Global aviation industry sets new record in traffic, profit
Record 4.1 billion passengers were carried by the industry on scheduled services in 2017, generating $60 billion in operating profit
A new record 4.1 billion passengers were carried by the aviation industry on scheduled services in 2017, generating another year of high operating profit of around $60 billion, International Civil Aviation Organisation (ICAO) on Thursday.
According to the preliminary figures released by ICAO, the passenger traffic indicates a 7.1 per cent increase over 2016 as budget carriers continued to push global air traffic to new record levels last year.
The airline industry was expected to end 2017 with another record operating profit of around $60 billion and an operating margin of eight per cent. The net profits for the industry are expected to be around $36 billion with nearly 45 per cent of this being generated by air carriers of North America, the Montreal-based agency said.
Improving economic conditions forecast by the World Bank could see traffic growth and profitability momentum continuing in 2018, it said.
"The sustainability of the tremendous growth in international civil air traffic is demonstrated by the continuous improvements to its safety, security, efficiency and environmental footprint. This sustainability is the result of concerted efforts and cooperation at the national, regional, and global levels, particularly in terms of ICAO compliancy, which is key to accessing the global network," said ICAO Council President Dr Olumuyiwa Benard Aliu.
ICAO Secretary General Dr Fang Liu said air traffic growth is making key contributions towards the achievement of United Nations Agenda 2030 Sustainable Development Goals, offering an opportunity to lift a generation out of poverty, figuratively and literally. "As a UN agency, ICAO is deeply committed to ensuring that all countries have an opportunity to benefit from the doubling in flight and passenger volumes forecast for the next 15 years," said Liu.
The number of departures rose to approximately 37 million globally, and world passenger traffic, expressed in terms of total scheduled revenue passenger-kilometres (RPKs), posted an increase of 7.6 per cent with approximately 7.7 trillion RPKs performed. This growth is a slight improvement from the 7.4 per cent achieved in 2016.
ICAO said the air traffic growth is illustrated by the fact that over half of the world's 1.2 billion tourists who travelled across international borders last year were transported by air, and that air transport now carries some 35 per cent of world trade by value. Indeed, more than 90 per cent of cross border Business-to-Consumer (B2C) e-commerce was carried by air transport.
"Air travel demand growth has gained solid momentum, supported by the ongoing improvement in global economic conditions throughout the year. World real gross domestic product (GDP) growth is projected to be at 2.7 per cent in 2017, an acceleration from the 2.4 per cent in 2016, and is expected to further strengthen to 2.9 per cent in 2018," ICAO said.
The lower air fares owing to the low fuel price also continued to stimulate traffic growth, albeit at a more moderate level compared to 2016.
International scheduled passenger traffic expressed in terms of RPKs grew by eight per cent in 2017, up from the 7.8 per cent recorded in 2016. All regions recorded stronger growth than in the previous year, with an exception of a slowdown in the Middle East due to a combination of factors such as the competitive environment - competing hubs and more point-to-point services, low oil prices and the impact of a strong US dollar.
The Middle East region carried 14 per cent RPK share and experienced a significant decline in growth from the 11.8 per cent observed in 2016 to 6.9 per cent in 2017. Europe remained as the largest international market with 37 per cent share of world international RPKs, and grew strongly by 8.1 per cent, supported by the improved economic conditions in the region.
Asia/Pacific had the second largest share with 29 per cent, and grew by 9.6 per cent, the second strongest growth among all regions. In terms of domestic scheduled air services, overall markets grew by seven per cent in 2017, an improvement from the 6.7 per cent growth recorded in 2016. Owing to the strong demand in India and China, especially the former with over 20 per cent growth, the Asia/Pacific region grew strongly by 10.6 per cent in 2017 while North America posted a slower pace compared to last year, at 3.8 per cent in 2017. Both regions were the world's largest domestic markets with each accounting for around 41 per cent share of world domestic scheduled traffic, ICAO said.
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