WHERE WILL THE GROWTH OF AIR TRANSPORT STOP?

24 Jul 2023

For decades, air transport has grown by an average of 5% per year, regardless of the basis of calculation. Thus, in the early 1970s, when the number of passengers carried was, so to speak, only a few hundred million, the growth in volume accelerated considerably. In 1970, 310 million passengers used this mode of transport, but in 1980 there were 641 million, i.e. an additional 331 million, i.e. the volume of traffic had doubled in 10 years. In 1990 traffic had increased to 1,020 million passengers and to 1,670 million in 2000. And from that moment the growth in volume soared: more than 1 billion between 2000 and 2010 and more than 1.8 billion between 2010 and 2019, in just 9 years to reach 4,460 million passengers. In short, we did not see where this crazy race would end.

And then the famous COVID was announced and in 2020 traffic collapsed to 1,770 million passengers, still the equivalent of what it was in 2000. It rose to 2.280 million in 2021 and 3.055 million in 2022. It is already believed that the results of 2023 will tangle those of 2019.

Does this mean that air transport will resume its headlong rush and pursue an unbridled development as it has known? This is worth thinking about. The first observation is the very significant increase in tariffs, let's say to simplify that they are 30% more expensive than before the crisis. This is already an important phenomenon of regulation. The frantic search for the lowest rates seems to have stopped. OTAs (Online Travel Agents), which have been a very powerful instrument leading to lower fares, will have to change their mode of operation because airlines will no longer accept that they feed on "incentives" and fees paid by GDS and financed in fact by carriers. So there is no doubt that tariff levels will remain at a much higher level than in 2019.

A new brake comes from the ecological pressure widely relayed by Western governments. Not only will airline customers be made to feel guilty, but bans of a more media than effective nature will be pronounced such as those hitting Air France on the Bordeaux - Orly route or the 10% reduction in "slots" at Amsterdam airport. And no doubt it will be necessary to add one or more inevitable demagogic taxes intended to increase air tickets for the benefit of surface public transport, I mean essentially the train.

However, everything is coming together to curb the growth of air transport. But is it so true and so effective? It seems that only Western countries are affected by this frenzy of actions against this activity. This is not the case in other parts of the world, in Asia, Africa or South America. And in these continents, airlines anticipate very high demand to such an extent that many of them have placed historic orders with manufacturers. In India alone, 1,000 aircraft were ordered during the last Paris Air Show: 500 for Indigo, recently led by former KLM CEO Pieter Elbers, and 500 for the future Air India/Vista conglomerate. Royal Air Maroc has just announced its intention to order 200 new aircraft.

Chinese carriers are running the production lines at full capacity. In total, Airbus holds an order portfolio of nearly 8,000 aircraft. However, current aircraft are much more resistant than old ones. They can be operated for about thirty years while the 1970 generation of aircraft had a duration of no more than 15 years.

In short, despite the constraints decided by Western countries, air transport is likely to continue growing, especially since, given the increase in fares, operators' profits are soaring, which will allow them to finance new aircraft.

Al Baker, the CEO of Qatar Airways and former president of IATA, has already announced that it seems impossible to achieve carbon neutrality by 2050. He said out loud what many are thinking. At best, air transport, at the cost of tremendous efforts, will limit its emissions to their current level and this will be no small feat.