assists in the development of airport capacity to meet growing demand supports the development of improved ground access to airports

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1 ATAG The Air Transport Action Group (ATAG) is a coalition of organisations from throughout the air transport industry, formed to press for economically beneficial aviation capacity improvements in an environmentally responsible manner. ATAG is a leading proponent of aviation infrastructure development, advocating the economic benefits of air transport, the industry s excellent environmental performance and the need for major improvements in airport, surface access and air traffic management capacity. ATAG s world-wide membership includes airlines, airports, manufacturers, air traffic control authorities, airline pilot and air traffic controller unions, chambers of commerce, tourism and travel associations, investment organisations, ground transport and communications providers. To achieve its objectives, ATAG: provides support for the expansion of air traffic management capabilities to meet future industry demands. assists in the development of airport capacity to meet growing demand supports the development of improved ground access to airports Recognising that these goals can only be obtained in an environmentally responsible manner, ATAG: emphasises the air transport industry s progress in minimising environmental impact promotes the environmentally responsible growth and development of air transport December 1999 This edition of the European Air Transport Forecasts is the second update of an original report prepared for ATAG by IATA in It covers European domestic and international air traffic through 1998 forecasting up to Air Transport Action Group 33 Route de l'aeroport, P.O. Box 406, 1215 Geneva 15, Switzerland Telephone: +41 (22) Telefax: +41 (22) Website: Page 1

2 Summary of conclusions Europe s share of worldwide international passenger traffic was 58.9% in 1998 and will decline to 58.0% by 2015 (Page 8). 1 European international passenger traffic will be over two times greater in 2015 than in 1998 (Page 9). Total demand for air transport in Europe was over 541 million passengers in This includes domestic and international passengers to, from and within the region (Page 9). This overall demand will more than double by 2015 to 1,101 million passengers. The projected average annual rate of growth is 4.8% between 1998 and 2005, 4.0% between 2005 and 2010, and 3.8% between 2010 and 2015 (Page 9). International passenger numbers to, from and within Europe amounted to 393 million in They are forecast to increase to 824 million passengers by 2015, an average annual growth rate of 4.4% (Page 9). International passenger traffic to, from and within Europe represented 72.6% of total European passenger traffic in This percentage is expected to increase to 74.8% by 2015 (Page 10). Domestic passenger traffic represented 27.4% of the total for This share is forecast to drop to 25.2% by 2015 (Page 10). The United Kingdom has been and will remain Europe s dominant traffic market. By 2015, 310 million passengers will travel to, from and within the United Kingdom. Europe s other major markets in 2015 will be Germany, Spain, France and Italy (Page 14). The strongest growth in traffic between 1998 and 2015 among the top eight European countries is estimated for the Netherlands, with 5.2% per annum (Page 15). 1 Europe includes countries from Greenland and Scandinavia in the north, to Spain, Greece and Turkey in the south, and from Russia (west of Urals) in the east to the Atlantic ocean in the west (Page 5). Page 2

3 Summary of conclusions (continued) Of passengers travelling on international scheduled services to/from and within Europe, 62% travelled on intra-european routes in This traffic is forecast to grow by 4.3% per annum on average between 1998 and 2015 (Pages 18-19). Routes to and from the Americas dominated intercontinental traffic, with 55 million passengers in However, the routes that will grow the fastest are those to and from the Middle East/Far East (Page 18). The United Kingdom will remain the dominant market for intercontinental traffic to and from the Americas and Asia. However, for Africa, France will remain the main market (Pages 20-22). Within Europe, the dominant international traffic flows in 1998 were between the United Kingdom and Spain (15.5 million passengers), Germany and Spain (14.9 million passengers) and the United Kingdom and Ireland (8.5 million passengers) (Page 23). The most heavily travelled routes within Europe in 1998 include Madrid - Barcelona, Milan (LIN)-Rome (FCO) and Paris (ORY)-Nice (Page 24). The opening of the Channel Tunnel has had a more serious effect on the ferry companies than the airlines in terms of the market share of passenger movements to/from the United Kingdom (Page 25). Secondary airport traffic grew more rapidly than traffic at major European hub airports between 1994 and 1998, except in the Netherlands (Page 28). Lufthansa and British Airways were the largest European airlines in Each carried more than 35 million passengers on international and domestic routes (Page 29). Low-cost carriers have become an integral part of the European aviation scene. Although they have only a very small share of the passenger market, their marketing profile and influence is being felt throughout the industry (Pages 31-32). Page 3

