal Safety and Con nued Airworthiness poli cal turmoil, has improved significantly: Program (COSCAP) with sub regional organiza they completed a study to create an autono ons (the UEMOA countries, the Banjul Ac mous CAA and are implemen ng a plan to cord countries, that is, Non UEMOA countries complete their ins tu onal reform. The se within ECOWAS, and the CEMAC countries). cond phase of the project, APL2 A, helped Ni With the program’s structure being a horizon geria drama cally improve its safety standard. tal Adaptable Program Loan (APL), any 12 The  country  has  also  made  no ceable  progress   cal  reforms  are  s ll  needed  regarding  the  over-­‐ all   ins tu onal   arrangements   and   governance   PROJECT  HIGHLIGHTS in  their  compliance  with  ICAO  safety  and  secu-­‐ rity  standards  through  an  update  of  their  regu-­‐ in  the  sector.  An  in-depth  study  on  ins tu on-­‐ al   reform   is   in   its   last   version   providing   some   latory   framework,   and   training   of   their   tech-­‐ insight  into  the  development  of  a  be er  over-­‐ nical   staff.   The   APL1’s   closing   date   has   just   all   strategy   and   financial   management.   A   been   extended   from   end   December   2011   to   roadmap   and   a   discussion   of   the   study’s   rec-­‐ end  June,  2013,  to  allow  the  full  comple on  of   ommenda ons   will   be   presented   at   a   work-­‐ on-going  and  a  few  scheduled  ac vi es,  to  en-­‐ shop   organized   by   the   Ministry   of   Avia on   next  year.  The  recer fica on  process  of  Nigeri-­‐ sure  that  the   project’s   implementa on   is  fully   an   air   carriers   has   been   sa sfactorily   estab-­‐ sa sfactory. lished,   and   contributed   to   air   transport   safety   Nigeria,  as  the  only  country  in  the  region,  has   improvement   by   strengthening   NCAA’s   tech-­‐ received   a   US   Federal   Avia on   Administra on   nical   staff   capacity.   Some   airlines   s ll   remain   (FAA)   Interna onal   Avia on   Safety   Assess-­‐ to   be   re-cer fied   in   line   with   the   new   revised   ments  (IASA)  Category  1  ra ng  in  August  2010.   guidelines,   include   Dana   Air   that   has   been   in-­‐ This  means  that  the  Nigerian  Civil  Avia on  Au-­‐ volved  in  a  fatal  accident  last  year  in  Lagos.   thority,  is  capable  of  enforcing  interna onal  air   Despite   slower   compara ve   progress,   Benin   safety  standards  set  by  ICAO  for  aircra s  oper-­‐ has  also  shown  some  significant  achievements   a on   and   maintenance,   and   that   the   country   in   the   last   year.   Compliance   with   ICAO   safety   has   the   laws   and   regula ons   necessary   to   standards   has   increased   from   19.2%   2007   to   oversee   air   carriers   in   accordance   with   mini-­‐ 42.9%  in  2012.  Senegal’s  audit  is  s ll  outstand-­‐ mum   interna onal   standards.   As   a   result,   Ni-­‐ ing   but   the   internal   audit   carried   out   by   the   geria’s  registered  carriers,  such  as  Arik  Air,  can   CAA   concluded   that   compliance   with   ICAO's   now  offer  direct  flights  to  the  USA  for  the  first   standards  is  85%  and  89%  for  safety  and  secu-­‐ me  in  nearly  30  years.   rity  respec vely.   Despite   improvements   in   safety   and   security   Contact   Person   is   Noroarisoa   Rabefaniraka   at           oversight  of  the  avia on  sector  however,  cri -­‐ nrabefaniraka@worldbank.org Tanzania  Transport  Sector  Support  Project  (P055120,  P126206) In   May   2010,   the   Bank   approved   a   credit   of   The  project  received  addi onal  funding  (AF)  of   US$270   million   for   the   Transport   Sector   Sup-­‐ US$59  million  on  30  of  June  2011.  This  prompt-­‐ port   Project   (TSSP)   in   Tanzania.   In   support   of   ed  the  revision  of  the  project  development  ob-­‐ the   Transport   Sector   Investment   Program   jec ves  and  the  expansion  of  the  scope  of  the   (TSIP),   the   project’s   goal   is   the   rehabilita on   avia on   component.   As   men oned   above   the   and   prepara on   of   designs   for   part   of   the   AF   will   finance   the   works   and   the   associated   paved  na onal  road  network,  and  the  rehabili-­‐ supervision   services   to   rehabilitate,   expand   ta on  and/or  upgrading  of  regional  airports. and/or  extend  the  exis ng  taxiways  and  apron   of  Zanzibar  Airport.  The  Revolu onary  Govern-­‐ The   three   works   contracts,   namely;     (i)     the   ment  of  Zanzibar  (GoZ)  has  also  secured  a  loan   paving  and  rehabilita on  of  the  runway  at  Kig-­‐ from  the  China  Exim  Bank  to  finance  a  new  ter-­‐ oma   airport   (ii)   the   rehabilita on   of   the   main   minal  building.           runway   at   Tabora   airport,   as   well   as   (iii)   the   extension,  rehabilita on  and  paving  of  the  run-­‐ Contact   person   is   Negede   Lewi   at   way  and  the  replacement  of  the  apron,  termi-­‐ nlewi@worldbank.org nal   and   car   parking   at   Bukoba   airport,   were   signed  in  FY12.   13 Tanzania Second Central Transport Corridor Project (P103633) PROJECT HIGHLIGHTS Approved for a credit of US$190 million on perimeter access road, repair and provision of May 27, 2008, the Second Central Transport new aeronau cal ground lights (AGL), and pro Corridor Project (CTCP2) in Tanzania aims to vision of a new filter drainage system on each support Tanzania's economic growth by side of the runway for the full length. providing enhanced transport facili es that are reliable and cost e ec ve, in line with the The project also financed the detailed design Na onal Transport Policy and Strategy. This for rehabilita on and extension of Zanzibar includes the establishment of the Bus Rapid airport taxiways and apron. The subsequent Transit (BRT) system in Dar es Salaam and the works are being financed under the addi onal rehabilita on and extension of Zanzibar air financing credit of IDA’s Transport Sector Sup port runway. port project (TSSP) with an alloca on of US$57.23 million for works and supervision. The Zanzibar airport component was imple The project improved safety and customer mented successfully between April 2009 and sa sfac on and has enabled an increase in the July 2010 and was completed o cially on Au number of commercial regular flights to gust 3, 2010.The airport’s runway was rehabil Zanzibar. itated and extended from 2462 meters by 560 meters to 3022 meters long. Other works in Contact person is Yonas Mchomvu at cluded runway marking, the construc on of a ymchomvu@worldbank.org Sierre Leone – Infrastructure Development Project (P078389, P110968) In support of Sierra Leone’s Na onal Transport The naviga on installa on and tower equip Strategy and Investment Plan (2003 2007) ment are in the process of being installed and (SLNTP), the World Bank approved a US$44 opera onal training for airport employees is million credit for the Infrastructure Develop ongoing. Over the course of the year there ment Project. The project’s objec ve is to re have been some delays with regards to this habilitate selected priority roads, port, and air installa on; comple on is now scheduled for port facili es in Sierra Leone, while also sup January 2013. por ng regulatory and ins tu onal reforms to TWITR provided technical advice throughout ensure e ec ve management of the country's the prepara on of design and bidding docu road, port, and airport sectors. ments for the airport infrastructure rehabilita The focus of its avia on component is on the on. Civil works are under way and goods are rehabilita on of Freetown Interna onal Air now being procured. port and capacity building for its management. This includes among other things the rehabili Contact person is Kavita Sethi at ta on and strengthening of the runway, with ksethi@worldbank.org upgrading of turning loops and taxiway en trances to safely accommodate modern air cra works. Through the project the govern ment has procured and installed power gener ators and independent water supply as well as an Instrument Landing System (ILS) and Air/ Ground Communica ons System. 