air traffic demand forecast -...
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AIR TRAFFIC DEMAND FORECAST
GDP Forecast for Hong Kong and World Markets
Preliminary Passenger Traffic Forecast Based on
GDP
Preliminary Cargo Traffic Forecast Based on GDP
Reality Check with Industries
Revised Passenger Traffic Forecast
Revised Cargo Traffic Forecast
Sensitivity Analysis
Air Traffic Movement Forecast
+-
Adjustment Factors
GDP Based Preliminary Forecast Adjustments and Finalised Forecast
Movement Forecast
Sensitivity Analysis
A Structured Air Traffic Demand Forecast ProcessFigure
3.1
Thefirststepofthemasterplanningprocessistodeterminethelong-termairtrafficdemandforecastupto2030.InternationalAirTransportAssociation(IATA)Consultinghasbeencommissionedtoundertakethistask,whichisaverystructuredprocessinvolving–
(a)Evaluatingthebestmodeltoapplyfortheforecast;
(b)Compilinggrossdomesticproduct(GDP)forecast;
(c)ProducingpreliminarytrafficforecastsbasedonGDP;
(d)Adjustingtrafficforecastsbaseduponthelatestmarketchanges;
(e)Carryingoutrealitycheckswithaviation-relatedindustries;
(f)Determiningasetofprimaryprojectionsforpassengerandcargotrafficandairtrafficmovements(ATMs,alsoknownasflightmovements);and
(g)Conductingsensitivityanalysistoproducearangeofestimatesforhigh,lowandbasecases.
GDP FORECASTCompilingaGDPforecastisaveryimportantstepasitprovidestheessentialbuildingblockfortheentiretrafficdemandforecast.IATAConsulting’sresearchclearly
demonstratedthatairtrafficgrowthbearsastrongcorrelationwiththeglobalGDPgrowth.Figure3.2showsthetwotrendsinthepastfourdecades.
AsHongKongisaninternationalcitywithanopenmarketandexternally-orientedeconomy,thecorrelationbetweenairtrafficgrowthandGDPgrowthinHongKongisevenmorepronounced,ascanbeseenfromtheclosecorrelationbetweenhistoricaltrafficderivedfromtheregressionformulaeusedbyIATAConsultingandtheactualtraffic(seeFigures3.3and3.4).Forpassengerdemandforecast,IATAConsultingadoptedsimplelinearregressionbasedonHongKong
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Global Air Traffic versus Economic GrowthFigure
3.2
Source:TrafficdatafromInternationalCivilAviationOrganization(ICAO)andInternationalAirTransportAssociation(IATA),GDPdatafromInternationalMonetaryFund(IMF)andEconomistIntelligenceUnit(EIU)
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0
-2
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-4
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4
1980
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1992
1995
1998
2001
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2007
2010
1977
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1971
Global GDP (year-on-year growth percent)
Global Revenue Passenger Kilometres (year-on-year growth percent)
millions of tonnes
4
0
3
2
9/11 Event1
1993
1994
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Actual Derived
Source:AAHKtrafficdata,IATAConsultingestimates
Comparison between Actual and Derived HKIA Cargo Traffic Based on Hong Kong GDP and Global GDP
Figure
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millions of passengers
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DerivedActual
SARS Outbreak
Comparison between Actual and Derived HKIA Passenger Traffic Based on Hong Kong GDP
Figure
3.3
Source:AirportAuthorityHongKong(AAHK)trafficdata,IATAConsultingestimates
GDP.Forcargodemandforecast,IATAConsultingadoptedmultiplelinearregressionbasedonHongKongandglobalGDP.
DespitetheglobaleconomicslowdownandSevereAcuteRespiratorySyndrome(SARS)epidemicin2001-2003,HongKong’sGDPexperiencedanincreasebyalmost4%perannumbetween2004and2009.Followingtherecoveryfromtheglobalfinancialcrisisandeconomicdownturnin2008-2009,theGovernmentestimated6.5%GDPgrowthfor20102.OnthebasisofinputfromEconomistIntelligenceUnit(EIU)3ofJuly2009andGlobalInsight4(July2009),IATAConsultingcompiledthefollowingGDPforecastbetween2008and2030–
(a)HongKong’sGDPwillgrowataCompoundAnnualGrowthRate(CAGR)of3.2%;
(b)Mainland’sGDPwillgrowataCAGRof7%;and
(c)TheglobaleconomywillgrowataCAGRof4%.
