the shape of air travel markets over the next 20 years
TRANSCRIPT
To represent, lead and serve the airline industry
The shape of air travel markets over the next 20 years Brian Pearce, Chief Economist www.iata.org/pax-forecast
IATA Economics www.iata.org/pax-forecast 2
Air travel likely to double over next 20 years
IATA Economics www.iata.org/pax-forecast 3
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2014 2019 2024 2029 2034
Outlook for worldwide O-D passenger trips, million
2014-2034
1.8-2.8x growth
2.3-5 billion additional O-D passenger trips
Currentpolicies
Liberalpolicies scenario
Closing borders scenario
But growth differs widely by market
IATA Economics www.iata.org/pax-forecast 4
0
100
200
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400
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Additional million O-D passengers a year by 2034
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
Developing economies show fastest growth
IATA Economics www.iata.org/pax-forecast 5
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
-2%
0%
2%
4%
6%
8%
-2%
0%
2%
4%
6%
8%
Living Standards Population & Demographics Travel cost Overall growth
% y/y % y/yDrivers of passenger growth (2014-2034, %CAGR, selected countries)
But US sees 2nd largest rise in numbers
IATA Economics www.iata.org/pax-forecast 6
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
-200
-100
0
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900
-200
-100
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Drivers of additional passenger numbers, million
Living standards Demographics Price and other Overall growth
Living standards are important up to a point
IATA Economics www.iata.org/pax-forecast 7
0.00
0.01
0.10
1.00
10.00
0 10 20 30 40 50 60 70 80 90 100 110 120
Flig
hts
per
cap
ita*
(2
01
3, l
oga
rith
mic
sca
le)
GDP per capita (2013, US$ '000s)
China
USA
UK Luxembourg
Norway
Qatar
AustraliaSwitzerland
Sweden
SingaporeHong Kong Iceland
BahamasMaldives
Seychelles
Uganda
FranceJapan
Russia
Brazil
New Zealand
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
They are certainly key for emerging markets
IATA Economics www.iata.org/pax-forecast 8
0.00
0.01
0.10
1.00
10.00
0 2 4 6 8 10 12 14 16 18 20
Flig
hts
per
cap
ita*
(2
01
3, l
oga
rith
mic
sca
le)
GDP per capita (2013, US$ '000s)
China
India
MaldivesSeychelles
Uganda
Belize
Swaziland
Gabon
Slovakia
Uruguay
Malaysia BarbadosIndonesia
Brazil
Russia
Middle-income High-incomeLow-income
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
Countries becoming ‘middle’ or ‘high’ income
IATA Economics www.iata.org/pax-forecast 9
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
Frequency of trips rises disproportionately
IATA Economics www.iata.org/pax-forecast 10
Trips/
year/
person
Months
before
next trip
Low-income 0.04 300
Middle-income 0.29 41
High-income 1.48 8
Below US$20K per person 0.27 44
Above US$20K per person 1.80 7
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
Demographic change dramatically different
IATA Economics www.iata.org/pax-forecast 11
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
India Indonesia Turkey US Brazil France China Germany Japan Russia
% c
han
ge 2
01
4-2
03
4
Demographic change, 2014-2034
Population change
'Flying' population change
Working-age population makes more trips
IATA Economics www.iata.org/pax-forecast 12
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
0 to 14 15 to 19 20 to 24 25 to 34 35 to 44 45 to 54 55 to 59 60 to 64 65 to 74 75+
'Over-represented'age groups
'Under-represented'age groups
Source: UK CAA
Ratio of air passengers by age group to population by age group compared to average
Emerging market population much younger
IATA Economics www.iata.org/economics 13
0
10
20
30
40
50
60
2014 2019 2024 2029 2034
Old-age dependency ratio, % (65+/15-64)
Japan
Germany
US
China
Brazil
Turkey
Indonesia
India
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
Trend in cost of travel is still downwards
IATA Economics www.iata.org/pax-forecast 14
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2.8
0.5
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0.9
1.0
1.1
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1.3
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1.5
1970 1980 1990 2000 2010
US
$ in 2
013 p
rices p
er
tonne k
ilom
ete
r
US
$ in 2
013 p
rices to fly
a t
onne k
ilom
ete
r
Unit cost and the price of air transport, adjusted for inflation
Price (US$/RTK)
Unit cost (US$/ATK)
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
Scope for lower fares on a number of markets
IATA Economics www.iata.org/pax-forecast 15
0.05
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0.11
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0.19
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000
Pass
enge
r yi
eld
s, U
S$ p
er R
PK
Average trip length (kms)
Passenger yields and average trip length
Within Africa
Within South America
Within ASEAN
WithinEurope
Middle East-rest of world
ASEAN-Europe
North Atlantic
Pacific
North-South America
Within East Asia
ASEAN-Africa
China-North America
ASEAN-North America
ASEAN-E Asia
Europe-Australia
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
Resulting in much change over next 20 years
IATA Economics www.iata.org/pax-forecast 16
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US
China
UK
Japan
Germany
Spain
France
Italy
India
Brazil
2013 rank 2034 rank
China
US
India
UK
Brazil
Indonesia
Spain
Germany
Japan
France
Source: IATA/Tourism Economics ‘Air Passenger Forecasts’
Rank by size of O-D passenger flows in, out & within country
IATA Economics www.iata.org/pax-forecast 17
Thank you for listening
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