IATA Projects 31-percent Rise in Passenger Demand by 2017

 - December 10, 2013, 11:53 AM
Routes within and connected to China will prove the single largest driver of passenger growth, according to IATA. (Photo: Airbus)

The world’s airlines expect to see a 31-percent increase in passenger numbers between 2012 and 2017, according to a new forecast for the period issued Tuesday by the International Air Transport Association (IATA). The report shows that by 2017 total passenger numbers will rise to 3.91 billion from the 2.98 billion carried in 2012. Of the new passengers, some 292 million will fly on international routes and 638 million on domestic routes, according to the report.

A consensus look at airline expectations, the report projects a 5.4 percent compound annual growth rate (CAGR) between 2013 and 2017. Global passenger growth expanded by an average of 4.3 percent each year between 2008 and 2012, largely reflecting the negative effect of the 2008 global financial crisis and recession

The report indicates that the emerging economies of the Middle East and Asia-Pacific will see the strongest international passenger growth, experiencing a CAGR of 6.3 percent and 5.7 percent, respectively, followed by Africa and Latin America at 5.3 percent and 4.5 percent.

Routes within or connected to China will prove the single largest driver of growth, according to the report, accounting for 24 percent of new passengers during the forecast period. Of the anticipated 227.4 million additional passengers, 195 million will fly domestically and 32.4 million on international routes, it added.

The airlines surveyed expect the Asia-Pacific region (including China) to add around 300 million additional passengers by the end of the current forecast horizon. Domestic passengers will account for 75 percent of the total, according to the study.

Expected to carry 677.8 million domestic passengers in 2017, U.S. airlines will continue to comprise the largest single market for domestic passengers, although it will add only 70 million passengers over the forecast period (2.2% CAGR), said the report. The U.S. also will reclaim the top spot from Germany for international passengers by the end of the forecast period, it added. The study indicates that Germany will add 27.2 million passengers to the 149.4 million that flew into and out of the country in 2012 (3.4 percent CAGR), while the U.S. adds 28.2 million international passengers, rising from 149.3 million in 2012 to 177.5 million (3.5 percent 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,” said IATA director general and CEO Tony Tyler. “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.”