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Wednesday, December 11, 2013

Asia, Middle East to Drive Future Airline Passenger Demand

Woodrow Bellamy III

Airlines based in the Middle East and Asia Pacific will experience the strongest international airline passenger growth through 2017, according to the International Air Transport Association (IATA) Airline Industry Forecast 2013-2017 released Tuesday, Dec. 10. 
 
Airlines based in the Middle East and Asia Pacific markets, such as Air China, are expected to be the main drivers of international air passenger demand through 2017, according to IATA's new forecast. 
 
By 2017, IATA projects the world's airlines will see a combined 31 percent increase in passenger numbers to 3.91 billion, an increase of 930 million passengers over the 2.98 billion carried in 2012. IATA's forecast is a "consensus outlook for system-wide passenger growth," the group said Tuesday. Demand is projected based on compound annual growth rate (CAGR), and IATA expects carriers in the Middle East will see the strongest international passenger growth with a CAGR of 6.3 percent through 2017; followed by Asia-Pacific carriers at a CAGR of 5.7 percent. 
 
"For international traffic, routes between the Middle East and Asia-Pacific will see the strongest growth," IATA said. 
 
Domestic and international routes connected to China will be the single largest driver of growth, with IATA anticipating 227 million additional passengers will fly to or from the country over the next five years. That would account for 24 percent of all new passengers during IATA's 2013-2017 forecast period. The Asia-Pacific region as a whole is projected to add 300 million additional passengers through 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," said Tony Tyler, chief executive at IATA. 
 
The United States will continue to be the largest single market for domestic passengers, although IATA expects American carriers will add 70 million passengers through 2017 at a CAGR of 2.2 percent. If the U.S. achieves that pace the market will carry a total of 677.8 million domestic passengers in 2017. 
 
North America is also projected to record the slowest international passenger demand growth at 3.6 percent through 2017, IATA reports.
 
Tyler said developing regions in Africa and Latin America have similar opportunities to experience growth that is projected to occur in the Asia-Pacific and Middle East, but that they will need some help from government regulators. 
 
"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 Tyler. 

 

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