4 Forecast Methodology Methodology Historic domestic and international passenger traffic data was collected from each individual European Civil Aviation Authority, to produce a consolidated total for Europe. Double counting of passengers travelling between countries within Europe was avoided by dividing the number of passengers identified as travelling within Europe by two. Charter passengers The distinction between scheduled and charter traffic has become blurred as some countries, e.g. Germany and Sweden, no longer report passenger traffic as schedule or charter. In this forecast, we could not make a meaningful distinction between international/domestic scheduled and charter passenger traffic. Therefore international and domestic passenger traffic are used instead. IATA Passenger Forecast data Passenger traffic volumes between European countries and individual world regions shown in pages 18 to 22 came from IATA country-pair passenger traffic information, obtained for the production of the IATA Passenger Forecast. These passengers were identified as being international scheduled passengers. Page 4

5 European region : Definition In this report, Europe is divided into two sub-regions: Western Europe: Andorra, Austria, Belgium, Cyprus, Denmark, Faeroe Islands, Finland, France (excluding overseas territories), Germany, Gibraltar, Greece, Greenland, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Malta, Monaco, Netherlands, Norway, Portugal (including Azores and Madeira), San Marino, Spain (including Canary Islands), Sweden, Switzerland, Turkey, United Kingdom. Central/Eastern Europe: Albania, Armenia, Azerbaijan, Belarus, Bosnia-Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Former Yugoslav Republic of Macedonia, Georgia, Hungary, Latvia, Lithuania, Moldova (Republic of), Poland, Romania, Russian Federation (West of the Urals), Slovakia, Slovenia, Ukraine, Yugoslavia (Serbia and Montenegro). Source: IATA Western Europe : represented 90.2% of total European international passenger traffic in Central/Eastern Europe : represented 9.8% of total European international passenger traffic in Page 5

6 Main demographic and socioeconomic trends in Europe Europe s population will increase from 859 million in 1998 to 900 million by Its share of total world population will continue to decline slowly. Population by world region : History and forecast Millions 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Asia/Pac Africa Source: DRI / Mc Graw-Hill Note: Europe includes all CIS and Central/Eastern Europe states, but not Turkey and Cyprus since the World Bank considers these countries as part of the Middle East. Americas Europe Middle East Europe's share of total world population % % % % Gross Domestic Product of Western Europe will see positive growth, similar to North America but less than Asia/Pacific. Western Europe Asia/Pacific North America Average Average Average annual annual annual (US $ billions) rate (US $ billions) rate (US $ billions) rate ,160 3,659 5, , % 5, % 7, % , % 7, % 8, % , % 8, % 9, % Source: DRI / Mc Graw-Hill Note: GDP figures are in 1990 constant terms Page 6

7 International passenger traffic Europe versus total world European international passenger traffic will be over two times greater in 2015 than in World World Europe Europe Index Index Average Average Annual Annual Growth Growth Index Index Average Average Annual Annual Growth Growth % 4.9% % 4.5% % 4.4% % 5.0% % 4.1% % 4.0% Total world international passenger traffic : Increased at an average annual rate of 6.6% between 1985 and It reached 538 million passengers in 1998 (ICAO Member States only, scheduled and charter traffic combined). Total world international passenger traffic : Is forecast to grow by 4.9% between 1998 and 2005, 4.5% between 2005 and 2010 and 4.4% between 2010 and European international passenger traffic : Is expected to grow at lower rates than total world traffic during the forecast period. Page 7

8 European international passenger traffic share of world Europe s share of total world passengers will slightly decline as other world regions, notably Asia/Pacific grow faster Europe 58.9% 59.6% 58.0% North America 25.5% 24.7% 24.1% Asia/Pacific Region analysed Rest of world Source: IATA Note : The shares of each region cannot be added together, as it would imply double counting of traffic between these regions (Asia/Pacific-Europe, Asia/Pacific-North America and Europe-North America) 32.1% 32.0% 33.8% Europe will experience an increase in market share to million passengers over the period The market share will then decline as Asia/Pacific resumes strong growth from 2005 onwards. North America s share declines throughout the forecast period from 25.5% (115.5 million passengers) in 1998 to 24.1% (217.0 million passengers) in Page 8

9 Forecast of total European passenger traffic (domestic and international) The combined total of domestic and international passenger traffic to, from and within Europe was estimated at over 541 million passengers in This traffic will double by the year All All Services Services Domestic Domestic International International Total Total Passengers Passengers Average Average Annual Annual Growth Growth Total Total Passengers Passengers Average Average Annual Annual Growth Growth Total Total Passengers Passengers Average Average Annual Annual Growth Growth % 4.8% % 4.2% % 5.0% % 4.0% % 3.6% % 4.1% % 3.8% % 3.3% % 4.0% Average Annual Growth % 4.3% 3.7% 3.7% 4.4% 4.4% Note : Russia was excluded from international and domestic traffic categories due to uncertainties about the validity of the data. Overall growth : Total European passenger traffic is made up of two components which are (a) domestic passengers, (b) international passengers. Each component includes both scheduled and charter traffic. Definition of domestic traffic : Traffic within each European state is considered as domestic. Traffic between metropolitan France and its overseas territories is not considered as domestic but part of Europe-Caribbean. Traffic between States, and within the Schengen 2 area, is considered as international over the forecast period A group of EU countries (excluding UK, Denmark, Ireland, Sweden and Greece) through which goods and people can move without government controls. Page 9

