the shape of air travel markets over the next 20 years - iata · pdf filethe shape of air...

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The shape of air travel markets over the next 20 years Brian Pearce, Chief Economist www.iata.org/pax-forecast

http://www.iata.org/pax-forecast



IATA Economics www.iata.org/pax-forecast 2




Air travel likely to double over next 20 years


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


0

100

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300

400

500

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800

900

Additional million O-D passengers a year by 2034





Developing economies show fastest growth



-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



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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


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





They are certainly key for emerging markets


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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


http://www.iata.org/economics



Countries becoming ‘middle’ or ‘high’ income






Frequency of trips rises disproportionately


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





Demographic change dramatically different



-25%

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-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


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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

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60

2014 2019 2024 2029 2034

Old-age dependency ratio, % (65+/15-64)

Japan

Germany

US

China

Brazil

Turkey

Indonesia

India



Trend in cost of travel is still downwards


0.8

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1.2

1.4

1.6

1.8

2.0

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2.8

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1.0

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1970 1980 1990 2000 2010

US

$ in 2

013 p

rices p

er

tonne k

ilom

ete

r

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$ 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)





Scope for lower fares on a number of markets


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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





Resulting in much change over next 20 years


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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


Rank by size of O-D passenger flows in, out & within country





Thank you for listening

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