2 HKSARGovernment,November2010.3 TheEconomistIntelligenceUnit(EIU)
istheworld’sleadingresourceforeconomicandbusinessresearch,forecastingandanalysis.Foundedin1946asanin-houseresearchunitforTheEconomist,itnowdeliverstrustedbusinessintelligenceandadvicetoover1.5milliondecision-makersfromtheworld’sleadingcompanies,financialinstitutions,governmentsanduniversities.
4 GlobalInsightwasfoundedin2001throughthemergerofWhartonEconometricForecastingAssociatesandDataResources,Inc.InOctober2008,GlobalInsightbecamepartoftheInformationHandlingServices(IHS)family.BasedintheNewEnglandRegionintheUS,IHSGlobalInsightprovidescomprehensiveeconomic,financial,andpoliticalcountryandindustryintelligenceproductstosupportplanninganddecisionmaking.
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Five Major GPRD AirportsFigure
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Guangzhou
Shenzhen
Hong Kong
Macao
Zhuhai
Landsat-7SatelliteImageprovidedbyGeocarto
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15
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millions of passenger trips millions of tonnes
203020252020201520082004
Actual Forecast
CargoPassenger
CAGR 2008-2030Passenger/Cargo = 5.9%
Note:GPRDairportsincludeHongKong,Guangzhou,Shenzhen,MacaoandZhuhaiairports
Source:CivilAviationAdministrationofChina(CAAC),AAHKforactualfigures,IATAConsultingforecast
GPRD Airports Passenger and Cargo Traffic ForecastFigure
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5 WorldBank,IATAConsultingestimatesbasedonGlobalInsight.6 ThePRDcomprisesDongguan,Foshan,Guangzhou,Huizhou,Jiangmen,Shenzhen,
Zhaoqing,ZhongshanandZhuhai.
AVIATION MARKET OuTLOOK : THE MAINLAND AND GPRDIATAConsultingforecaststhatairtraffictoandfromtheMainlandwillreachnearly2.1billiontripsby2030,whilecargotrafficwillreach44milliontonnes.Thisprojectionissupportedbyanumberofobservations.Onthepassengerside,theWorldTourismOrganisationforecaststhattheMainlandwillbecometheworld’sfourth-largesttouristsourcemarketandthelargestdomestictouristmarketby2015.TheMainland’sGDPpercapitawillreachapproximatelyUS$14,000in20305,andastheeconomygrows,thedesireandabilityofthepeopleontheMainlandtotravelbothdomesticallyandinternationallywillgrowrapidly.
TheMainlandisalsothemanufacturingcapitaloftheworld,anditscargomustbedeliveredtotheiroverseasdestinationsaroundtheworld.Risingforeigndirectinvestment,improvinglivingstandards,moreliberaltradepoliciesandagrowingexpresscargoandlogisticssectorsupportarobustcargogrowthprojection.Also,cargotrafficofMainlandairportshasincreasedbyaCAGRofover10%eachyearinthepastdecade,reaching9.5milliontonnesin2009.TheMainland’ssubstantialtradevolumeandgrowingeconomywillbekeyfactorsinitscargogrowth.
ThePearlRiverDelta(PRD)6–HKIA’scatchmentarea–isoneoftheMainland’smostdiverseandfastestgrowingregions.ItisoneoftheMainland’scentresofmanufacturingandmostaffluentareas.Withthe
air traffic deMand forecast
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Annual Passenger Demand by 2020 – 233 Million
Annual Passenger Demand by 2030 – 387 Million
Anticipated AnnualHandling Capacity of GPRDAirports – 200 Million*
Unfulfilled Demand – 33 Million
(in passenger trips) Unfulfilled Demand – 147 Million
Anticipated AnnualHandling Capacity of GPRDAirports – 240 Million*
*ForHKIA,thecapacityassumedis60millionbasedoncompletionofthecommittedMidfieldPhase1Development
Source:CAAC,IATAConsultinganalysisandestimates
GPRD Airports Capacity and Forecast Passenger Demand (2020 and 2030)
Figure
3.7
7 TheGreaterPRDcomprisesPRDplusHongKongandMacao.
continuousgrowthintradeandintheoveralleconomy,IATAConsultingestimatesthattheaviationmarketintheGreaterPRD(GPRD)7willgrowto387millionpassengertripsand18milliontonnesofcargoby2030(seeFigure3.5).
