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The global air transport industry continues to grow well over twice of Gross Domestic Product.

For 2017, growth of passengers was over 7 %, topping 4 billion worldwide passengers. Airlines

are profitable in most regions of the world, reaching an expected global combined net profit of

$31.4 billion. Many emerging and developing countries benefit from this positive development,

as affordable and reliable air travel fosters economic growth by supporting trade, tourism and

foreign direct investments. This continued growth, however, puts high demand on some of the

World Bank Group’s (WBG) client countries in terms of developing and maintaining required in-

frastructure, and complying with international standards and best practice.

For over seven decades, the WBG has financed various types of infrastructure, including in air

transportation, such as airports or air traffic control systems. However, given the worldwide huge

requirements for infrastructure financing on the one hand, and the generally solid and abundant

liquidity of the private sector on the other hand, the WBG has embarked on an effort to help

countries maximize finance for development without pushing the public sector into unsustainable

levels of debt and contingent liabilities.

By applying the so called “Cascade Approach", the WBG helps

countries maximize their development resources by drawing on

private financing and sustainable private sector solutions to pro-

vide value for money and meet the highest environmental, social,

and fiscal responsibility standards, and reserve scarce public fi-

nancing for those areas where private sector engagement is not

optimal or available. This means that WBG teams are consistently

testing—and advising clients on—whether a project is best deliv-

ered through sustainable private sector solutions while limiting

public liabilities, and if not, whether WBG support for an improved

investment environment or risk mitigation could help achieve such

solutions. In air transport, especially the financing of airport infrastructure, private funding in the

form or Public Private Partnerships (PPP) for airports is the preferred way of mobilizing finance.

The 13th edition of the World Bank Group (WBG) Air Transport Annual Report, outlines the sup-

port that is given to emerging and developing countries in air

transportation. It summarizes the current portfolio of the air

transport practice at the WBG, and highlights some of the pro-

jects in more detail. The above described new approach of fi-

nancing infrastructure by involving the private sector has al-

ready shown it effect on the air transport portfolio. Given that

no new major airport infrastructure projects have been initiated,

the overall portfolio has declined to about US$ 1 billion. The

decline is especially significant in IBRD projects, which is con-

sistent as middle income countries have easier access to pri-

vate funding.

This annual report summarizes the WBG air transport development activities,

which includes an overall portfolio of US$1.03 billion, and several analytical and

technical research products. With these activities we remain actively engaged

around the world on air transport development, by addressing policy and regula-

tion, safety, infrastructure rehabilitation, institutional strengthening, and capacity

building in client countries. Finally, environmental challenges of aviation, and

how to mitigate them in emerging markets, continue to be a top priority for the

WBG, which we address in cooperation with strategic partners.

We look forward to continue addressing the challenges and opportunities of the

sector in 2018 to help achieving safe, affordable, and sustainable air transporta-

tion for all.

Dr. Charles E. Schlumberger

Lead Air Transport Specialist

The World Bank

ACI Airports Council International

ADS-B/C Automatic Dependent Surveillance – Broadcast/Contract

AGL Aeronautical Ground Lights

ATC Air Traffic Control

ATM Air Traffic Management

BOT Build-Operate-Transfer

BOO Build-Own-Operate

BOOT Build-Own-Operate-Transfer

BTO Build-Transfer-Operate

CAA Civil Aviation Authority

CES Charles E. Schlumberger, Lead Air Transport Specialist (WBG)

DME Distance Measuring Equipment

GNSS Global Navigation Satellite System

EASA European Aviation Safety Agency

EC European Commission

ESW Economic Sector Work

FAA Federal Aviation Administration (United States)

FY Fiscal Year

IATA International Air Transport Association

IASA International Aviation Safety Assessment (FAA)

IBRD International Bank for Reconstruction and Development (WBG)

ICAO International Civil Aviation Organization (UN Agency)

ICSID International Centre for Settlement of Investment Disputes

IDA International Development Association (WBG)

IFC International Finance Corporation (WBG)

ILS Instrument Landing System

IOSA IATA Operational Safety Audit

LCC Low-Cost Carrier

MIGA Multilateral Investment Guarantee Agency (WBG)

PASO Pacific Aviation Safety Office

PPPA Public Private Partnership Agreement

PPP Public-Private Partnership

SARPS Standards and Recommended Practices

TA Technical Assistance

DOT Department of Transportation

USOAP Universal Safety and Security Oversight Audits Program (ICAO)

VOR VHF Omni-Directional Radio Range

VSAT Very Small Aperture Terminal

WB World Bank

WBG World Bank Group

This report benefited from the contributions of a number of staff

members from across the World Bank Group.

We would like to thank Shruti Vijayakumar, Adam Diehl, Christo-

pher J. De Serio, Christopher Bennet, Nora Weisskopf; To-

joarofenitra Ramanankirahina, Weimin Zhou, Sami Ali, Olivier Le

Ber, Paula Pardo Pachon, Carlo Bongianni, Ramatou Magagi

and Alexandre Leigh for their input to this report.

We would also like to thank Jose Luis Irigoyen, Senior Director,

and Franz R. Drees-Gross, Director of the Transport and Digital

Development Global Practice for the continued guidance and

support, as well as Aldo Giovannitti for the research and prepa-

ration of this report.

The Mission

The World Bank Group (WBG) is a vital

source of financial and technical assis-

tance to developing countries around the

world through the provision of low-interest

loans, grants, credits, guarantees and advi-

sory services. The World Bank Group aims

to achieve two major goals by 2030:

End extreme poverty by decreasing the

percentage of people living on less than

$1.25 a day to no more than 3 percent.

Promote shared prosperity by boosting

the income of the bottom 40 percent of

the population in every country.

The World Bank Group aims to tackle

these challenges through financing, cutting

-edge solutions, cross-sectorial knowledge,

and partnerships with relevant public and

private sector actors, as well as civil socie-

ty. The organization’s investments span

across a number of sectors including edu-

cation, health, public administration, private

sector development, agriculture, and

transport and digital development.

The Institutions and New Structure

The International Development Association

(IDA) is the part of the World Bank that

helps the world’s poorest countries by

providing interest-free loans, or credits,

and grants. The World Bank’s original lend-

ing arm is the International Bank for Re-

construction and Development (IBRD),

which lends to governments of middle-

income and creditworthy low-income coun-

tries. The International Finance Corpora-

tion (IFC) provides loans, equity, and advi-

sory services to stimulate private sector

investment in developing countries. The

Multilateral Investment Guarantee Agency

(MIGA) provides political risk insurance or

guarantees to facilitate foreign direct in-

vestment in developing countries. The In-

ternational Centre for Settlement of Invest-

ment Disputes (ICSID) is also a part of the

WBG, but will not be covered in this report.

The WBG has recently undergone major

institutional change, and Transport and

Digital Development is now a Global Prac-

tice. The Bank’s new nimble structure with

Global Practices and Cross-Cutting Solu-

tion Areas is designed to strengthen collab-

oration and improve knowledge sharing

across the institution. These changes are

intended to improve operational efficiency,

financial sustainability, and ultimately work

toward meeting the twin goals of ending

extreme poverty and boosting shared pros-

perity.

Enhancing Mobility and Connectivity

Transport is a critical driver of economic and

social development. Transport infrastructure

connects people to jobs, education, and

health services; it enables the supply of

goods and services around the world; and

allows people to interact and generate the

knowledge and solutions that foster long-term

growth. The World Bank’s transport invest-

ments have facilitated more efficient trade

and enhanced human development through

greater mobility.

As a multi-sectorial institution, the World

Bank Group is uniquely positioned to sup-

port large-scale transformational projects

and deliver innovative cross-cutting solu-

tions for greater connectivity. The World

Bank’s strategy in the transport sector,

adopted in 2008, envisioned mobility solu-

tions for developing countries that would

be safer, cleaner and more affordable.

These three principles guide the Bank ’s

infrastructure investments and policy work.

The WBG is the largest provider of devel-

opment finance for transport globally, with

an active portfolio of around US$46.7 bil-

lion.

Air transport plays an important role in fos-

tering development, particularly in facilitat-

ing economic integration, generating trade,

promoting tourism, and creating employ-

ment opportunities. It facilitates integration

into the global economy and provides vital

connectivity on a national, regional, and

international scale. However, in many

countries air transport equipment and infra-

structure, regulatory frameworks, and safe-

ty and security oversight systems are inefficient or

inadequate.

In view of these challenges and to assist clients in

establishing a safe, secure, cost efficient, accessi-

ble and reliable air transport network, the Bank is

mandated to undertake the following major activi-

ties:

Operational work through projects and tech-

nical assistance.

Economic sector work, research, and

knowledge dissemination on air transport relat-

ed issues.

External relations and collaboration with part-

ner organizations.

Internal services (such as the airline advisory

service for WBG staff travel).

Portfolio and Project Highlights

In Fiscal Year 2017 (FY17), WBG’s Air Transport

Portfolio amounted to US$1.03 billion, a decrease

of 17% from Fiscal Year 2016 (FY16), which was

due to the completion and closing of larger airport

infrastructure projects. The Air Transport segment

makes up around 2.2% of the WBG’s US$46.7 bil-

lion Transport portfolio. The WBG’s FY17

Transport portfolio consists approximately 16.7%

of the WBG’s active portfolio of US$279.5 billion

(excluding MIGA).

The Air Transport portfolio includes 45 projects or

project components through the International Bank

for Reconstruction and Development (IBRD) and

International Development Association (IDA), as

well as the International Finance Corporation

(IFC)’s portfolio of lending and non-lending prod-

ucts in the aviation sector.

Project highlights in 2017 include the preparation

of a US$285 million Aviation Modernization Pro-

ject in Kenya and the additional financing for the

Aviation Investment Projects in Vanuatu, Tuvalu

and the Pacific Aviation Safety Office (PASO),

which are part of the Pacific Aviation Investment

Program (PAIP). PAIP is currently being imple-

mented in Vanuatu, Kiribati, Tonga, Tuvalu, and

Samoa.

