The International Air Transport Association (IATA) has updated its passenger growth forecast, lowering its estimate of passenger numbers to 7 billion by 2034. Previously, IATA forecast 7.4 billion passengers in 2034 based on a 4.1% average annual growth rate.
The revised result reflects negative developments in the global economy that are expected to dampen demand for air transport, especially slower economic growth projections for China.
Despite the lower forecast, the 7 billion passenger forecast represents a 3.8% average annual growth in demand (2014 baseline year). That is more than double the 3.3 billion who flew in 2014 and exactly twice as many as the 3.5 billion expected in 2015.
“Economic and political events over the last year have impacted some of the fundamentals for growth. As a result, we expect some 400 million fewer people to be traveling in 2034 than we did at this time last year,” said Tony Tyler, IATA’s Director General and CEO.
“Air transport is a critical part of the global economy. The economic impact of 400 million fewer travelers is significant,” he added.
IATA reports that the five fastest-increasing markets in terms of additional passengers per year over the forecast period will be China (758m new passengers for a total of 1.196 billion), the US (523m new passengers for a total of 1.156 billion), India (275m new passengers for a total of 378m, Indonesia (132m new passengers for a total of 219m) and Brazil (104m new passengers for a total of 202m).
Seven of the ten fastest-growing markets in percentage terms will be in Africa. These are expected to grow by 7-8% each year on average over the next 20 years, doubling in size each decade. The top ten will be: Malawi, Rwanda, Sierra Leone, Central African Republic, Serbia, Tanzania, Uganda, Papua New Guinea, Ethiopia and Vietnam.
In terms of routes, Asian, South American and African destinations will see the fastest growth, reflecting economic and demographic growth in those markets. Indonesia-East Timor will be the fastest growing route, at 13.9%, followed by India-Hong Kong (10.4%), Within Honduras (10.3%), Within Pakistan (9.9%) and UAE-Ethiopia (9.5%).
Routes to, from and within Asia-Pacific will see an extra 1.8 billion annual passengers by 2034, for an overall market size of 2.9 billion. In relative terms it will increase its size compared to other regions to 42% of global passenger traffic, and its annual average growth rate, 4.9%, will be the joint-highest with the Middle East.
The North American region will grow by 3.3% annually and in 2034 will carry a total of 1.4 billion passengers, an additional 649 million passengers a year.
Europe will have the slowest growth rate, 2.7%, but will still handle an additional 591 million passengers a year. The total market will be 1.4 billion passengers.
Latin American markets will grow by 4.7%, serving a total of 605 million passengers, an additional 363 million passengers annually compared to today.
The Middle East will grow strongly (4.9%) and will see an extra 237 million passengers a year on routes to, from and within the region by 2034. The UAE, Qatar and Saudi Arabia will all enjoy strong growth of 5.6%, 4.8%, and 4.6% respectively. The total market size will be 383 million passengers.
Africa will grow by 4.7%. By 2034 it will see an extra 177 million passengers a year for a total market of 294 million passengers.
Divergence among the BRIC nations
A sizable gulf has opened up between the performance of air passenger markets in the BRIC economies (Brazil, Russia, India and China). China and India are growing fast, with annual growth this year-to-date of 12.5% and 16.5% respectively.
India has bounced back from a subdued 2014, and is seeing a strong increase in domestic frequencies.
China’s growth rate has moderated, but it is still on course to add an additional 230 million passenger journeys between 2014 and 2019. This is more than double the other three BRIC nations put together.
Brazil and Russia, by contrast, are struggling. Falling oil and other commodity prices are partly to blame. Economic sanctions have also affected the Russian economy.
It is notable that airlines in Brazil pay some of the highest fuel charges in the world; bringing the country’s fuel policy in line with global standards would certainly be a boost for air transport, says IATA.
Trends in the 10 largest air passenger markets
China is expected to overtake the United States as the world’s largest passenger market (defined by traffic to, from and within) by 2029. In 2034 China will account for some 1.19 billion passengers, 758m more than 2014 with an average annual growth rate of 5.2%.
Traffic to, from and within the US is expected to grow at an average annual growth rate of 3.1% that will result in 1.16 billion passengers by 2034 (52m more than 2014).
India will displace the United Kingdom as the third-largest market in 2026, with Indonesia rising to number 5 in the world.
Japan, Spain, Germany and France fall relative to their competitors, Italy falls out of the top 10, and Brazil moves from 10th place to 7th.