INGENIEUR Traffic Forecast Figure 1: Major Domestic Markets (Source: IATA) Drivers of Change Recently, IATA carried out a study of the Future of the Airline Industry 2035 to identify the key drivers of change that air transport organisations should be considering to prepare for future opportunities and challenges over the next 20 years. The study consisted of four phases (1) interviews and horizon scans to identify drivers of change (2) prioritization of the drivers of change and themes (3) scenario development and (4) identification of implications and recommendations. Out of 50 identified forces, 13 of them were classified as having a greater than average impact and uncertainty. These are: ● ● Alternative fuels and energy sources, ● ● Cybersecurity, ● ● Environmental activism, ● ● Extreme weather events, ● ● Geopolitical (in)stability, ● ● Infectious disease and pandemics, ● ● International regulation of emissions and noise pollution, ● ● Level of Integration along air-industry supply chain, ● ● New modes of consumption, ● ● Price of oil, ● ● Strength and volatility of the global economy, ● ● Tensions between data privacy and surveillance, and ● ● Terrorism 6 10 VOL 2018 VOL 74 55 APRIL-JUNE JUNE 2013 The Asia-Pacific region will lead the world’s air traffic by 2036 (Airbus’ Global Market Forecast or GMF 2017). It has been recorded by IATA that there is a shift towards the East and the biggest driver of demand will be the Asia-Pacific region as it is seen to be the source of more than half of new passengers over the next two decades. Domestic China air traffic will displace the United States as the world’s largest aviation market (defined as traffic to, from and within the country). It has moved two years closer since last year’s forecast, as shown in Figure 1. It is anticipated this will occur around 2022, through a combination of slightly faster Chinese growth and slightly reduced growth in the US. The UK will fall to fifth place, surpassed by India in 2025, and Indonesia in 2030. Thailand and Turkey will enter the top ten largest markets, while France and Italy will fall in the rankings to 11 th and 12 th respectively as shown in Figure 1. In 2036, Asia- Pacific will dominate with 50% traffic flows as per Airbus’ GMF 2017 (Figure 2). However, it should be pointed out that the above estimated forecast is subject to two main factors; namely, the level of trade liberalization and visa facilitation. The above prediction assumed that both elements are maintained as of now. If trade protectionism and travel restrictions are put in place, the benefits of air connectivity will decline as growth could slow to 2.7%, in other words, 1.1 billion fewer passenger journeys annually by 2036. Conversely, the potential benefits of aviation can be greater if we move towards trade liberalization with an annual growth rate that could be more than two percentage points faster than predicted, leading to a tripling in passenger numbers over the next 20 years, as depicted in Figure 3. Simultaneously, a contingency plan will be required whereby the aviation industry should be working closer with the communities and Governments to accommodate the predicted growth without compromising the quality of airport infrastructure, airport security and cargo handling amongst others. IATA has been pressing for an urgent reform in the air traffic management globally in order to cut delays, costs and emissions.