14 PROJECT HIGHLIGHTS Kenya – Northern Corridor Transport Improvement Project and Transport Sector Support Project (P082615, P106200, P124109) In 2003, the World Bank approved the first both KAA and KCAA have been given financial major African air transport infrastructure and autonomy and now retain the revenues gen regulatory capacity building project in Kenya. erated. As part of this process, KCAA has been The focus of this ongoing project, is to (i) sup raising the pay packages for key flight safety port the Kenya Airports Authority (KAA) in opera ons sta , cri cal for carrying out its airport infrastructure improvements and en oversight func on. Furthermore KAA has tak hancing security at Kenyan airports, and (ii) en over the responsibility of screening pas support the Kenya Civil Avia on Authority sengers and baggage from the Kenyan police. (KCAA) in regulatory capacity building and A consultant for the separa on of the service specific investments in naviga on aids and provision from its regulatory func on has training equipment. Due to the success of the been selected to assist KCAA. project and a high growth in passenger flows Expansion of Kisumu airport has been com resul ng from a sudden economic upturn, an pleted and is fully opera onal. The Govern addi onal credit of US$253 was approved in ment of Kenya (GoK) has awarded a contract April 2009. The addi onal financing supports for further expansion of the airport, which the building of a new passenger terminal at involves the construc on of an apron for a Kenya a Interna onal Airport (JKIA). cargo handling facility; the construc on of In FY12 works have progressed successfully. taxiways and expansion of the new terminal At the request of its stakeholders, the new building. Tra c has increased from 70,000 terminal at JKIA is being converted into an passengers in 2005 to about 300,000 in 2010. interna onal terminal. The apron has been With the opening up of and growth prospects expanded and the taxiways extended increas in Western Kenya, a further increase is to be ing the aircra parking space capacity by 50%. expected. The GoK will also focus on the re The remodeling and renova on of Units 1, 2 habilita on of the runway at Mombasa Inter and 3 of the airport are experiencing some na onal Airport in FY13. delays. Due to the con nuous improvements Contact person is Josphat O. Sasia at JKIA has obtained security clearance from the jsasia@worldbank.org US Transport Security Administra on and is on a good track to achieve FAA IASA Category 1 Cer fica on. The government of Kenya has also endorsed the restructuring of KCAA and 15 PROJECT HIGHLIGHTS Democra c Republic of Congo Mul Modal Transport Project (P092537, P129594) In 2010, the Bank approved an IDA grant of (FIH), (iii) two studies on the development of US$255 million for the first transport project airports in the country (one on freight devel in Democra c Republic of Congo since the opment at FIH, and one on secondary air end of the civil war. The objec ve of the Mul ports), and (iv) training for RVA personnel in modal Transport Project's (MTP) is to (i) to air tra c control, and airport rescue and fire improve transport connec vity in the figh ng services. Democrac c Republic of Congo (DRC) so as to support na onal economic integra on, (ii) to Based on the Bank’s avia on component in restore Société Na onale des Chemins de Fer DRC which includes a SOE reform component, du Congo’s (Na onal Railway Company of the African Development Bank (ADB) pre DRC SNCC) financial and opera onal viabil pared an airport/air transport project of ity, and (iii) to implement a sector wide gov US$180 million, which provides complemen ernance plan and strengthen transport state tary investments to the RVA moderniza on owned enterprises (SOEs) opera onal perfor plan. mances. A significant reduc on in average annual US$10 million of the grant are dedicated to number of Air Tra c System (ATS) incidents the avia on sector. The funds finance (i) the related to failed communica ons has been procurement and installa on of ADS B sur achieved. veillance equipment by the Na onal Airways Management Agency (RVA), (ii) a new Contact person is Jean Charles Crochet at category II ILS/VOR/DME system for the capi jcrochet@worldbank.org tal’s interna onal airport Kinshasa/N’Djili 16 PROJECT HIGHLIGHTS MIDDLE EAST AND NORTH AFRICA Egypt Cairo Airport Development Project TB 2 (P101201) The air transport sector is highly strategic for The Egypt Cairo Airport Development Project, Egypt’s economic development, genera ng sig approved in 2010, is suppor ng the Egyp an nificant employment and suppor ng its tourism Government to (i) enhance the quality of air sector. Tourism accounts for 3.5% of Egypt’s transport services in Egypt by increasing tra c GDP, with 12.4 million of tourists and a total rev handling capaci es at CAI, and (ii) strengthening enue of US$10.5 billion in FY09. Around 80% of Egypt’s air transport in the context of interna tourist tra c comes through Egypt’s airports and onal compe on. The principal target benefi tourism counts for half of the passenger interna ciaries include: (i) business and tourism passen onal tra c at Cairo Interna onal Airport (CAI). gers, who will benefit from be er airport infra structure and services, (ii) businesses, which will Air transport is progressively being liberalized. benefit from extended air transport services and Twenty years ago, the Government of Egypt a more a rac ve CAI’s area, and (iii) workers, (GoE) realized the growing importance of air who will benefit from job crea on during con transport as a driver of growth in its own right. struc on, which would contribute to Egypt’s The GoE’s objec ve therefore became to ensure s mulus package in response to the economic that the liberaliza on of the industry would con crisis, and a er construc on through airport ac tribute posi vely to the development of the vi es as well as ac vi es of industries and ser Egyp an avia on sector. Consequently, Egypt has vices a racted to the CAI area. embarked on the gradual liberaliza on of inter na onal air services on a bilateral basis with sev In FY12 the two project components moved eral countries in the Middle East, Africa, and Eu ahead at a good pace. The procurement of the rope. It has also significantly improved airport works contract for the rehabilita on and expan services through a range of capacity investments sion of the Terminal Building 2 at Cairo Interna and the strengthening of airport opera ons. onal Airport was awarded to a Joint Venture However, Egypt needs to con nue expanding air between Limak and CMR. The second component port infrastructure and improve airport services finances the development of five studies. To to meet the growing demand, especially at CAI date, two studies have been completed, two the main gate to Egypt. It also has to con nue studies are under prepara on, and the procure strengthening air tra c control (ATC) infrastruc ment of the last fi h study is currently on going. ture and air tra c management (ATM). Contact person is Olivier Le Ber at oleber@worldbank.org 17 PROJECT HIGHLIGHTS LATIN AMERICA AND CARIBBEAN Grenada Regional Disaster Vulnerability Reduc on APL1 (P117871) The small island states of the Eastern Carib commercial air ac vity severely a ec ng bean (EC) regularly su er disasters related to communica ons and tourism. natural events such as earthquakes, hurri canes, landslides, rains and droughts. These In order to address these deficiencies, the natural hazards have caused significant and Regional Disaster Vulnerability Reduc on recurrent damages to na onal infrastructure Program will support the avia on sector including housing, road networks, schools, through the provision of works, technical ad hospitals and other facili es. visory services, training, and acquisi on of Grenada’s Maurice Bishop Interna onal Air goods. This includes training on open water port (MBIA) func ons as an important region rescue opera ons, construc on of a new wa al infrastructure site in the region’s emergen cy response capacity. It is the alternate air ter tank and emergency coordina on center, port for Trinidad and Tobago, Barbados, and as well as acquisi on of rescue boats, fire de St. Vincent and the Grenadines, and provides tec on and alarm systems, runway fric on air tra c support in emergency situa ons to measuring equipment and radio communica the island of Saint Vincent. The con nued ons equipment. A contract for the produc opera on of the airport is therefore cri cal to the region as well as to Grenada. on and delivery of 3 ARFF trucks was signed in August 2012, with expected delivery in Several cri cal investments are needed at the 2013. These investments will allow the air airport to maintain an adequate emergency port to comply with ICAO requirements, and response capability and to comply with oper improving opera onal resilience and re a onal standards as required by the Interna sponse capacity to disaster impacts. onal Civil Avia on Organiza on (ICAO). In absence of these investments, Grenada and Contact person is Jus n T. Locke at the region risk a downgrading of its airport jlocke@worldbank.org cer fica on. This would lead to a halt of most 18 PROJECT HIGHLIGHTS Bolivia – Na onal Roads and Airport Infrastructure (P122007) The Bolivia Na onal Roads and Airport Infra passenger terminal; and the acquisi on and structure Project (P122007) supports road installa on of avia on control, rescue and infrastructure improvement in the depart firefigh ng equipment. The client, AASANA ment of La Paz and and upgrading of airport (Administracion de Aeropuertos y Servicios infrastructure and equipment in the town of Auxiliares a la Navegacion Area), is in the Rurrenabaque in the department of