Additional current projects in air transport include

the Shangrao Sanquingshan Airport, which is be-

ing funded through a US$50 million loan, and the

US$52 million DRC Goma Airport Safety Improve-

ment Project.

Major current commitments by the International

Finance Corporation (IFC) include

ASECNA in Africa, Queen Alia II in Jordan, the Za-

greb Airport in Croatia, the Enfidha airport con-

struction in Tunisia and the Pulkovo Airport in the

Russian Federation. IFC is active through Advisory

Services in Jamaica, Saudi Arabia and Santa Lu-

cia. MIGA has been involved in the air transport

sector in the past through the issuance of guaran-

tees for two airport projects in Ecuador and Peru.

Research and External Relations

World Bank staff members continue to represent

the organization externally at various air transport

conferences and events, notably the ACI-WBG

Aviation Symposium in London, UK. Research and

knowledge dissemination also continue to consti-

tute critical functions of the WBG’s Air Transport

Community of Practice (ATCOP). Looking forward,

the practice maintains its strong commitment to

addressing the challenges of its client countries.

Note

: E

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l In

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ear

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orld B

ank's

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ransport

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air transport projects worldwide focusing on regulatory reform, capacity build-

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ic/advisory services.

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CABO VERDE

Cabo Verde Transport Sector Reform Pro-

ject (P126516)

The objective of the project, in the IDA amount of

US$ million, is to improve efficiency and manage-

ment of the national road assets and to lay the

groundwork for transport sector State Owned En-

terprise reform. Among the concerned transport

sector State Owned Enterprises is TACV, the na-

tional airline company, which is structurally in defi-

cit. Making the right decision on TACV requires

strong political will and leadership given the sensi-

tivity of the company in Cabo Verde. Following a

request from the new Government, the World Bank

has conducted a mission to analyze the situation

of TACV in order to recommend the appropriate

way forward. The mission has developed several

restructuring options concerning domestic traffic

and international traffic. Follow-up activities are

underway to allow the Government to make an in-

formed decision on the future of TACV.

Contact person is Tojoarofenitra Ramanankirahina

at tramanankirahina@worldbank.org

DEMOCRATIC REPUBLIC OF CONGO

Goma Airport Safety Improvement Project

(P153085)

In FY15, the World Bank’s Board approved a

US$52 million IDA grant to help improve the safe-

ty, security, and operations of Goma International

Airport, the main international gateway of Eastern

Democratic Republic of Congo (DRC) and repair

the infrastructure. The airport is a vital link to con-

necting the area to the rest of the country and sup-

porting ongoing peace consolidation efforts. In ad-

dition to decades of conflict, the most significant

damage to the airport’s sole runway and taxiway

resulted from the 2002 Mount Nyiragongo volcano

eruption.

The lava flow from the volcano buried more than

one third of the 3,000-meter runway and isolated

the terminal and apron, constraining humanitarian

aid flows, UN operations, and passenger and car-

go transport. There have been seven recorded air

crashes since 2002 at the airport with dozens of

fatalities, many of them attributed to the condition

of the airport.

The project will restore the airport’s runway origi-

nal length, rehabilitate the apron, existing passen-

ger and cargo terminals, and electrical system, as

well as supply a new low-cost control tower and

navigational equipment to upgrade air navigation.

The project will also include the construction of the

airport’s security fence and support airport rescue

and firefighting services.

The project will support the valorization of the

large quantity of lava rock removed from the air-

port through labor-intensive activities targeted to

communities living close to the airport. The project

will also complement a Japan-GFDRR grant sup-

porting the monitoring of volcano risks and

strengthening preparedness of the airport and sur-

rounding communities. The significance of the pro-

ject is evident – DRC’s landmass is almost as

large as the whole of Western Europe, therefore

transport remains key to in- creasing agriculture,

improving trade, supporting mining growth, over-

coming the economic and social barriers that iso-

late communities, and providing security through-

out the country.

Contact person is Mustapha Benmaamar

mbenmaamar@worldbank.org

DEMOCRATIC REPUBLIC OF CONGO

Multi-Modal Transport Project

(P092537)

The Bank approved a US$255 million IDA grant for

the Multi-Modal Transport Project in the Democrat-

ic Republic of Congo (DRC) in 2010 as well as a

US$180 million additional financing IDA grant in

2013. The project’s main objectives are to (i) im-

prove transport connectivity in the DRC, (ii) to re-

store Société Nationale des Chemins de Fer du

Congo (National Railway Company of DRC,

SNCC) financial and operational viability, and (iii)

to strengthen transport state-owned enterprises

(SOEs) operational performance.

The project’s four main components include: (1)

SNCC recovery plan, (2) operational performance

strengthening and improved governance of the

sector, (3) international trade procedures simplifi-

cation, and (4) project management. Most of the

project financing (85%) go to the railway compo-

nent. The sub-component dedicated to aviation will

help DRC move towards compliance with interna-

tional safety and security standards through the

supply and installation of critical equipment for air

traffic control and airspace control. The sub-

component is financing (US$ 15 million): (i) the

procurement and installation of ADS-B surveillance

equipment by the National Airways Management

Agency/Regie des Voies Aeriennes in five airports

(RVA), the organization in charge of airports, (ii) a

new category II ILS/VOR/DME system for the capi-

tal’s international airport Kinshasa/N’Djili (FIH), (iii)

two studies on the development of airports in the

country (one on freight development at FIH, and

one on secondary airports), (iv) training for RVA

personnel in air traffic control, airport rescue and

firefighting services, and (v) the strengthening of

the National Civil Aviation Agency, which is in

charge of overall regulation of the sector. (vi) a

recertification campaign for the five largest air-

lines.

Key activities related to aviation have already been

implemented, albeit with some delays in procure-

ment and reforms. The study on the cargo zone in

Djili airport and the study on secondary airports

are complete. The installation of the navigation as-

sistance systems (CNS/ATM and 5 ADS-B) is pro-

gressing. Landing assistance systems (ILS/DME)

are installed at N’Djili airport while the DVOR/

DME initially procured for Kinshasa airport will

eventually be installed at Kalemie airport. There

still remain areas of improvement for the reform of

governance in the aviation sector. Five of the larg-

est airlines in DRC seeking recertification initially

failed to provide the requested documentation.

Contact person is Mustapha Benmaamar

mbenmaamar@worldbank.org

KENYA

Transport Sector Support Project (P124109)

A US$300 million IDA commitment was approved

in 2011 for the Transport Sector Support Project in

Kenya. The project’s objective is to increase the

efficiency of road transport, raise aviation safety

and security at Kenya’s airports to international

standards, and improve the institutional arrange-

ments and capacity of the transport sector.

Following the fire at Jomo Kenyatta International

Airport (JKIA) in August 2013 that destroyed the

only international arrival building, the Bank provid-

ed an additional financing component of US$60

million to help finance activities to restore the ca-

pacity of the international passenger terminal de-

stroyed in a fire at JKIA, strengthen KAA in disas-

ter preparedness and responsiveness at Kenyan

airports, and fill any unanticipated financing gaps.

Most of the emergency activities at JKIA following

the fire incident have either been completed or are

nearing completion.

The aviation component of the project entails

providing support to the Kenya Civil Aviation Au-

thority (KCAA) in regulatory capacity building and

through specific investments in navigation aids

and training equipment. In addition, support to

Kenya Airports Authority (KAA) will include provi-

sion of a new baggage-handling system at Jomo

Kenyatta International Airport (JKIA), and capacity

building and training of manpower in safety, secu-

rity, and airports management.

As planned under the project, the Government of

Kenya agreed to the restructuring of the KCAA by

separating the oversight function from its service

provision responsibilities to improve effectiveness

of oversight services and contribute to enhanced

efficiency among service providers. Both KAA and

KCAA have been given financial autonomy and

now retain revenues generated. As part of this pro-

cess, KCAA has increased the pay packages for

key flight safety operations staff, which is critical

for carrying out its oversight function. Furthermore,

KAA has taken over the responsibility of screening

passengers and baggage from the Kenyan police.

A consultant has been selected and is assisting in

the restructuring process.

KAA has to conclude the procurement of several

outstanding contracts including reconstructing the

runway at MIA Mombasa, design for upgrading

power supply at MIA, design for augmenting water

supply at JKIA, MIA and Kisumu airport, and sup-

ply of apron buses at JKIA.

The expansion of apron at JKIA and taxiways has

increased the capacity of parking space for air-

crafts by 50 percent, and expanded the capacity of

the runway. The construction of Terminal 4

(renamed T 1A) is completed and the terminal is in

use.

Expansion and improvements at Kisumu airport is

now complete, and has contributed to the stimula-

tion of economic activities in Western Kenya. Traf-

fic at the airport has grown from 40,000 passen-

gers at the time of appraisal to 400,000 in the year

2013.

Contact person is Josphat O. Sasia at

jsasia@worldbank.org.

TANZANIA

Transport Sector Support Project

(P055120)

In May 2010, the Bank approved a credit of

US$270 million for the Transport Sector Support

Project (TSSP) in Tanzania. In support of the

Transport Sector Investment Program (TSIP), the

project’s goal is the rehabilitation and preparation

of designs for part of the paved national road net-

work, and the rehabilitation and/or upgrading of

regional airports.

The project received additional funding (AF) of

US$59 million on 30 June 2011. This prompted the

revision of the project development objectives and

expanded the scope of the aviation component.

The component for airport upgrades and rehabilita-

tion includes (i) the paving and rehabilitation of the

runway at Kigoma airport (ii) the rehabilitation of

the main runway at Tabora airport, as well as (iii)

the extension, rehabilitation and paving of the run-

way and the replacement of the apron, terminal

and car parking at Bukoba airport, which were

signed in FY12.

The works at Kigoma and Tabora Airports has

been completed and final acceptance was done in

June 2014. The Bukoba airport runway, and apron

were also completed and final acceptance was

done in December 2014. The construction of Buko-

ba airport terminal building was completed and

provisionally accepted in September 2015. The

extension, and rehabilitation and widening works

of the main taxiway (taxiway C), and the construc-

tion of the new apron, taxi way D, and a new link

taxiway in the Zanzibar airport are also completed.

