IATA Air Passenger Forecast Shows Dip in Long-Term Demand

Total passenger set to double to 7 billion by 2034

Government policies can counteract economic headwinds    

 The International Air Transport Association (IATA) released its updated passenger growth forecast, projecting that passenger numbers are expected to reach 7 billion by 2034 with a 3.8% average annual growth in demand (2014 baseline year). That is more than double the 3.3 billion who flew in 2014 and exactly twice as many as the 3.5 billion expected in 2015.      

Previously, IATA forecast 7.4 billion passengers in 2034 based on a 4.1% average annual growth rate. The revised result reflects negative developments in the global economy that are expected to dampen demand for air transport, especially slower economic growth projections for China. 

The five fastest-increasing markets in terms of additional passengers per year over the forecast period will be China (758 million new passengers for a total of 1.196 billion), the US (523 million new passengers for a total of 1.156 billion), India (275 million new passengers for a total of 378 million), Indonesia (132 million new passengers for a total of 219 million) and Brazil (104 million new passengers for a total of 202 million). 

• Seven of the ten fastest-growing markets in percentage terms will be in Africa. The top ten will be: Malawi, Rwanda, Sierra Leone, Central African Republic, Serbia, Tanzania, Uganda, Papua New Guinea, Ethiopia and Vietnam. Each of these markets is expected to grow by 7-8% each year on average over the next 20 years, doubling in size each decade. 
• In terms of routes, Asian, South American and African destinations will see the fastest growth, reflecting economic and demographic growth in those markets. Indonesia-East Timor will be the fastest growing route, at 13.9%, followed by India-Hong Kong (10.4%), Within Honduras (10.3%), Within Pakistan (9.9%) and UAE-Ethiopia (9.5%) 

“The demand for air transport continues to grow. There is much work to be done to prepare for the 7 billion passengers expected to take the skies in 2034,” said Tony Tyler, IATA’s Director General and CEO.

“Economic and political events over the last year have impacted some of the fundamentals for growth. As a result, we expect some 400 million fewer people to be traveling in 2034 than we did at this time last year. Air transport is a critical part of the global economy. And policy-makers should take note of its sensitivity. The economic impact of 400 million fewer travelers is significant. Each is a lost opportunity to explore, create social and cultural value, and generate economic and employment opportunities. It is important that we don’t create additional headwinds with excessive taxation, onerous regulation or infrastructure deficiencies,” said Tyler.

Divergence among the BRIC Nations

A sizable gulf has opened up between the performance of air passenger markets in the BRIC economies (Brazil, Russia, India and China). China and India are growing fast, with annual growth this year-to-date of 12.5% and 16.5% respectively. India has bounced back from a subdued 2014, and is seeing a strong increase in domestic frequencies. Although China’s growth rate has moderated, it is still on course to add an additional 230 million passenger journeys between 2014 and 2019. This is more than double the other three BRIC nations put together. Brazil and Russia, by contrast, are struggling. Falling oil and other commodity prices are partly to blame. Economic sanctions have also affected the Russian economy. It is notable that airlines in Brazil pay some of the highest fuel charges in the world; bringing the country’s fuel policy in line with global standards would certainly be a boost for air transport.  

Exciting prospects for Iran and Cuba

The prospects for more open travel between the rest of the world and Cuba and Iran offer exciting possibilities for business, tourism and development as diplomatic relations warm up. Of the two markets, Iran offers the greater potential. Although Cuba is the largest Caribbean country by population, passenger growth would be from a low base of 5 million passengers today to around 13 million by 2034, in the best-case scenario. Iran, by contrast, already has a market of 12 million passengers, mostly domestic flyers. If strong GDP growth is accompanied with a full normalization of international relations and the end to sanctions, the total size of the Iran market could be 43.6 million passengers by 2034. 

“There is a great deal of scope for economic development in Cuba and Iran, and air transport can play an enormous role in that. Relative to their economic development, the people of Iran and Cuba fly less than the global average. In Iran, full integration in the global economy could mean a difference in passenger growth of around 13 million extra travelers a year,” said Tyler.

Trends in the 10 largest air passenger markets

China is expected to overtake the United States as the world’s largest passenger market (defined by traffic to, from and within) by 2029. In 2034 China will account for some 1.19 billion passengers, 758 million more than 2014 with an average annual growth rate of 5.2%. Traffic to, from and within the US is expected to grow at an average annual growth rate of 3.1% that will see 1.16 billion passengers by 2034 (523 million more than 2014). India will displace the United Kingdom as the third-largest market in 2026, with Indonesia rising to number 5 in the world. 