Beni. process of engaging a supervision consultant and civil works will be bid before end of The investment is being used for the con 2012. struc on of a new taxiway, apron, control tower, opera ons building, rescue and fire Contact Person is Gylfi Palsson at figh ng buildings, an access road, and a gpalsson@worldbank.org Hai Infrastructure and Ins tu ons Emergency Recovery (P120895) On January 12, 2010, Hai was shaken by a bilita on of key avia on infrastructure by an 7.0 magnitude earthquake, at a depth of 10 ini al grant of US$3million, which includes (i) km, which was followed by several a er reconstruc on of ground air communica shocks, some as strong as 6.1 and 5.9 magni ons tower, (ii) repair and/or replacement of tudes. two VORs, and verifica on of ILS (IMG), (iii) repair of runway lights at PAP, (iv) financing Global relief e orts followed immediately of associated cost for air tra c controllers a er the earthquake with the World Bank training, and (v) construc on of a runway announcing support of US$100 million on 13 end safety area on RWY10 at PAP. January 2010. As the only opera onal entry point, Port au Prince (PAP) proved to be a In FY12 GoH requested an addi onal financ vital in conduc ng humanitarian relief ing which has been prepared and approved e orts. The airport was also severely dam by the board of director on 27 Sept 2012 for aged however. Major structural damage oc an amount of US$35 million with US$5 mil curred to the terminal building and to the lion dedicated to the air transport sector. control tower. In addi on, the ligh ng sys This addi onal financing will support (i) gov tems and power supply are insu cient for ernance and capacity building (ii) equipment night opera ons, and naviga onal aids (ILS/ for air safety naviga on system (iii) con nui VOR) do not have a backup system. Although ty of opera on from treatment of debris o not severely a ected by the earth quake the the earthquake (iv) roads to support devel airport’s runway and apron also had pre opment of tourism in the north (vi) support exis ng cracks and damages which repre to Ministry of PW to handle the reconstruc sented a danger to aircra . on process. The Technical Coopera on Bu reau (TCB) finalized the Haï Site Survey Re The Bank’s board approved the Hai Infra port, iden fying equipment need and provid structure and Ins tu ons Emergency Recov ing terms of reference for the various com ery Project on 09 March 2010, consis ng of a ponents. US$65 million grant. Its objec ve is to sup port Hai in its early recovery e orts, Contact person is Pierre Bonneau at through selected interven ons aiming at pbonneau@worldbank.org helping to rebuild key ins tu ons and infra structure. The project is financing the reha 19 PROJECT HIGHLIGHTS EAST ASIA AND PACIFIC Pacific Avia on Investment Program (P128939, P128938, P128940) Based on the successful implementa on of the In FY12 the program has already achieved con avia on component of the Tonga Transport Sec siderable progress. ICAO audits of the respec ve tor Consolida on Project, the World Bank ap airports have been conducted iden fying the proved a grant of US$ 125 Million in Dec 2011 deficiencies that need to be addressed in order for the Pacific Avia on Investment Program. The to make airports compliant with ICAO Standards objec ve of the regional program including Ton and Recommended Prac ces (SARPs). The De ga, Kiriba and Tuvalu in a first and Vanuatu, sign and Supervision (D&S) Consultant for infra Samoa and Solomon Islands in subsequent phas structure has been appointed and are mobilizing es, is to improve opera onal safety and over sta and equipment to commence the detailed sight of interna onal air transport infrastructure design work for each runway, with the objec ve in the Pacific. of bidding by June 2013. The main components of the project include: (i) As part of the project the Pacific Avia on Safety Avia on Infrastructure Improvements in order O ce is to be restructured to provide more e to meet ICAO standards (ii) Avia on Sector Re cient and cost e ec ve services to its member form suppor ng the Civil Avia on Departments/ states. A consultant has been appointed to pre Authori es of each country to strengthen pare the PASO business plan. The dra plan was State’s civil avia on system and to assist in the presented to the PASO Council at the PASO capacity and e ciency of the regional safety Mee ng on October 30 31 in Tonga. In the oversight agency, the Pacific Avia on Safety event that the PASO Council agrees to imple O ce (PASO) (iii) Strengthening Airport Opera ment this plan, the project will then: (i) finance ons and Management Capacity; and (iv) Pro the costs of restructuring PASO to implement gram Support and Training to the Technical and the business plan; and, (ii) Tonga will be able to Fiduciary Services Unit (TFSU) to implement the use the project funds to finance PASO services Program and Implemen ng Agent (Tonga Air to Tonga. ports Limited) to support the project as necessary. 20 PROJECT HIGHLIGHTS Determined in the legal covenants of the considerably in FY12 with Air New Zealand Project, a Safety and Security Levy is to be agreeing to support with IATA the collec on introduced in order to cover safety and secu of the safety and security levy as part of the rity cost incurred by the airport operator and cket price. the CAA. This also includes future fees that Contact person is Christopher Benne at will paid to the Pacific Avia on Safety O ce cbenne 2@worldbank.org for regional safety oversight and cer fica on. The introduc on and mechanism for collec on of the tax has progressed Tonga Transport Sector Consolida on Project (P096931) With its remote loca on, small size, dis Consistent with the Government’s Strategic persed islands se ng and other geographical Development Plan (SPD8) and the recom factors, Tonga faces many challenges in de menda ons of the TTSR, GoT requested IDA veloping and maintaining sustainable inter grant assistance to con nue and accelerate nal, regional and interna onal transport and the process of reforming and consolida ng communica on linkages, all of which are cru its transport sector to be er respond to both cial to the economic development and social current and future needs. An IDA grant of well being of its es mated 105,000 popula $US 5.4 million was approved in FY09 that on. Recognizing the key role of transport in focuses on achieving (i) stronger policy, plan the economy and the social fabric of the ning, and regulatory ins tu ons and frame country, Government of Tonga (GoT) is com work, (ii) improved safety and security facili mi ed to improving the e ciency of the sec es and compliance with interna onal safety tor, a process it commenced in 2004 follow and security standards, and (iii) greater do ing a request to IDA to support a joint review mes c capacity for road rehabilita on and of Tonga’s en re transport sector and formu maintenance. The project progressed suc late recommenda ons for improving sector cessfully in FY12. In the avia on sector, all performance. The Tonga Transport Sector originally planned high priority equipment Review (TTSR) was completed in 2005 and and technical ac vi es have been completed. many of its recommenda ons subsequently were adopted by Government as policy. Contact person is Christopher Benne at Among some of the ac ons already have cbenne 2@worldbank.org been, for example, the crea on of the Tonga Airports Ltd (TAL) in July 2007 as a corpora zed airport company under the Public En terprises Act. 21 PROJECT HIGHLIGHTS SOUTH ASIA REGION Pakistan – Second Trade and Transport Facilita on Project (P101684) In support of its Na onal Trade Corridor Im safety by financing several GNSS based in provement Program (NTCIP) the Govern strument approaches, and by assessing the ment of Pakistan requested technical assis regulatory oversight by the CAA. In FY12 an tance lending from the World Bank in 2006. successful audit of Pakistan’s CAA was con The objec ve of the project is to (i) support ducted by ICAO repor ng a lack of compli en es directly concerned with the imple ance of 16.4%, well below the global aver menta on of NTCIP and establish a sustaina age. ble monitoring system including communica ons, (ii) support implementa on process of Contact person is Manzoor Ur Rehman at NTCIP through analy cal work on trade pro mrehman1@worldbank.org cedures and suppor ng infrastructure and services needs (including roads, railways, ports & shipping, avia on, and energy sub sectors), and (iii) further strengthen par ci pa on of the private sector aiming to inter nalize public private collabora on on trade facilita on through a dedicated project com ponent. The avia on component focuses on the de velopment of Air Transport Master Plan for Pakistan and an air safety improvement com ponent that aims to improve opera onal 22 PROJECT HIGHLIGHTS EUROPE AND CENTRAL ASIA Tajikistan – Programma c Development Policy Grant 6 (P117692, P126042) The Programma c Development Policy Grant 6 cargo in