The feasibility study and detailed engineering de-

sign of eleven regional airports as well as the

preparation of the Civil Aviation Master Plan have

also been completed under the project.

Contact Person is Yonas Mchomvu at ymchomvu@worldbank.org

TANZANIA

Second Central Transport Corridor Project

(P103633)

Approved for a credit of US$190 million on 27 May

2008, and additional financing of US$100 million

on 15 January 2013, the Second Central Transport

Corridor Project (CTCP2) in Tanzania aims to sup-

port the country’s economic growth by providing

enhanced transport facilities that are reliable and

cost effective, in line with the National Transport

Policy and Strategy. This includes the establish-

ment of the Bus Rapid Transit (BRT) system in Dar

es Salaam and the rehabilitation and extension of

Zanzibar airport runway.

The Zanzibar airport component (US$39.3 million)

was implemented successfully between April 2009

and July 2010 and was completed officially on 3

August 2010. The airport’s runway was rehabilitat-

ed and extended by 560 meters, from 2,462 me-

ters to 3,022 meters long. Other works included

runway marking, the construction of a perimeter

access road, repair and provision of new aeronau-

tical ground lights (AGL), and provision of a new

filter drainage system on each side of the runway

for the full length.

The project also financed the detailed design for

the rehabilitation and extension of Zanzibar airport

taxiways and apron and technical assistance to the

Zanzibar Ministry of Infrastructure and Communi-

cation. The apron and taxiway rehabilitation works

were implemented under the additional financing

credit of IDA’s Transport Sector Support project

(TSSP), with an allocation of US$57.23 million for

works and supervision. The project improved safe-

ty and customer satisfaction and has enabled an

increase in the number of commercial regular

flights to Zanzibar.

Contact Person is Yonas Mchomvu at ymchomvu@worldbank.org

CHINA

Shangrao Sanquingshan Airport Project

(P123729)

A US$50 million IBRD commitment for the Shan-

grao Sanqingshan Airport Project was approved in

May 2013. The overall objective of the project is to

improve airline connectivity in the northeastern

Jiangxi province, as well as demonstrate the envi-

ronmental sustainability of the development and

operation of the Shangrao Sanqingshan Airport.

Component 1: The first component of the project

covers the airport infrastructure development and

includes the construction and installation of the

following: (a) airfield, runway, taxiway; (b) terminal

building; (c) air traffic control; (d) freight facility; (e)

supporting infrastructure facility, including fuel

storage farm, water supply, water supply, power

supply, fire stations, heating, storm/water manage-

ment, parking, fence; (f) environmental manage-

ment plan; (g) land acquisition and rehabilitation;

(h) auxiliary facility; (i) service vehicles; and (j)

storm water reuse system and ground aircraft aux-

iliary power unit. The project is well on track to

achieve its PDO. The construction of the whole

airport is approaching to the end and the overall

acceptance by the Civil Aviation Administration of

China (CAAC) will follow. It is planned that the

Shangrao airport will allow several commercial air-

lines to connect to different domestic large cities.

Airport Acceptance: The regional bureau of CAAC

had the acceptance inspection for the completed

air-related infrastructure in Aug 2016. The Shan-

grao municipal construction had the acceptance

inspection on the non-airfield buildings and munici-

pal engineering works in Sep 2016. Certain recom-

mendations were provided by the inspections, and

the contractors are finalizing the civil works and

installation. Between 6 and 11 October 2016 the

flight inspection center of CAAC conducted an in-

spection for navigation equipment and flight proce-

dures. During the testing flight, the control tower

equipment was fully tested, as well as the runway

and lighting system. The testing result met the

CAAC’s standard and regulation.

Airport Operational Arrangement: The operational

arrangement for the airport has now been final-

ized, and the Jiangxi Airport Group, which is a sub

-company of the Beijing Capital Airport Group, has

signed an operating concession agreement with

the Shangrao Municipality to operate the Shangrao

airport. Jiangxi Airport Group established a sub-

company in Dec 2015, Shangrao Airport Operation

Company, to take over the operations of Shangrao

airport once the overall acceptance is completed.

Currently there are about 60 employees hired for

Shangrao Airport Operation Company, and they

are taking relevant trainings in the Shangrao air-

port. In addition to operating the airport, the Jiang-

xi Airport Group will assist Shangrao municipal

government and the PMO to obtain the necessary

approval and clearance from the civil aviation ad-

ministration authorities before the airport is ready

for operation.

Airline Service Agreement: The Shangrao Munici-

pality paid much effort on the establishment of air-

lines connecting Shangrao with other major cities

in China. The regional bureaus of the Civil Aviation

Administration of China (CAAC) have been con-

tacted, and the major airline companies have been

communicated. To date, Shangrao Municipality

has signed strategic cooperation agreements with

the Sichuan Airline and the China United Airline, to

create airlines connecting to Chengdu, Chongqing,

Beijing and Foshan. The official service contracts

will be signed after the final acceptance of the

Shangrao Airport. At the same time, the PMO

plans to contact the Shenzhen Airline in the near

future to secure the connection to Shenzhen, be-

cause there are already many existing travel de-

mands between Shangrao and Shenzhen due to

the economic activities between two cities.

Component 2: The second project component fi-

nances consultancy services, studies and training,

including advisory services to support the Project

Management Office (PMO) and Shangrao San-

qingshan Airport Company Limited (SSAC) on pro-

ject coordination and monitoring activities. Other

activities will include consultancy services to de-

velop airport operation model for SSAC and com-

pliance with regulations and international practic-

es.

The Shangrao PMO plans to organize a workshop

in Beijing/Shangrao on the topic of the experienc-

es and lessons learnt during the design and con-

struction of Green Airport covering planning, de-

sign, construction and operation. A new study on

the Shangrao Airport operational manual review

and optimization is newly added under the TA

component as to assist the Jiangxi Airport Group

to customize the standard operational manual to

the Shangrao city circumstances, in terms of sav-

ing energy, improving efficiency, tourism develop-

ment and local transport plan.

The project is well on track to achieve its project

development objectives. With the construction

largely completed, the focus of the project supervi-

sion has turned to operation arrangement, obtain-

ing the green building certificate and sharing of

green airport design experience more widely.

Contact person is Weimin Zhou at

wzhou4@worldbank.org

PACIFIC AVIATION INVESTMENT

PROGRAM

In December 2011 IDA approved the Pacific Avia-

tion Investment Program (PAIP), a series of pro-

jects designed to ensure that critical aviation infra-

structure meets operational safety requirements,

as well as to measures to strengthen regulatory

compliance of international air transport of the par-

ticipating Pacific Island Countries. Major elements

of the US$220 million program focus on the up-

grading of and maintenance of critical airport infra-

structure, including runway and apron rehabilita-

tions, improvements to airport terminals, aeronau-

tical equipment (navigation aids, runway lighting),

fire and rescue equipment, as well as technical

assistance with strengthening of policy and regula-

tory capacity through master planning, reviewing

air services agreements and developing aviation

sector strategies.

Phase I of PAIP includes projects in Kiribati, Ton-

ga and Tuvalu. Samoa entered the program in

April 2014 as Phase 2, and IDA has since ap-

proved Phase 3 with Vanuatu in March 2015. Solo-

mon Islands remains an eligible entrant to the IDA

regional program. IDA also approved a Pacific Avi-

ation Safety Office Reform Project in September

2013 in support of the regional entity’s regulatory

advisory mandates.

The Pacific Region Infrastructure Facility (PRIF), a

multi-donor trust fund, has supported PAIP with

resources to enable the continuation of on-going

regional aviation safety and security oversight in

participating States during a restructuring and tran-

sition of the Pacific Aviation Safety Office (PASO)

through the IDA-financed PASO Reform Project.

The funding allows grant recipients to purchase

regulatory oversight advisory services in fulfilling

safety inspection requirements for international

aviation, while also supporting their obligations as

a signatory to the Pacific Islands Civil Aviation

Safety and Security Treaty.

Program contact person is Christopher Bennett at

cbennett2@worldbank.org

KIRIBATI

Kiribati Aviation Investment Program

(P128938)

With an original IDA Grant commitment of

US$22.91 million, the project is entering its fifth

year in implementation. The AU$5 Safety and Se-

curity Levy on departing international passengers

has been successfully implemented and is being

collected, which represents a major policy

achievement that will result in increased fiscal re-

sources towards safer and more secure air

transport operations. The project is making good

progress in several areas. The contracts for the

terminal works and the associated supervision ser-

vices have been signed and respective contractors

have mobilized. Specifications for the replacement

of the airport perimeter fence have now been

agreed upon and it is expected that the contractor

will mobilize before the end of the year. The re-

quest for bids for the London-CXI road has now

been launched. The only remaining major invest-

ment left to procure is the seawall to protect the

eastern end of the runway. The contract of the avi-

ation advisor has been concluded with considera-

ble progress achieved with regards to the develop-

ment of air service agreements, the CXI-Nadi sub-

sidy and upper air space issues and capacity

building activities with the Civil Aviation Authority

(CAA). The GoK is now receiving regular revenue

from the Safety and Security Levy collected by air-

lines such as Fiji Airways as part of the ticket

price.

Contact person is Pierre Graftieaux at

pgraftieaux@worldbank.org and Nora Weisskopf at

nweisskopf @worldbank.org

SAMOA

Samoa Aviation Investment Program

(P143408)

The project development objective (PDO), which is

to improve operational safety and oversight of in-

ternational air transport and associated infrastruc-

ture, remains achievable. Faleolo International Air-

port has maintained all regulatory compliance re-

quirements throughout the project.

Subsequent to an initial IDA Grant of US$25.0 mil-

lion, the World Bank approved in June 2016 Addi-

tional Financing (IDA Credit US$16.62 million

equivalent), to scale up apron pavement expan-

sions and fuel hydrant extensions necessary to

integrate a new terminal building currently under

construction. The project is completing the third

year of implementation and is making reasonable

progress towards the development objectives.

Implementation of the AU$5 regional safety and

security levy for departing international passen-

gers has been achieved, representing a major poli-

cy achievement that will enable increased fiscal

resources towards safe and secure air transport.

