The growth of air travel in Poland is one of the clearest measures of the country's economic growth and expansion.

Where the demand is, so the investment follows. And pretty much every major city's airport in the country is undergoing a transformation as planners struggle to keep pace with the growing demand for air travel.

Traffic volumes at Warsaw's Frederic Chopin Airport continue to dwarf all other airports in the country, but Warsaw is not where the biggest growth is found.

And, in fact, its dominance is actually declining as other airports expand at truly exponential rates.

Last year, just over 11.5 million passengers passed through Poland's airports, a rise of almost 31% over the previous year.

Warsaw handled over 7 million of those passengers, representing 61% of all travelers, a percentage that was down from 68% the previous year.

In absolute terms, Warsaw handled almost an additional 1 million passengers last year.

And in clear second place and well ahead of any other Polish airports was Krak?which handled a further 761,000 passengers.

Along with Katowice airport, and Lodz, that made Krak? currently fairly modest John Paul II airport, one of Poland's fastest growing in terms of percentage and actual numbers - expanding its operations by 88.5% in a single year.

(Lodz's passengers tripled in the same time frame, but started from a mere 6,000 passengers in 2004).

Changing pattern of growth as provincial cities develop fast

As business investors increasingly look for opportunities beyond just Warsaw, a number of key Polish cities will develop rapidly by attracting FDI in larger amounts. So their airports will develop, therefore open up even greater access to their markets and create more jobs and more wealth - a virtuous circle.

Poland's Civil Aviation Office says that this changing pattern - of growth in provincial traffic partially at the expense of growth in Warsaw - is already underway, and the data relating to airport traffic confirms that it is.

The CAO forecasts that the pattern will continue to accelerate and by 2020, Poland's regional airports will handle the majority of all air passengers - hence the current huge expansion push in preparation to meet this demand.

Successful airports generate wealth - drive property markets

What is most significant, though, for property investors who understand just how much wealth is generated by successfully growing airports is that during 2006 Krak? airport will be making the biggest investment in infrastructure and facilities outside of Warsaw.

These two airports together will account for a whopping 70% of all capital expenditure projects at Poland's airports this year.

Warsaw airport has capex projects worth PLN190 million (£33 million) underway.

While Krak?a airport tiny by comparison, has projects worth PLN120 million lined up for this year. That's £21.3 million for Krak?out of a grand total - according to research by Piotr Gaber, an analyst with PMR Publications - of PLN 440 or £78.5 million.

EU membership was the jump start to air travel

Poland's EU accession was the jump start to the growth of air passenger travel in the country. One key reason is the huge exodus of Polish workers abroad, who want easy and cheap access home again - hence the growth of budget airline services.

Another reason is the massive inflow of foreign business people and tourists into Poland's key cities.

While average aviation growth in Poland was 31% between 2004 and 2005, the average in Europe was a mere 6.3%, which illustrates just how rapidly Poland's market is growing.

The Polish Civil Aviation Office suggests that in the next 15 years the aviation passenger market will grow to carry up to 39 million people through Polish airports annually - an increase of 239%.

And the International Air Transport Association (IATA) predicts that between 2005 and 2009, passenger traffic in Poland will grow at an average of 11.2% per year - that's 18 million passengers in just three years time.

This would give Poland the highest aviation growth rate in the world of countries carrying more than 2 million people a year. This beats even the growth forecast in China.

Krak?irports £21.3 million plans for this year are underway and include:

• Modernisation of the existing departure section of the passenger
• terminal
• Building a new passenger terminal
• The implementation of an aircraft positioning system
• Building a new air traffic control tower
• An extension of the take-off strip
• An extension of the aircraft ramp
• Building a new administration centre and hangars with
• workshops
• Completing a train connection between the airport and
• Central Station in Krak?li>

Krak?irport's development plan is based on it being able to cater for double its current passenger throughput in three years.

That means growth from just over 1.5 million passengers handled last year to an anticipated three million passengers by 2009.

So far so good, but what does this directly mean for the property investor?

The bottom line is that airports create jobs, not only on site, as they expand to handle more passengers, and more cargo, but within their sphere of influence, or catchment area.

Krak? large catchment area to drive growth

And in this regard, Krak?s especially well-positioned with almost 8 million people living within 100 kms of it - 100kms equating to approximately a 90 minute drive, which is the standard measure of an international airport's passenger catchment area.
By applying this criteria to other Polish airports we can see how well-positioned Krak?s.

Krak? 7.9 million
Warsaw - 6.4 million
Poznań - 4.2 million
Gdańsk - 3.0 million
Rzesz? 2.6 million
Szczecin - 1.4 million

A study carried out by US consultants EER, titled 'General Plan and Investment Plan of Civil Aviation' forecast that eight airports would dominate in Poland:

1) International main airports in Warsaw, Krak?nd Gdańsk
2) Regional airports in Szczecin, Poznań, Wrocław, Katowice and Rzesz?p>

Certainly this pattern appears to be already developing.

The immediate effect on jobs created in the area is key to the growth of the property market.

And the Airports Council International has a tried and tested formula for calculating airports' 'jobs effect', which it spelt out in The Social and Economic Impact of Airports in Europe.

'European airports are now widely recognised as having a considerable economic and social impact on their surrounding regions.

'These impacts go far beyond the direct effect of an airport's operation on its neighbours to the wider benefits that air service accessibility brings to regional business interests and to consumers.

'Airports provide essential infrastructure to support regional social and economic growth as well as being commercial entities in their own right...

'On the basis of the evidence we estimate that, on average, for every 1,000 on-site jobs supported by European airports there are around 2,100 indirect/induced jobs supported nationally, 1,100 indirect/induced jobs supported regionally, or 500 indirect/induced jobs supported sub-regionally.

'Given that there are 950 on-site jobs created per million passengers, once we factor in the direct, indirect and induced jobs, we conclude that for every million passengers (workload units), European airports support around:

2,950 jobs nationally
2,000 jobs regionally
1,425 jobs sub-regionally

So, if we take the short-term forecast of 3 million passengers within three years, we have for Krak?the creation of:

8,850 jobs nationally
6,000 jobs regionally
4,275 jobs sub-regionally (locally)

The study goes on:

'Airports can make a substantial contribution to the overall economy of the areas that they serve, when the combined effect of their direct, indirect and induced impact is taken into account. Estimates vary in the range 1.4-2.5% of GDP, excluding tourism impacts.'

Of course, in Krak? case, tourism is a major factor and the growth of the airport is likely to provide a huge boost to tourist trade in the city, which remains Poland's prime tourist destination, with 3 million visitor forecast for 2006.

We believe then that the airport factor is a major reason for Krak? exceptionally good property investment potential, and its influence over wealth creation in the city is likely to grow increasingly important over the next few years.