WithintheGPRD,therearefivemajorairports,namely,HKIA,GuangzhouBaiyunInternationalAirport,ShenzhenBao’anInternationalAirport,MacaoInternationalAirportandZhuhaiAirport(seeFigure3.6).Havingtakenintoaccounttheanticipatedincreaseinthehandlingcapacityofthefiveairportsinthenext20years,IATAConsultingforecaststhattherewouldstillbeasignificantunfulfilleddemandforairservicesbothinthemediumtermupto2020andinthelongtermupto2030(seeFigure3.7).
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In2008,wehandledabout80%ofGPRDairports’internationalpassengers(excludingHongKong–Mainlandtraffic)andabout90%ofitsinternationalcargothroughput.Aslongasourhandlingcapacityisnotconstrained,wearewellpositionedtocontinuetocaptureahandsomeportionofthisgrowingmarketbyleveragingourextensiveinternationalairnetwork.
ADjuSTMENT FACTORS RELEVANT TO HKIAIATAConsultinghasspecificallylookedintoarangeofspecialfactors(namely,airservicesagreements,cross-straitdirectflights,tradeagreements,travelpolicy,tourismdevelopment,cross-boundaryinfrastructuredevelopment,passengers’travellingpreferences,modalcompetitionfromcontainerisedshipping,developmentsof
surroundingairportsandairlines’strategies)thatmightaffectitsairtrafficdemandforecast.Most,ifnotall,ofthemhavebeenfoundtobeeitherhavingnegligibleimpactorhavealreadybeenfactoredintoIATAConsulting’seconomicmodels.Theassessmentsonthetwomostfrequentlycitedfactorsaresetoutbelow.
Cross-Strait Direct FlightsHongKong/TaiwanhasformanyyearsbeenthebusiestairrouteoutofHKIAwithcurrentlyabout50flightsperday.Beforecross-straitdirectflightsfirstcommencedinJuly2008,passengertrafficsegmentspotentiallyimpactedbydirectflightsconstitutedabout16%(i.e.7.7million)ofourtotalthroughputin2007,whichhasbeendecreasedto10%(i.e.4.9million)in2010.Cargotrafficwasreducedfrom17%(i.e.0.6milliontonnes)
ofourthroughputin2007to13%(i.e.0.5milliontonnes)in2010.However,thisshort-termnegativeimpacthasbeenpartlymitigatedbytherelaxationofthepolicyforMainlanderstovisitTaiwanandthenewdemandforairtravelstimulatedbyincreasedcross-straiteconomicactivities.In2010,overallpassengerandcargotrafficbetweenHongKongandTaiwangrew4%and14%respectively,over2009.Lookingahead,increasingtourismandtradeactivitiesacrossthestraitisexpectedtostimulatefurthergrowthintheHongKong/Taiwanpassengerandcargomarket.
High-Speed RailThehigh-speedrailwouldcutcurrentrailtraveltimebynearlytwothirdsandisthereforegenerallyexpectedtocompetewithairservicesonshort-haulandoverlappingmarkets.WiththedevelopmentoftheExpress
air traffic deMand forecast
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Train Fasterthan Plane
Train Non-competitive
Plane Fasterthan Train
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Note:Airtraveltimeincludesanadditionalthree-hourdwellandaccesstimeontopoftheflightduration.