Modernization of air traffic communications is un-

derway. Airfield Rescue and Fire Fighting (ARFF)

Category 9 outcomes will be exceeded, as the two

additional vehicles will enable Samoa Airport Au-

thority (SAA) to now meet Category 10 status. The

pavement rehabilitation works, and airfield ground

lighting and navigation aid packages are currently

scheduled to be completed one month prior to the

project closing date.

Contact person is Christopher De Serio at

cdeserio@worldbank.org

TONGA

Tonga Aviation Investment Program

(P128939)

Subsequent to an original IDA Grant contribution

of US$27.21 million, the World Bank approved in

2016 a US$7.3 million Additional Finance. The

project is in the sixth year of implementation

schedule. The AU$5 Safety and Security Levy on

departing international passengers has been suc-

cessfully implemented and is being collected,

which represents a major policy achievement that

will result in increased fiscal resources towards

safer and more secure air transport operations.

Upgrading and rehabilitation of runway pavements

at both the Fua’amotu International Airport (TBU)

and the Vava’u International Airport (VAV) have

been completed in 2016.

The project continues to progress well, it is on

track to achieve its current development objec-

tives. The Tonga Airports Limited (TAL) is pro-

gressing with procurement of multiple investments

including Ha’apai terminal repairs (funded by TAL),

Vava’u terminal extension (funded by TAIP) and

Fua’amotu International Airport (TBU) control tow-

er and terminal upgrades (funded by TAIP). No

major issues with the investments were outlined by

TAL. The construction of the control tower is ex-

pected to take approximately 12 months.

Several other key activities have been completed:

(i) terminal upgrade, and commissioning of requi-

site security equipment on site at Vava’u to sup-

port regional operations; (ii) fencing repairs at Fu-

a’amotu; and (iii) a Training Needs Analysis with

budget available to the State for implementation.

Navigational aids and communications contract is

in place and the supply and installation is currently

ongoing. The contracts for the VSAT design, sup-

ply and installation are also in place and procured

as a regional good, with the installation of VSAT

equipment is not yet completed. A coordinator has

been supporting equipment and equipage needs,

in preparation of a regional rollout of ADS-B, also

procured as a regional activity, with the ADS-B in-

stallation is completed and awaiting commission-

ing.

A Regional study to develop the PASO Business

Development Plan and organizational restructure

has been completed, financed by PRIF, and an

increased use of PASO services has been facilitat-

ed through the allocated PRIF budget. The regional

study on the Flight Information Region and Upper

Airspace management, financed by PRIF, has been

completed. An increased use of PASO services has

been facilitated through PRIF.

Contact person is Julie Babinard at

jbabinard@worldbank.org and Pierre Graftieaux at

pgraftieaux@worldbank.org.

TUVALU

Tuvalu Aviation Investment Program

(P128940)

With an IDA Grant contributions of US$11.85 mil-

lion, US$6.06 million and US$2.89 million, the pro-

ject is in the sixth year of implementation, with a

revised closing date of June 2018. The AU$5

Safety and Security Levy on departing internation-

al passengers has been successfully implemented

and is being collected, which represents a major

policy achievement that will result in increased fis-

cal resources towards safer and more secure air

transport operations.

Further, Tuvalu has taken the necessary institu-

tional steps for restructuring government depart-

ments with the separation of regulatory oversight

from airport management within the Ministry of

Communications and Transport.

The project is progressing well and is almost cer-

tain to achieve a satisfactory outcome and its pro-

ject development objectives. The runway and road

civil works are completed, fuel truck and fire tender

have been delivered and are in use, and naviga-

tion aids have been installed. There have been

some delays with the construction of the terminal

works due to shipping delays and inclement

weather, resulting in a revised expected comple-

tion date for the terminal. The GoTv is now receiv-

ing regular revenue from the Safety and Security

Levy as well as the higher departure tax, both col-

lected by Fiji Airways as part of the ticket price.

However, there have been a number of challenges

affecting the project, particularly with regards to

the runway and apron resurfacing. Since comple-

tion of the works, the newly resurfaced runway has

experienced a number of visible failures. An inde-

pendent investigation has identified that these fail-

ures are due to pressure build up under the run-

way caused by water infiltration exacerbated by

tidal and sea level impacts. A design consultancy

has been engaged to pilot a number of different

potential design solutions on the runway to test the

efficacy of the options in alleviating the pressure

under the runway. The outcome of the pilots will

inform the final designs.

Contact person is Nora Weisskopf at nweisskopf

@worldbank.org

VANUATU

Vanuatu Aviation Investment Program

(P154149)

The project is nearing the midpoint of the implemen-

tation cycle, and is now in the third year of implemen-

tation, with an original IDA Credit contribution of

US$59.5 million. A first Additional Finance for

US$14.1 million has been approved in 2017, and a

second Additional Finance is currently under prepa-

ration. The safety and security levy for international

departing passengers went into effect on 1 Septem-

ber 2017. With the mobilization of the contractor to

repair the runways at Bauerfield, Pekoa and White-

grass airports, the project implementation will be ac-

celerating. The key studies on the Aviation Sector

Plan and the Airports Master Plan are progressing

and will provide guidance to the sector.

The project Completed activities include the pave-

ment coring and deflection testing, as well as tempo-

rary remedial works to the runway realized in order to

ensure safe operations at Bauerfield international air-

port, in Port Vila. A desktop review has been com-

pleted to confirm the relevancy of the project invest-

ments for future aircraft operating types. Procure-

ment of two airfield rescue and firefighting (ARFF)

vehicles is awarded which will lead to upgrading the

capability of the ARFF compliance to achieve Airport

Category 8. ADS-B ground stations have been pro-

cured and the VSAT design completed; VSAT hard-

ware contract being finalized. The design of the reha-

bilitation of Bauerfield is completed, and PRIF funds

have been made available to the state in order to fa-

cilitate the use of PASO services.

Contact person is Christopher Bennett at cben-

nett2@worldbank.org and Christopher De Serio at

cdeserio@worldbank.org

PACIFIC ISLANDS

Pacific Aviation Safety Office (PASO)

Reform Project (P145057)

The PASO Reform project, which is entering its

fifth year of the original implementation timeline,

continues to successfully support aviation safety

and security oversight in the Pacific. The project is

focused around three components, namely: (i)

transitional management and support for PASO,

comprising technical assistance activities that fa-

cilitate implementation of its newly adopted busi-

ness plan; (ii) the establishment of a pool of re-

gional aviation experts available to PASO member

states to advise on aviation safety and security

regulatory matters; and (iii) the establishment of

appropriate quality assurance and information

management systems.

Key achievements are:

A. The PASO Council has endorsed the recom-

mendation of the Financial Management and

Sustainability Analysis and are seeking Minis-

terial approval to implement the proposed re-

gional levy. An institutional specialist familiar

with executive management and the aviation

sector has evaluated the organizational gov-

ernance structure and PASO management will

begin to implement key recommendations. Dia-

logue with Vanuatu the Host State Agreement

continues with PASO management.

B. The register of inspectors continues to provide

expert advice to regulatory authorities, with the

technical specialists on the registry implement-

ing State’s agreed annual work plans.

C. The Quality Management activity has devel-

oped key policies and procedures related to

organizational staffing and operational direc-

tives.

D. A new Component was approved in a January

2017 project restructuring and additional fi-

nancing from the Pacific Region Infrastructure

Facility was approved for Very Small Aperture

Terminal (VSAT) installations in Cook Islands

and Niue. Implementation of the related activi-

ties is underway and is expected to be com-

pleted in 2018.

Contact person is Christopher De Serio at

cdeserio@worldbank.org

BOLIVIA

National Roads and Airport Infrastructure

Project (P122007)

The Bolivia National Roads and Airport Infrastruc-

ture Project supports road infrastructure improve-

ment in the department of La Paz and the upgrad-

ing of airport infrastructure and equipment in the

town of Rurrenabaque in the department of Beni.

The investment is being used for the construction

of a new taxiway, apron, control tower, operations

building, rescue and firefighting buildings, an ac-

cess road, a passenger terminal, and the acquisi-

tion and installation of aviation control, rescue and

firefighting equipment.

The current state of the project progress is that

civil works were procured and the contract signed

in 2017. The supervision selection was launched

resulting in the selection of a consulting firm which

is about to be contracted, with works beginning

once supervision is in place. Also, a firefighting

truck has been procured and contracted with deliv-

ery at the end of 2017.

The revised deadline of the project’s Bank financ-

ing is July 2018. The new 1,500 meter runway has

been inaugurated on 15 November 2016 by presi-

dent Evo Morales. Works were executed with a

direct financing of the Department’s Government.

Contact person is Gylfi Palsson at

gpalsson@worldbank.org

EGYPT

Cairo Airport Development Project – TB2

(P101201)

Air transport is highly strategic for Egypt’s economic

development because it creates significant employ-

ment and supports the country’s tourism sector. In

FY09, tourism accounted for 3.5% of Egypt’s GDP

and generated US$10.5 billion in revenue and 12.4

million visitors. Around 80% of tourists came through

Egypt’s airports, and tourists represented half of the

international passenger traffic at Cairo International

Airport.

About twenty years ago, the Government of Egypt

realized the growing importance of air transport as a

driver of growth in its own right. The Government’s

objective therefore became to ensure that the liberali-

zation of air transport would contribute positively to

the development of the Egyptian aviation sector.

Thus, Egypt has embarked on the gradual liberaliza-

tion of international air services on a bilateral basis

with several countries in the Middle East, Africa, and

Europe. It has also significantly improved airport ser-

vices through a range of capacity investments and

the strengthening of airport operations.

Egypt needs to continue expanding airport infrastruc-

ture and improve airport services to meet growing

demand, especially at Cairo International Airport, the

main gateway to Egypt. It also needs to continue

strengthening air traffic control infrastructure and air

traffic management.