terms of aircra types, size, frequen (PDPG6) builds on a series of Programma c cy, upli or discharge (as long as technically Development Policy Grants that were ini ated feasible); ensures equal treatment at the air in 2006. ports for all carriers in terms of pricing, fueling, and other services; and improves air safety The focus of PDPG 1 3 was to support a strate through adequate funding and strengthened gic set of policy reforms in private sector de licensing cer fica on, monitoring compliance velopment, public sector management and so and inspec on. cial service delivery. The two main objec ves of the PDPG4 6 are to: (a) mi gate the nega The Bank has con nued to monitor implemen ve impact of the crisis on poverty and vulner ta on of the new avia on policy and assess ability in Tajikistan, and (b) pave the way for the extent to which PDPG supported reforms post crisis recovery and sustained growth. The have helped expand access to cheaper, safer, PDPG 4 6 series seeks to (i) protect social and more frequent avia on services. Under spending and increase its e ciency, (ii) im PDPG 6 the government will con nue to foster prove the climate for private sector develop compe on in air transport to expand access ment and (iii) strengthen government e ec and strengthen avia on sector opera ons. veness. Through PDPG4 support, the govern Contact person is Salman Zaidi at ment approved the na onal avia on policy in szaidi@worldbank.org 2010, which allows progressively increased ac cess to interna onal airlines in terms of routes and frequency; removes any restric ons on air 23 The IFC, which provides financing to private sector companies, has tradi onally financed air carriers and airport infrastruc ture projects. It has several projects at the proposal stage, or in ac ve status. 24 IFC PROJECT OVERVIEW IFC PROJECT OVERVIEW IFC’s Exposure Project Country Descrip on Amount of June 30 Type No. 2012 Africa (Mali, AKFED Avia on; General purpose loan to a regional Burkina Faso 27048 US$25 million US$25 million A Loan alliance of African Airlines and Uganda) Brazil 24609 GOL airline: financing for spare parts US$50 million US$12.5 million Corp. Loan TAM Airlines: pre delivery payments for the purchase Nil Rev. Credit and Brazil 24384 of Airbus A 320 family aircra ; corporate loan to sup US$50 million Corp. Loan port ongoing opera ons IFC A Loan up to Cambodia Airports II: priva za on of Phnom Penh Up to US$17.5 mil US$7.5 million, IFC Cambodia 25332 Interna onal Airport – required capital and invest US$5.26 million lion standby up to ments for expansion US$10 million Cambodia Airports: priva za on of Phnom Penh Inter 25 Cambodia 21363 US$10 million US$3.76 million A Loan na onal Airport US$36.88 mil Colombia 25899 Avianca: Financing of fleet renewal program US$50 million A & C Loans lion Dominican US$17.14 mil 27883 Punta Cana Airport: Capacity expansion US$20 million A Loan Republic lion US$12.54 mil Georgia 24628 Tbilisi Airport: priva za on US$27 million A Loan lion US$45 million ; A & B Loans 11353 MBJ Phase 1 – New landside terminal renova on of US$ 12.39 mil Jamaica US$20 million for Cross currency 24676 exis ng terminal for Sangster Interna onal Airport lion IFC’s own account swaps US$42 million; MBJ Phase II Expansion and redevelopment of Sang US$16.92 mil Jamaica 24306 US$20 million for A & B loans ster Interna onal Airport lion IFC’s own account MBJ (CUTE) financing for new Common Use Terminal Jamaica 26202 Equipment (CUTE) and Baggage Handling and Screen US$5 million US$0.63 million A Loan ing (BHS) systems for Sangster Intl Airport Exposure is defined as outstanding balance plus commi ed but undisbursed amounts if any. IFC’s Exposure of Country Project Nr. Descrip on Amount Type 30 June 2012 A, B, C Loans and risk management 26182 products. IFC A 26864 US$295 million; US$187.23 million Loan US$80 mil Queen Alia Interna onal Airport : Rehabilita on of Jordan US$120 million for lion, Syndicated B 26685 both airside and landside facili es IFC’s own account loan US$175 mil lion, IFC C US$40 million; Cross Cur rency Swaps KQ Airways: expansion program consis ng of the ac Kenya 31650 quisi on of 9 Boeing 787 Dreamliner aircra and 10 US$25 million US$23.12 million Equity Embraer 190 aircra . Vuela: Pre delivery financing of up to 20 A 319 air Mexico 24672 US$40 million US$10 million Rev. Credit cra for Volaris airline Buddha Air: purchase of small aircra and long term 26 Nepal 27247 US$10 million US$7.58 million A loan working capital requirements Lima Airports Partnership: Financial Restructuring and Peru 24489 US$20 million US$20.00 million Equity assistance in conjunc on with Fraport. Russian Fed Air Transport Systems: Purchase of small aircra for 24127 US$15 million US$0.18 million C Loan era on air taxi opera on US$236 million; Russian Fed 28218 Pulkovo airport US$101.3 million for US$88.06 million A & B Loans era on IFC’s own account Tanzania 31878 Precision Air: Aircra Financing Pipeline IFC A Loan, Subor 26913 TAV Tunisia: construc on of a new airport in Enfidha, US$253 million; US$ dinated Loan, Syn Tunisia with an ini al capacity of 7 million passengers a year, 184 million for IFC’s US$153.70 million 28076 dicated B Loan, and rehabilita on of the airport in Monas r own account Equity IFC PROJECT OVERVIEW IFC PROJECT HIGLIGHTS Mexico — Vuela Aircra Financing Vuela (branded Volaris) commenced opera compe on and high fares. This will s mulate ons on 13 March 2006. It ini ally operated demand and make air transporta on accessible five routes with four aircra throughout Mexi for a larger share of the Mexican popula on, co from its base at Aeropuerto Internacional de promote connec vity, and economic growth. Toluca but has plans to grow significantly over the next decade, with a planned fleet of 90 air The IFC investment is an IFC revolving credit cra including Airbus 319, A320 and A320 Neo. line of $30 million for the financing of aircra pre delivery payments and a $10 million. Vuela will provide substan ally discounted fares in a market historically marked by limited Colombia—Avianca Airline Fleet Renewal Aerovias del Con nente Americano S.A. ed the purchase of 42 aircra over the next 5 (Avianca) is one of the largest airlines in La n years (including at least 12 Boeing 787s and a America and the largest in Colombia, oper number of Airbus 319/320/330s) to replace its a ng from its main base at El Dorado Interna MD 83 and Boeing 757/767 aircra . IFC is to onal Airport in Bogota. The company pro provide financing of up to $50 million to Avian vides scheduled services to 21 interna onal ca and its subsidiaries, Sociedad Aeronau ca des na ons (in Europe and the Americas) and de Medellin Consolidada S.A (SAM) and Avia 21 domes c des na ons. Avianca has five on Leasing Services Investment S.A. (ALS) to code sharing agreements with interna onal help finance the implementa on of the carriers (Iberia, Mexicana, Delta, Air Canada company’s fleet renewal program. and Taca). Avianca is planning to renew its fleet over the period 2008 2012 to reduce costs, improve e ciency and safety as well as provide be er passenger service. The company has nego at 27 IFC PROJECT HIGLIGHTS Africa—AKFED Avia on The Aga Khan Fund for Economic Development region. Addi onally, the Project is also ex (“AKFED”), through its Avia on Services divi pected to provide a boost to tourism. Con n sion, is currently expanding its ac vi es in both ued trade and economic growth in Africa is East and West Africa. The aim of the division is con ngent on further investments and im to assist in maintaining the cri cal avia on in provements in regional transport infrastructure frastructure in support of economic develop and services. The division’s opera on will fill ment and to provide much needed regional air the service gap that exists today and will result line services in Africa. IFC’s involvement with in increased frequencies for exis ng des na the organiza on includes a corporate loan of ons as well as the addi on of new des na up to $25 million to AKFED for on lending to its ons, be er passenger service and improved three airlines: Air Burkina, Air Mali and Air e ciency and safety. Such improvements will Uganda. This allows AKFED to consolidate all of increase the connec vity, compe veness and the Division’s airlines and avia on ac vi es and a rac veness of these countries’ economies. op mize rou ng, synergies and overall e ec Moreover, the proposed project will support veness across the group’s airline opera ons. regional integra on by assis ng the develop ment and expansion of a group of regional air The proposed project is expected to promote lines. inter regional and interna onal trade in the Nepal—Buddha Air Private Ltd I and II and was the first one to bring in larger 45 Air connec vity is a key requirement in Nepal seater turbo prop aircra for domes c routes given its di cult terrain and poor road network in Nepal and also the first to fly to Bhutan and and strong domes c airlines are needed to pro to towns across the