It was reported last week by the International Air Transport Association (IATA) that air passenger growth is expected to reach 7 billion (bn) by 2034, with an average increase of 3.8% per annum.
This notable figure has more than doubled the 3.3bn recorded in 2014 and also comes in at twice as many as the 3.5bn expected to fly by the end of this year.
Last year, IATA forecasted that 7.4bn passengers would fly over the same period but following “negative developments in the global economy”, as well as political events it has had to release this revised outlook. However, despite this, the latest predictions released by the trade association are still quite phenomenal.
Issued on November 26, the forecast discusses the shape of the economy and future outlook and explains that the slow economic growth projections for China have contributed towards the lower anticipated air passenger figures seen in the report.
But in despite of this, IATA explains that the five fastest-increasing markets in terms of additional passengers (based on an annual average) will be China, the U.S, India, Indonesia and Brazil.
It also says that Africa will be home to seven of the 10 fastest growing markets in percentage terms, listing the Top 10 places as: Malawi, Rwanda, Sierra Leone, Central African Republic, Serbia, Tanzania, Uganda, Papua New Guinea, Ethiopia and Vietnam, with each of these markets expected to grow by 7-8% per year.
And Asian, South American and African destinations are highlighted as areas that will experience the fastest growth, in terms of routes.
So with an influx of passengers expected to travel by plane over the next 20 years, and many regions preparing for fast growth, we have to look at how the industry will prepare for – and fulfil – such a significant rise in demand.
The passengers are coming…
Airlines, Maintenance Repair and Overhaul providers (MROs), Original Equipment Manufactures (OEMs), suppliers and airports are just some of the organisations that will have to adapt their business models and strategies in order to meet the new wave of passenger growth. And that’s in addition to these businesses already trying to evolve alongside the fast-growing markets that have already started to blossom.
As with any predicted growth, there is a level of excitement and anticipation for what the future holds, such as the opportunities that it will bring. But there will also be a level of unease, especially with regards to the challenges that the industry will face.
For example, the UAE is already tackling the issue of a crowded air space. So we have to ask how the expected future demand will actually affect this area of the global market?
While the future surge in passenger traffic will definitely lead to more consolidation, innovation and profit, there are additional steps that industry players will need to take in order to remain competitive, right through until 2034.
Plan ahead and do it well
According to Boeing, in 2014, there were approximately 21,600 aircraft in service, and this number is expected to double over the next 20 years to an in-service fleet of 43,560 aircraft.
So there’s no shying away from the fact that all companies (no matter how big!) need to plan for the forecasted growth and intense competition that will follow. It’s this very future that has the potential of being extremely lucrative but also highly challenging.
Of course, there are the obvious steps that a business such as an airline can take to improve its services and overall flying experience, to ensure that it stands out against fellow competitors and secures repeat business. Undeniably, improving value for customers is a key to success.
Then, there are the MROs, suppliers and OEMs that in recent years have leant towards consolidation in a bid to offer cost-effective solutions to customers, while safeguarding their competitive edge. Similarly, joint ventures between a wide variety of organisations, mergers and/or acquisitions have become increasingly popular in today’s fast paced market.
But what really wows?
Indeed, expanding networks, increasing passenger comfort and offering cheaper air fairs are some of the ways in which airlines can attract passengers and meet demand.
So unsurprisingly, the industry is seeing an increase in the number of options made available to air transport passengers, including: in-flight entertainment systems with thousands of shows at the touch of a button; a full LED cabin lighting system; and extra-comfortable wide seats (Airbus offers a standard 18-inch wide seat in economy class, for example).
But for all businesses, one of the key things to consider alongside customer value is being compliant and having a tight hold of your business operations and strategies.
After all being compliant and up to date with all rules and regulations is a sure-fire way to ensure that industry players and consumers alike have trust in your products and services.
Certainly, compliance is something that lies at the heart of any cost-effective operation. And the fact that there are a selection of products out there specifically designed to help aid the loading, sorting and updating of regulatory documents and data makes it a whole lot easier.
For example, with an IT solution such as Rusada’s Envision, your company can manage everything from current fleet and maintenance operations to quality assurance, ensuring that accurate tracking of compliance and responsibility can be achieved.
By having a reliable hub of accurate information like Envision at your fingertips your business is able to carry out complex forecasting scenarios for both actual and planned events. Therefore you can effectively plan ahead and better prepare yourself for the impending passenger boom.