icao forecasts for effective planning and …...– infrastructure planning and capacity building...

ICAO Forecasts for Effective Planning and Implementation

Sijia Chen Economic Development

Air Transport Bureau, ICAO

Appendix C : Forecasting, planning and economic analyses

The Assembly: • Requests the Council to prepare and maintain, as necessary, forecasts of future trends and

developments in civil aviation of both a general and a specific kind, including, where possible, local

and regional as well as global data, and to make these available to Contracting States and support

data needs of safety, security, environment and efficiency

• Requests the Council to develop one single set of Long Term Traffic Forecasts, from which

customized or more detailed forecasts can be produced for various purposes, such as air navigation

systems planning and environmental analysis

Assembly Resolution A38-14

• The forecasts are critical to:

– effectively implement ICAO’s No Country Left Behind (NCLB) initiative

– estimate future trends of noise, emissions and particulate matter

– assess the operational and cost-effectiveness of air navigation systems including the Aviation System Block Upgrades (ASBU)

– assess licensed personnel and training requirement

– infrastructure planning and capacity building for improved safety of operations

• The forecasts are the basis for effective planning activities in States and ICAO.

• The development of the forecasts has taken into account the needs of States and the Organization and various ICAO entities.

3

Needs of Long-Term Traffic Forecasts (LTF)

ECONOMIC DEVELOPMENT

Development of Long-term Traffic Forecasts

Main source: ICAO Air Transport Reporting Forms A, B and C submitted by States

Completed with data from national offices of statistics:

5

Data sources

US Department of Transportation (Bureau of Transportation Statistics)

Bureau of Infrastructure, Transport and Regional Economics (Australia)

Official Airline Guide (OAG)

AvStats (UK CAA)

90% of scheduled international passenger and 95% of Freight traffic covered by reported traffic

Cleaned OAG used to complement the data to arrive at 100% coverage

ECONOMIC DEVELOPMENT Data sources for the Forecasts

Factors influencing air traffic demand

Air Traffic Demand = Function (Economic Growth, Cost, non-economic events …..) Macro-economic factors • GDP per capita (More disposable income per capita, higher demand for leisure travel) • Employment (Increasing economic activity and employment generating higher demand for business travel) • Population growth (Increasing population can drive travel demand) • International Trade (Cargo) Micro-economic factors (cost of travel) • Regulations (market access/ticket prices) • Infrastructure (transportation network, connections to airport, air traffic control, etc.) • Market structure (extent of airline competition) • Input costs (fuel, capital costs, labor costs etc.) Random non-economic factors • 2001 9/11 (North America and connected routes) • 2003 SARS (Asia and connected routes) • 2010 Iceland Volcano (Europe and connected routes) • 2011 Tsunami (Japan and connected routes)

6

7

Econometrics Modeling

Utilized panel model approach

Overcomes time series limitations and allows for using the entire dataset

ECONOMIC DEVELOPMENT Passenger Traffic Demand Model

50 Route Groups 900 Observations

Passenger traffic demand model

Capture Key Economic Drivers

Traffic demand per capita = f(Income per capita, Cost) RPKPCt = f(GDPPCt , OilPricet)

Income and Cost – Real GDP Per Capita & Oil Prices

Transportation maturity

As countries income grows demand for air travel increases; transport infrastructure improves to allow for increased activity (Ishutkina and Hansman 2009)

As economies move from lower to higher income levels air demand growth will increase and then moderate (S-curve)

Forecast model needs to account for this transition of route groups

Basic Specification

Effects of 9/11 on air travel in the North America domestic, Intra north America and North Atlantic.

SARs epidemics in Asia for 2003 , etc.

