Results of a country report on the economic benefits of aviation published in Iceland on 23 February 2012, show that the air connectivity of Iceland scores the highest among 52 countries measured on the same scale. In addition number of jobs created by the industry and the impact of air transport on the economy of Iceland seems unique in its scope, relative to GDP.
The Oxford Economics report focuses on the ‘economic footprint’ of the industry, measured by its contribution to GDP, jobs and tax revenues generated by the sector and its supply chain. But also the benefits created for the customer, the passenger or shipper, using the air transport service – and the assets generated by connections between cities and markets. On the whole, the results show that the importance of the aviation sector to the Icelandic economy is unmatched anywhere in the world. Icelandair Group airlines including Icelandair, Icelandair Cargo and Air Iceland, represent 78% of the air services of Iceland, and Icelandair’s hub and spoke network to North American and European cities is the key to the county’s thriving aviation and tourism industries. The wages, profits and tax revenues created by these airlines flows through the Icelandic economy, generating multiplier effects on Icelandic national income or GDP.
Brian Pearce, IATA Chief Economist, said "Iceland's economic recovery since the banking crisis has been encouraging, and the Benefits of Aviation study shows that air transport is integral to economic growth and employment in Iceland. With a percentage GDP contribution to the economy considerably beyond that of any other nation, it is clear that Iceland will benefit from policies that place aviation at the very centre of the nation's economy. Each 10% improvement in connectivity relative to GDP increases the long term productive capacity of the Icelandic economy by ISK983 million, so it’s clear that a healthy aviation sector will be crucial to Iceland's continuing recovery."
Aviation has a significant footprint in Iceland’s economy, supporting 6.6% of Icelandic GDP and 9,200 jobs or 5.5% of the Icelandic workforce. Including the sector’s contribution to the tourism industry, these figures rise to 12.9% of Icelandic GDP and 20,600 jobs, or 12.3% of the workforce.
In comparison to this 12.9% figure in Iceland, Norway´s aviation industry represents 2.6% of GDP, in Sweden 3.9% and in Denmark 2.3%. Also significant is the fact that these are high productivity jobs. The annual value added (or GVA) by each employee in air transport services in Iceland is ISK 16.0 million, approximately 1.7 times higher than the Icelandic average of ISK 9.2 million. All together these points demonstrate that aviation provides significant economic benefits to the Icelandic economy and its citizens.