Key highlights:
- In 2024, global passenger traffic is expected to surpass pre-pandemic levels, reaching 9.5 billion passengers(104% of 2019 levels). Revenue Passenger Kilometers (RPK) are expected to reach 8.8 trillion (101% of 2019 levels).
- By 2030, global passenger traffic is forecast to exceed 12 billion, driven by growth in international markets, particularly in the Asia-Pacific and Middle East regions.
- By 2042, global passenger traffic is projected to reach 19.5 billion, representing a twofold increase compared to the levels recorded in 2024.
- By 2050, global passenger traffic is projected to grow at a CAGR of 3.6% to reach 244% of 2019 levels, driven by strong growth in emerging markets. RPK are expected to grow at a CAGR of 4.2%, reaching 284% of 2019 levels by 2050.
- In 2023, the largest passenger markets were the United States, China, India, and Spain. By 2042, emerging markets like Indonesia and Thailand are expected to enter the top 10. By 2052, the largest markets will include China, the United States, India, and Indonesia.
- By 2052, domestic routes in China/Mongolia, North America, and Southwest Asia, along with long-haul connections between Asia, the Middle East, and Europe will dominate the top 20 global routes, reflecting the growing influence of Asia-Pacific and Middle Eastern markets in global air travel.
Retrospective analysis: COVID-19 impact and recovery
Since March 2020, when the World Health Organization (WHO) declared the COVID-19 outbreak a global pandemic, daily life across the globe has been significantly impacted. The crisis led to severe consequences for the global economy, trade, and mobility.
At the onset of the pandemic, prior to the widespread distribution of vaccines, the aviation industry faced an unprecedented reduction in passenger numbers, with a decline of 5.5 billion passengers (ACI World) [1] and 5.8 trillion Revenue Passenger Kilometers (RPK) (ICAO) [2] in 2020 due to travel restrictions and lockdowns. This represented a 61% drop in global passenger traffic and a 66% decline in global RPK, compared to 2019.
Additionally, the global economy encountered a new array of challenges, from geopolitical conflicts to disruptions in global supply chains. These risks led to significant price increases in various sectors, including food and energy. The rise in costs prompted a tightening of global monetary policies, with central banks raising interest rates to curb inflation. This, in turn, led to a decline in economic activity and consumer confidence.
The aviation industry is closely linked to macroeconomic factors. The impact of rising prices and disposable income remains a critical determinant of air transport demand. Additionally, the industry faced pressures from rising costs and a tight labor market, creating uncertainty during the recovery period.
Source: ACI World
In 2020, according to ICAO statistics, global RPK dropped by 66% compared to 2019, totaling 3 trillion RPK. International flights decreased to 1.3 trillion RPK, a 76% drop from 2019, while domestic flights fell to 1.6 trillion RPK, a 49% decrease from 2019. Similarly, ACI World statistics showed that global passenger numbers dropped to 3.6 billion, a 66% decline compared to 2019. International passenger traffic fell to below 1 billion passengers, marking a 76% decrease from 2019, while domestic passenger traffic amounted to 2.3 billion, a 52% decline from 2019. This gap reflected the greater reduction in long-haul international flights compared to short-haul domestic flights during the early stages of the pandemic.
With the lifting of international travel restrictions, passenger traffic recovered in 2022, reaching 6.7 billion (73% of the 2019 level), and RPK rebounded to 5.9 trillion (67% of the 2019 level). By 2023, global passenger numbers reached 8.7 billion (95% of the 2019 level), and RPK totaled 8.1 trillion (94% of the 2019 level).
Looking at the most recent data, by June 2024 year-to-date (YTD), total passengers had increased by 11% year-on-year (YoY), reaching 102% of the June 2019 YTD level. While the domestic market experienced slower growth at 5% YoY, the international market drove the recovery with a 17% YoY increase.
Source: ICAO (RPK), ACI World (Total passengers)
2024 preliminary analysis
ACI World estimates that 2024 will be the first year for global passenger volume to fully recover and surpass 2019 levels, reaching 9.5 billion passengers (104% of 2019). In its early 2023 short-term forecast, ICAO predicted that most route groups would return to or exceed pre-pandemic levels by the end of 2023. While this was largely achieved, the overall recovery remained slightly below expectations, at 94% of 2019 levels, primarily due to underperformance in certain route groups, particularly those involving Asia and especially routes to and from China. ICAO forecasts that global RPK will reach 8.8 trillion (101% of 2019) in 2024, with most routes recovering or exceeding pre-pandemic levels. By 2025, ICAO projects global RPK to rise to 9.4 trillion (108% of 2019), driven by the recovery of these lagging routes, further solidifying the overall market rebound.
Medium- to long-term outlook
Despite positive macroeconomic developments, such as easing inflationary pressures, the medium- to long-term outlook has become more cautious due to escalating geopolitical conflicts, persistent labor market bottlenecks, and constraints on aircraft deliveries. While the gradual recovery of international passengers and the return to profitability for airlines signal positive momentum, travel costs remain elevated compared to pre-pandemic levels, and uncertainty surrounding global trade policies continues to grow.
