Asia Pacific economies continue to exhibit strong growth. Intrinsic strength, progressive trade agreements among the region's countries, and recovering global demand are helping most economies in the region maintain healthy growth. Led by China and India, the region's economies will grow 4.5 percent per year over the next 20 years, outpacing the world's average growth rate. The region's share of world GDP will expand from 28 percent today to 36 percent by 2032.
Rising traffic levels
During the next 20 years, nearly half of the world's air traffic growth will be driven by travel to, from, or within the Asia Pacific region. Total traffic for the region will grow 6.3 percent per year. Fueled by national economic growth and the increasing accessibility of air transport services, traffic within the region will grow faster than traffic to and from other regions. Domestic and international travel within the region will grow 6.5 percent per year.
Air cargo plays a critical role in the region's economy, transporting goods over difficult terrain and vast stretches of ocean. Some of the world's largest and most efficient cargo operators are located in Asia. The region's air cargo will grow 5.8 percent per year during the next 20 years. Carriers within the region are expected to take 370 new freighters, with an additional 490 conversions.
Asia Pacific airlines will need 12,820 new airplanes, valued at $1.9 trillion, over the next 20 years. The number of airplanes in the Asia Pacific fleet will nearly triple, from 5,090 airplanes in 2012 to 14,750 airplanes in 2032. New low-cost carriers and demand for intra-Asia travel have spurred a substantial increase in single-aisle airplanes, a trend that will continue as single-aisle airplanes gain an increasing percentage of the region's traffic.
Liberalization expands markets
The structure of the Asia Pacific airline industry is changing as regulations liberalize and carriers expand beyond national boundaries. Cross-border franchise agreements and direct investment in foreign carriers allow established airlines access to new markets and promote expanded air service to smaller markets. The growth of air travel as low-cost carriers reduce fares and open new markets testifies to the effects of liberalization. To compete, established airlines are forming low-cost enterprises, often through joint ventures with recognized LCCs. The improved affordability and accessibility of air travel will stimulate demand in established markets and meet emerging travel needs of the rising middle class.