INTERNATIONAL. The world’s airlines carried +6.0% more passengers in 2016 to reach a total of 3.7 billion, according to the International Civil Aviation Organization (ICAO). Growth slowed from the +7.1% rate recorded in 2015.
Low-cost carriers accounted for approximately 28% of total passenger traffic, crossing the milestone of 1 billion passengers for that sector in 2016. In Europe, low-cost carriers transported 32% of all passengers, with Asia Pacific and North America following with 31% and 25% respectively. ICAO also noted that the increasing presence of low-cost carriers in emerging economies had contributed to overall passenger growth.
International passenger traffic, measured in revenue passenger kilometres (RPKs), grew +6.3% in 2016. This was down from the +7.0% recorded in 2015.
All regions, except for Africa and the Middle East, posted slower growth than last year. Europe accounted for the largest share of international RPKs with 36%, increasing +4.3%. Asia Pacific had the second largest share with 29%, and grew by +8.0%. The Middle East had a 15% RPK share and recorded growth of +11.2%.
Source: ICAO
North America, with a 13% share, experienced the lowest pace of growth among all regions at +3.5%. Carriers in Latin America and the Caribbean accounted for 4% of international RPKs and recorded growth of +6.5%. Africa had a 3% share and witnessed an improvement from +2.3% growth in 2015 to +5.7% in 2016.
Over half of the world’s tourists who travel across international borders each year were transported by air and air transport carries some 35% of world trade by value, ICAO said. More than 90% of cross border business to consumer (B2C) e-commerce was carried by air transport.
The forecast of world real gross domestic product (GDP) growth in 2016 is expected to be at around +2.4%, down from the +2.9% pace projection at the beginning of the year. ICAO said the revision was due to “sluggish growth in advanced economies, stubbornly low commodity prices, weak global trade, and diminishing capital flows”. Despite the weak economic conditions, passenger traffic growth was boosted by lower air fares as the result of a fall in oil prices.
ICAO said the airline industry was expected to end 2016 with another record operating profit of around US$60 billion and an operating margin of 8.0%. This comes after an operating profit of US$58 billion and an operating margin of 8.0% in 2015. More than a third of the profits are expected to come from North American carriers, whose domestic market represents 66% of total operations.