Source:IATAConsultingestimates,TransportandHousingBureau
Projected High-Speed Rail Travel Time versus Air Travel Time from Hong Kong in 2020
Figure
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Chinese Railway Infrastructure Development MapFigure
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Source:TransportandHousingBureau
( )Beijing (8 hrs)
Legend
Major Mainland Cities connected toGuangzhou-Shenzhen-Hong Kong Express Rail Link
( )Zhengzhou (6 hrs)
Beijing-Guangzhou Passenger Line and Hangzhou-Fuzhou-Shenzhen Passenger Line
Guangzhou-Shenzhen-Hong Kong Express Rail Link
Other Proposed Passenger Line
( )Wuhan (4 hrs)
( )Xi’an (8 hrs)
( )Shanghai (6 hrs)
( )Chengdu (12 hrs)
Other Proposed Passenger Line
“9+2”Pan-Pearl River Delta Region “9+2” Area( )
Nanjing (5 hrs)
( )Changsha (3 hrs)
( )Hangzhou (7 hrs)
( )
( )Nanchang (5 hrs)
( )Chongqing (10 hrs)
Hangzhou-Fuzhou-Beijing-Guangzhou Passenger ( )Fuzhou (5 hrs)
( )Xiamen (4 hrs)
( )
gShenzhen Passenger Line
Beijing Guangzhou PassengerLine
)Kunming (8 hrs)
( )Nanning (4 hrs)
( )Shantou (2 hrs)
Guangzhou-Shenzhen-HongKong Express Rail Link
RailLink(XRL)connectingHongKongtotheMainland’shigh-speedtrainnetwork,andfurtherexpansionofthehigh-speedrailnetworkwithintheMainland(seeFigure3.8),thehigh-speedrailcouldpotentiallyaffectthecompetitivenessofairtravelbetweenHongKongandshort-haulMainlanddestinationslikeShantou,Changsha,Nanning,Xiamen,Wuhan,Nanjing,NanchangandFuzhou(seeFigure3.9).However,alltheseregionalMainlandroutescombinedcontributedonlyabout3%ofHKIA’spassengerthroughputin2010.Therefore,anynegativeimpactfromXRLwouldunlikelybesignificant.Ontheotherhand,trainsprovide
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millions of tonnes CAGR 2008-2030
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Low Base High
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4.2%
3.7%
millions of tonnes 2015 2020 2025 2030
High 4.7 6.1 7.9 9.8
Base 4.4 5.7 7.2 8.9
Low 4.2 5.2 6.5 8.0
Source:IATAConsultingestimates;AAHKstatisticsforactualfigures
HKIA Cargo Traffic Projection (Up to 2030)Figure
3.12
HKIA Passenger Traffic Projection (Up to 2030)Figure
3.11
millions of passenger trips
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CAGR 2008-2030
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3.2%
2.8%
millions of passenger trips 2015 2020 2025 2030
High 59 72 88 105
Base 57 68 82 97
Low 54 64 76 89
Source:IATAConsultingestimates;AAHKstatisticsforactualfigures
HKIA Air Traffic Movement Projection (Up to 2030)Figure
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thousands
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Low Base High
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3.2%
2.8%
thousands 2015 2020 2025 2030
High 362 448 548 652
Base 347 421 509 602
Low 332 394 470 552
Source:IATAConsultingestimates;AAHKstatisticsforactualfigures
convenientandfrequentlink-uptosecond-tierandthird-tierlocationsoutsidemajorcities,thuspotentiallyenlargingthecatchmentareaforHKIA.ExperiencesinEuropeandJapanindicatethattheintroductionofhigh-speedrailmaynegativelyaffectshort-haulandoverlappingmarketsbutitcanincreasepeople’swillingnesstotraveland,inthemediumtolongterm,increasetheoverallmarketsizeforbothrailandairtransportation,therebycompensating(or,asinmostcases,over-compensating)forthepotentialairtrafficlossonindividualshort-haulroutes.
AIR TRAFFIC DEMAND FORECASTAccordingtotheGDPregressionbasedforecastingmodel,andtaking
air traffic deMand forecast
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Traffic Forecasts from Boeing and AirbusFigure
3.13
cagr 2009-2028 Boeing airbus
Asia Pacific Region
Passenger 6.3% 6.1%
Cargo 6% 6.3%
China
Passenger 7.6% 7.3%
Cargo 6.6% 7.8%
World
Passenger 4.7% 4.5%
Cargo 5.2% 5%
intoaccountvariousaspectsofHKIA’smarketenvironment,suchasindustrytrends,regionalmarketdynamics,changesinpoliciesandsoon,IATAConsultingestimatesthatairtrafficdemandforecastsforHKIAwillfallwithintherangeof89–105millionpassengersand8–9.8milliontonnesofcargoby2030,growingatrespectiveCAGRsof2.8%–3.6%and3.7%–4.6%between2008and2030.Flightmovementswillreachabout550,000–650,000,growingataCAGRof2.8%–3.6%.
TheIATAConsultinganalysisincluded,amongotherthings,a“realitycheck”ofitstrafficforecastagainsttheprojectionsoftheglobalaircraftmanufacturingindustry,whichareconsideredtobeparticularlyrelevant.TrafficforecastsfrombothBoeingandAirbusindicatethatover
thenext20years,globalpassengerandcargotrafficwilleachgrowataround5%ayear.AsiaPacific–drivenbytheMainland–willseeevenhighergrowth,atabout6%,duetotheregion’sdevelopmentpotential.Theseprojectionshave
alreadytakenintoaccounttherecentfinancialandeconomiceventsof2008-2009.Theyalsoacknowledgethetraditionalresilienceofairtraveltoexternalshocksandthestronglong-termfundamentalsoftheindustry.
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