Japan, Spain, Germany and France fall relative to their competitors, Italy falls out of the top 10, while Brazil moves from 10th place to 7th.

Regional growth highlights

• Routes to, from and within Asia-Pacific will see an extra 1.8 billion annual passengers by 2034, for an overall market size of 2.9 billion. In relative terms it will increase its size compared to other regions to 42% of global passenger traffic, and its annual average growth rate, 4.9%, will be the joint-highest with the Middle East. 
• The North American region will grow by 3.3% annually and in 2034 will carry a total of 1.4 billion passengers, an additional 649 million passengers a year. 
• Europe will have the slowest growth rate, 2.7%, but will still cater for an additional 591 million passengers a year. The total market will be 1.4 billion passengers. 
• Latin American markets will grow by 4.7%, serving a total of 605 million passengers, an additional 363 million passengers annually compared to today. 
• The Middle East will grow strongly (4.9%) and will see an extra 237 million passengers a year on routes to, from and within the region by 2034. The UAE, Qatar and Saudi Arabia will all enjoy strong growth of 5.6%, 4.8%, and 4.6% respectively. The total market size will be 383 million passengers. 
• Africa will grow by 4.7%. By 2034 it will see an extra 177 million passengers a year for a total market of 294 million passengers. 

 

Economic prosperity and environmental responsibility

At present, aviation helps sustain 58 million jobs and $2.4 trillion in economic activity. In 20 years’ time, aviation is expected to support around 105 million jobs and $6 trillion in GDP. The aviation industry, however, also recognizes that air travel has an environmental impact. It is committed to reducing its carbon footprint. In 2009, the industry agreed three targets which will ensure that aviation plays its part in ensuring a sustainable future. 

• 1.5% annual fuel efficiency improvement to 2020 
• Capping net emissions through carbon-neutral growth from 2020 
• A 50% cut in net emissions by 2050, compared to 2005. 

“Aviation is determined to achieve carbon neutral growth from 2020. But we need governments to help by agreeing a global market-based measure, to be implemented from 2020. We believe that a global carbon offsetting scheme would be the best option, but the decision rests with the 191 member states represented at the International Civil Aviation Organization, who will meet in late 2016. We urge all governments to agree a global solution and help air transport meet its goals for a sustainable future,” said Tyler.

NIGERIA's OIL CURSE

By Hilary Matfess

On Nov. 8, the head of the Nigerian National Petroleum Corporation, Emmanuel Ibe Kachikwu, announced that the state-run company was on the verge of a major oil discovery in the Lake Chad area after years of failed exploration attempts.

Kachikwu estimated that the new fields could contribute a significant amount to the NNPC's projected 2016 revenue of $20 billion as early as next year. He also suggested the bolstered budget would allow the company to fund more exploration projects. Given that the cratering oil prices and drop-off in oil revenue has contributed significantly to the country’s economic stagnation (the national statistics bureau estimates the national second quarter growth at 2.35 percent as compared to over 6 percent at the same time last year), many Nigerians greeted the announcement with enthusiasm. However, a more thorough examination suggests that this discovery is neither new, nor a blessing. Adding oil to already volatile social and geopolitical factors in the Lake Chad Basin — an ecological region that spans Nigeria, Niger, Chad, Cameroon and the Central African Republic — is a recipe for further instability.

Nigeria’s claims of “significant oil find” in the Lake Chad Basin are not new. It’s long been established that the region has immense potential for petroleum exploration. Chad has been producing oil on its side of the border since the 1970s with production reaching estimated 100,000 barrels a day in 2013.

The area is so valuable that Nigeria and Chad fought a series of border skirmishes in the 1970s over control of the basin. Their disputes remain unresolved. There is still ambiguity over ownership of a number of islands in Lake Chad. There’s been ongoing diplomatic posturing and local communal conflicts between Nigeria, Chad and Cameroon over control of the ecological basin. Nigeria’s intention to drill new oil fields will only heighten the stakes of these tensions and lead to violence.

Boko Haram’s insurgency may have temporarily eclipsed the standoff over drilling rights. But tensions remain. Communities around the Lake Chad Basin have borne the brunt of the insurgency, which has claimed an estimated 20,000 lives and has displaced at least 4 million people since 2009. Any serious attempt at drilling by Nigeria will require subduing the insurgency. However, amid diplomatic wrangling over national boundaries in the basin, regional cooperation on larger security issues remains complicated. Already, the deployment of the 8,7000 member force — drawn from Chad, Niger, Nigeria, Cameroon and Benin — has been delayed due to logistical and political tensions. In particular, Chad has accused Nigeria for not pulling its weight in the offensive against Boko Haram, heightening tensions between the two countries.

