Home » Aviation, Breaking News » ACI report: developing economies to represent over 60% of air passenger traffic by 2040

Twenty-two years years from now, emerging and developing economies, many of them in the Asia-Pacific region led by China, will account for more than 60% of all passenger traffic, according to a new report from Airports Council International (ACI) World.

From 2017 to 2040, the predicted total passenger compound annual growth rate (CAGR) for emerging and developing economies is 5.3%, almost double the CAGR of 2.8% for advanced economies, said the World Airport Traffic Forecasts 2018 (WATF), published November 1 by ACI, the trade association of the world’s airports.

China is predicted to become the largest passenger market with just under four billion passengers which will represent a 19% share of the global passenger traffic market. The U.S. and India follow, with 3.1 and 1.3 billion passengers respectively. Together, the three countries will handle 40% of global passenger traffic.

A number of other emerging economies are projected to rise in the rankings, including Indonesia, Turkey, and Vietnam.

According to the report, global passenger traffic surpassed the 8.2 billion passenger mark in 2017 and is expected to double by 2034 based on a projected growth rate of 4.3% per annum. Over the long term, it is projected to grow at an annualized rate of 4.1%, reaching 20.9 billion by 2040.

Asia-Pacific’s airports are predicted to handle more than half of all worldwide passenger traffic growth by 2040.

“Aviation’s gravitational center continues to shift eastward, because future growth in passenger traffic will originate from emerging markets, many of which are in the Asia-Pacific region,” the report said.

Of those country markets that handled over 50 million passengers in 2017, Vietnam, India, Saudi Arabia, the United Arab Emirates, and China are projected to be the fastest growing from 2017 to 2040. Following them in the top 10 list are the Philippines, Indonesia, Colombia, Mexico, and Malaysia.

In terms of domestic passenger traffic growth, an annualized growth rate of 5.7% is forecast for the next two years . The growth trend slows in the long term, resulting in a compound annual growth rate of 3.5% from 2017 to 2040. Growth will come largely from Asia-Pacific, Latin America-Caribbean, and North America, together hosting 88.5% of all domestic passenger traffic expansion.

Despite the steady upward trend exhibited by domestic markets, growth will come primarily from international passenger traffic, forecast to grow at an annualized rate of 4.9% to 2040.

As of 2017, international traffic represented 41.4% of global passenger traffic. It is expected to reach an approximate parity with domestic traffic around 2040.

Meanwhile, on the cargo front, in 2040 an estimated 20% of all air cargo will be handled in the U.S. Meantime, China and the United Arab Emirates, predicted to be the second and third largest markets, will together handle another fifth of the 203.4 million tonnes of global air cargo volumes.

In the short term, however, while there was strong growth in air cargo volumes in 2017, it is unlikely that 2018 will repeat 2017’s growth rates, given the adverse headwinds in trade relations and heightened geopolitical tensions that have played out this year, said the report.

“The prospects for growth in the passenger market over the short, medium and long term remain robust and, while there are some concerns around cargo in the short term, the longer-term outlook is more positive,” said Angela Gittens, director general of ACI World.

“Passenger numbers are set to surpass 8.7 billion in 2018 and the global medium-term forecast shows almost 30% growth in passenger numbers from now until 2022,” she added.

“While this is welcome, surging air transport demand threatens to outstrip current and planned airport infrastructure in many regions around the world. These physical capacity considerations and potential bottlenecks in air transport infrastructure pose challenges to the global industry in accommodating the strong forecast future demand.”

Geopolitical tensions and protectionist policies that retreat from further economic integration and air transport liberalization could also have an adverse effect on the air transport industry, said Gittens.

Graphic illustration courtesy of ACI World


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