10 Breakdown of traffic between domestic and international The largest European traffic category in 1998 was international. Its share of total passengers will increase from 72.6% in 1998 to 74.8% in % 26.4% 25.8% 25.2% 72.6% Total passengers (millions) : 73.6% 74.2% 74.8% ,100.6 International Domestic Domestic passenger traffic : Its share of total traffic is forecast to decline slightly during the forecast period, from 27.4% in 1998 to 25.2% in International passenger traffic : This traffic category is forecast to grow slightly from 72.6% in 1998 to 74.8% in Page 10

11 European passenger traffic past trends There was significant growth in both international and domestic passenger traffic between 1994 and Annual passengers (millions) Past evolution of European passenger traffic International Domestic International passenger traffic Past trends : The overall growth from averaged 6.8%, with a high rate of 13.6% taking place in 1987 over 1986, and a low of 5.2% in Domestic passenger traffic Past trends : The overall growth from averaged 4.9%, with a high rate of 9.4% taking place in 1987 over 1986, and a low of 6.2% in Since 1993 : Improved surface travel has meant domestic passenger traffic has grown more slowly than international. Page 11

12 European passenger traffic projected trends International passenger traffic will grow at a faster rate than domestic traffic over the forecast period. Annual passengers (millions) Forecast evolution of European passenger traffic International Domestic International passenger traffic Forecast trends : Will grow by 5.0% per annum on average between 1998 and 2005, 4.1% per annum between 2005 and 2010 and 4.0% between 2010 and Domestic passenger traffic Forecast trends : Will grow by 4.2% per annum on average between 1998 and 2005, 3.6% per annum between 2005 and 2010 and 3.3% between 2010 and This relatively high growth comes from many large countries including the United Kingdom and Germany. Reasons for stronger growth of international passenger traffic : Continuation of past trends. Globalisation. Lower unit costs, resulting in real reductions in air fares and increased economic activity. Page 12

13 European total domestic and international traffic past and future growth European passenger traffic has demonstrated considerable fluctuations in growth before Annual rates of growth 15.0% 10.0% 5.0% 0.0% Annual percent changes in passenger traffic - history and forecast % change - Total traffic % change - Domestic % change - International -5.0% History Forecast -10.0% Past trends : Demand increased at an average rate of 6.3% per annum between 1985 and 1989, and 6.6% per annum between 1989 and : The only year of the period showing a significant decline, mainly due to the combined effect of the Gulf war, rising fuel prices and the economic recession : A strong recovery, following the 1991 decline. Forecast rates of growth : An average annual rate of growth of 4.3% per annum is anticipated for the whole period Page 13

14 Major travel markets in Europe domestic and international combined The United Kingdom was and will remain the region s dominant traffic market. The size of this market will more than double between 1998 and Million passengers (total domestic and international) Rank Country United Kingdom Germany Spain France Italy Netherlands Switzerland Turkey Ranked according to 1998 data Germany, Spain and France were the next largest markets in Europe after the United Kingdom. Contrast between countries : Although Italy s economy in 1998 was larger than that of the United Kingdom, its traffic level in 1998 was just 40% of the level achieved by the United Kingdom. Importance of the Netherlands : Despite its small size, the Netherlands handles large numbers of passengers who connect at Amsterdam-Schiphol Airport. Page 14

15 Fastest growing travel markets in Europe The Netherlands will achieve the most rapid growth over the forecast period, followed by Turkey and the United Kingdom. Average annual rates of growth in total domestic and international traffic Rank Country Netherlands 8.8% 5.3% 5.1% 5.2% 2 Turkey 14.5% 5.6% 4.8% 5.1% 3 United Kingdom 6.6% 5.3% 4.1% 4.6% 4 Germany 7.3% 4.8% 4.1% 4.4% 5 Italy 7.0% 4.8% 3.8% 4.2% 6 France 5.5% 4.5% 3.6% 4.0% 7 Spain 6.8% 4.1% 3.5% 3.8% 8 Switzerland 5.6% 4.4% 3.3% 3.7% Ranked according to annual rates of growth Most rapid growth recorded in the past : Turkey, with 14.5% average rate between 1985 and Variations between countries : For the whole period between 1998 and 2015, the average annual rate of growth will range from 3.7% per annum for Switzerland to 5.2% per annum for the Netherlands. In absolute terms : The largest growth in absolute terms will be achieved by the United Kingdom, with 166 million additional passengers in 2015 over 1998, followed by Germany (114 million additional passengers) and Spain (80 million additional passengers). Page 15