The Cairo Airport Development Project-TB2, ap-

proved in 2010 for an amount of US$280 million, has

been primarily supporting the rehabilitation and ex-

pansion of the Terminal Building 2 (TB2) at Cairo In-

ternational Airport, with a focus on enhancing the ca-

pacity and the quality of services of the airport

(component 1 of the project). The component 2 con-

sists of five studies of technical assistance on various

topics. The project has been closed in FY17.

The project’s objectives are to (i) enhance the capac-

ity and the quality of services of the Cairo Internation-

al Airport, and (ii) improve the capacity of key stake-

holders (Ministry of Civil Aviation and the Egyptian

Holding Company for Airports and Air Navigation) in

the strategic planning of the air transport sector.

The project’s beneficiaries will be: (i) business and

tourism passengers, who will benefit from better

airport infrastructure and services, (ii) businesses,

which will benefit from extended air transport ser-

vices and a more attractive area around Cairo Air-

port International, and (iii) workers, who will benefit

from job creation through the construction phase

as well as after construction, through airport activi-

ties as well as activities of industries and services

in the area of Cairo International Airport.

The project has completed the construction and

testing of TB2. On 28 September 2016, the airport

operated two airlines in a soft opening. Munich Air-

port has been selected to be the terminal operator

for TB2 and the interfaces with TB3.

Contact person is Olivier Le Ber at

oleber@worldbank.org

People’s Republic of China

A World Bank mission travelled to China from 3 to

12 April 2017. The World Bank has financed the

construction of the new Shangrao Sanquingshan

Airport in the northeastern Jiangxi province. The

objective was to improve airline connectivity,

which would support economic development also

through tourism. Furthermore, new airport at

Shangrao was designed to become a “green air-

port”, which is energy efficient and therefore ad-

dresses Climate Change. The mission’s objective

was to review the progress made in the imple-

mentation of the project, discuss and consider the

measures of rendering the airport a “green infra-

structure”, and to prepare the Green Airport Work-

shop and Carbon Accreditation process.

The project was originally approved in May 2013,

and the construction of the new Shangrao San-

quingshan Airport had well progressed, with the

completion reached recently. The airport design

contains several features to lower energy con-

sumption and thus implement a “green” airport,

i.e. energy efficient. For example, the design of

the main terminal allows natural daylight to illumi-

nate most of the building without energy con-

sumption. Furthermore, heating and cooling is

supported by a geothermal installation, which al-

lows lowering energy consumption for hearing by

40%, and for cooling by 30%. Airport is also

equipped with a water treatment system, and dur-

ing its construction, a special emphasize was

made on the usage of environmentally friendly

materials.

In order to capture and disseminate knowledge

and experiences with the construction and opera-

tion of a green airport, the World Bank project al-

so finances a study on the project. The dissemi-

nation of information about the Shangrao Airport

serves to communicate with other airports to ex-

change expertise and specific knowledge, with the

further objective of helping identifying future air-

port projects which aim to replicate the green air

port concept done at Shangrao Airport, which is

committed to attain Chinese energy efficiency cer-

tification for buildings.

Contact person is Charles Schlumberger at

cschlumberger@worldbank.org

Democratic Republic Of The Congo

A World Bank mission travelled to Kinshasa and

Goma, DRC, from 27 May to 17 June 2017. In

DRC the supervision mission focused on the pro-

gress of the Goma Airport Project, which in-

cludes including the CAA capacity building work-

shop of ICAO. In Goma, the construction phase

for the rehabilitation of the runway was formally

initiated on 02 May 2017.

At the time of the mission the contractor did not

yet commence the works. The construction su-

pervision firm was present, and the mission dis-

cussed various elements of the works, including

the construction of the control tower, and the re-

habilitation of the tarmac. A central issue has

been the completion of the drainage system of

the airport, which the project is financing. The

challenge for the drainage system is to avoid that

it will become the sewer system of the surround-

ing buildings, and as such an environmental

challenge. Finally, the objective of certifying the

airport to ICAO standards has been discussed

with the ICAO’s expert. The challenge for

Goma’s certification is that it will need to be done

by filing several differences to ICAO Standards

and Recommended Practices. The World Bank’s

aviation team has been studying this issue in or-

der to identify which mitigation measures will be

necessary, and will work with ICAO to achieve

this important objective. Finally, the issue of a

possible PPP solution for the rehabilitation of the

airport terminal was not examined during this

mission, but was deferred to the next supervision

mission.

In Kinshasa the mission participated in the meeting

of the Steering Committee of the capacity building

component, which is executed by ICAO. Overall the

technical assistance has made good progress, with

a few areas deserving further fucus: (i) support was

provided to the AAC (Civil Aviation Authority) for

the certification of two operators (Congo Airways

and FlyCAA); (ii) the first phase of capacity building

needs assessment was completed; (iii) several in-

spectors were trained in Personnel Licensing, Air-

craft Operations, and Airworthiness; and (iv) a fol-

low-up mission to the recent USOAP audit support-

ed AAC in correcting several findings in various do-

mains.

Major next steps include (i) the follow-up with the

design and supervision consultants to track the

general progress and the final approved design of

the control tower and tarmac; (ii) discussion with

ICAO on the final report of the Steering Committee

meeting for the ICAO capacity building project com-

ponent; and (iii) Review of safeguards issues in

connection of the drainage system.

Contact person is Charles Schlumberger at

cschlumberger@worldbank.org

Kenya

A World Bank mission was held in Nairobi, Kenya,

from 27 May to 17 June 2017. In Nairobi the su-

pervision mission of the Aviation Modernization

Project (P156971) focused on airport infrastructure

issues, including the green airport strategy, a cru-

cial item in World Bank’s financed projects. The

mission met with the design consultant and dis-

cussed the implementation of the design consul-

tancy, which included various refinements to terms

-of-reference in order to include provisions for the

preparation of the Airport Carbon Certification.

In order the learn about Best Practice of Airport

Environmental Management and Airport Carbon

Certification, the World Bank has been coordinat-

ing a workshop for the Kenyan Airport Authorities

and Bank project staff at Athens International Air-

port (first airport to receive ACI Carbon Accredita-

tion). The workshop’s focus has been on climate

change-related issues, including Airport Carbon

Accreditation, noise, waste, water, air quality, wild-

life, Environmental Management System, commu-

nity relations, and among others, with the findings

directly relevant and applicable for the Carbon

Certification of Jomo Kenyatta International Air-

port.

Contact person is Charles Schlumberger at

cschlumberger@worldbank.org

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AFRICA: AKFED Aviation (27048)

The Aga Khan Fund for Economic Development

(“AKFED”), through its Aviation Services division,

is currently expanding its activities in both East

and West Africa. The aim of the division is to as-

sist in maintaining the critical aviation infrastruc-

ture in support of economic development and to

provide much needed regional airline services in

Africa. IFC’s involvement with the organization in-

cludes a corporate loan of up to US$25 million to

AKFED for on-lending to its three airlines: Air

Burkina, Air Mali and Air Uganda. This allows

AKFED to consolidate all of the division’s airlines

and aviation activities and optimize routing, syner-

gies and overall effectiveness across the group ’s

airline operations.

Loan proceeds will be used to fund fleet acquisi-

tion cost (introduction of nine refurbished MD-87

and two MD-83 aircraft) and other airline develop-

ment costs including training of crews and engi-

neers, purchase of spare parts, and improving

maintenance facilities.

The project is expected to promote inter-regional

and international trade in the region. Additionally,

the project is also expected to provide a boost to

tourism. Continued trade and economic growth in

Africa is contingent on further investments and im-

provements in regional transport infrastructure and

services. The division’s operation will fill the ser-

vice gap that exists today and will result in in-

creased frequencies for existing destinations as

well as the addition of new destinations, better

passenger service and improved efficiency and

safety. Such improvements will increase the con-

nectivity, competitiveness and attractiveness of

these countries’ economies. Moreover, the project

will support regional integration by assisting the

development and expansion of a group of regional

airlines.

SUB-SAHARAN AFRICA: ASECNA (32546)

The Agence pour la Securite de la Navigation Aer-

ienne en Afrique et a Madagascar (ASECNA) is a

multi-state governmental agency. It was created in

1959 and is composed of 18 member countries

(Benin, Guinea Bissau, Burkina Faso, Cameroon,

Central African Republic, Chad, Comoros, Congo,

Cote d’Ivoire, Equatorial Guinea, France, Gabon,

Madagascar, Mali, Mauritania, Niger, Senegal,

and Togo).

ASECNA is responsible for the design, implemen-

tation and management of facilities and services

related to the transmission of messages and traffic

information, guiding aircrafts, air traffic control,

forecasting and reporting meteorological infor-

mation, for traffic route, approach and landing at

airports in African members countries. It is also in

charge of the maintenance of all facilities required

for the implementation of these services, including

the management of an airspace covering 16 mil-

lion square km, with a total of 32 airports.

IFC investment consist of an A loan of USD$36.03

million aimed at financing a list of specific infra-

structure refurbishment including purchase and

installation of back-up power equipment in a num-

ber of member countries in Africa. The loan is de-

signed to promote regional and integration and

improve air space management facilities, infra-

structure, and communications thus enhancing

member countries’ safety in the air transportation

sector.

COTE D’IVOIRE: International Aircraft

Services (32061)

The project, which was approved in March 2013,

provides financing of US$7 million to International

Aircraft Services (IAS) for the acquisition of up to

three secondhand Dauphin N3 helicopters by IAS.

The helicopters are to be used to provide transport

services to leading oil and gas exploration and

production companies in Cote d’Ivoire and the

Western African region. The project will enable

IAS to modernize its fleet with newer helicopters to

meet its client needs.

IAS is an aviation operator and maintenance com-

pany created in 2002 and registered with the Ivory

Coast Civil Aviation Authority. It provides mostly

helicopter transport services to the oil and gas in-

dustry in Cote d’Ivoire and to the mining industry

in West Africa. The company currently owns 13

helicopters and employs 25 pilots. IAS is based in

Felix Houphouet-Boigny International Airport,

which is approximately 16 km South-East of Abid-

jan.

The expected development impact will be develop-

ing local know-how, and support the development

of exploration and production of natural gas activi-

ties by providing reasonably priced transportation

services. The project also hopes to create a

demonstration effect by providing financing to a

company in a post-conflict country to pave the way

for more investments in the future.

