Airline passenger numbers could double to 8.2 billion in 2037, bolstered by strong demand in the Asia-Pacific region, but growth could be curtailed if protectionist measures are implemented by governments.
That’s according to the latest 20-Year Air Passenger Forecast from the International Air Transport Association (IATA).
Over the next two decades, the forecast expects a 3.5 percent compound annual growth rate (CAGR), leading to a doubling in passenger numbers from today’s levels.
However, it warned that that growth prospects for air transport, and the economic benefits driven by aviation, could be stifled.
“Aviation is growing, and that is generating huge benefits for the world. A doubling of air passengers in the next 20 years could support 100 million jobs globally,” said Alexandre de Juniac, IATA’s director general and CEO.
“There are two important things that stand out about this year’s forecast. Firstly, we are seeing a geographical reshuffling of world air traffic to the East.
“And secondly, we foresee a significant negative impact on the growth and benefits of aviation if tough and restrictive protectionist measures are implemented.”
IATA has forecasted that the Asia-Pacific region will drive the biggest growth, with more than half the total number of new passengers over the next 20 years coming from these markets.
Growth in this market is being driven by a combination of continued robust economic growth, improvements in household incomes and favourable population and demographic profiles.
China is expected to displace the US as the world’s largest aviation market (defined as traffic to, from and within the country) in the mid-2020s. India will take third place after the US, surpassing the UK around 2024.
Thailand is expected to enter the top ten markets in 2030, replacing Italy which drops out of the ranking.
IATA said that the 3.5 percent CAGR to 2037 assumes an unchanged policy framework over that period.
However, should protectionism continue to expand in a “reverse globalisation” scenario, aviation would continue to grow, but at a slower pace and deliver fewer economic and social benefits.
“Aviation is sensitive to policies that either support or undermine growth,” de Juniac added.
“And these seem to be pointing in the wrong direction. Dampening demand for air connectivity risks high quality jobs, and economic activity dependent on global mobility.
“This forecast is a cautionary warning to governments. First, the industry will grow but they must clear the infrastructure bottlenecks to bring that growth to their home markets.
“And secondly, governments must understand that globalisation has made our world more socially and economically prosperous. Inhibiting globalisation with protectionism will see opportunities lost.”
Fastest growing aviation markets in terms of annual additional O&D passengers from 2017 to 2037 (constant policies scenario):
- China: 1 billion new passengers for a total of 1.6 billion
- US: 481 million new passengers for a total of 1.3 billion
- India: 414 million new passengers for a total of 572 million
- Indonesia: 282 million new passengers for a total of 411 million
- Thailand: 116 million new passengers for a total of 214 million
- Routes to, from and within Asia-Pacific will see an extra 2.35 billion annual passengers by 2037, for a total market size of 3.9 billion passengers. Its CAGR of 4.8 percent is the highest, followed by Africa and the Middle East.
- The North American region will grow by a CAGR of 2.4 percent annually and in 2037 will carry a total of 1.4 billion passengers, an additional 527 million passengers.
- Europe will grow at a CAGR of 2.0 percent, and will see an additional 611 million passengers. The total market will be 1.9 billion passengers.
- Latin American markets will grow by a CAGR of 3.6 percent, serving a total of 731 million passengers, an additional 371 million passengers annually compared to today.
- The Middle East will grow strongly with a CAGR of 4.4 percent and will see an extra 290 million passengers on routes to, from and within the region by 2037. The total market size will be 501 million passengers.
- Africa will grow by a CAGR of 4.6 percent. By 2037 it will see an extra 199 million passengers for a total market of 334 million passengers.