For many decades, the heart of aviation has centered around the transatlantic routes, with more seats, routes and destinations between the US and Europe than anywhere else in the world. However, in the past decade alone, we’ve seen a massive shift towards the Middle East, and the International Air Transport Association thinks we’re not done yet. Here’s where the aviation industry is heading.
IATA says the ‘center of gravity’ is moving east
When we look at the airline industry, we can talk about its center of gravity (COG) as being the area where the most connectivity exists. This is the place where a country is most integrated into the global air transport network in terms of numbers of destinations, flights and seats.
At the recent IATA Wings of Change Europe conference, IATA chief economist Brian Pearce demonstrated how the COG has moved in the past. Back in 1914, the world’s first scheduled passenger flight took off from St. Petersburg to Tampa in Florida, meaning the center of gravity was there, in Florida.
By 2004, the industry had evolved greatly, and the COG was somewhere between the US and Europe, although slightly closer to Europe thanks to the additional connectivity possible from places like London and Paris. As middle- and far-eastern connections began to rise up, the COG began moving faster towards the east.
Right now, Pearce says that the COG is in the Gulf region. That’s no big surprise, given the big airlines based there and the huge number of global connections they provide. However, over the next 20 years, this GOC will continue to move eastwards, driven by the massive growth expected in the Asia-Pacific region.
The growth in demand for travel in the Asia-Pacific region will, IATA says, bring more than half of the total number of new passengers over the next 20 years. This is being driven by the combination of economic growth in this area, as well as improvement in household income and changes in demographics.
As such, IATA predicts that China will displace the USA as the largest aviation market in the world. By 2024, India will overtake the UK’s third position, hot on the heels of the USA for second place. Also a standout area of growth is Indonesia, which is predicted to become the world’s fourth largest aviation market by 2030, compared to its current position as 10th. Thailand is also expected to grow massively, entering the top 10 aviation markets by 2030, and knocking Italy out of the top 10 altogether.
IATA’s estimates are backed up by the 2019 Cirium Fleet Forecast for commercial aircraft. This report estimates that, of the 48,860 new passenger and freighter aircraft that will be delivered over the next 20 years, almost a quarter will arrive in the Asia-Pacific region (23%). An additional 19% will go to China, bringing the total to almost half (42%) of all the deliveries.
This represents an increase in the combined Asia-Pacific and China fleet from 30% of the global fleet to 42%. Rahul Oberai, VP Sales, APAC for Cirium told Business Insider,
“The new Cirium Fleet Forecast shows that the center of gravity in the aviation industry is shifting eastwards. By 2038, the combined Asia-Pacific and China fleet will increase its global share from 30% to 42%, followed by the North and Latin Americas (28%), Europe and Russia (21%), Middle East (6%) and Africa (3%),”
What do you think about these predictions? Does the move east of the aviation industry’s hub mean good news for the rest of the world, or does this mean new challenges ahead for airlines and passengers in the west? Let us know your thoughts in the comments.