Year Specific Event

8

Passenger Traffic Demand Model ECONOMIC DEVELOPMENT

9

• Forecast at regional level • Africa • Asia and Pacific • Europe • Latin America and the Caribbean • Middle East • North America

• Model Specification

• Individual ordinary least squares (OLS) regression was used for each region as it performed better than other approaches

• GDP and oil prices main explanatory variables

Cargo Traffic Demand Model ECONOMIC DEVELOPMENT

Cargo traffic demand model

Results of Long-term Traffic Forecasts


11

Global Passenger Traffic Forecasts

0

2

4

6

8

10

12

14

16

18

20

22

1995 2000 2005 2010 2015 2020 2025 2030 2035 2040

Re

ven

ue

Pas

sen

ger

Kilo

mtr

es (

RP

K)

(tri

llio

ns)

International Domestic

History

Forecast

1995-2012

5.2%

2012-2032

4.6%

2012-2042

4.5%

38%

62%

59%

41%

42%

58%

Scheduled Services


12


13

Africa

0 50 100 150 200 250

Africa - Middle East

Europe - Sub Saharan Africa

Europe - North Africa

Africa - Asia/Pacific

Intra Africa

Africa Domestic

Africa - North America

Africa & Middle East - South America

Africa & Middle East - CentralAmerica/Caribbean

Revenue Passenger-Kilometres (RPK) (billion)

