state of the industry...economics increasing accessibility of air travel 5 source: iata economics...
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EconomicsEconomics
State of the Industry:Charts from the monthly reports
& related sources
IATA Economics
September 2019Economics
Economics
More cities connected at lower real cost
Source: IATA Economics using data from ICAO, IATA Statistics, SRS Analyzer and our own forecasts2
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2.1
2.3
2.5
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
22,000
24,000
1995 1999 2003 2007 2011 2015 2019
US
$/R
TK
in 2
01
4U
S$
Nu
mb
er
of
un
iqu
e c
ity
-pa
irs
Unique city-pairs and real transport costs
Unique city-pairs
Real transport costs
Economics
Flows of trade and tourism boosted
Source: IATA Economcis using data from UNWTO, Oxford Economics, IATA Economics forecast3
Economics
More than 2.9 million airline jobs in 2019
Source: IATA Economics using data from ICAO, ATAG, IATA forecasts4
Economics
Increasing accessibility of air travel
Source: IATA Economics using data from IATA Statistics, UN, IATA forecasts5
15
20
25
30
35
40
45
50
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Av
era
ge
nu
mb
er
of
mo
nth
s b
efo
re n
ex
t tr
ip
Mill
ion
Passenger numbers and months before next trip for world population
Airline passengers
Average number of months before average member of world population takes a flight
Economics
But airline industry profit margins under pressure
Source: The Airline Analyst, IATA Economics6
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2011 2012 2013 2014 2015 2016 2017 2018 2019
% o
f o
pe
rati
ng
re
ve
nu
es
Airline industry operating margin
Seasonally adjusted
Actual
Economics
As unit costs rise and cost recovery falters
Source: IATA Economics using data from Airline Analyst7
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
2011 2012 2013 2014 2015 2016 2017 2018 2019
% c
ha
ng
e y
ea
r-o
n-y
ea
r
Unit cost and unit revenue growth
Unit cost growth
Unit revenue growth
Economics
…and cost pressures are broader than just fuel
Source: The Airline Analyst
Economics
Breakeven rises, narrowing gap with load factor
Source: The Airline Analyst, IATA9
58
60
62
64
66
68
70
72
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
% A
TK
s
Breakeven and achieved load factor
Achieved
Breakeven
Economics
Net profits fall to $28 billion, but still better than before 2015
Source: IATA Economics, Economic Performance of the Airline Industry, Mid-Year 201910
-40
-30
-20
-10
0
10
20
30
40
-10
-8
-6
-4
-2
0
2
4
6
8
10
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
US
$ b
illio
n
% r
ev
en
ue
s
Global commercial airline profitability
Net post-tax profit
EBIT margin
Economics
Regional profitability remains very uneven
Source: IATA Economics using data from ICAO, The Airline Analyst, IATA forecasts11
-4%
-2%
0%
2%
4%
6%
8%
10%
N America Europe Asia Pacific Middle East L America Africa
Net post-tax profit margins
2016 2017 2018 2019F
Economics
Driven largely by N.America, Europe & Asia
Source: ICAO, IATA12
-5
0
5
10
15
20
25
30
35
40
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019F
N America Europe Asia Pacific
Midle East L America Africa
Net profit (US$ billion)
Economics
Per passenger (net) profit shows wide regional variation
Source: IATA Economics13
18.9
1.7
8.37.1
-2.3
0.5
9.2
14.7
-1.7
8.2
4.7
-1.1
-4.5
6.9
14.8
0.5
6.7
3.5
-1.5
-5.0
6.1
-10
-5
0
5
10
15
20
25
Nth America Latin America Europe Asia Pacific Africa Middle East Industry
Profit per passenger (US$)
2017 2018 2019F
Economics
…but expected growth varies widely across regions
Source: IMF – April 201914
1.4
2.5
6.2
2.4 2.6
3.8
5.9
7.6
1.8
0
1
2
3
4
5
6
7
8
Euro area Emerg.
Europe
Emerg. Asia Latin
America
ME & Nth.Afr S-Saharan
Africa
China India US
GDP Growth (% per year)
Economics
Passenger and freight load factors continue to diverge in the long run
Source: IATA Monthly Statistics15
41%
43%
45%
47%
49%
51%
53%
77%
78%
79%
80%
81%
82%
83%
84%
2012 2013 2014 2015 2016 2017 2018 2019
Passenger load factor, seasonally adjusted Freight load factor, seasonally adjusted
% of ASKs % of AFTKs
Source: IATA Monthly Statistics
Economics
The global air transport industry:
Source: IATA16
Economics
Every day in 2018…
12 MILLION PASSENGERS
104,400 FLIGHTS
$18.2 BILLION WORTHOF GOODS CARRIED
Source: IATA17
Economics
Average price of air travel (real terms)
Source: IATA18
Economics
Demand for air travel to double over the next 20 years
Source: IATA/Tourism Economics19
3
4
5
6
7
8
9
10
11
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038
Passengers (billion, O-D basis)
Current trends scenario
Protectionism deepens scenario
Return to globalization scenario8.1bn
3.8bn
Economics
Demand for air travel to double over the next 20yrs…
3.9%Average annual growth in global air passenger journeys over the next 20 years
2.1xThe number of air passenger journeys in 2038 compared with today
Source: IATA/Tourism Economics20
Economics
20-year air passenger growth is shifting East & South
Source: IATA/Tourism Economics21
Economics
Where’s the growth coming from?
