The global aviation industry has seen an uptick in air travel demand in the last few years. While the road to recovery from the pandemic-related downturn was challenging for airlines worldwide, most have successfully come out of that phase. From increased available seat kilometers (ASK) to passenger traffic, most major airlines have surpassed the 2019 numbers.
Aviation analysts have also noticed that passengers are becoming increasingly aware of the sustainability aspect of aviation. With the demand for air travel growing, passengers are more interested in knowing the impact of their journey (and air travel in general) on the environment. Airbus recognizes the trend and states in the highlights of the 2023 Global Market Forecast,
“People want to fly – and want to fly sustainably. More and more people are flying for the first time than ever before, while emissions per revenue passenger kilometre have halved through technology and operational improvements over the last 30 years.”
Sustainability awareness among passengers and stakeholders in aviation also means that people are making efforts at every level to offset their carbon footprints on the environment. Airbus also states that the demand for air travel is directly related to global GDP growth.
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The increase in GDP means the expansion of the middle class, which translates to more first-time fliers. In populated regions such as China and India, first-time fliers are growing thanks to more affordable travel offerings and a significant increase in ASK. Airbus provides data on the increasing demand by stating,
“Airbus forecasts that demand for passenger traffic will grow annually by 3.6% (2019-2042 CAGR – Compound Annual Growth Rate) over the next 20 years.”
An increase in air transport significantly impacts global GDP and employment. Since recovery, the industry has welcomed more and more employees. In 2018, the contribution of air transport to the world GDP was 4.1%, which amounts to $3.5 trillion. Approximately 87.7 million jobs were created globally as a result of air transport.
Last week, Simple Flying highlighted the forecasted growth in passenger numbers and the need for new aircraft globally. This article shows how the increase in air transport has impacted GDP and employment in various regions of the world.
1 North America
In North America, primarily including the United States, Canada, and Mexico, the impact of air transport on the regional GDP was 5%. More than 8.7 million jobs were created and fulfilled in the region. North America has one of the largest aviation markets in the world. From aircraft and turbine engine manufacturing to material fabrication and testing facilities, North America is a leader in aviation technologies.
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The big three airlines in the United States, Delta Air Lines, American Airlines, and United Airlines, were ranked the world’s top three airlines by revenue in 2023. Apart from the North American manufacturing giant Boeing, tens of major airlines in the region are responsible for the North American GDP.
2 Latin America
In Latin America, the impact of air transport on the regional GDP was 3.5%. More than 7.7 million jobs were created and fulfilled in the region. Along with its rich aviation history and continuing technological advancements, Latin America has significantly benefited from the growth in air transport. Embraer is one of many examples contributing to the aviation market in the Latin American region.
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The region created both direct and indirect jobs through air transport. Latin America is one of the fastest-growing aviation markets. With future technologies being tested in the area, it is expected to grow further in the coming years.
3 Europe and the CIS
Europe and the Commonwealth of Independent States (CIS) have shown that the impact of air transport on the regional GDP was 4.4%. Approximately 13.7 million jobs were created as a result of the industry at large. These jobs include both direct and indirect employment and contribute to the combined regional GDP. Europe is home to Airbus, another aerospace giant across from the pond from Boeing.
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Airbus works closely with its partners across the continent and is involved in both commercial and defense aviation. The region is also prospered by numerous aerospace companies constantly working on disruptive technologies for future-generation aircraft.
Africa is another region with one of the highest growth rates in aviation, and the impact of air transport on its regional GDP was 2.7%. This is impressive for the continent, considering the size of its overall economy compared to other parts of the world. More than 7.7 million jobs have been created and fulfilled in the region. Many small companies are making their mark in fostering the aviation market in the area.
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Major airlines, such as Ethiopian Airlines, Kenya Airways, and Royal Air Maroc, are expanding their service offerings, thereby contributing more and more to the regional GDP. With the expansion of the middle class, the impact on the aviation job market is substantial.
5 The Middle East
In the Middle East, the impact of air transport on the regional GDP was an astounding 7.6%. Over 3.4 million jobs were created and fulfilled in the region. The Middle Eastern market is growing at a much faster rate. With new low-cost and full-service airlines, employment opportunities are increasing. Additionally, the Saudi Arabian Vision 2030 is targeting more than 100 million visitors in the country in the next decade.
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Riyadh Air, a brand-new entrant to the market (not commercially operational until 2025), is taking the aviation job market by storm. And as many readers can guess, the Middle Eastern big three, Emirates, Etihad Airways, and Qatar Airways, majorly contribute to the regional GDP.
6 Asia Pacific
In the APAC region, the impact of air transport on the regional GDP was 3.1%. This is a significant number considering the population of the area. The percentage impact amounts to nearly 46.7 million jobs across the vast region. China, India, and other Asian countries have been booming in terms of aviation growth. According to Airbus,
“Asia, notably China and India will power growth, further shifting aviation’s ‘centre of gravity’ toward Asia.”
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While China continues to struggle with the recovery of its international traffic, the domestic ASK and passenger demand has increased by more than 25% compared to pre-pandemic levels. Similarly, India has seen tremendous aviation and related business growth in the last several years.
What are your thoughts on the impact of air transport on the GDP and employment of global regions? Are you associated with the aviation industry in some respect? Tell us in the comments section.
Source: Airbus GMF