2042 2032 2012

4.7%

2.0%

3.3%

5.8%

4.3%

4.3%

3.1%

4.2%

4.3%

4.9%

2.1%

3.3%

6.1%

4.5%

4.5%

3.1%

3.8%

4.4%

11.9%

4.6%

8.6%

7.9%

7.1%

3.6%

8.3%

12.2%

19.2%

CAGR*

2012-2042 2012-2032 1995-2012

*CAGR: Compound Annual Growth Rate


14

Asia/Pacific

0 1,000 2,000 3,000 4,000 5,000

Central South West Asia Domestic

Central South West Asia - Pacific South East Asia

Central South West Asia - Middle East

Pacific South East Asia Domestic

Central South West Asia - Europe

Intra Pacific South East Asia

Central South West Asia - North America

Central South West Asia - North Asia

Europe - Pacific South East Asia

Intra Central South West Asia

Middle East - North Asia & Pacific South East Asia

North Asia - Pacific South East Asia

North America - North Asia

North America - Pacific South East Asia

Europe - North Asia

North Asia Domestic

Africa - Asia/Pacific

Intra North Asia

Latin America/Caribbean - North Asia & Pacific South East…


2042 2032 2012

7.6%

7.4%

8.2%

5.1%

4.7%

5.1%

5.5%

7.7%

3.6%

7.7%

3.5%

3.6%

2.5%

4.1%

2.2%

1.4%

5.8%

1.4%

2.7%

8.8%

7.9%

8.6%

5.3%

5.2%

5.3%

6.3%

8.4%

3.8%

8.7%

3.7%

3.8%

2.6%

4.3%

2.3%

1.6%

6.1%

1.6%

2.9%

12.5%

6.8%

9.9%

8.1%

8.3%

4.7%

6.5%

5.1%

3.8%

9.3%

11.3%

2.3%

0.7%

3.9%

2.5%

0.7%

7.9%

4.4%

11.2%

CAGR*

2012-2042 2012-2032 1995-2012



15

Europe

0 400 800 1,200

Intra Europe

Europe - North America

Central South West Asia - Europe

Europe Domestic

Europe - Middle East

Europe - Pacific South East Asia

Europe - South America

Europe - Sub Saharan Africa

Central America/Caribbean - Europe

Europe - North Africa

Europe - North Asia


2042 2032 2012

3.5%

3.7%

2.9%

3.5%

2.9%

4.2%

3.5%

4.0%

4.2%

4.2%

2.7%

6.7%

4.3%

3.2%

4.0%

3.0%

3.7%

3.2%

4.2%

3.2%

3.8%

4.2%

3.8%

2.9%

7.7%

4.4%

9.3%

6.1%

6.8%

4.4%

7.2%

5.1%

6.8%

10.6%

3.4%

12.2%

11.2%

0.0%

19.2%

CAGR*

2012-2042 2012-2032 1995-2012



16

Latin America and the Caribbean

0 100 200 300 400

South America Domestic

Central America/Caribbean - North America

Europe - South America

North America - South America

Central America/Caribbean - Europe

Central America/Caribbean Domestic

Intra South America

Central America/Caribbean - South America

Intra Central America/Caribbean


Latin America/Caribbean - North Asia & Pacific…

Latin America/Caribbean - Central South West Asia

Africa & Middle East - Central America/Caribbean


2042 2032 2012

3.5%

3.7%

2.9%

3.5%

2.9%

4.2%

3.5%

4.0%

4.2%

4.2%

2.7%

6.7%

4.3%

3.2%

4.0%

3.0%

3.7%

3.2%

4.2%

3.2%

3.8%

4.2%

3.8%

2.9%

7.7%

4.4%

9.3%

6.1%

6.8%

4.4%

7.2%

5.1%

6.8%

10.6%

3.4%

12.2%

11.2%

0.0%

19.2%

CAGR*

2012-2042 2012-2032 1995-2012



17

Middle East

0 300 600 900 1,200

Central South West Asia - Middle East

Europe - Middle East

Middle East - North Asia & Pacific South EastAsia

Africa - Middle East

Middle East - North America

Intra Middle East

Middle East Domestic


Africa & Middle East - CentralAmerica/Caribbean


2042 2032 2012

8.2%

2.9%

3.5%

4.7%

3.4%

4.4%

4.4%

4.2%

4.3%

8.6%

3.1%

3.7%

4.9%

3.6%

4.7%

4.7%

3.8%

4.4%

9.9%

8.8%

11.3%

11.9%

12.0%

10.2%

5.8%

12.2%

19.2%

CAGR*

2012-2042 2012-2032 1995-2012



18

North America

0 500 1,000 1,500 2,000 2,500

North America Domestic

Europe - North America

Central South West Asia - North America

Central America/Caribbean - North America

North America - North Asia

North America - South America

North America - Pacific South East Asia

Middle East - North America

Intra North America

Africa - North America


2042 2032 2012

2.9%

2.7%

5.5%

3.7%

2.5%

3.5%

4.1%

3.4%

2.9%

3.1%

3.0%

2.8%

6.3%

4.0%

2.6%

3.7%

4.3%

3.6%

3.0%

3.1%

2.5%

3.1%

6.5%

6.1%

0.7%

4.4%

3.9%

12.0%

4.9%

8.3%

CAGR*

2012-2042 2012-2032 1995-2012



19

Cargo Traffic Forecasts

Summary of Total Cargo Traffic Forecasts by Region of Airline Registration

(Scheduled Services)

Cargo traffic results in terms of FTKs

Region CAGR*

Flight Stage 2012-2022 2012-2032 2012-2042

Europe Total 2.9% 2.6% 2.4%

International 2.9% 2.6% 2.4%

Domestic 0.2% 0.8% 1.0%

Africa Total 1.6% 2.1% 2.2%


Domestic 0.3% 0.1% 0.1%

Middle East Total 6.6% 7.1% 6.9%


Domestic 1.4% 0.7% 0.5%

Asia and Pacific Total 5.7% 5.1% 4.7%


Domestic 8.7% 7.8% 7.0%

North America Total 2.7% 2.5% 2.6%


Domestic 0.8% 0.7% 0.6%

Latin America and the Caribbean Total 3.1% 2.9% 2.8%


Domestic 2.0% 1.7% 1.6%

WORLD Total scheduled 4.4% 4.3% 4.2%


Domestic 3.9% 4.0% 4.0%


20

Global RTK Forecasts ECONOMIC DEVELOPMENT

Forecasts for Aviation Planning


22

Forecast for Aviation Planning

Use of traffic forecasts

Air navigation systems planning

Aircraft movements

Airport planning

Aircraft movements

Airport passengers

Licensed personnel

Airline planning

Planning of routes and services

Fleet planning

Estimation of airline’s market share


Forecasts can be used as the base to produce customized or more detailed forecasts for various purposes, such as air navigation systems planning and environmental analysis.

Forecasts can also serve as an input to environment for critical tasks such as trend analysis, assessment and development of fleet forecasts.