Source: ACI World
* Africa & Middle East – Central America/Caribbean: below 1 billion RPK
Source: ICAO
* Other Routes (in Billions RPK):
Europe – Intra China & South West Asia (2019: 58, 2023: 59, 2024: 67)
China – Middle East (2019: 42, 2023: 41, 2024: 46)
Africa – Asia/Pacific (2019: 33, 2023L 19, 2024: 25)
North America – South West Asia (2019: 20, 2023: 20, 2024: 23)
Intra North Asia (2019: 17, 2023: 12, 2024: 16)
Latin America/Caribbean – North Asia & Pacific South East Asia (2019: 10, 2023: 5, 2024: 7)
Latin America/Caribbean – China (2019: 1, 2023: 1, 2024: 1)
Source: ICAO
Source: ICAO
* Other Routes (in Billions RPK):
Intra Central America/Caribbean (2019: 13, 2023: 12, 2024: 13)
Africa & Middle East – South America (2019: 12, 2023: 12, 2024: 14)
Latin America/Caribbean – North Asia & Pacific South East Asia (2019: 10, 2023: 5, 2024: 7)
Latin America/Caribbean – China (2019: 1, 2023: 1, 2024: 1)
Africa & Middle East – Central America/Caribbean (below 1 billion RPK)
Source: ICAO
* Africa & Middle East – Central America/Caribbean: below 1 billion RPK
Source: ICAO
* Other Routes (in Billions RPK):
Africa – North America (2019: 23, 2023: 20, 2024: 21)
North America – South West Asia (2019: 20, 2023: 20, 2024: 23)
Source: ICAO
Source: ACI World
Source: ACI World
The long-term forecasts from ICAO and ACI World both indicate continued growth in the global aviation industry. While there are differences in the metrics used (RPK vs. Total passengers—see footnote 3 for details) and the methodologies employed, the overall trends align. It is projected that, by 2044, RPK will reach 224% of the 2024 level (ICAO), while total passenger numbers will be 205% of 2024 levels, effectively doubling the volume of 2024.
Global CAGR projections
Source: ICAO (RPK), ACI World (Total passengers)
Source: ICAO (RPK), ACI World (Total Passengers)
In the long-term the global passenger market dynamic is expected to shift, transitioning from advanced economies towards emerging and developing economies. This dynamic would lead to changes in the composition of the top 20 passenger markets (ACI World) and routes (ICAO), with countries in the Asia-Pacific and Middle East region gaining a more visible presence.
Top 20 markets (Total passengers)
Source: ACI World
Top 20 routes
Factors impacting air transport demand
Upside factors
- World economy growth
The baseline IMF (International Monetary Fund) forecast predicts global economic growth at 3.2% in 2024 and 3.2% in 2025. Advanced economies are expected to experience slight growth, increasing from 1.7% in 2023 to 1.8% in 2024 and 1.8% in 2025, while emerging markets will see a slowdown, decreasing from 4.4% in 2023 to 4.2% in 2024 and 2025. Global growth is projected to average 3.1% over the next five years, remaining mediocre compared to the pre-pandemic average.[3] - Easing inflationary pressure
Global inflation is forecast to decline steadily, from 6.7% in 2023 to 5.8% in 2024 and 4.3% in 2025, with advanced economies returning to their inflation targets sooner than emerging markets and developing economies (IMF).[4] - Global trade growth
World merchandise trade volume is projected to grow by 2.6% in 2024 and 3.3% in 2025, following a larger-than-expected decline of 1.2% in 2023.[5] - Surge in international travel worldwide
According to the first UNWTO World Tourism Barometer of 2014, international tourism is expected to fully recover to pre-pandemic levels in 2024, with initial estimates pointing to a 2% growth above 2019 levels.[6] - Stabilization of jet fuel prices
Jet fuel prices have stabilized in 2024. As of September 27, 2024, the global average jet fuel price is $86.22 per barrel, down 7.9% from the previous month (approximately $93.60 per barrel) and 23.2% lower compared to the same period last year (approximately $112.30 per barrel).[7] - Airline industry returning to profitability
In 2023, the airline industry is expected to report a net profit of US$27.4 billion with a 5.7% operating margin, driven by higher yields in Asia Pacific, Latin America, and Europe. In 2024, net profits are forecast to rise to US$30.5 billion, with a 3.1% net profit margin and a 6.0% operating margin, supported by strong demand, improved fleet utilization, and higher load factors. [8]
Downside risks
- Escalating geopolitical conflict
Geopolitical risks can impact the global economic outlook, affecting growth, inflation, financial markets, and supply chains. Conflicts like the Russia-Ukraine war and the Israel-Hamas war fuel regional instability, impacting energy and food security and driving inflation. The US-China relationship could also affect sourcing patterns and tariffs, while Asia-Pacific governments are securing access to critical minerals.[9] - Labor market bottlenecks
The global unemployment rate is projected at 4.9% in 2024, slightly lower than in 2023 (5.0%). However, progress in reducing labor underutilization remains slow, with 402 million people unemployed or underemployed. These deficits are more pronounced in developing countries and among women.[10] - Constraints on aircraft deliveries
Aircraft deliveries are expected to reach their highest number since 2018, with a 17% year-on-year increase. However, supply chain issues have led to a reduction in the forecasted deliveries, from 1,777 to 1,583, an 11% decrease. These constraints may impact airlines’ ability to meet growing demand, despite a strong order backlog and market recovery post-COVID.[11]
Footnotes
[1] ACI World Total Passengers: ∑Number of passengers carried.
[2] ICAO RPK: ∑ (Number of passengers carried × Distance of flight).
[3] https://www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024
[4] https://www.imf.org/external/datamapper/PCPIPCH@WEO/WEOWORLD
https://www.imf.org/en/Publications/WEO/Issues/2024/10/22/world-economic-outlook-october-2024
[5] https://www.wto.org/english/res_e/booksp_e/trade_outlook24_e.pdf
[6] https://www.unwto.org/news/international-tourism-to-reach-pre-pandemic-levels-in-2024
[7] https://www.iata.org/en/publications/economics/fuel-monitor/
[9] https://www.spglobal.com/en/research-insights/market-insights/geopolitical-risk
Tags: Airports Council International (ACI) World International Civil Aviation Organization (ICAO)