Nigeria’s oil discovery in the Lake Chad Basin highlights the urgent need for reform and greater regional cooperation to quell the Boko Haram insurgency. 

Even if Boko Haram is subdued to make way for oil drilling, the group has shown a remarkable resilience and could re-emerge to take advantage of the oil bunkering. As seen in Nigeria’s oil-rich Niger Delta, discontent among local communities in the Lake Chad Basin could lend support to Boko Haram or subsequent militant groups. In the mid-2000s, oil theft, and the vast revenue it produces, allowed for a conflict to accelerate and metastasize in the Niger Delta. The United States Institute of Peace estimates that the Nigerian economy lost approximately $100 billion to oil theft from 2003 to 2008. The consequences of Boko Haram tapping into such a robust revenue stream could be cataclysmic. It is already Nigeria’s single biggest and most lethal crisis since the civil war of the late 1960s. 

Nigeria has proven incapable of protecting oil pipelines from theft and ensuring that oil extraction does not harm local ecologies and communities. There were more than 7,000 oil spills from 1970 to 2000 in the Niger Delta. An estimated 15 percent of Nigerian oil was stolen in 2014, resulting in a loss of 300,000-400,000 barrels per day.

The problem with Nigerian oil production does not stop there; there is also the specter of corruption. According to a recent report by the Natural Resource Governance Institute, a New York-based think tank that provides policy analysis and research, the NNPC withheld more than $12 billion from the sale of 110 million barrels of oil over the past 10 years, “spending the money in a secretive, off-budget manner.”

President Muhammadu Buhari has initiated a serious effort at reducing corruption, especially in the petroleum industry. But the recent arrests of six senior central bank officials by Nigeria’s anti-corruption agency are not sufficient to entrust the petroleum agency to pursue new drilling operations. In fact, the premature announcement of the new oil discovery appears to be part of an effort to make up for falling oil revenues. It could undermine Buhari’s agenda by fracturing the regional effort against Boko Haram and leading to additional loot before institutional reforms can be implemented.

The effects of resource curse and misuse of natural resource wealth, especially in the extractive industries, are well documented. Nigeria appears to be looking gleefully past those lessons and its own experience with oil extraction in the Niger delta. Nigeria’s oil discovery in the Lake Chad Basin should not be taken as a blessing. If anything, it highlights the urgent need for reform and greater regional cooperation to quell the Boko Haram insurgency.

Hilary Matfess is a research analyst at the National Defense University’s Center for Complex Operations. The views expressed in this article are those of the author and do not reflect the official policy or position of the National Defense University, the Department of Defense or the U. S. government.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera America's editorial policy.

Lagos First Lady urges women aviation professionals to inspire more female

The Wife of the Lagos State Governor, Mrs Bolanle Ambode, has called on Women In Aviation (WIA) to continue to do more for women in aviation and other potential female aviation professionals to match with the theme of the conference; Women :Connect, Engage and Inspire the Next Generation.

She said this while speaking at the 2015 annual conference of WIA, Nigeria Chapter in Lagos.
She stated that aviation industry is strategic and that its various departments are sophisticated, highly technical and scientific, adding aviation employment is different from any other job because of the specialised skills and expertise required of the personnel to function effectively and efficiently.

Mrs Ambode, who was represented by Mrs Ogundamola Ogunsanwo, listed such highly specialised areas to include piloting, aircraft maintenance, aero-medicals, Air Traffic Controller (ATC) and several others.
According to her, “What this means to me is that Nigeria women have registered their impact and established their relevance in the complex field of aeronautic as they have done in the other challenging areas of human endeavour .So, who say the women are not flying?

Ogunsanwo stated that considering these feat, women are matching on and on the right part, adding that women should encourage themselves and also strive harder to achieve more.
“Though your association has been doing an exceedingly good job of promoting public awareness of the accomplishments of women in this unique industry, you must do more in consonance with the theme of the conference ;W:omen: Connect, Engage and inspire the Next Generation.” She said

She stated that WIA owe it a duty to inspire the next generation of teeming ladies, young ambitious girls, many of them hungry and thirsty for knowledge.

