800 million more passengers by 2016

Iata has released an industry traffic forecast showing that airlines expect to welcome some 3,6bn passengers in 2016. This is around 800 million more than the 2,8 billion passengers carried by airlines in 2011.

These figures are revealed in the Iata Airline Industry Forecast 2012-2016. This industry consensus outlook for system-wide passenger growth sees passenger numbers expanding by an average of 5,3% per annum between 2012 and 2016. The 28,5% increase in passenger numbers over the forecast period will see almost 500 million new passengers travelling on domestic routes and 331 million new passengers on international services.

The regional outlook over the 2012-2016 forecast period shows that Africa will report the strongest passenger growth with 6,8% compound annual growth rate. International cargo demand will rise 4%.

The emerging economies of Asia-Pacific, Latin America and the Middle East will see the largest passenger growth. This will be led by routes within or connected to China, which are expected to account for 193 million of the 831 million new passengers over the forecast period (159 million on domestic routes and 34 million traveling internationally). Passenger growth within the Asia-Pacific region (domestic and international) is expected to add around 380 million passengers over the forecast period.

Through 2016, the United States will continue to be the largest single market for domestic passengers (710,2 million). In the same year, passengers on international routes connected to the United States will total 223 million, making it the largest single market for international travel as well. Reflecting the maturity of the United States market, growth rates (2.6% for domestic and 4.3% for international) will be well below the international average (5.3 % for international travel and 5.2% for domestic traffic).

“Despite the current economic uncertainty, expected demand for connectivity remains strong. That’s good news for the global economy. Growing air transport links generate jobs and underpin economic growth in all economies. But exploiting these will require governments to recognise aviation’s value with policies that do not stifle innovation, tax regimes that do not punish success and investments to enable infrastructure to keep up with growth,” said Tony Tyler, Iata’s director general and CEO. Globally, aviation supports some 57 million jobs and US$2,2 trillion in economic activity.

Lanseria to become aerotropolis

Lanseria International Airport will see dramatic infrastructural changes in the coming years as the new owners have announced plans to transform the region into a true airport city or aerotropolis.

LIA was sold to a consortium of investors, including Sandton-based pan-African infrastructure development fund manager, Harith; women’s empowerment company, Nozala; and the Government Employee Pension Fund (GEPF). Harith is heavily invested in the aviation industry in Africa and has financed two airports in Tunisia through the TAV Group.

Pule Molebeledi, Harith’s investor relations and communications executive, told Tourism Update that Harith’s investment would seek to augment the plans of the City of Johannesburg to turn the area into an aerotropolis. The city first announced expansion plans for Lanseria in 2009 after an extensive study into the possible expansion of South African airports. In March this year, executive mayor, Parks Tau, restated these plans in his 2012 state of the city address.

The airport’s new owners have now approved a capital expenditure plan allowing for drastic infrastructural improvements, which could make an aerotropolis a real possibility. Pule says plans for the airport will see development of a new runway, the upgrade of the existing aircraft parking bays and the development of a new multi-storey parkade. He says the plan further allows for continued expansion and development of the terminal building and associated retail and other airport infrastructure.

“We essentially want to build LIA as a pre-eminent low-cost operator in South Africa through the increased passenger numbers and scheduled flights,” says Pule. He says LIA has been able to attract a lot of business from privately owned aircraft as well as scheduled airlines, thanks to its strategic location and modern infrastructure. “This growth is forecast to continue and potentially accelerate, on the back of growth and new entrants in the South African low-cost carrier market and as more regional airlines and SA-based airlines begin flying to LIA,” Pule says.

Industry players in the aviation sector have welcomed the ambitious expansion plans for the airport. Hein Kaiser, Communications Manager Mango Airlines, says he expects the major infrastructural developments that are planned will likely enhance operations in the near future. “An increase in economic activity within the geographic area of secondary airports is normally an indirect consequence of stimulation brought about by air travel. Increased development in the area will, in turn, increase demand for air travel, so it could become a win-win situation.”

GEPF communication manager, Khaya Buthelezi, says the investment in LIA is a secure one within a volatile environment. “From a GEPF perspective, our investment in Lanseria is informed by our development investment framework that has identified infrastructural investments as an attractive asset class with diversification benefits and investment returns that are uncorrelated with financial market volatility.”