16 Total passengers for the five main European countries past trends The United Kingdom and Germany were the dominant European markets and experienced the strongest growth. Annual passengers (millions) Top five European countries - Past evolution of total domestic & international passengers United Kingdom Germany France Spain Italy Strongest growth among the top five countries in the period : Germany, with an average annual growth of 7.3% per annum. Lowest growth among the top five countries in the period : France, with an average annual growth of 5.5%. Spain replaced France as the third largest European market in Page 16

17 Total passengers for the five main European countries projected trends The United Kingdom will remain the most important European market. Top five European countries - Forecast evolution of total domestic & international passengers Annual passengers (millions) United Kingdom Germany France Spain Italy The United Kingdom will be the fastest growing market of the top five countries during the forecast period, with million passengers in 1998 to in Germany will have the second fastest growing market followed by Italy. Italy achieved an average annual rate of growth of 4.8% for the period , higher than that of France (4.5%) and Spain (4.1%). France achieved an average annual rate of growth of 4.0% for the period , with Italy achieving 3.9% and Spain 3.6% for the same forecast period. Italy achieved an average annual growth rate of 3.7% for the forecast period , with France and Spain each achieving 3.5% for the same forecast period. Page 17

18 Forecast of international scheduled passengers between Europe and main world areas The most rapid growth in international scheduled passenger traffic is expected to take place between Europe and Middle East/Asia. However, Within Europe will continue to be the most important traffic area. Europe-Americas Avg. growth 4.4% Within Europe Avg. growth 4.3% Note : Traffic figures are in million annual passengers. Growth rates are average annual figures. Europe-Africa Avg. growth 4.7% Europe-Middle East/Asia Avg. growth 5.1% Europe-Middle East/Asia : This will be the fastest growing market. This market will rebound from the Asian crisis and should experience an annual growth rate of 5.1%. By 2015, the number of passengers will have more than doubled. Europe-Americas : Of all international markets from Europe this is the one that will experience the slowest growth rate at 4.4% reflecting a maturing market. Though in terms of passengers it will remain the largest international market. Page 18

19 Breakdown of European international scheduled traffic by main world region There will be little change in the distribution of share of European international scheduled passenger traffic between 1998 and Asia 12.4% Asia 13.8% Americas 20.6% Within Europe 62.4% Americas 20.5% Within Europe 60.9% Africa 4.7% Africa 4.8% The dominant region is and will remain Within Europe : As the other regions develop over the next 20 years, Within Europe s share will decline from 62.4% to 60.9%. The region with the strongest growth in share will be Asia (which includes the Middle East and the Far East) : Its share will grow from 12.4% in 1998 to 13.8% in The Americas will experience a marginal decline reflecting a mature market. The market share between Europe and Africa will increase slightly. Page 19

20 Forecast of scheduled passengers between the main European countries and the Americas The most rapid growth between the Americas and the main European countries will take place in France and Spain. T H E A M E R I C A S Note : Traffic figures are in million annual passengers. Growth rates are average annual figures. Spain Avg. growth 5.0% United Kingdom Avg. growth 4.3% France Avg. growth 5.0% The Netherlands Avg. growth 3.7% Germany Avg. growth 4.3% Switzerland Avg. growth 4.3% Italy Avg. growth 2.9% Europe-US : With about 19 million annual passengers, this market will remain by far the largest. France and Spain are the two countries that will see the largest growth : France has just signed an open sky agreement with the US, which should generate increased traffic between the two countries. Page 20

21 Forecast of scheduled passengers between the main European countries and Africa The most rapid growth between Africa and the main European countries will take place in the United Kingdom. Note : Traffic figures are in million annual passengers. Growth rates are average annual figures. United Kingdom Avg. growth 6.1% France Avg. growth 5.0% The Netherlands Avg. growth 1.0% Germany Avg. growth 3.7% Switzerland Avg. growth 3.0% Spain Avg. growth 4.1% AFRICA Italy Avg. growth 3.2% The UK is expected to experience the strongest growth to Africa with a 6.1% annual increase over the forecast period. The most important market : France is by far the most important European country in terms of air traffic to/from Africa. South-Africa : The overall improvement in the Western Europe-South Africa outlook can be linked to improving economic growth prospects coupled with a growing number of tourists. Page 21

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