Indian border. vide reliable and safe air services. With tourist arrivals in Nepal growing at 12% annually since For the follow up project Buddha Air II, IFC is 2006, with Nepal increasingly focusing on tour providing financing of $6.9 million to BAPL to ism revenues and with a GDP growing at ~4.5% now purchase its second ATR 72, which it has p.a., the requirement for domes c/ tourist air taken on lease since September 2011, at a cost line seats is expected to grow further. of $8.6 million. IFC's will also help the Company Buddha Air Private Limited is a closely held pri enhance safety standards and undergo IATA vate limited company providing air services IOSA audit. financed with a US$6.9 million loan. since 1997. BAPL currently has 357 seats across a fleet of three Beechcra s (18 seats), three ATR 42s (47 seats) and two ATR 72 (72 seats). The expansion to its current fleet had been par ally financed by an IFC corporate loan of $US10 Million in FY09. BAPL had a 42% market share by passengers in the first half of 2011, 28 IFC PROJECT HIGLIGHTS Tanzania—Precision Air Expansion Precision Air Service Limited. the largest Tanza IFC is contempla ng an investment of US$4 to nia based airline, is undergoing a gradual fleet US$6 million, which will contribute to financing expansion along with financing regular compa the Company’s capital expenditure. ny’s capital expenditure. The Company plans to From a social and labor point of view, Precision increase its fleet with 5 addi onal aircra s to Air's proposed capital expenditure is expected come by 2015, 2 to be owned and the remain to help crea ng a li le less than 600 new jobs der through leases. The major part of the fleet in Tanzania (currently 771 employees) most of expansion will be with the turboprop ATRs to which are of a technical/qualified labor nature. cater for short haul and domes c markets, but Addi onally, the opening of over 10 new re the company also plans to expand its narrow gional des na ons will contribute to a higher body fleet with an addi onal Boeing 737 300 markets integra on in Sub Saharan Africa and, series for the medium haul and regional mar in par cular, in the fast growing East African kets. region and foster tourism in a high poten al Precision Air aims to triple its capacity (ASK) as touris c area. Moreover, this will help remote well as to grow the number of transported pas Tanzanian regions get a be er access to other sengers from close to 1 million per year to over countries of Sub Saharan Africa in a region 1.6 million and double its revenues by 2016. To where there are o en no land transport alter finance the resul ng capital expenditure, the na ves. Finally, the Project will contribute to airline has raised TZS11.84 billion (or US$7 mil improved safety and reliability of flights to/ lion) through an IPO in November 2011. The from Tanzania. Company plans to complete its financing needs with internal cash flow genera on and external debt. Brazil— GOL Financing A ordable and e cient airline services are vital The company’s strategy is to grow its business in Brazil, given the size of the country and its by popularizing air travel, s mula ng and inadequate rail transporta on infrastructure. mee ng demands for a ordable and convenient However, historically high domes c fares in Bra air travel in Brazil and between Brazil and other zil have reserved the avia on market for a small South American des na ons for both business segment of the Brazilian popula on. and leisure passengers. It currently o ers over 470 daily flights to 49 major business and travel The entry of the first low cost airline Gol into des na ons in Brazil, Argen na, Bolivia, Para the market has lowered the costs of air travel in guay and Uruguay. GOL’s long term business Brazil to both business and leisure travelers, and objec ve is to bring a ordable air travel to all has thus made air transporta on accessible to significant des na ons in South America. the general popula on. Gol is now extending The IFC project is a $50 million corporate loan to the benefits of low cost travel to other regional the company for the financing of spare parts des na ons including Argen na, Bolivia, Uru and working capital. guay and Paraguay. Gol’s low cost model will also contribute to making the industry more compe ve and more e cient. 29 IFC PROJECT HIGLIGHTS Kenya—Kenya Airways Expansion Plan Kenya Airways Ltd. (KQ) the na onal flag carrier million pre delivery payments (PDP) financing of Kenya and the third largest airline in Sub facility. The investment in KQ is IFC’s first ever Saharan Africa in terms of seat capacity o ered, equity investment in the airline sector and to is in the midst of the implementa on of a stra gether with the PDP facility it will be the largest tegic fleet and network expansion plan focused investment in the sector to date. on growing its passenger network and diversify ing its fleet to match the network needs as well IFC's support of Kenya Airways’ expansion plan as launching a dedicated freighter division. Hav is expected to have significant development ing reached a cri cal mass and achieved a solid impact. At the regional level of Sub Saharan financial posi on, KQ finds itself well posi oned Africa, the launch of the freighter division cou to capitalize on the growth prospects and op pled with the opening of new intra Africa des portuni es that the African region and the in na ons will contribute to markets integra on terna onal market presents. KQ’s strategic in and will reduce the transac onal costs of trade, tent is to establish its brand and its presence in an aspect that is extremely important to pro the most important intra African markets as mote the economic development of the SSA well as become a significant player in long haul economies. KQ's entry into new interna onal origin des na on city pairs that are expected markets will also promote compe on as well to grow over the next few years. To implement as provide a key transporta on link between the project, the Company has placed firm or growing economies in the Middle East and ders to aircra manufacturers in connec on Northern Africa region and Asia promo ng in with the acquisi on of nine Boeing 787 Dream terna onal trade, South South Investments and liner aircra and ten Embraer 190 aircra . tourism to and from Africa. Earlier this year, KQ ini ated capital raising e orts to support the expansion. In June 2012, IFC invested $23 million dollars of equity and is currently in the process of documen ng an $80 Contact persons for all IFC air transport projects are Ravinder Bugga at rbugga@ifc.org and Harsh Gupta at hgupta@ifc.org 30 IFC  ADVISORY  SERVICES Air  Transport  Advisory  Mandates The   Infrastructure   Advisory   Services   Depart-­‐ and   required   service   standards.   Airport   PPPs   ment   of   the   IFC   provides   advisory   assistance   are   useful   approaches   to   meet   both   private   to   governments   on   structuring   and   imple-­‐ and  public  sector  objec ves. men ng   (tendering)   Public-Private- Of   the   various   airport   PPP   models   available,   Partnerships   (PPPs)   in   infrastructure.   IFC   has   experience   shows   that   concessions   and   full   undertaken   more   than   100   advisory   transac-­‐ dives ture  are  most  effec ve:   ons   in   over   67   countries   over   the   last   20   years.  IFC/World  Bank's  reputa on  for  compe-­‐  Concession   Contracts   (BOT,   BOO,   BOOT,   tence,   transparency,   and   fairness   allows   it   to   BTO,   etc.):   State   retains   ownership   of   air-­‐ play   the   role   of   neutral   partner   to   balance   port   but   transfers   investment   as   well   as   each   party's   interest,   thus   reassuring   foreign   opera ons   and   management   responsibili-­‐ investors,   local   partners,   other   creditors,   and   es  to  the  private  sector government  authori es    Full   Dives ture:   Ownership,   opera ons,   The   two   main   domains   in   air   transporta on   and   investment   responsibili es   are   fully   advisory   services   are   private   sector   par cipa-­‐ transferred  to  the  private  sector. on  in  airports  and  air  carriers.  In  certain  cases,  a  blend  of  first-phase  BOT   followed   by   public   offering   can   maximize   1)   IFC   Public-Private   Partnerships   (PPP)                 benefits Advisory  Mandates  in  Airports Only  2%  of  the  world’s  10,000  commercial  air-­‐ ports  are  managed  or  owned  by  private  sector   en es.  