Region's aviation sector to 'grow strongly' at a CAGR of 4.4% and see extra 290mn passengers’ over next 20 years
The Middle East’s aviation sector will “grow strongly” at a compound annual growth rate of 4.4% and see an extra 290mn passengers’ by 2037, the International Air Transport Association said on Thursday.
The total market size will be 501mn, IATA said in a passenger analysis report.
The Asia-Pacific region will drive the biggest growth with more than half the total number of new passengers over the next 20 years coming from these markets, IATA said.
Growth in this market is being driven by a combination of continued robust economic growth, improvements in household incomes and favorable population and demographic profiles.
China will displace the United States as the world’s largest aviation market (defined as traffic to, from and within the country) in the mid-2020s. The rebalancing of China’s economy towards consumption will support strong passenger demand over the long term.
India will take 3rd place after the US, surpassing the UK around 2024.
Indonesia is forecast to be a standout performer—climbing from the world’s 10th largest aviation market in 2017 to the 4th largest by 2030.
Thailand is expected to enter the top 10 markets in 2030, replacing Italy, which drops out of the ranking.
IATA revealed that present trends in air transport suggest passenger numbers could double to 8.2bn in 2037.
An increasing shift Eastwards in the center of gravity of the industry is behind the continued strong growth. Over the next two decades, the forecast anticipates a 3.5% compound annual growth rate (CAGR), leading to a doubling in passenger numbers from today’s levels.
The Association warned, however, that growth prospects for air transport, and the economic benefits driven by aviation, could be curtailed if protectionist measures are implemented by governments.
IATA’s Director General and CEO Alexandre de Juniac said, “Aviation is growing, and that is generating huge benefits for the world. A doubling of air passengers in the next 20 years could support 100mn jobs globally. There are two important things that stand out about this year’s forecast.
“Firstly, we are seeing a geographical reshuffling of world air traffic to the East. And secondly, we foresee a significant negative impact on the growth and benefits of aviation if tough and restrictive protectionist measures are implemented.”
The 3.5% CAGR to 2037 assumes an unchanged policy framework over that period. Policy shifts, however, are likely over time. Should protectionism continue to expand in a “reverse globalisation” scenario, aviation would continue to grow, but at a slower pace and deliver fewer economic and social benefits.
Under a liberalised environment connectivity would generate significantly more jobs and GDP growth.
“Global prosperity depends on air connectivity. Aviation is sensitive to policies that either support or undermine growth. And these seem to be pointing in the wrong direction. Dampening demand for air connectivity risks high quality jobs, and economic activity dependent on global mobility. This forecast is a cautionary warning to governments. First, the industry will grow but they must clear the infrastructure bottlenecks to bring that growth to their home markets. And secondly, governments must understand that globalization has made our world more socially and economically prosperous. Inhibiting globalization with protectionism will see opportunities lost,” said de Juniac.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
Al Khaliji profit up 6% to QR646mn in 2019
QIIB briefs Qatar Academy students on Islamic banking
Chamber, Turkish delegation push for setting up of manufacturing hubs in Qatar
Listed firms ‘need to bring in more women’ on their boards to improve Qatar’s ranking in ESG framework
‘Green Swan’ event could trigger financial crisis: BIS
International Business Delegation Summit to take place in Doha on April 6-9
Pinsent Masons holds Mideast arbitration symposium in Qatar
Weaker economic conditions take toll on Islamic finance growth
New Indian law to protect foreign investors to exclude tax demands