CROATIA: Zagreb International Airport

(31969)

The IFC is supporting the development of a termi-

nal at Zagreb International Airport as part of a

Public Private Partnership (PPP). The new

US$450 million terminal, built by a consortium

supported by IFC, is expected to contribute to eco-

nomic growth and tourist activity. Tourism is a ma-

jor driver of employment in Croatia, and improved

infrastructure will develop the sector and boost

GDP. IFC is committing US$72.65 million to the

project, including a loan of up to US$47 million

and an equity investment of nearly US$26 million.

The concession includes financing, design, and

construction of the terminal, along with airport op-

eration until 2042.

The new terminal will be 65,000 square meters

and is expected to welcome 5 million travelers per

year when it opens in 2017, compared to the cur-

rent capacity of 2 million. An average of 400 new

jobs are expected to be created during construc-

tion, and up to 700 at peak. For the first time in

Croatia private firms involved in a transport con-

cession project have assumed passenger volume

risks, enabling the country to upgrade essential

infrastructure without adding a burden to state fi-

nances.

KENYA: Kenya Airways Expansion Plan

(31650)

Kenya Airways Ltd. (KQ), the national carrier of

Kenya and the third largest airline in Sub-Saharan

Africa (in terms of seat capacity offered), is in the

midst of implementing a strategic fleet and net-

work expansion plan. It is focused on growing its

passenger network and diversifying its fleet to

match the network needs, as well as launching a

dedicated freighter division. Having reached a crit-

ical mass and achieved a solid financial position,

KQ finds itself well positioned to capitalize on the

growth prospects and opportunities that the Afri-

can region and the international market present.

KQ’s strategic intent is to establish its brand and

its presence in the most important intra-African

markets as well as become a significant player in

long haul origin-destination city pairs that are ex-

pected to grow over the next few years. To imple-

ment the project, the company has placed firm or-

ders to aircraft manufacturers in connection with

the acquisition of nine Boeing 787 Dreamliner air-

craft and ten Embraer 190 aircraft.

IFC's support of Kenya Airways expansion plan is

expected to have significant development impact.

At the regional level of Sub Saharan Africa, the

launch of the freighter division coupled with the

opening of new intra-Africa destinations will con-

tribute to markets integration and will reduce the

transactional costs of trade, an aspect that is ex-

tremely important to promote the economic devel-

opment of the SSA economies.

KQ's entry into new international markets will also

promote competition as well as provide a key

transportation link between growing economies in

the Middle East and Northern Africa region and

Asia promoting international trade, South-South

Investments and tourism to and from Africa.

Contact person for all IFC Investment projects is

Pierre Pozzo di Borgo at ppozzodiborgo@ifc.org

The Infrastructure Advisory Services Department

of the IFC provides advisory assistance to govern-

ments on structuring and implementing (tendering)

Public-Private-Partnerships (PPPs) in infrastruc-

ture. IFC has undertaken more than 100 advisory

transactions in over 67 countries over the last 20

years. IFC/World Bank's reputation for compe-

tence, transparency, and fairness allows it to play

the role of neutral partner to balance each party's

interest, thus reassuring foreign investors, local

partners, other creditors, and government authori-

ties. The two main domains in air transportation

advisory services are private sector participation in

airports and air carriers.

1) IFC Public-Private Partnerships (PPP) Advi-

sory Mandates in Airports

Only a fraction of the world’s commercial airports

are managed or owned by private sector entities.

However, as passengers carried by air transport

has neared 4.1 billion in 2017, and more than one-

third in value of all merchandise and goods were

air freighted – Public-Private-Partnerships (PPPs)

in airport infrastructure will grow to meet invest-

ment and required service standards. Airport PPPs

are useful approaches to meet both private and

public sector objectives.

Of the various airport PPP models available, expe-

rience shows that concessions and full divestiture

are most effective:

• Concession Contracts (BOT, BOO, BOOT,

BTO, etc.): State retains ownership of airport

but transfers investment as well as operations

and management responsibilities to the private

sector

• Full Divestiture: Ownership, operations, and

investment responsibilities are fully transferred

to the private sector.

• In certain cases, a blend of first-phase BOT

followed by public offering can maximize bene-

fits

In certain cases, a blend of first-phase BOT fol-

lowed by public offering can maximize benefits.

2) IFC Public-Private Partnerships (PPP) Advi-

sory Mandates in Airlines

As the airline industry has proceeded along this

privatization path over the last 30 years, IFC has

participated in nearly a dozen airline transactions.

Unfortunately, many have proved to be difficult

projects due to important sector-specific structural

reasons:

• Fixed-cost structure: Airlines tend to build up a

legacy-costs base (staff and fleet) that is diffi-

cult for a new owner to manage. In addition,

fuel costs are beyond management’s control.

During the period of higher oil price in 2011-

2014, they accounted for as much as 30% of

the cost base (up from 15-20% in 2009), and

have since dropped with declining oil prices

(variations according to individual airline hedg-

ing strategies).

• Price-sensitive product: Demand for travel is

highly elastic, especially in tourist markets. In

recessions, people forgo vacations for other

consumer goods. Conversely, price reductions

increase passenger numbers dramatically.

• Complicated demand chain: Customers often

purchase tickets through travel agents, fre-

quently in a package with hotel accommoda-

tions. Since airlines rely on these other actors

for their sales, if there are bottlenecks else-

where the aviation sector suffers.

• Overregulation: Bilateral agreements between

governments, still prevalent in many parts of

the world, prevent competition from functioning

normally. Open skies are being adopted, but

not in all countries.

3) IFC Air Transportation Experience

When undertaking a transaction advisory man-

date, IFC provides a one-stop solution to govern-

ments covering all aspects of the proposed trans-

action. One of the distinguishing features of IFC ’s

value addition is its ability to balance private and

public sector interests and take into account sus-

tainable long term economic and social effects.

Selected IFC Advisory Mandates in Airports

PROJECT NAME COUNTRY YEAR MANDATE/RESULT

Samoa Airline JV Samoa 2017 JV Options Analysis

Jacksons Airport Papua New Guinea 2017 Strategic Options Analysis

Clark Airport Philippines 2016-ongoing Due Diligence ongoing

Nepal Airports Nepal 2016-ongoing Strategic Assessment Ongoing

Jamaica Airports Jamaica 2011-ongoing RFP Process Ongoing

Jeddah Airport Saudi Arabia 2016 Due Diligence / Project Structuring /

Tender process

Taif Airport Saudi Arabia 2016 Due Diligence / Project Structuring

Saint Lucia Airport Saint Lucia 2016 Due Diligence / Project Structuring

Croatia Airlines Croatia 2015 Strategic Partnership analysis

Brazilian Airports Brazil 2014

Galeao and Confins Airports success-

fully awarded to Changi and Zurich

Airport led consortiums respectively

Dili Airport East Timor 2014 Feasibility Study Completed

Madinah Airport Saudi Arabia 2012 Successfully awarded to TAV, Saudi

Oger, Al Rajhi consortium

Male Airport Maldives 2010 Successfully awarded to MAHB —

GMR

Queen Alia Airport Jordan 2007 Successfully awarded to Aéroports de

Paris, ADIC, J&P, Noor consortium

Hajj Terminal Saudi Arabia 2007

Successfully awarded to Saudi Bin

Laden Group, Aéroports de Paris con-

sortium

Abuja Airport Nigeria 2006

Successfully awarded to Abuja Gate-

way consortium (Airport Authority

and equity partners)

Air Jamaica Jamaica 2009 Awarded to Caribbean Airlines

Drukair Bhutan 2008 Strategic analysis

JAT Yugoslavia 2006 Strategic analysis

Polynesian Airlines Samoa 2005 49% sold to Virgin Blue

Cameroon Airlines Cameroon 2005 Awarded but cancelled by Govt.

Air Tanzania Tanzania 2002 49% sold to SAA

Kenya Airways Kenya 1996 76% sold to KLM, financial investors

Building on a previously completed round of con-

cessions from 2011, the Brazilian Development

Bank (BNDES) approached IFC in mid-2012 to as-

sist with the second round of airport concessions,

covering Galeão and Confins airports, in coopera-

tion with Estruturadora Brasileira de Projetos

(EBP). The National Aviation Secretary (SAC) au-

thorized EBP to develop the financial, engineering,

and environmental studies necessary for the two

airport projects. In order to undertake these activi-

ties, EBP and IFC signed a Cooperation Agree-

ment, with IFC focusing principally on the technical

work stream. Both projects closed in April 2014.

Galeão International Airport is located in the

southeast region of Brazil; the airport serves as a

major air transportation hub for the country and

region. The Galeão project was structured as a 25

-year concession, through which the operation and

management of assets is transferred to the con-

cessionaire. The concessionaire is responsible for

providing all necessary investments, including civil

works, to meet growing demand. Galeão airport

was awarded to the Aeroportos do Futuro consorti-

um, composed of Odebrecht, a leading Brazilian

engineering and construction company, and

Changi Airport Group. The winning bid was

US$7.9 billion, and US$ 2 billion will be invested

over the concession term.

Confins International Airport, is the main com-

mercial airport in the Belo Horizonte region, with a

population of approximately six million people.

The project was structured as a 30-year conces-

sion, through which the O&M of assets is trans-

ferred to the concessionaire. The concessionaire

has the responsibility to provide all the necessary

investments, including civil works, to meet growing

demand. Confins was awarded to the Aerobrasil

consortium, composed by CCR/SA, a large Brazili-

an engineering and construction company, and

Flughafen Zurich AG. The winning bid was

US$750 million, and US$1.2 billion will be invested

over the concession term.

