Domestic Travel Surges
One of the more unusual aspects of the latest forecast is the strong surge in domestic travel.
For 20 years prior to the recent recession, domestic growth averaged 2.8% a year compared with international growth of 6.4%. Through 2014 the two segments are expected to enjoy comparable rates of expansion.
The main reason for this change is the emergence of major domestic markets in Brazil, China, and India. GDP growth in the mature Japanese, United States, and European markets is expected to fall below the global average in the next five years.
In contrast, China and India GDP rates are almost three times that average. So, although the United States will remain the largest domestic market, China will add twice as many passengers to its network in the next five years (180.9 million passengers versus 78.3 million).
Brazil and India will also grow their domestic networks at a rate averaging about 10% a year. By 2014 Brazil will cater to 90 million domestic passengers, while India will overtake Australia to become the fifth-largest domestic market. Passenger numbers within the sub-continent will exceed 60 million.
With global figures for domestic travel anticipated to break through the two billion barrier by 2013, the industry will need to respond with investment in both ground and air infrastructure.
The fastest-growing 10 markets through 2014 will see passenger numbers grow by up to 90%, and many of them are in emerging markets still underdeveloped in aviation terms. Countries with double-digit growth include Vietnam (10.9%), South Africa (10.6%), India (10.5%), and the Philippines (10.2%).
“Industry and governments will be challenged to work together even more closely,” says Giovanni Bisignani, IATA Director General and CEO.
Next: A strong rebound