Role of the Transportation Sector in Economics PDF

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11.INTRODUCTIONTransportation is the most important and vital to the movement of both freight and passengersaround the world. Without transportation system in every country the people can consider theactivities in their life is not efficient. It is also have a benefits and role to the other industries in anational economy. The transportation network is not only important because it provides aneconomic base and employment, but also because it is a service that is utilized to some extent bymost sectors in the economyTransportation can be define as any device used to move an item or services from onelocation to another. Commons forms of transportation include planes, trains, automobiles. Butthe specific in this study is on Land Transport, Water Transport, Air Transport, Port and AirportOperation Services, Highway, Bridge and Tunnel Operation Services and Communication alsoconsidered in transportation sector.Malaysia is a south-east Asian country and surrounding countries and water bodies ofMalaysia. It covers an area of 329,750 sq km and a population of approximately 28.86 million inyear 2011. Land and rail transport are responsible for providing domestic freight and passengerservices, while water and air transportation which makes it essential for global business andtourism. It plays a vital role in facilitating economic growth, particularly in developing countries.The two main aim to this assignment is to provide basic knowledge of transport economicsespecially for domestic airport, and to identify the role and influence of the transportation sectoron the national economy of Malaysia.
22.BACKGROUND OF STUDYThe main modes of transport n Peninsular Malaysia include buses, trains, cars and to an extent,airplanes Malaysia has six international airports. The official airline of Malaysia is MalaysiaAirlines, providing international and domestic air service alongside two other carriers. Most ofthe major cities are connected by air routes.Therefore,thesubjectofmychoiceisairtransportationinvolvingdomesticandinternational airport.The three main aim I will highlight to this assignment is to provide basicknowledge of transport economics especially for domestic airport, to identify the importance oftransportation of economic development, and to identify the impact of the transportation sectoron the national economy of Malaysia. Airport that I choose is located Tawau Airport Sabah.3.MALAYSIA AIR TRANSPORTATION POLICY3.1 Domestic AirportA domesticairport isan airport thathandlesonlydomesticflights—flightswithinthesame country. Domestic airports do not have customs and immigration facilities and so cannothandle flights to or from a foreign airport.Theseairportsoftenhaveshortrunwayssufficienttohandleshortormediumhaul aircraft andregionalairtraffic. Securitycheckandmetaldetectorsareusedinmostcountries, but such checks were for domestic flights installed in many cases decades after checksfor international flights.Currently, there are three domestic airlines operating on the domestic routes, namely theMalaysia Airlines Berhad (MAS), Air Asia and Berjaya Air. These airlines operate on designatedroutes approved by the government on regular schedule. Another airline, Transmile Air has alsobeen given the license to provide cargo services on domestic routes. The rates for domesticairfares are subjected to the approval of the government. At the moment, domestic airfares areamongst the lowest in the region even though the government has recently approved an increaseof 51.8% in domestic airfares for peninsular Malaysia.
33.2International AirportThe Governmental policy that lays the foundation for a civil air transport system need toconsider allowing liberal international access to the country and to allow competition amonginternational airlines to stimulate the tourist source markets and assure sufficient domestic airservicestopermittouristsreadyaccesstovariouspartsofthecountry.Thesuccessfuldevelopment of international air services depends on the ability for airlines to fly commerciallybetween countries and the availability of adequate airports to support and services the flights.Once these are in place, the operational and marketing aspects of air transportation can beundertaken without undue complication.The Malaysia Airline System (MAS), the national airline, provides international airservices to various international destinations based on the landing rights accorded under thebilateral air services agreement. The Ministry of Transport (MOT) is responsible to obtain theroutesandlandingrightsthroughnegotiationsandagreementswiththerelevantforeigngovernments. The bilateral air services agreement specify the routes and the frequency of airservicesthatcanbeallowedforairlinesfrombothcountries.Withrespecttofaresforinternational routings, these are generally approved pursuant to International Air TransportAssociation (IATA) regulations and practices.Malaysia has always adopted the liberal open sky policy in negotiations on air serviceswith foreign countries for the purpose of giving the freedom and flexibility for the foreignairlines to operate their services. The aim is to give incentives for foreign airlines to operate atthe international airports in the country. Nevertheless, not all countries adopted the liberal opensky policy. At the moment, Malaysia has the open sky agreements with the United States, NewZealand, the Scandinavian countries, UnitedArab Emirates, Yemen, Austria and Taiwan.Although currently Malaysia has 81 air services agreements with foreign countries only 41foreign airlines use the right to operate in the country. The national carrier, MAS currently hasair services to 78 international destinations, 19 of which are on code-sharing basis.
44.MALAYSIA AIRPORTThere are currently 5 international airports operating in the country, namely the Kuala LumpurInternational Airport (KLIA), Penang, Kuching, Kota Kinabalu and Langkawi airports. All theseairports are able to accommodate the largest commercial aircrafts currently in use. In addition, thereare 17 domestic airports and 15 rural airstrips in the rural areas mainly in Sabah and Sarawak.Although the airports in Malaysia has been privatized and operated by the Malaysia AirportsHoldings Berhad (MAHB), the government is still directly involved in the development andfinancing of the airports.There has been a gradual increase in number of passengers handled by all internationalairports in Malaysia since the early nineties till around 1997. A slight drop in passengers wereobserved in 1998 when the new Kuala Lumpur International Airport (KLIA) started operationsin June 1998 and the then Subang International Airport began to cease most of its internationalflight operations. It may not have been very easy to maintain a smooth switch between Subangand KLIA since the two locations is quite some distance apart. In the beginning, the KLIA wasmeant to handle all international flights while the Subang airport still maintains the domesticflights. This may have been a factor that affects the passenger demand since direct connectionsare not available at either airport for those intending to change between international anddomestic flights.Nevertheless, the total passengers handled by Malaysian airports began to rise in 1999onwards especially when the KLIA began to receive greater patronage from foreign airlines.Despite the slowdown in air travel after the September 11, 2001 terror attacks in the US and theOctober 2002 bombing on the Indonesian resort island of Bali, there is a significant growth inpassenger traffic at the KLIA.
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