CEPII, Recherche et Expertise sur l'economie mondiale
Fewer Planes Means Less Trade

Diego Botero Garcia
Ariell Reshef
Camilo Umana Dajud

With the onset of the Covid-19 pandemic, international air traffic collapsed. For some European countries, air transport is the main mode of transport for their exports. Despite its higher cost, air transport is also a widely used mode of transport for products with a high value relative to their weight, such as precious stones, electronic components and pharmaceuticals. The same is true for intermediate products that are at the heart of global value chains. Yet, the more air links countries have with each other, the more they trade: the share of overall trade between two countries that have more than 103 air links between them is 9% higher than that of countries that share no direct air links; and for trade that is transported by air alone this figure rises to 15%. In the case of goods that are not shipped by air, the effect is also substantial (about 8%) because business travel supports trade. If travel restrictions continue, or if the air transport sector is included in international commitments to reduce greenhouse-gas emissions, air transport could remain disrupted and, with it, international trade.

 Data  :   let422_EN.xlsx

 Keywords : International Trade | Covid | Airborne transport of goods | Global Value Chains

 JEL : F14

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La Lettre du CEPII
N° 422   December 2021

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