Page 230 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
serve an effective soft power tool in China’s territorial felt,” said Juniac. Whatever scenario is eventually realized,
disputes in the South China Sea as it starts to heavily growth will put pressure on infrastructure that is already
traffic the area, not only with goods, but with its own struggling to cope with demand. “Runways, terminals,
population on board luxurious cruise ships (Meesak). security and baggage systems, air traffic control, and
a whole raft of other elements need to be expanded to
Cruise lines are already looking to the largely be ready for the growing number of flyers. It cannot be
untapped market of potential cruisers in China’s inland done by the industry alone. Planning for change requires
cities, a market that is becoming more accessible as the governments, communities and the industry working
nation builds more airports and high-speed railways. together in partnership,” said Juniac . The fastest-growing
“They just can’t ignore a broader market beyond the markets in terms of additional passengers per year over
coastal regions,” Yu said. “If they can extend the market the forecast period will be China with 817 million new
to the hinterland, then the number of cruise travelers passengers for a total of 1.3 billion, followed by the U.S.
could grow from millions to tens of millions” (Whitley with 484 million new passengers for a total of 1.1 billion.
and Dong). Routes to, from and within Asia-Pacific will see an extra
1.8 billion annual passengers by 2035, for an overall
Air Transportation market size of 3.1 billion. Its annual average growth rate
of 4.7 percent will be the second highest, behind the
The International Air Transport Association (IATA) Middle East (IATA).
expects 7.2 billion passengers to travel worldwide in
2035, a near doubling of the 3.8 billion air travelers in IATA said it is bullish on the growth potential of
2016. The prediction is based on a 3.7 percent annual China’s aviation market and believed the new airport
Compound Average Growth Rate (CAGR).“People want to in Beijing, which will start operations in 2019, would
fly. Demand for air travel over the next two decades is set ensure sufficient airport capacity to meet expected
to double. Enabling people and nations to trade, explore, traffic growth. Juniac said, “Today, Chinese airlines and
and share the benefits of innovation and economic airports rank among the top 10 by passenger numbers.”
prosperity makes our world a better place,”said Alexandre Meanwhile, the on-time performance of Chinese airlines
de Juniac, IATA’s Director General and CEO. The forecast was 76.48 percent between January and November
for passenger growth confirms that the biggest driver 2016, an almost 10 percent improvement over the same
of demand will be the Asia-Pacific region. It is expected period the previous year, according to the Civil Aviation
to be the source of more than half the new passengers Administration of China. “I recognize the authorities have
over the next 20 years. China will displace the U.S. as the taken steps to improve the situation,” Juniac said. “Still
world’s largest aviation market (defined by traffic to, from more needs to be done to address the delay situation.
and within the country) around 2024 (IATA). That includes a restructuring of the air route network and
closer civil and military air traffic control cooperation to
The 20-year forecast puts forward three scenarios. The allow rerouting flexibility, especially during bad weather.”
central scenario foresees a doubling of passengers with The IATA said the northern Asian region, including China,
a 3.7 percent annual CAGR. If trade liberalization gathers had the lowest accident rate for the first half of 2016 and
pace, demand could triple the 2015 level. Conversely, if the lowest five-year average between 2011 and 2015. In
the current trend towards trade protectionism gathers 2016, the global airline industry’s profits reached $35.6
strength, growth could cool to 2.5 percent annual billion with a net profit margin of 5.1 percent, the highest-
CAGR, which would see passenger numbers reach 5.8 ever absolute profit generated by the sector and the
billion by 2035. “Economic growth is the only durable highest net profit margin. IATA forecast the global airline
solution for the world’s current economic woes. Yet we industry would make a net profit of $29.8 billion, with a
see governments raising barriers to trade rather than 4.1 percent net profit margin in 2017. “Airlines continue
making it easier. If this continues in the long-term, it will to deliver strong results. Even though the conditions in
mean slower growth and the world will be poorer for it. 2017 will be more difficult with rising oil prices, we see the
For aviation, the protectionist scenario could see growth industry earning $29.8 billion,” the IATA chief said. “That’s
slowing to as low as 2.5 percent annually. Not only will that a very soft landing which is safely in profitable territory.
mean fewer new aviation jobs, it will mean that instead These last three years were the best performance in the
of 7.2 billion travelers in 2035, we will have 5.8 billion. industry’s history - irrespective of the many uncertainties
The economic impact of that will be broad and hard- we face,” he said (Yu, China Plans).