On his part, the President of WIA, Nigeria Chapter, Rejoice Ndudinachi, stated that women in the association were in tune with trends in the aviation industry and are committed to sustaining contributions to the sector’s development.

She said that as an association it reaches out to schools to sensitise students about career opportunities in aviation, thereby empowering them for better career choices.
According to him, ”We believe in catch them young and we have contributed immensely to the advancement of our very dynamic industry and the society in general .We have organised series of programmes to help the young ones ,most recently ,the Nigerian Girls in Aviation Day.”

She added that WIA also gave special gifts to outstanding children, adding that the body believes this would inspire them to pursue careers in the aviation industry

The WIA President stated that one of the objectives of women in aviation Nigeria is to encourage the young ones to build up their future in aviation, promising that the body would pursue this objective very vigorously.

President Buhari's address at the swearing in of Cabinet Members

"Your Excellency, The Vice President; Professor Yemi Osinbajo; The Senate President, and the Hon. Speaker, House of Representatives; The Chief Justice of Nigeria, Rt. Hon. Justice Mahmoud Mohammed; The National Chairman, All Progressive Congress, Chief John Oyegun; National Leader of APC, Chief Bisi Akande; Other APC Executive Committee Members here present; The Secretary to the Government of the Federation; Head of the Civil Service of the Federation; Honourable Ministers; Members of the Diplomatic Corps; Members of the Press and Invited Guests.

"Today we have reached another milestone in the evolution of our new government which Nigerians overwhelmingly voted into office in the March 28th, 2015 general elections. Today we witness the swearing-in of new ministers of the government of the Federal Republic of Nigeria.

"Since our inauguration on May 29, 2015, the Vice President and I have been mindful of the need to constitute a cabinet that will best deliver our expectations of a better country than we inherited. We want to work towards a prosperous nation respected for the right reasons, and whose citizens can hold up their heads anywhere in the world. And we are optimistic that bringing this set of ministers into the service of our country today is a step in the right direction, a timely move towards realizing our positive goals for our country.

"Since we assumed office in May, I have been mindful of the need to ensure that the appointment of new ministers translates into putting round pegs in round holes while showing sensitivity to our diversity as a people and our various positions as groups of stakeholders in our country.

"I have also been conscious of the need not to repeat such mistakes of the past where the right people were allocated the wrong portfolios, which translated into their performing poorly to our collective detriment despite their obvious capabilities. Also, I have responded to the counsel to consult as widely as possible, given the need to build a stable and all-inclusive government by reaching across our various ethnic and political divides.

"With the inauguration of ministers, our government shall continue more decisively to implement its policies in respect of the economy and in other areas. While working hard to maximise revenue from oil in the face of a sharp decline in the price for the commodity, we are determined to diversify the economy in agriculture to enhance employment and explore solid minerals as a major revenue earner.

"The primary aim is to achieve self-sufficiency in the production of such staples as rice and wheat and to become a major consumer and exporter of both items as well as solid minerals. We intend to pursue policies that will generate massive employment for millions of our youth.

"We shall also continue with greater determination and focus to pursue our goal of ensuring improved security for our country and its citizens, and without letting up on our fight against corruption. Our commitment to defeat Boko Haram and all the threats it constitutes remains as strong as ever. So is our resolve to root out vices such as kidnapping and neutralise the various forms of criminalities that threaten the social peace of Nigerians.

"While recognizing the challenges we face and the need to surmount them, let us not fail to note the progress we have made in the short life of this government, as an indication of how much better we can do as a people driven by patriotism and a common resolve to do things right.

"On the moral sphere, trust is slowly but steadily being re-established between the government and the people. Now, when the government speaks, the people listen; and when the people's expectations are not met, they appreciate that it is not for lack of commitment or trying on the part of government. In effect, government business is now being conducted with transparency and cynicism is waning as a result.

"Our adoption of the Treasury Single Account has resulted in the blocking of financial leakages in the public sector, making more funds available for the business of governance and ensuring the welfare of our citizens. The Central Bank of Nigeria has also assisted more than 30 States of the

"Finally, our new ministers must proceed to work speedily and do their utmost to justify the confidence we have placed in them not only by their conduct but also by their performance in their various positions.

"Over all our economy is poised for sustained job creation, poverty reduction and inclusive growth. Regardless of the present challenges we are confronting, I believe all Nigerians will keep hope alive and sustain their optimism about the future of our economic well being.

"The Ministries have been rationalised and reduced to twenty-four. These are the Ministries and their Ministers.