Contact persons for all IFC air transport advisory

services projects are Ramatou Magagi at

rmagagi@ifc.org and Alexandre Leigh at

aleigh@ifc.org

GALEÃO AND CONFINS AIRPORTS

Guarantees provided by the Multilateral

Investment Guarantee Agency (MIGA)

cover projects in a broad range of sectors,

with projects in infrastructure accounting

for an important share of the agency’s

portfolio. Infrastructure development is an

important priority for MIGA given the esti-

mated need for US$230 billion a year

solely for new investment (maintenance

needs are of a similar magnitude) to deal

with rapidly growing urban centers and

underserved rural populations in develop-

ing countries. Two examples of projects

undertaken by MIGA include Jorge

Chavez International Airport in Peru and

New Airport in Ecuador.

EQUADOR: New Airport at Quito

MIGA issued three guarantees of US$32.8

million, US$16.4 million, and US$16.4 mil-

lion to the Aecon Group INC. of Canada,

the HAS Development Corporation of the

United States, and ADC Management Ltd.

of the United Kingdom for their respective

shareholder loans to Corporacion Quiport

of Ecuador. In addition, MIGA also issued

guarantees of US$450,000, US$225,000,

and US$225,000 for the investors' respec-

tive equity investments in the project en-

terprise.

The Aecon Group and HAS Development

Corporation have coverage for a period of

14 years for their shareholder loans, while

the remaining four guarantees are for a

period of 15 years. Each guarantee pro-

vides coverage against the risks of Trans-

fer Restriction, War and Civil Disturbance,

and Breach of Contract.

The project involves the construction of a

new airport near Puembo, 24 km outside

the capital city of Quito. The project will be

a key economic driver for sustainable eco-

nomic development of the metropolitan

region of Quito. The airport replaces the

existing airport in the city of Quito, which

suffers from safety deficiencies as well as

capacity constraints.

PERU: Jorge Chavez International

Airport (JCIA)

MIGA provided Fraport AG of Germany

with a guarantee of US$11.5 million to

cover its US$12.8 million counter guaran-

tee for a performance bond posted for the

privatization of Lima's airport, Jorge

Chavez International Airport (JCIA). The

coverage is against the risk of expropria-

tion (the wrongful call of the performance

bond), and extends for eight years.

The Peruvian government views airport

privatization as central to its efforts to ex-

pand employment opportunities, and cre-

ate a modern transportation facility to

serve as the country's gateway to the

world. It will also enhance and expand

tourism, another key government goal.

During the first four years of the conces-

sion, the consortium is expected to invest

over US$130 million in new infrastructure,

including upgrades to the current terminal,

construction of a new passenger con-

course, expansion and addition of new air-

craft aprons and taxiways, and creation of

a hotel and retail center within the existing

airport perimeter.

Contact person for all MIGA guarantees is

Carlo Bongianni at

cbongianni@worldbank.org

KNOWLEDGE SHARING:

THE GLOBAL MARKET-BASED

MEASURES FOR AVIATION

On 07 December 2016, the International

Aviation Day, the Air Transport Community

of Practice (ATCOP) hosted a Brown Bag

Lunch (BBL) in cooperation with the Cli-

mate Change Cross Cutting Solutions Area

(CCSA) on the topic of the Global Market-

Based Measure for Aviation (GMBM).

A historic agreement was reached to miti-

gate international aviation emissions at the

39th Assembly of the International Civil Avi-

ation Organization (ICAO) on October 6,

2016. The GMBM known as Carbon Offset-

ting and Reduction Scheme for Internation-

al Aviation (CORSIA) is designed to com-

plement the basket of mitigation measures

the air transport community is already pur-

suing to reduce CO2 emissions from inter-

national aviation activities. Under the

agreement, countries (and/or airlines) will

have to purchase carbon offsets to com-

pensate for any increase in carbon emis-

sions from international flights starting in

2020. Aviation currently represents approx-

imately 2% of worldwide emissions - as

much as the 7th largest emitter - a number

anticipated to rise exponentially by 2050,

and today the sector is not regulated under

international climate agreements.

The Transport GP in collaboration with the

Climate Change CCSA has already started

discussions with the ICAO Secretariat to

build a partnership that would provide tech-

nical and financial assistance to World

Bank Group (WBG) client countries to build

the necessary carbon market infrastructure

to comply with the CORSIA. The BBL was

well-participated and generated a fruitful

discussion about the agreement, its poten-

tial implications and opportunities for WBG

engagement.

Jose Luis Irigoyen, Director of the

Transport & ICT Global Practice (T&I)

opened the BBL with a few words to high-

light the prioritization of the Transport sec-

tor in the context of Climate Change and a

renewed focus on policies. Tanguy de

Bienassis and Eduardo Ferreira of the Cli-

mate CCSA then provided an overview of

the historic agreement and presented the

World Bank’s proposed Capacity Building

Initiative to help WBG’s client countries to

get ready to comply with CORSIA and to

raise their climate ambitions and invest in

sustainable aviation.

The two guest speakers, Nancy Young of

Airlines for America and Carl Burleson of

the US Federal Aviation Administration,

shared their perspectives on the topic.

From the US regulator’s standpoint, Bur-

leson highlighted that underpinning the

agreement, both industry and regulators

share a mutual interest in having one ap-

proach to carbon offsetting and a system

that is simple to understand and can be

factored into business plans. He also ex-

pressed his support and the critical need

for providing capacity building to develop-

ing states and insisted that the World Bank

had a key role to play. Young emphasized

that CORSIA is a “gap filler” in the basket

of measures to keep aviation emissions at

the 2020 level. At the 2050 horizon, the

ambition is to reduce emissions through the

development of new aircraft technology,

sustainable alternative fuels and improve-

ment in infrastructure and operations.

Overall there is broad positive reception on

the ICAO outcome from the industry.

As part of the Transport and ICT Knowledge and

Learning Form 2017, an Air Transport Workshop was

held on 27 February 2017. The objective was to up-

date transport staff on three themes of the air

transport sector:

1. Air Transport Financing by the Bank: Charles E.

Schlumberger, outlined the current air transport port-

folio of the WBG, and talked about the kind of pro-

jects (investment, T/A, capacity building).

Pierre A. Pozzo di Borgo, outlined his experience in

private air transport sector projects (airports and air-

lines) in client countries, with a special focus on Afri-

ca. The challenge in Africa is the relatively small mar-

ket for air services, and the high associated cost of

the sector. In addition, several countries want to oper-

ate their state-owned carriers, and keep protecting

them against competition. Another issue is the fact

that several states are planning new airports with the

objective to become a hub, while there was no case

to justify this. There are therefore, even though the

need for better air services in Africa exists, not many

private sector air transport projects in Africa that

could bear fruits.

Lincoln Flor presented financing of airport Private-

Public Partnerships in Latin America. He explained

that several airport PPP projects were done in the

region in the past years, but the main partners are

regional MFIs. While the WBG had only participated

in eight small PPP deals in LAC between 1990 and

2015, there was still potential for IDRB or IDA to fill

some financing gap in pending airport PPP.

2. Climate Change and Aviation: Shomik Mehndiratta,

moderated the session on Climate Change and Avia-

tion, which was co-organized with the Carbon Fi-

nance Group of the WB.

Dr. Lourdes Maurice, Executive Director of the Office

of Environment & Energy, US FAA, outlined the

agreement reached at ICAO on the Carbon offsetting

and Reduction Scheme for International Aviation

(CORSIA). She explained that ICAO is working to de-

velop Standards And Recommended Practices

(SARPs) that the U.S. and other Member States will

need to implement into national law. The challenge is

timing, and the need for many emerging countries to

develop capacities to implement CORSIA. Here the

WBG can play an important role by supporting its cli-

ent countries on CORSIA.

Eduardo Ferreira acknowledged the need to support

client countries in capacity building. The objective

was to leverage existing initiatives from the World

Bank to provide capacity building and channel finan-

cial assistance to developing countries for a success-

ful and ambitious implementation of the CORSIA.

3. Unmanned Aerial Systems (UAS): Edward Ander-

son presented activities with UAS the Bank was con-

ducting in various projects. For the time being, these

were concentrated on mapping and visualization of

disaster areas, primarily in Africa. The Bank was also

providing technical assistance to client countries for

the application of UAS. Another application that the

Bank was considering is the project of the Rwanda

Drone Hubs, which allow the transportation of small

cargo, such as blood samples or medicine. There are

many more applications for potential Bank use, in-

cluding taking drones for preparation or supervision

of projects. Finally, GSURR has prepared the first

draft position paper for Unmanned Aerial Vehicles

(UAV) Technology. ATCOP and GSURR have

agreed to co-operate on the development of applica-

tions, technical support, and guidelines on UAS.

Christina Engh, UASolutions Group, provided an in-

teresting analysis on who the application of UAS can

support the WBG objectives to end extreme poverty,

promote shared prosperity, and to support the global

sustainable development agenda. These include (i)

the transportation of goods, (ii) improve the global

food supply chain, (iii) create opportunities for eco-

nomic growth and equity, and (iv) address the refu-

gee crisis by e.g. saving migrants at sea .

Mark Gibson, Senior Advisor UAS, FAA, outlined the

US efforts to regulate UAS. UAS needed to be regu-

lated for various reasons, such as safety and securi-

ty. Small recreational drones, for example, must now

be registered with the FAA. The regulation of com-

mercial UAS had initially well progress, but one of the

current challenges are security considerations. In

t6hat context it was important that countries coordi-

nate the regulatory efforts with international organiza-

tions . The US FAA can provide certain support, as its

regulation has progressed fairly well.

KNOWLEDGE SHARING: AIR TRANSPORT WORKSHOP AND LEARNING EVENT

The Bank has maintained an evaluation

tool for assessing risks associated with air

travel for mission travel since 2008. The

air carrier advisory system developed by

the Bank’s General Services Department

and Air Transport team was launched in

FY2011. Airline ratings/risk are based on

the following criteria: Risk Criteria:

1. Serious accident in the last 3 years

(defined as any incident that results in in-

jury or death of a passenger, or substan-

tial damage to the aircraft)

2. Registered in a country with poor over-

sight (based on ICAO safety audit)

3. A flag of convenience airline (an airline

that is registered and maintained in a

country other than where it operates)

4. Use of aircraft over 20 years old

Overall there were 193,686 flights booked

by American Express for Bank staff in Fis-

cal Year 2017 (from HQ), representing a

decrease in traveling by 0.4% compared

to Fiscal Year 2016. The majority of flights

booked were with airlines considered to

be “Good to fly”. Note: This data does not

capture trips arranged in the regions.