However,  as  passengers  carried  by  air   transport  has  exceeded  two  billion  since  2005,   and   that   same   year,   40%   of   all   merchandise   and  goods  (in  value)  were  air  freighted  –  Pub-­‐ lic-Private-Partnerships   (PPPs)   in   airport             infrastructure   will   grow   to   meet   investment   ©    Photo  ADPI  Designers  and  Planners 31 IFC ADVISORY SERVICES In certain cases, a blend of first phase BOT accommoda ons. Since airlines rely on followed by public o ering can maximize ben these other actors for their sales, if there efits are bo lenecks elsewhere the avia on sector su ers. 2) IFC Public Private Partnerships (PPP) Advi Overregula on: Bilateral agreements be sory Mandates in Airlines tween governments, s ll prevalent in As the airline industry has proceeded along many parts of the world, prevent compe this priva za on path over the last 20 years, on from func oning normally. Open IFC has par cipated in nearly a dozen airline skies are being adopted, but not in all transac ons. Unfortunately, many have countries. proved to be di cult projects due to im portant sector specific structural reasons: 3.) IFC Air Transporta on Experience Fixed cost structure: Airlines tend to build When undertaking a transac on advisory up a legacy costs base (sta and fleet) mandate, IFC provides a one stop solu on to that is di cult for a new owner to man governments covering all aspects of the pro age. In addi on, fuel costs are beyond posed transac on. One of the dis nguishing management’s control. During the recent features of IFC’s value addi on is its ability to oil price spike, they accounted for as balance private and public sector interests much as 30% of the cost base. and take into account sustainable long term Price sensi ve product: Demand for travel economic and social e ects. is highly elas c, especially in tourist mar kets. In recessions, people forgo vaca ons for other consumer goods. Conversely, price reduc ons increase passenger num bers drama cally. Complicated demand chain: Customers o en purchase ckets through travel agents, frequently in a package with hotel 32 IFC ADVISORY SERVICES Selected IFC Advisory Mandates in Airports Project Name Country Year Mandate / Result Successfully awarded to TAV / Madinah Airport Saudi Arabia 2012 Saudi Oger / Al Rajhi consor um Due Diligence / Project Structur Vanuatu Airport Vanuatu 2012 ing completed Jamaica Airports Jamaica 2011 ongoing Ini al Due Diligence Ongoing Dili Airport East Timor 2012 ongoing Ini al Due Diligence Ongoing Successfully awarded to GMR Maldives Airports Maldives 2010 MAHB consor um Successfully awarded to Aéro Queen Alia Airport Jordan 2007 ports de Paris / ADIC / J&P / Noor consor um Successfully awarded to Saudi Hajj Terminal Saudi Arabia 2007 Bin Laden Group / Aéroports de Paris consor um Successfully awarded to Abuja Nigeria Airports Nigeria 2006 Gateway Consor um (Airport Authority + equity partners) Selected IFC Advisory Mandates in Airlines Project Name Country Year Mandate / Result Air Jamaica Jamaica 2009 Awarded to Caribbean Airlines Drukair Buthan 2008 Strategic analysis JAT Yugoslavia 2006 Strategic analysis Polynesian Airlines Samoa 2005 49% sold to Virgin Blue Awarded but Cancelled by Gov Cameroon Airlines Cameroon 2005 ernment Air Tanzania Tanzania 2002 49% sold to SAA 76% sold to KLM, financial inves Kenya Airways Kenya 1996 tors 33 IFC ADVISORY SERVICES IFC Advisory Project: Concession of Malé Airport, Maldives Malé Interna onal Airport (MIA) services GMR Infrastructure Limited (GMR) from India nearly 80% of the tra c to the Maldives. The and Malaysia Airports Holdings Berhad airport has a unique inter modal process with (MAHB) from Malaysia as a 25 year conces inter change between conven onal aircra to sion. The project included rehabilita ng ex domes c conven onal aircra , seaplanes is ng facili es, construc ng a new terminal (that ensure connec ons with island resorts with a capacity of five million passengers per sca ered throughout the Maldivian archipela year, and opera ng the airport. go) or boats. As tourism is a significant com The winning bid comprised a US$78 million ponent of the Maldivian economy, the availa upfront fees component and a revenue per bility of adequate airport infrastructure is centage share that represents nearly US$1 key. The lack of available land, limited inter billion (calculated on NPV basis) of fiscal ben na onal best management prac ce of the air efits for the government over the length of port and available financing for necessary im the concession. The proposed investment of provements to terminal capacity as well as US$ 400 million by GMR MAHB in MIA repre interna onal safety standard compliance sents nearly a third of Maldives’ US$ 1.3 bil have however been proving to be major ob lion GDP (2009 figures). stacles in ensuring this. The project was implemented in a record nine Consequently, the Government of Maldives months. This is the first successful public (GoM) invited private sector par cipa on to private partnership project in the Maldives expand and rehabilitate the airport, and build and marks a flagship deal for the Government a new terminal. This decision was part of a of Maldives’ priva za on program. It is al broader strategy by the government to liber ready serving the Maldives as a model for alize air transport policies, improve the com launching a full scale public private partner pe veness of Maldives’ airports and boost ship in infrastructure. an economy that is heavily dependent on tourism related ac vi es. In August 2009, the government recruited IFC as the Lead Transac on Advisor to assist with the implementa on of the PPP. In June 2010, IFC completed its mandate and, following a compe ve bidding process, Malé Airport was successfully awarded to a consor um of Contact persons for all IFC air transport advisory services are Ramatou Magagi at rmagagi@ifc.org and Alexandre Leigh at aleigh@ifc.org 34 MULTILATERAL INVESTMENT GUARANTEE AGENCY Guarantees provided by the Mul lateral Investment Guarantee Agency (MIGA) cover projects in a broad range of sectors, with projects in infrastructure accoun ng for the largest share (41%) of the agency’s outstanding por olio. Infrastructure development is an important priority for MIGA, given the es mated need for US$230 billion a year solely for new investment (maintenance needs are of a similar magnitude). This is to deal with the rapidly growing urban centers and underserved rural popula ons in developing countries. Two recent example projects of MIGA guarantees are Jorge Chavez Interna onal Airport project in Peru and New Airport project in Quito, Ecuador. Peru Jorge Chavez Interna onal Airport (JCIA) MIGA provided Fraport AG, of Germany with a During the first four years of the concession, guarantee for US$11.5 million, to cover its the consor um is expected to invest over US$12.8 million counter guarantee for a perfor US$130 million in new infrastructure, including mance bond posted for the priva za on of upgrades to the current terminal, construc on Lima's airport, Jorge Chavez Interna onal Air of a new passenger concourse, expansion and port (JCIA). The coverage is against the risk of addi on of new aircra aprons and taxiways, expropria on (the wrongful call of the perfor and crea on of a hotel and world class retail mance bond), and extends for eight years. center within the exis ng airport perimeter The Peruvian government sees airport priva za on as a key factor in its e ort to expand em ployment opportuni es, and create a modern transporta on facility to serve as the country's gateway to the world. It will also enhance and expand tourism, another government goal. 35 © Photo Peru Tourism Bureau MULTILATERAL INVESTMENT GUARANTEE AGENCY Ecuador – New Airport at Quito MIGA issued three guarantees of US$32.8 provides coverage against the risks of Trans million, US$16.4 million, and US$16.4 million fer Restric on, War and Civil Disturbance, to the Aecon Group INC. of Canada, the HAS and Breach of Contract. Development Corpora on of the United States, and ADC Management Ltd. of the The project involves the construc on of a United Kingdom for their respec ve share new airport near Puembo, 24 km. outside holder loans to Corporacion Quiport of Ecua the capital city of Quito. The project will be a dor. In addi on, MIGA also issued guaran key economic driver for sustainable econom tees of US$450,000, US$225,000, and ic development of the metropolitan region US$225,000 for the investors' respec ve eq of Quito. The airport is expected to be oper uity investments in the project enterprise. a onal by early 2008 to replace the exis ng The Aecon Group and HAS Development airport in the city of Quito, which su ers Corpora on have coverage for a period of from safety deficiencies as well as capacity fourteen years for their shareholder loans constraints. while the remaining four guarantees are for a period for fi een years. Each guarantee Contact person for all MIGA guarantees is Margaret A. Walsh at mwalsh@worldbank.org 36 EXTERNAL RELATIONS Interna onal Civil Avia on Organisa on (ICAO) The Interna onal Civil Avia on Organiza on In addi on, the Bank maintained regular (ICAO) is the specialized air transport agency contact and mee ngs with ICAO o cials dur of the United Na ons. The WBG and ICAO ing FY12. A par cularly prominent topic in have been working closely together on vari these mee ngs has been the ongoing debated ous air transport