23

Air navigation systems planning

Estimates of Aircraft Movements • Passenger forecasts are converted into aircraft movements taking into account fleet mix and

average load factors • forecasts of aircraft movements in a particular route group can be derived from forecasts of

passengers, and assumptions about future trends in load factors and average aircraft size. The link between these variables is given by:

𝑨𝒊𝒓𝒄𝒓𝒂𝒇𝒕 𝑴𝒐𝒗𝒆𝒎𝒆𝒏𝒕 =𝑷𝒂𝒔𝒔𝒆𝒏𝒈𝒆𝒓 𝒏𝒖𝒎𝒃𝒆𝒓𝒔 𝒇𝒐𝒓𝒆𝒄𝒂𝒔𝒕𝒔

𝑳𝒐𝒂𝒅 𝒇𝒂𝒄𝒕𝒐𝒓 ∗ 𝑨𝒊𝒓𝒄𝒓𝒂𝒇𝒕 𝒔𝒊𝒛𝒆

where:

𝐿𝑜𝑎𝑑 𝑓𝑎𝑐𝑡𝑜𝑟 =𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑎𝑠𝑠𝑒𝑛𝑔𝑒𝑟𝑠 𝑐𝑎𝑟𝑟𝑖𝑒𝑑

𝑇𝑜𝑡𝑎𝑙 𝑠𝑒𝑎𝑡𝑠 𝑜𝑓𝑓𝑒𝑟𝑒𝑑 𝐴𝑖𝑟𝑐𝑟𝑎𝑓𝑡 𝑠𝑖𝑧𝑒 =

𝑇𝑜𝑡𝑎𝑙 𝑠𝑒𝑎𝑡𝑠 𝑜𝑓𝑓𝑒𝑟𝑒𝑑

𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑎𝑖𝑟𝑐𝑟𝑎𝑓𝑡


24

Airport Planning

Estimates of Aircraft Movements

Airport Passengers

• break down passenger forecasts into passengers using the arrival and departure facilities (e.g. check-in, baggage collection, customs and immigration) and passengers using transfer or transit facilities (e.g. cafeterias and transit lounges)

• The factors that influence the number of originating/terminating passengers at an airport will differ from those affecting the number of direct transit and transfer passengers

• Analyze passenger forecasts by traffic category


25

Airline Planning (Routes and Services)

Planning of routes and services

• Total market outlook for domestic and international markets estimated in LTF forecasts

• Internationally, the traffic rights granted by governments in bilateral agreements provide the basis for the operation of an airline’s scheduled route system, the expansion of operations and the serving of new routes

• Traffic coming from, or destined for, other points should be taken into account as part of demand for traffic between two airports

• Competition between carriers or airline alliances is one of the most important elements in route and service planning


26

Airline Planning (Fleet Planning)

Fleet planning can be described as the act of determining future fleet requirements and the timing of aircraft acquisitions

Three approaches are commonly used in airline fleet planning efforts. They can be categorized as the macro-evaluation method, the schedule-evaluation method and the aircraft-assignment method

Macro-evaluation method : The macro-evaluation method is a multi-year system analysis wherein the number of various types of aircraft required is determined based on a macro-traffic forecast. There are several steps in the macro-evaluation method: a) Forecast aggregate passenger/freight traffic. b) Convert traffic forecast to a capacity forecast based on load factor assumptions. c) Project the capacity available from the current fleet. d) Calculate the additional requirements for growth and replacement, considering the fleet mix, aircraft productivity and system characteristics.


Future Work in Aviation Forecasts


• Develop an electronic interface allowing States and other users to generate customized forecasts at

different levels of granularity (for example, by route, by country-pair, by State of departure, by airport);

• Customize forecast results/data required for the Environment to develop its fleet forecasts, trends and

assessment activities;

• Customize forecast results/data required for air navigation service planning and assessment activities

at a global and regional level; and

• Updated global and regional twenty year forecasts for pilots, maintenance personnel and air traffic

controllers (DOC 9956) in April 2018 to meet the needs of the ICAO Next Generation Aviation

Professional (NGAP) programme.

28

Future work in aviation forecasts


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