Ahead of its Annual General Meeting in Dubai, IATA released its Global Outlook for Air Transport, offering key insights into the industry's future. While rich in data, the report raises critical questions about aviation’s growth trajectory, challenges, and constraints.
Air Travel: Who’s Flying?
IATA forecasts a 3.8% CAGR in passenger traffic over the next 20 years, while Alton Aviation Consultancy is slightly more optimistic at 4.0% over the next decade. But where will this growth come from? Population growth is unlikely to be the key driver, as the UN projects less than 1% CAGR globally, with the highest increases in Africa and India, while China's population has already begun declining.
A striking statistic: in 2018, only 11% of the world’s population flew, and just 4% traveled internationally. Expanding this base is possible, but not at an explosive rate. Airlines must focus on retaining frequent travelers and attracting competitors' customers, with advertising and loyalty programs playing a major role.
Air Travel: Where to?
Most major airports already operate near capacity, with expansion projects mostly in India and China. Europe and the U.S. are seeing limited growth, while Africa has only two new airports planned (Ethiopia and Rwanda). Low-cost carriers (LCCs) help by using secondary airports, but this requires improved cargo logistics and multimodal transport networks. Meanwhile, environmental restrictions (e.g., Schiphol’s flight caps) could further limit expansion.
Air Travel: How?
Can airlines meet growth expectations? Challenges include aircraft production delays, supply chain issues, and pilot shortages. Some strategies include:
- Higher load factors and larger aircraft (e.g., A321NEO surpassing A320NEO in orders).
- Extended aircraft leases to sustain fleet size.
- LCC growth, offering more affordable travel options in emerging markets.
Aviation has proven its resilience, but long-term success depends on tracking demographic trends, aligning with sustainability goals, and ensuring OEMs deliver aircraft on time. Growth won’t happen in isolation—airlines must navigate broader economic, environmental, and regulatory shifts.