issues. ICAO has among oth on environmental sustainability of avia on. er things provided safety and security audits With regards to this, ICAO, IATA, ATAG and and supervision services for the Bank’s pro the WBG have been engaged in discussion jects in West and Central Africa and in the throughout the year with regards to a possi South Pacific and has assisted in iden fying ble coopera on on the se ng up of a global needs and priori es of air transport projects scheme addressing interna onal avia on CO2 in various countries. emissions. In April 2012 Charles Schlumberger represent ed the World Bank Group (WBG) at the Inter na onal Air Transport Symposium as speaker on the Panel: Financing Air Transport: Chal lenges and Prospects (h p://www.icao.int/ Mee ngs/iats/Pages/default.aspx). On the panel of financing air transporta on, he pre sented the WBG air transport por olio, and outlined challenges and opportuni es. 37 EXTERNAL RELATIONS Global Avia on Strategy Summit (Berlin, Germany, 2—4 October 2011) As in previous years ICAO, the World Bank, ated by BBC reporter Aaron Heslehurst, re and Routes jointly held the Global Avia on sulted in dynamic interac ons between the Strategy Summit (GASS) in Berlin, Germany speakers, industry leaders, and other par ci between 2 October and 4 October 2011. This pants. As last year a report was prepared annual event serves as a pla orm for ex highligh ng the main conclusions and trends change between the Bank, ICAO and the avi (see h p://legacy.icao.int/WRDSS2011/ a on community including airlines, airports SummaryDiscussions.pdf) and service providers. The conference, the Charles Schlumberger moderated the panels seventh of its kind, was co located with the “Constraints to growth and sustainability: 17th World Route Development Forum at Analysing the impact of policy on the devel the Messe Berlin. In a series of panel discus opment of the avia on industry” and “Air sions the industry’s most prominent issues transport policies – lessons learnt in liberali were discussing including topics such as the za on and open skies and the poten al chal avia on industry today, the environmental lenges that may arise. “ challenges and opportuni es for the avia on industry, avia on as an economic develop The next GASS took place during the 18th ment catalyst, and the role of alliances and World Route Development Forum in Abu new aircra in the development of airport Dhabi, United Arab Emirates on September infrastructure. The successful event, moder 30—October 2, 2012. China Civil Avia on Development Forum (Beijing, China, 23 – 24 May 2012) Charles Schlumberger par cipated as The high level conference further discussed speaker represen ng the WBG in the China several key topics on China's future air Civil Avia on Development Forum 2012 in transport development agenda, which in Beijing, presen ng "Air Transporta on: Im cluded (i) CAAC plans for inves ng for de portant Founda on of Na onal Compe velopment in the next 5 years, (ii) Future of veness”. The presenta on focused on air ATC System and Airspace moderniza on, connec vity and explained the Bank's re (iii) Chinese airline leaders on future direc cent publica on of the Air Connec vity In ons, (iv) Chinese airport leaders on future dex where China was ranked 46 among 211 direc ons (v) Shanghai Integrated Transpor countries and territories examined. Charles ta on Hub as a model for future develop Schlumberger concluded that the develop ment, (vi) Increasing system safety, capaci ment of air services and their necessary in ty, and e ciency (vii) General Avia on de frastructure was of great importance for velopment and future growth, (viii) Interna China's economic development. He also onal coopera on, and (ix) Coopera on men oned the Bank's first airport project in with Chinese provincial and city govern Shagroa, Jiangxi Province, as an example of ments a small infrastructure project, which focus ses on becoming a "green airport". Contact person is Charles E. Schlumberger at cschlumberger@worldbank.org 38 EXTERNAL RELATIONS Community Service Several World Bank sta members at the Bank was a flight from Greensboro, South Carolina, are licensed and ac ve pilots, cer fied by the to Bal more, Maryland, to transport baby US FAA and / or European Avia on Authori es Prince Ojong and his mother Catherine, a ci EASA. To remain current on their pilot’s quali zen from Cameroon. Prince was recovering fica ons, they regularly fly and undergo re from emergency surgery in Greensboro, and quired refresher training. the young immigrant family was grateful to have been transported comfortably and safely The most rewarding way of maintaining cur in a private aircra , which they never could rency is to provide community service by have a orded given their limited means. providing free air transporta on to people of all ages whose medical needs – evalua on, The flight was conducted by Charles E. Schlum diagnosis, and treatment – can only be met by berger and his Bank colleague Nora Weisskopf health care facili es far from their homes. In who both bore all cost for the mission. The the US, the not for profit organiza on Angel Bank’s contribu on, in accordance to Sta Flight provides mely travel to pa ents who Manual 9.10, consisted of one day administra can't withstand traveling long distances by au ve leave to carry out this rewarding commu tomobile, rail, or bus, and who do not have nity service. the financial means to purchase suitable alter For more informa on visit na ve transporta on. In addi on, transport in www.angelflighteast.org smaller private aircra can be er accommo date those pa ents whose condi on could worsen if exposed to the re circulated air on commercial flights, and who need e cient point to point transport. One example of such an Angel Flight Mission Contact person is Charles E. Schlumberger at cschlumberger@worldbank.org 39 INTERNAL  DISSEMINATION Air  Transport  Brown  Bag  Luncheon—A  Dog  Fight  in  the  Air:  The  ba le   over  inclusion  of  Avia on  in  the  EU  ETS On   8   March   2012,   the   Transport   Unit   clusion   of   avia on   in   the   EU   ETS   was   cur-­‐ (TWITR)   and   the   Carbon   Finance   Unit     rently   unavoidable.   In   fact,   the   EU   took   (ENVCF)   jointly   organized   a   Brown   Bag   this  decision  a er  ICAO  confirmed  in  2004   Lunch   on   the   developments   and   challeng-­‐ that  it  would  not  be  in  a  posi on  to  devel-­‐ es  of  the  inclusion  of  avia on  in  the  Euro-­‐ op  a  global  ETS,  and  it  encouraged  the  de-­‐ pean   Union   emission   trading   scheme   (EU   velopment  of  regional  schemes. ETS).  The  event  was  moderated  by  Charles   The  presenta on  was  followed  by  an  inter-­‐ Schlumberger  and  started  with  a  presenta-­‐ ac ve   session   touching   on   various   issues   on   by   Dr.   Guenther   Hoermandinger,   and   arguments   that   have   been   brought   Counselor  of  Environment  of  the  European   forward  in  opposi on  to  this  move  by  the   Union’s  Delega on  to  Washington.   European   Union.   These   discussions   will   Dr.   Hoermandinger   outlined   the   different   hopefully   s mulate   a   con nued   dialogue   events  as  well  as  the  factors  leading  to  the   on   the   subject   of   emissions   trading   inclusion   of   avia on   in   the   EU   ETS,   which   schemes   and   carbon   finance   in   the   has   been   implemented   this   January.   He   transport   sector,   and   lead   to   various   fol-­‐ explained   that   due   to   an   unfortunately   low-up  events. slow   development   of   a   global   avia on   framework   for   the   reduc on   of   carbon   emissions   at   the   Interna onal   Civil   Avia-­‐ on   Organisa on   (ICAO)   and   significant   growth  projec ons  in  the  industry,  the  in-­‐ Contact  person  is  Charles  E.  