The International Air Transport Association (Iata) expects 7.2 billion passengers to travel in 2035, a near doubling of the 3.8 billion air travelers in 2016. The prediction is based on a 3.7 per cent annual Compound Average Growth Rate (CAGR) noted in the release of the latest update to the association’s 20-Year Air Passenger Forecast.
'People want to fly. Demand for air travel over the next two decades is set to double. Enabling people and nations to trade, explore, and share the benefits of innovation and economic prosperity makes our world a better place,' said Alexandre de Juniac, Iata’s director general and CEO.
EASTWARD SHIFT
The forecast for passenger growth confirms that the biggest driver of demand will be the Asia-Pacific region. It is expected to be the source of more than half the new passengers over the next 20 years. China will displace the US as the world’s largest aviation market (defined by traffic to, from and within the country) around 2029. India will displace the UK for third place in 2026, while Indonesia enters the top ten at the expense of Italy. Growth will also increasingly be driven within developing markets. Over the past decade the developing world’s share of total passenger traffic has risen from 24 per cent to nearly 40 per cent, and this trend is set to continue.
RISKS AND OPPORTUNITIES
The 20-year forecast puts forward three scenarios. The central scenario foresees a doubling of passengers with a 3.7 per cent annual CAGR. If trade liberalisation gathers pace, demand could triple the 2015 level. Conversely, if the current trend towards trade protectionism gathers strength, growth could cool to 2.5 per cent annual CAGR, which would see passenger numbers reach 5.8 billion by 2035.
'Economic growth is the only durable solution for the world’s current economic woes. Yet we see governments raising barriers to trade rather than making it easier. If this continues in the long-term, it will mean slower growth and the world will be poorer for it. For aviation, the protectionist scenario could see growth slowing to as low as 2.5 per cent annually. Not only will that mean fewer new aviation jobs, it will mean that instead of 7.2 billion travellers in 2035, we will have 5.8 billion. The economic impact of that will be broad and hard-felt,' says de Juniac.
Whatever scenario is eventually realised, growth will put pressure on infrastructure that is already struggling to cope with demand. 'Runways, terminals, security and baggage systems, air traffic control, and a whole raft of other elements need to be expanded to be ready for the growing number of flyers. It cannot be done by the industry alone. Planning for change requires governments, communities and the industry working together in partnership,' said de Juniac.
FAST-GROWING MARKETS
The five fastest-growing markets in terms of additional passengers per year over the forecast period will be
• China (817 million new passengers for a total of 1.3 billion)
• US (484 million new passengers for a total of 1.1 billion)
• India (322 million new passengers for a total of 442 million)
• Indonesia (135 million new passengers for a total of 242 million)
• Vietnam (112 million new passengers for a total of 150 million).
The top ten fastest-growing markets in percentage terms will be in Africa: Sierra Leone, Guinea, Central African Republic, Benin, Mali, Rwanda, Togo, Uganda, Zambia and Madagascar. Each of these markets is expected to grow by more than 8% each year on average over the next 20 years, doubling in size each decade.
REGIONAL GROWTH
• Routes to, from and within Asia-Pacific will see an extra 1.8 billion annual passengers by 2035, for an overall market size of 3.1 billion. Its annual average growth rate of 4.7 per cent will be the second-highest, behind the Middle East.
• The Middle East will grow strongly (5.0 per cent) and will see an extra 258 million passengers a year on routes to, from and within the region by 2035. The UAE, Qatar and Saudi Arabia will all enjoy strong growth of 6.3 per cent, 4.7 per cent, and 4.1 per cent respectively. The total market size will be 414 million passengers.