The Travel Industry is Booming

The Travel Industry is Booming

The Travel Industry is Booming

The International Air Transport Association (IATA) said Tuesday it expects 7.8 billion passengers to travel in 2036, a near doubling of the 4 billion air travelers expected to fly this year.

The prediction is based on a 3.6 percent average compound annual growth rate noted in the release of the latest update to IATA’s 20-year air passenger forecast.

“It’s fantastic news for innovation and prosperity, which is driven by air links. It is also a huge challenge for governments and industry to ensure we can successfully meet this essential demand,” said Alexandre de Juniac, IATA’s director general and CEO.

The biggest driver of demand will be the Asia-Pacific region said IATA, which represents 275 airlines accounting for 83 percent of global traffic.

The Asia-Pacific region will be the source of more than half the new passengers over the next two decades.

IATA said the point at which China will replace the United States as the world’s largest aviation market (defined as traffic to, from and within the country) has moved two years closer since last year’s forecast.

It now anticipates this will occur around 2022, through a combination of slightly faster Chinese growth and slightly reduced growth in the United States.

The fastest-growing markets in terms of annual additional passengers in 2036 compared to 2016 will be China, the United States, India, Indonesia and Turkey.

IATA said risks to the forecast have been identified and that maximizing the potential benefits of aviation growth will depend on current levels of trade liberalization and visa facilitation being maintained.

“Increasing demand will bring a significant infrastructure challenge,” De Juniac cautioned.

Airbus on Wednesday delivered its first A320neo aircraft to AirAsia, which was assembled at the Airbus Final Assembly Line Asia (FALA) in north China’s port city of Tianjin.

The European aerospace giant delivering the aircraft was a key stepping-stone in their move into the Asian aviation market.

“The delivery of the A320neo is a milestone for our Asia Final Assembly Line, which will help us to meet the robust demand from the customers in China and the Asia-Pacific region,” said Eric Chen, president with Airbus Commercial Aircraft China.

“AirAsia will continue to benefit from all variants of the Airbus family and enjoy efficiencies throughout its existing fleet,” he said.

The Airbus FALA in Tianjin was inaugurated in 2008 and is the third single-aisle aircraft final assembly line location of Airbus worldwide, following Toulouse and Hamburg.

It was also the first Airbus Final Assembly Line outside Europe. To date, about 340 aircraft have been assembled and delivered from Tianjin.

The new A320 aircraft is powered by CFM LEAP-1A and capable of carrying 186 passengers.

“We would like to congratulate Airbus for achieving yet another milestone. This is also a milestone for AirAsia,” said Aireen Omar, CEO with AirAsia.

“As AirAsia is expanding our network and grow our fleet, it is important for us to stay at the forefront of the market,” she added.

Based in Kuala Lumpur in Malaysia, AirAsia is Asia’s leading low-cost carrier with an airline network of more than 120 destinations across the Asia-Pacific region.

AirAsia operates 59 routes connecting 19 cities in China. Since April 2005, it has served for more than 40 million passengers in and out of China, making it the largest foreign airline by passenger volume in China market.

It is also the largest airline customer for the A320 family. It has placed orders for a total of 578 aircraft from Airbus, including 404 A320neo family aircraft.

The A320neo family, the newest series of Airbus single-aisle aircraft, incorporates the latest technology such as new generation engines and sharklets, which contribute to fuel-saving and emission-reduction.

With more than 5,200 orders received from 95 customers worldwide since its launch in 2010, the A320neo family has gained around 60 percent of the market share of its class.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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