AIR TRANSPORTATION
GROWTH: Global and
Local Scenarios
By Assoc. Prof. Ir. Ts. Dr Abd. Rahim Abu Talib
Head of Department Aerospace Engineering, Universiti Putra Malaysia
Dr Nadiir Bheekhun
Senior Lecturer, Faculty of Information System and Engineering,
Management Science University
Ts. Liew Chee Leong
Head of Engineering, SR Aviation Sdn Bhd
I
n the global scenario, air travel, with a growth
of 60% over the past 10 years has proved to
be resilient to external shocks whether sudden
or gradual. It now has two options to deal with
passenger growth; firstly intensifying the frequency
of flights which requires more operational aircraft,
or secondly by increasing aircraft capacity.
In 2017 international passenger traffic soared
by 7.9% compared with 2016. The International
Air Transport Association (IATA) expects a near
doubling by 2036 of the 4 billion air travellers that
will fly this year. The prediction is based on a 3.6%
average Compound Annual Growth Rate (CAGR)
contained in the release of the latest update of
the association’s 20-Year Air Passenger Forecast.
Such a forecasting tool is necessary for evaluating
technologies, approaching future emissions
or anticipating capacity constraints. In terms
of profitability, it is forecast that the global air
transport industry’s net profit will rise to US$38.4
billion in 2018, an improvement from the US$34.5
billion expected net profit in 2017 (revised from
a US$31.4 billion forecast in June 2017). IATA
predicts that strong demand, improved efficiency
and reduced interest payments will help airlines
enhance their net profitability in 2018 despite
rising costs. 2018 is expected to be the fourth
consecutive year of sustainable profits with a
return on invested capital (9.4%) exceeding the
industry’s average cost of capital (7.4%).
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