Middle East to lead passenger growth over 20 years: IATA

Muscat: Middle East is expected to lead passenger growth in the world during the next two decades. About 258 million additional passengers are estimated to travel a year on routes to, from and within the region by 2035, a growth of 5 per cent in 20 years from now, said International Air Transport Association (IATA) on Tuesday.
The UAE, Qatar and Saudi Arabia will all enjoy strong growth of 6.3 per cent, 4.7 per cent, and 4.1 per cent respectively with the total market size at 414 million passengers, the IATA said in its 20-year air passenger forecast report said.
Region wise, Asia-Pacific will see an annual growth rate of 4.7 per cent; North American region 2.8%; Europe 2.5%; Latin American 3.8%; and Africa 5.1%.
Globally, the IATA expects 7.2 billion passengers to travel in 2035, a near doubling of the 3.8 billion air travellers in 2016. The prediction is based on a 3.7 per cent annual compound average growth rate (CAGR).
“People want to fly. Demand for air travel over the next two decades is set to double. Enabling people and nations to trade, explore, and share the benefits of innovation and economic prosperity makes our world a better place," said Alexandre de Juniac, IATA director general and chief executive officer.
The forecast for passenger growth confirms that the biggest driver of demand will be the Asia-Pacific region. It is expected to be the source of more than half the new passengers over the next 20 years. China will displace the United States as the world’s largest aviation market around 2029, the note said.
India will displace the UK for third place in 2026, while Indonesia enters the top ten at the expense of Italy. Growth will also increasingly be driven within developing markets. Over the past decade the developing world’s share of total passenger traffic has risen from 24 per cent to nearly 40 per cent, and this trend is set to continue, IATA said.
The 20-year forecast puts forward three scenarios. The central scenario foresees a doubling of passengers with a 3.7 per cent annual CAGR. If trade liberalisation gathers pace, demand could triple the 2015 level. Conversely, if the current trend towards trade protectionism gathers strength, growth could cool to 2.5 per cent annual CAGR which would see passenger numbers reach 5.8 billion by 2035.
The five fastest-growing markets in terms of additional passengers per year over the forecast period will be China (817 million new passengers for a total of 1.3 billion); United States (484 million new passengers for a total of 1.1 billion); India (322 million new passengers for a total of 442 million); Indonesia (135 million new passengers for a total of 242 million); and Vietnam (112 million new passengers for a total of 150 million).
"Economic growth is the only durable solution for the world’s current economic woes. Yet we see governments raising barriers to trade rather than making it easier. If this continues in the long-term, it will mean slower growth and the world will be poorer for it,” said de Juniac.
“For aviation, the protectionist scenario could see growth slowing to as low as 2.5% annually. Not only will that mean fewer new aviation jobs, it will mean that instead of 7.2 billion travelers in 2035, we will have 5.8 billion. The economic impact of that will be broad and hard-felt," de Juniac added.
Whatever scenario is eventually realised, growth will put pressure on infrastructure that is already struggling to cope with demand. "Runways, terminals, security and baggage systems, air traffic control, and a whole raft of other elements need to be expanded to be ready for the growing number of flyers. It cannot be done by the industry alone. Planning for change requires governments, communities and the industry working together in partnership," he said.