Source: IATA/Tourism Economics22
Additional pax journeys per year in 2038 vs 2018 (million) & CAGR (% per year)
Economics
Top 10 air passenger markets 2018-38
Source: IATA/Tourism Economics23
1
2
3
4
5
6
7
8
9
10
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038
United States
Spain
China
United Kingdom
Japan
India
Germany
Italy
France
Indonesia
China
United States
India
Indonesia
UnitedKingdom
Spain
Japan
Germany
Thailand
South Korea
Top 10 largest air passenger markets over time (ranked by passenger numbers, to/from and within each country)
Economics
Top 10 domestic air passenger markets 2018-38
Source: IATA/Tourism Economics24
1
2
3
4
5
6
7
8
9
10
2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038
United States
Indonesia
China
India
Japan
Brazil
Australia
Russian Fed.
Mexico
Turkey
China
United States
India
Indonesia
Brazil
Japan
Mexico
Vietnam
Australia
Turkey
Top domestic passenger markets, ranked by passenger numbers
Economics
Changes in market share over time…
Source: IATA Statistics 25
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
Share of global passenger revenue…
Asia Pacific
North America
Europe
Middle East
Latin America
Africa
19
90
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
…and freight tonne kilometres*
Asia Pacific
North America
Europe
Middle East
Latin America Africa
*Region of registration basis
Economics
The Americas
26
Economics
In North America, air transport supports…
27
…7.3million jobs & $844billion of GDP
Source: ATAG 27
EconomicsSource: ATAG 28
Economics
Jet aircraft deliveries made & scheduled
Source: Ascend29
4878 91
301 287263
98
12
6253
56
0
50
100
150
200
250
300
350
400
2017 2018 2019 2017 2018 2019
Narrowbody Widebody
Lat.Am
NthAm
# deliveries made & due
Source: Ascend
Aircraft deliveries to the Americas (as of September 2019)
Economics
Europe
30
Economics
In Europe, air transport supports…
31
…12.2 million jobs & $823 billion of GDP
Source: ATAG31
EconomicsSource: ATAG32
Economics
Jet aircraft deliveries made & scheduled
Source: Ascend33
316365
286
50
55
92
0
50
100
150
200
250
300
350
400
450
2017 2018 2019
Narrowbody Widebody
# deliveries made & due
Source: Ascend
Aircraft deliveries to Europe (as of September 2019)
Economics
Asia Pacific
34
Economics
In the Asia Pacific, air transport supports…
35
…30.2 million jobs & $684 billion of GDP
Source: ATAG35
EconomicsSource: ATAG36
Economics
Freight volumes – FTK growth comparison
Source: IATA Statistics Note: Asia-Pacific includes North Asia37
-15%
-10%
-5%
0%
5%
10%
15%
20%
2013 2014 2015 2016 2017 2018 2019
Asia-Pacific Total Industry
Growth in air freight volumes
FTKs, % Growth year-on-year
Source: IATA Statistics
Economics
Jet aircraft deliveries made & scheduled
Source: Ascend38
520571
411
159
173
160
0
100
200
300
400
500
600
700
800
2017 2018 2019
Narrowbody Widebody
Aircraft deliveries to the Asia Pacific (as of September 2019)# deliveries made & due
Source: Ascend
Economics
North Asia
39
Economics
Business confidence
Source: Markit40
40
45
50
55
60
2013 2014 2015 2016 2017 2018 2019
China Hong Kong Chinese Taipei
Business confidence - manufacturing PMIs
50=no change, seasonally adjusted
Source: Markit
Economics
Jet aircraft deliveries made & scheduled
Source: Ascend41
331 338
218
520571
411
57 76
55
159
173
160
0
100
200
300
400
500
600
700
800
2017 2018 2019 2017 2018 2019
Narrowbody Widebody
People's Republic of China
Asia Pacific# deliveries made & due
Source: Ascend
Aircraft deliveries to China & the Asia Pacific (as of Sep 2019)
Economics42
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