Travelers should be aware that surface

transportation may not always be possible

or may represent more risks than air travel

in some client countries. The advisory

team continues to provide on-demand as-

sessments and safety advice for opera-

tional staff.

Contact person is Shruti Vijayakumar at

svijayakumar@worldbank.org and Ndeye

Anna Ba at nba@worldbank.org

1

All airlines that are industry certi-fied by having passed an IATA IOSA audit, unless subsequent safety experience indicates a safe-ty problem.

Good to fly. The Bank has no objection to using these airlines.

2

All airlines that though they are not industry certified are either li-censed by a country with an FAA IASA rating of Category 1, or are known to the Bank as safe carri-ers.

Good to fly. The Bank has no objection to using these airlines.

3

All airlines that are not in (1) or (2) above, or are on any blacklists, or are deemed to be unsafe for other reasons.

3a. Airlines that do not qualify for Category 1 or 2, but have been reviewed by the Bank’s air transport specialist and considered good to fly.

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 alternatives before selecting 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-tial missions and only if no viable and safer transport alternatives are available.

WORLD BANK STAFF AIR TRAVEL

ACI-WBG ANNUAL AVIATION

SYMPOSIUM

The WBG continues to strengthen its part-

nership with Airports Council International

(ACI). In April 2017, the two organizations

joined forces to host the third ACI-WBG

Aviation Symposium, held annually in Lon-

don prior to ACI’s Annual Finance and Eco-

nomics Conference, of which WBG is a

supporting partner going forward.

The WBG delegation was led by Dr.

Charles E. Schlumberger, Lead Air

Transport Specialist at The World Bank,

supported by Aldo Giovannitti, Aviation

Specialist at The World Bank, and included

World Bank and IFC staff participation.

WBG staff highlighted the Bank’s role in

aviation finance and development, focusing

on the priority of improving air transport in

small island nations, landlocked developing

countries and many parts of Africa

(especially West Africa), including needed

policy and regulatory reforms and facilita-

tion of private investments.

The objective of this annual event with the

air transport industry is to take stock of the

main issues, challenges and opportunities

the industry is facing. With participants ’ af-

filiations ranging from airport operators, fi-

nancial institutions, regulators, rating agen-

cies and advisory firms, the ACI-World

Bank Aviation Symposium and the ACI Air-

port Economics & Finance Conference &

Exhibition has been again a unique occa-

sion where the industry committed to sit to-

gether to exchange knowledge, network,

share analyses and set the course for the

upcoming years.

Following the event, a White Paper was

prepared by Aldo Giovannitti, Aviation Spe-

cialist at The World Bank. The paper sum-

marizes the discussions that took place

during the 3rd ACI-World Bank Aviation

Symposium and the 9th ACI Airport Eco-

nomics & Finance Conference.

COOPERATION WITH INTERNATIONAL

CIVIL AVIATION ORGANIZATION (ICAO)

ICAO is the specialized air transport agency of

the United Nations. The WBG and ICAO have a

long history of cooperation in the development of

the air transport sector in emerging and develop-

ing countries. The field of cooperation includes

air transport policy, safety and security, facilita-

tion, airport and air traffic control infrastructure,

and the environment.

From 25 - 30 September 2016, CES led a mission

to represent the WBG at the 39th Assembly of

ICAO “A39”, and to attend the ICAO World Avi-

ation Forum (IWAF) which preceded the A39.

The main objective of the IWAF was to discuss

the Aviation Partnerships for Sustainable Devel-

opment. The importance of safe, secure, and

efficient air transport for sustainable develop-

ment was underscored. CES participated as

speaker and elaborated on the funding mecha-

nism for aviation development of the WBG.

During the A39, the principle of Global Market-

Based Measure (GMBM) was adopted The dur-

ing the preceding discussions, the WB presented

working paper WP/248 which urged States to

adopt the GMBM as described in WP/52. The

Carbon Offsetting and Reduction Scheme for

International Aviation (CORSIA) was subse-

quently adopted on 6 October 2016.

During the seventh session of the Executive

Committee, the World Bank’s working paper

WP/240 was presented. The paper outlines the

WBG’s support in the air transport sector and in

the achievement of the SDGs. The paper recog-

nizes the importance of elevating the priority of

the aviation sector in the national development

plans of Member States, and urges Member

States to consider the inclusion of the air

transport sector in their development strategies

through their respective Country Partnership

Frameworks (CPFs) with the WBG.

Several World Bank staff members are licensed

and active pilots, certified by the US FAA and/or

European Aviation Authorities EASA. To remain

current on their pilot qualifications, they regularly

fly and undergo required refresher training. The

most rewarding way of keeping current is to en-

gage in community service by providing free air

transportation to people of all ages whose medical

needs – evaluation, diagnosis, and treatment –

can only be met by health care facilities far from

their homes.

In the US, the not-for-profit organization Angel

Flight provides timely travel to patients who cannot

withstand traveling long distances by automobile,

rail, or bus, or who do not have the financial

means to use suitable alternative transportation.

Oftentimes, transport in smaller, private aircraft

can better accommodate patients whose condi-

tions could worsen if exposed to the re-circulated

air on commercial flights, or who need efficient

point-to-point transport.

One example of an Angel Flight mission, which

was carried out by Charles E. Schlumberger, Lead

Air Transport Specialist and Daniel M. Saslavsky,

Transport Economist at the World Bank, was a

flight to transport one year old Norien, who is suf-

fering from Arthrogryposis Mulitplex Congenita,

and his parents from her home in Lynchburg, Vir-

ginia, to Philadelphia, Pennsylvania, for treatment

at the Shriner's Hospital for Children.

The WBG’s contribution, in accordance to Staff

Manual 9.10, consisted of one day of administra-

tive leave to carry out this rewarding community

service.

Contact person is Charles E. Schlumberger at

cschlumberger@worldbank.org

For more information visit:

www.angelflighteast.org

Air Transportation will continue its strong

growth over the coming years. According to

IATA, 7.8 billion passengers will travel in

2036, a near doubling of the 4 billion air

travelers expected that flew in 2017. IATA’s

prediction is based on a 3.6% average

Compound Annual Growth Rate (CAGR)

over the next two decades. The biggest

driver of demand will be the Asia-Pacific

region, where more than half the new pas-

sengers are sourced. Its growth rate of

4.6% will generate 2.1 billion annual pas-

sengers by 2036, creating an Asia-Pacific

market size of 3.5 billion.

However, the strongest growth rates are

expected in Africa, which will grow by 5.9%.

By 2036, Africa will need to accommodate

an additional 274 million passengers a year

for a total market of 400 million passengers.

This is followed by the Middle East, which

will grow by 5.0%, resulting in an additional

322 million passengers a year, reaching a

total market size of 517 million passengers.

Latin American markets, finally, will grow by

4.2%, serving 757 million passengers by

2036, an increase of 421 million passengers

annually compared to today.

The strong growth of air transportation in

emerging and developing will serve as cata-

lyst for economic development. However,

expansion of these markets will depend on

several factors. First, many lesser devel-

oped states must adjust their policies in

terms of access to markets (liberalization),

taxation of the sector, and facilitation of pri-

vate and/or foreign investment. Second,

large improvements and expansion of air-

port and air traffic management infrastruc-

ture will be necessary. In many poorer

countries, this often requires non-

governmental sources of financing, as pub-

lic funding is limited. Third, the expansion of

air services must be safe, secure, and sus-

tainable. Complying with international stand-

ards in terms of safety and security are a

prerequisite for sustainable growth. In addi-

tion, environmental sustainability has be-

come a global initiative, in which emerging

countries will need to participate.

Given the above-mentioned growth and

economic opportunities for emerging coun-

tries, but also given the stated challenges,

the WBG will continue to support the devel-

opment of air transportation in selected cli-

ent countries. However, the development

approach will primarily aim at policy and the

mobilization of private funding for the ex-

pansion of necessary infrastructure. By ap-

plying the principles of the “Cascade Ap-

proach”, as discussed in the introduction of

this report, the WBG will help clients mobi-

lizing the private sector, for example by es-

tablishing PPPs for major infrastructure pro-

jects. This may continue decreasing the

WBG air transport portfolio decline on in

terms of IBRD/IDA financing, while IFC

could increase its activities on advisory ser-

vices and investment financing of private

entities. In poorer countries, where PPPs

are difficult or too early, the WBG will con-

tinue to support investments for selective air

transport infrastructure. The main regional

focus continues to be on African countries,

and on several Pacific Island States, which

are modernizing their aviation infrastructure.

To address the environmental challenges of

aviation, given it is the strongest growing

emitter of greenhouse gases, ICAO adopted

two resolutions at its 39th Assembly. The

first is an endorsement of a basket of

measures, including technology, operations,

and alternative fuels, the second concerns

market-based measures, which include the

Carbon Offsetting and Reduction Scheme

for International Aviation. For implementa-

tion of these measures, states need to pre-

pare action plans. The WBG is supporting

client countries in capacity building for the

implementation of these plans. Furthermore,

the WBG provides carbon off-set solutions

by its Carbon Finance unit.

The focus of research continues to be on air

transport development in Africa. An assess-

ment of infrastructure development needs,

as well as the question on how to best ad-

dress certain policy issues, such as high

charges or taxes on the sector or restricting

access to protect a struggling national carri-

er, will be researched and discussed in co-

operation with the African Development

Bank and ECOWAS.

Finally, maintaining or developing produc-

tive partnerships with the air transport in-

dustry, as well as with bilateral and interna-

tional partners, as it is essential for achiev-

ing the development objectives. The WBG

has partnerships in air transportation with

ICAO, ACI, IATA, as well as with multina-

tional and regional development banks.

Photography Credits:

• Page 33, JeppView Electronic Chart Viewer, in cooperation with Jeppesen a Boeing Company.

• Page 47, Kenya Airway’s Dreamliner, Kenya Airways official website.

• All other images belong to WBG or contributors to this report.