230
serve an effective soft power tool in China’s territorial felt,” said Juniac. Whatever scenario is eventually realized,
disputes in the South China Sea as it starts to heavily growth will put pressure on infrastructure that is already
traffic the area, not only with goods, but with its own struggling to cope with demand. “Runways, terminals,
population on board luxurious cruise ships (Meesak). security and baggage systems, air traffic control, and
a whole raft of other elements need to be expanded to
Cruise lines are already looking to the largely be ready for the growing number of flyers. It cannot be
untapped market of potential cruisers in China’s inland done by the industry alone. Planning for change requires
cities, a market that is becoming more accessible as the governments, communities and the industry working
nation builds more airports and high-speed railways. together in partnership,” said Juniac . The fastest-growing
“They just can’t ignore a broader market beyond the markets in terms of additional passengers per year over
coastal regions,” Yu said. “If they can extend the market the forecast period will be China with 817 million new
to the hinterland, then the number of cruise travelers passengers for a total of 1.3 billion, followed by the U.S.
could grow from millions to tens of millions” (Whitley with 484 million new passengers for a total of 1.1 billion.
and Dong). Routes to, from and within Asia-Pacific will see an extra
1.8 billion annual passengers by 2035, for an overall
Air Transportation market size of 3.1 billion. Its annual average growth rate
of 4.7 percent will be the second highest, behind the
The International Air Transport Association (IATA) Middle East (IATA).
expects 7.2 billion passengers to travel worldwide in
2035, a near doubling of the 3.8 billion air travelers in IATA said it is bullish on the growth potential of
2016. The prediction is based on a 3.7 percent annual China’s aviation market and believed the new airport
Compound Average Growth Rate (CAGR).“People want to in Beijing, which will start operations in 2019, would
fly. Demand for air travel over the next two decades is set ensure sufficient airport capacity to meet expected
to double. Enabling people and nations to trade, explore, traffic growth. Juniac said, “Today, Chinese airlines and
and share the benefits of innovation and economic airports rank among the top 10 by passenger numbers.”
prosperity makes our world a better place,”said Alexandre Meanwhile, the on-time performance of Chinese airlines
de Juniac, IATA’s Director General and CEO. The forecast was 76.48 percent between January and November
for passenger growth confirms that the biggest driver 2016, an almost 10 percent improvement over the same
of demand will be the Asia-Pacific region. It is expected period the previous year, according to the Civil Aviation
to be the source of more than half the new passengers Administration of China. “I recognize the authorities have
over the next 20 years. China will displace the U.S. as the taken steps to improve the situation,” Juniac said. “Still
world’s largest aviation market (defined by traffic to, from more needs to be done to address the delay situation.
and within the country) around 2024 (IATA). That includes a restructuring of the air route network and
closer civil and military air traffic control cooperation to
The 20-year forecast puts forward three scenarios. The allow rerouting flexibility, especially during bad weather.”
central scenario foresees a doubling of passengers with The IATA said the northern Asian region, including China,
a 3.7 percent annual CAGR. If trade liberalization gathers had the lowest accident rate for the first half of 2016 and
pace, demand could triple the 2015 level. Conversely, if the lowest five-year average between 2011 and 2015. In
the current trend towards trade protectionism gathers 2016, the global airline industry’s profits reached $35.6
strength, growth could cool to 2.5 percent annual billion with a net profit margin of 5.1 percent, the highest-
CAGR, which would see passenger numbers reach 5.8 ever absolute profit generated by the sector and the
billion by 2035. “Economic growth is the only durable highest net profit margin. IATA forecast the global airline
solution for the world’s current economic woes. Yet we industry would make a net profit of $29.8 billion, with a
see governments raising barriers to trade rather than 4.1 percent net profit margin in 2017. “Airlines continue
making it easier. If this continues in the long-term, it will to deliver strong results. Even though the conditions in
mean slower growth and the world will be poorer for it. 2017 will be more difficult with rising oil prices, we see the
For aviation, the protectionist scenario could see growth industry earning $29.8 billion,” the IATA chief said. “That’s
slowing to as low as 2.5 percent annually. Not only will that a very soft landing which is safely in profitable territory.
mean fewer new aviation jobs, it will mean that instead These last three years were the best performance in the
of 7.2 billion travelers in 2035, we will have 5.8 billion. industry’s history - irrespective of the many uncertainties
The economic impact of that will be broad and hard- we face,” he said (Yu, China Plans).
230
