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The Economic Impacts of Air Transport Policy in New Zealand

Ministry of Economic Development, New Zealand

Governments have a critical role in the provision of air transport services, but frameworks for the evaluation of policy are not well developed. Through this project Steer Davies Gleave researched and examined the theory and evidence for the full range of economic impacts of air transport policy to develop a comprehensive and effective evaluation framework.

Our role

New Zealand is one of the most isolated countries in the world, and air transport is critical to its international connectivity and economic growth.

The New Zealand government interacts with the air transport industry through several areas of policy, including partial ownership of the national carrier, but policy is often made without consideration of the net economic impacts.

As part of  this study, we assessed the feasibility of developing a cost-benefit evaluation methodology to inform decision making across the New Zealand government.

By evaluating a range of methodologies and techniques we were able to develop a method to account for the competitive structure and international characteristics of the industry. We then applied this method to a single case study to illustrate the process and outcomes of the analysis and to show how it could be used to inform decision making in government.

How we did it

Steer Davies Gleave built a strong team of individuals with expertise in economics and air transport, including external partners in academia. We worked closely with the client team to understand the available data and how it could be used within our proposed framework, finally developing a case study example to illustrate the process.

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