Schlumberger  at      cschlumberger@worldbank.org 40 ©  Photo:  Universal  Weather  and  Avia on RESEARCH AND INTERNAL SERVICES Air Transport and Energy E ciency The well being of the airline industry hinges tral growth" from 2020, with a net reduc on significantly on the price fluctua ons of the in emissions of 50 percent by 2050 compared price of crude oil. Consequently in July of to 2005 emissions. The achievement of this 2008, when the price for crude oil reached an goal requires a steady increase in fuel e cien historical high level of 147 dollars per barrel, cy, which will be achieved with several the industry su ered tremendously. Although measures including the applica on of biofuels prices have declined substan ally since then, in jet engines. Achieving ‘CNG 2005’ through about 50 percent, many airlines are con out 2020 to 2030, without biofuels, would re cerned about future price spikes that might quire fuel e ciency to improve 43 percent in occur when global demand for crude oil is re 2020 over 2005. With biofuels (17 billion li stored. Energy security, with reliable and ade ters, 6 percent of fuel use by 2020) the fuel quate supply of energy at a reasonable cost, is e ciency required to hit ‘CNG 2005’ would be an increasing worry for airlines. substan ally less, because of lower emissions from fuel burn. In face of these challenges, the Interna onal Civil Avia on Organiza on (ICAO) emphasized Complemen ng research into oil security and at its 36th Session of the Assembly in 2007, a climate change, the interna onal airline com proac ve approach rela ng to alterna ve munity has also begun to push the research fuels, by recognizing “the importance of re and the eventual development of alterna ve search and development in fuel e ciency and fuels for air transporta on with par cular fo alterna ve fuels for avia on that will enable cus on the cer fica on and produc on biofu interna onal air transport opera ons with a els. The Study ‘Air Transport and Energy E lower environmental impact”. In the summer ciency focuses on measures of improving en of 2009, the industry announced at the Annu ergy e ciency of the air transport industry al General Mee ng the Interna onal Air including cleaner aircra technology, airport Transport Associa on (IATA) that the air infrastructure and Air Tra c Control. transport industry would aim for "carbon neu Contact person is Charles E. Schlumberger at cschlumberger@worldbank.org 41 RESEARCH  AND  INTERNAL  SERVICES Air  Carrier  Advisory  System  for  World  Bank  Staff  Air  Travel   The  Bank  has  been  developing  an  evalua on  tool  for  assessment  of  the  risks  associated  with  air  travel  by  Bank   staff  since  FY  2008.  The  air  carrier  advisory  system  developed  by  the  Bank’s  General  Service  Department  and   TWITR  was  tested  during  FY10,  and  is  ready  for  launch  in  FY11.  The  advisory  service  is  based  on  the  following   criteria  with  three  categories  of  airlines: Category Descrip on Recommenda on 1 All   airlines   that   are   industry   cer fied   by   having   Good   to   fly.   The   Bank   has   no   objec on   to   passed   an   IATA   IOSA   audit,   unless   subsequent   using  these  airlines. safety  experience  indicates  a  safety  problem. 2 All  airlines  that  though  they  are  not   industry  cer-­‐ Good   to   fly.   The   Bank   has   no   objec on   to   fied   are   either   licensed   by   a   country   with   an   using  these  airlines. FAA  IASA  ra ng  of  Category  1,  or  are  known  to   the  Bank  as  safe  carriers. 3 All  airlines  that  are  not  in  (1)  or  (2)  above,  or  are   3a.  Airlines  that  do  not  qualify  for  category  1   on  any  blacklists,  or  are  deemed  to  be  unsafe  for   or  2,  but  there  is  no  informa on  known  about   other  reasons. them  that  would  increase  the  risk  factor. 3b.   Airlines   that   have   1   of   the   4   risk   criteria   listed  below,  or  some  other  safety  factor  that   has   been   raised   by   the   Bank's   air   transport   specialist.  Check  to  see  if  there  are  any  viable   and   safer   transport   alterna ves   before   se-­‐ lec ng  this  airline  for  mission  travel. 3c.  Airlines  with  significantly  elevated  risk  and   2  or  more  of  the  4  risk  criteria  listed  below,  or   some  other  safety  factor  that  has  been  raised   by  the  Bank's  air  transport  specialist. Use  only  for  essen al  missions  and  only  if  no   viable   and   safer   transport   alterna ves   are   available. Risk  Criteria:  Serious  accident  in  the  last  3  years  (defined  as  any  incident  that  results  in  injury  or  death  of  a  passen-­‐ ger  or  substan al  damage  to  the  aircra )  Registered  in  a  country  with  poor  oversight  (based  solely  on  ICAO  safety  audit)  A   flag   of   convenience   airline   (an   airline   that   is   registered   and   maintained   in   a   country   other   than   where  it  operates)  Use  of  aircra  over  20  years  old Overall  there  were  182’843  flights   booked  by  American  Express  for  Bank   Staff  in  FY  2012.  Most  of  the   flights   booked  by  Bank   staff   are  with  airlines   that   considered  to  be   Good  to  fly.  Less   than  one   percent   (1,215  flights)  of  the  flights  were  on  airlines  considered  Category  3,  (There  may  have  been  many  more,  as   the  data  did  not  capture  trip  arranged  in  the  regions.)  Travelers  should  be  aware  that  surface  transporta-­‐ on  may  be  impossible  or  may  represent  more  risk  than  air  travel  in  some  client  countries.  TWITR  will   con nue  to  provide  ongoing  assessments  and  safety  advice  for  air  travel  of  Bank  staff.   Contact  Person  is  Nora  Weisskopf  at  nweisskopf@worldbank.org 42 OUTLOOK FISCAL YEAR 2013 Financing of Air Transport related countries for the avia on sector, project financing should be provided in coopera on with the private Projects sector, for example through public private partner Air Transporta on has become the key infrastruc ships. The WBG will con nue to advise its clients on ture for global economic development. Despite un such models in air transporta on. certain es and poten al challenges that may slow The IFC is funding the private sector of the air down growth, air transport services must con nue transport industry with the same development fo to expand in a safe, secure, and sustainable manner. cus, as long as projects meet commercial criteria. This entails substan al investments for rapidly The range of expected projects include aircra fi emerging markets such as China or India with ex nancing, project finance of private run airports or pected passenger growth to average between 7 and terminals, and air tra c control en es which are 8 percent annually. However, even less rapidly grow not directly state owned. Given the con nued ing countries must invest in modern airport and air strong demand for air transport services in many tra c management and surveillance infrastructure. emerging markets, new IFC air transport projects are Operators around the globe can only secure sustain expected in FY13. able and profitable air services when achieving high energy e ciency through modern aircra and e cient opera ons. Research and Publica ons The WGB will focus on a few air transport invest The Bank, as a leading development ins tu on, will ment projects in FY13, which include for example con nue to maintain high standards in its specialized the prepara on and implementa on of airport fi technical sectors by maintaining research, con nancing projects in Egypt, Kenya, and China. Such duc ng high level technical exchanges, and fostering projects do also include smaller Bank clients states specific industry contacts. The Bank has launched a and are increasingly launched on a regional new study on the role and opportuni es of low cost pla orm. The current regional avia on infrastruc carriers in developing countries, which is expected ture project if the Pacific Avia on Investment Pro to be published in FY13. ject, which plans to support six Pacific island states In addi on, several economic and policy research by financing needed infrastructure investments. In pieces on air transport services and trade develop addi on, the WBG will be financing modern air ment will be carried out and published. tra c control systems that allow more direct rou ngs and increase safety. However, given the limita ons of public funding in many developing 43 About the World Bank Group The World Bank is a vital source of financial and technical assistance to developing countries around the world. Our mis sion is to fight poverty with passion and professionalism for las ng results and to help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors. We are not a bank in the common sense; we are made up of two unique development ins tu ons owned by 187 mem ber countries: the Interna onal Bank for Reconstruc on and Development (IBRD) and the Interna onal Development Associa on (IDA). Each ins tu on plays a di erent but collabora ve role in advancing the vision of inclusive and sustainable globaliza on. The IBRD aims to reduce poverty in middle income and creditworthy poorer countries, while IDA focuses on the world's poorest countries. Their work is complemented by that of the Interna onal Finance Corpora on (IFC), Mul lateral Investment Guarantee Agency (MIGA) and the Interna onal Centre for the Se lement of Investment Disputes (ICSID). Together, we provide low interest loans, interest free credits and grants to developing countries for a wide array of pur poses that include investments in educa on, health, public administra on, infrastructure, financial and private sector development, agriculture and environmental and natural resource management. The World Bank, established in 1944, is headquartered in Washington, D.C. We have more than 10,000 employees in more than 100 o ces worldwide. Transport, Water and Informa on & Communica on Technologies Department The World Bank Group 1818 H Street, NW Washington, DC 20433 USA www.worldbank.org/transport