The Middle East is likely to report the strongest international passenger growth with CAGR of 6.3 per cent during the five-year period of 2012-2017, says International Air Transport Association in its latest forecast for 2014 and beyond. And the icing on the cake is the fact that the UAE is expected to add 29.2 million passengers, with 6.6 per cent compound annual growth rate over the forecast period, nearly as many as China.
For international traffic, routes between the Middle East and Asia-Pacific will see the strongest growth, says IATA. The industry forecast for 2013-2017 showed that airlines expect to see a 31 per cent increase in passenger numbers between 2012 and 2017. By 2017 total passenger numbers are expected to rise to 3.91 billion – an increase of 930 million passengers over the 2.98 billion carried in 2012.
The IATA Airline Industry Forecast 2013-2017 is a consensus outlook for system-wide passenger growth. Demand is expected to expand by an average of 5.4 per cent CAGR between 2013 and 2017. By comparison, global passenger growth expanded by 4.3 per cent CAGR between 2008 and 2012, largely reflecting the negative impact of the 2008 global financial crisis and recession. Of the new passengers, approximately 292 million will be carried on international routes and 638 million on domestic routes.
The emerging economies of the Middle East and Asia-Pacific will see the strongest international passenger growth with CAGR of 6.3 per cent and 5.7 per cent, followed by Africa and Latin America with CAGR of 5.3 per cent and 4.5 per cent.
Routes within or connected to China will be the single largest driver of growth, accounting for 24 per cent of new passengers during the forecast period. Of the anticipated 227.4 million additional passengers, 195 million will be domestic and 32.4 million will be international.
The Asia-Pacific region (including China) is expected to add around 300 million additional passengers by the end of the current forecast horizon. Of these, around 225 million or 75 per cent are expected to be domestic passengers.
With 677.8 million domestic passengers in 2017, the United States will continue to be the largest single market for domestic passengers, although it will add only 70 million passengers over the forecast period (2.2 per cent CAGR). This reflects the market’s maturity. China is firmly established in second place (487.9 million passengers in 2017, 10.2 per cent CAGR.). The US also will reclaim the top spot from Germany for international passengers by the end of the forecast period. Germany will add 27.2 million passengers to the 149.4 million in 2012 (3.4 per cent CAGR.), while the US will add 28.2 million international passengers, rising from 149.3 million in 2012 to 177.5 million (3.5 per cent CAGR) in 2017.
“The fact that the Asia-Pacific region – led by China – and the Middle East will deliver the strongest growth over the forecast period is not surprising. Governments in both areas recognize the value of the connectivity provided by aviation to drive global trade and development. Similar opportunities exist for developing regions in Africa and Latin America. To reap the benefit, governments in those regions will need to change their view of aviation from a luxury cash cow to a utilitarian powerful draft horse to pull the economy forward,” said Tony Tyler, IATA’s Director-General and CEO.
Globally, aviation supports some 57 million jobs and $2.2 trillion in economic activity.
International Passenger Development
· International passenger numbers are expected to rise by 25% from 1.2 billion in 2012 to 1.5 billion in 2017, bringing 292 million additional passengers (4.6% CAGR).
· Uzbekistan (10.3% CAGR) has displaced Kazakhstan (9.0% CAGR) as the fastest growing market for international passenger traffic. The remaining eight are Russia (7.7% CAGR), Turkey (7.6% CAGR), Oman (7.5% CAGR), China (7.1% CAGR), Vietnam (6.9%CAGR), Saudi Arabia (6.9%), Azerbaijan (6.8% CAGR), and Pakistan (6.7% CAGR). No Latin American or African countries are among the fastest growing markets.
· United Arab Emirates will add 29.2 million passengers (6.6% CAGR) over the forecast period, nearly as many as China. For international traffic, routes between the Middle East and Asia-Pacific will see the strongest growth.
Domestic Passenger Development
· Domestic passenger numbers are expected to rise from 1.82 billion in 2012 to 2.46 billion in 2017, an increase of 639 million reflecting a CAGR of 6.2% over the period.
· Brazil will firmly establish itself as the third-largest domestic market after the US and China, with 122.4 million passengers in 2017, an increase of 32 million passengers from the 90 million 2012 (6.3% CAGR).
· Turkey enters the Top 10 largest markets with 26.3 million passengers and is expected to add 17.2 million more (10.6% CAGR) over the forecast period. It is also the second fastest growing domestic market.
· Of the Top 10 Fastest growing countries by domestic passengers, the bottom five are all in Latin America: Brazil, Peru, Colombia, Mexico and Ecuador.
Regional Outlook over the 2013-2017 forecast period
· Asia-Pacific passenger traffic is forecast to grow at 5.7% CAGR. Traffic within the Asia-Pacific region will represent 31.7% of global passengers in 2017, up from 28.2% in 2012. North America and Europe will continue to see their share decline, from 26%, and 24%, respectively, to 24% and 23%.
· The Middle East will report the strongest international passenger growth with 6.3% CAGR.
· Europe will see international passenger demand growth of 3.9% CAGR.
· North America will record the slowest international passenger demand growth—3.6% CAGR.
· Latin America will see international passenger demand grow 4.5% CAGR.