1. Aviation forecasting activities
ICAO Strategic Objective:
Economic Development of Air Transport
Aviation forecasting activities
Narjess Abdennebi
Chief, Economic Analysis and Policy (EAP) Section
AIR TRANSPORT BUREAU

2. Background Assembly Resolution A37-20
Appendix C : Forecasting, planning and economic analyses
The Assembly:
Requests the Council to prepare and maintain, as necessary, forecasts of future trends and developments in civil aviation of both a general and a specific kind, including, where possible, local and regional as well as global data, and to make these available to Contracting States and support data needs of safety, security, environment and efficiency
Requests the Council to develop methodologies and procedures for the preparation of forecasts, the analyses of cost-benefit or cost-effectiveness, and the development of business cases to meet the needs of the Organization, the regional air navigation planning groups and, as required, other systems or environmental planning bodies of the Organization

3. Decisions must be supported by good analysis and information
Why we need forecasts?
Positive results in aviation are driven by sound decisions; Forecasts are essential for planning purposes
Decisions must be supported by good analysis and information
Good Analysis and Information must be based on good analytical models and data

4. Direct link to the facts & figures page
Facts and figures on ICAO website
Direct link to the facts & figures page

5. ICAO website: Medium-term forecasts
Total (domestic and international) scheduled traffic

6. Long-term air traffic forecasts: “GATO”
12/6/2013
Past decade air transport trends
Demand drivers analysis:
Economic growth
Liberalization
Low Cost Carriers
Improving technologies …
Challenges for air traffic development
Fuel prices
Airport/ANSPs capacity constraints
Competition and inter-modality
Forecasts
Structure and methodology
Passenger and cargo
Results and analysis by route group
PASSENGERS
AND CARGO TRAFFIC
The new ICAO Global Air Transport Outlook to 2030 (GATO) summarizes the latest and most expansive passenger and freight traffic forecasts ever produced by ICAO. Designed to help regulators and the aviation industry respond to evolving passenger and shipper needs over the next 20 years, this unique document benefits from an expanded system of routes and more sophisticated econometrics techniques, the worldwide expertise of ICAO and the extensive data provided by ICAO’s Member States; in short, the most advanced techniques and the timeliest information.
ICAO forecasts have considered many divergent and opposing viewpoints and, while they readily confirm the present optimism of airlines and aircraft manufacturers, they are, in every way, balanced, independent, comprehensive and objective. Although the forecasts themselves receive the major emphasis of this document, it further contains, various market trends and analyses, taking into account economic growth, technological change, market liberalization, the growth of low cost carriers, airport congestion and oil prices, amongst others. Finally, the GATO examines the major factors that promote or impede the growth of civil aviation and how they influence the resulting forecasts.
Available at:
12 June 2013

7. Passenger traffic forecasts for the horizon 2030
12/6/2013
Source: Cir 333, Global Air Transport Outlook to GATO
12 June 2013

8. RPK distribution in 2030 Domestic International
12/6/2013
Domestic
International
Source: Cir 333, Global Air Transport Outlook to GATO
12 June 2013

9. Licensed personnel forecasts
Available at:

10. Future licensed personnel: Surplus or shortage
Pilots needs and training capacity in 2030

11. Economic Analysis and Policy Section
Studies on regional differences in international airline operating economics
Scope of the studies
all international routes aggregated into 17 route groups.
passenger, freight and mail yield data for scheduled services
regional differences in the costs on a route group basis
major causes of regional differences in costs
Used by IATA for prorating airline passenger revenues from interline journeys
SPans2007
Economic Analysis and Policy Section

12. E-learning courses on forecasting activities
Forecasting Aviation activities
address key demand and supply issues
assess forecasting methodologies
discuss future strategies
e-Learning courses reference material

13. Support to Planning and Implementation Regional Groups (PIRGs)
Regional Traffic Forecasting Groups (TFG):
Specific forecasts of traffic and aircraft movements
Meet the requirements of the PIRGs
Used in the planning of air navigation systems in ICAO’s regions
PIRG reports available on the ICAO website at:

14. TFGs meetings Regional Traffic Forecasting Groups (TFGs): 2011: 2012:
Africa-Indian Ocean TFG (AFI TFG)
Middle East Air Navigation PIRG (MIDANPIRG) Traffic Forecast Sub-Group
2012:
Asia/Pacific Area TFG (APA TFG)
Caribbean/South America Region TFG (CAR/SAM TFG)
2013:

15. Forecasting for Environmental protection
SUPPORT TO CAEP:
Participation in the Forecast and Economic Analysis Support Group (FESG) of the Committee on Aviation Environmental Protection (CAEP)
provision of input in terms of aviation data toward the development of global long-term traffic and fleet forecasts for environmental analyses
review of a global constrained forecasting model for potential use in support of environmental assessment of the potential impact of constraints.

16. Support through additional sensitivity analysis
MBM potential surcharge
Impact of change in yield resulting from
´´MBM surcharge´´ on long-term traffic growth
for international scheduled traffic
Yield: Passenger Operating Revenue per Revenue Passenger-Kilometre

17. Traffic forecast model
Top down econometric model based on:
Disposable Income represented by real GDP per capita
Average fares represented by real international yield (International revenues / international RPKs)
Ticket price increase reflecting the cost-pass through is treated in the same manner than the current treatment of the fuel surcharge and could be an “MBM surcharge”
Fuel surcharge is showing a new trend as it is cost pass through to the passenger
GDP : Gross Domestic Product
RPK: Revenue Passenger-Kilometre

18. World international traffic
Fares trends in real terms
Between 1997 and 2011, yields decreased (in real terms) by around 0.6% p.a. for world international traffic
World international traffic

19. Scenarios and assumptions
Forecasts are for horizon 2036 with continuous and yearly MBM implementation
Ticket price increase reflecting cost pass through is simulated by yield assumptions
+0.1% annual change in yield corresponds to:
US$ 3.9 increase by flight stage of 2200 Km in
The positive assumptions in yield change should reflect the impact of MBM offsetting by simulating an increase in ticket price
Scenario
impact
on yield
Yield total variation
Baseline
No impact
-0.5% p.a.
Scenario 1
+0.1 pt.
-0.4% p.a.
Scenario 2
+0.2 pt.
-0.3% p.a.
Scenario 3
+0.3 pt.
-0.2% p.a.

20. Impact of a yield change on world international scheduled traffic
World international traffic
In 2036:
Modeling assumptions to the horizon 2036
GDP per capita:
+3.0% annual growth
Scenarios of change in real yields:
from -0.5% to -0.2% annual growth
The model shows that air travel demand is driven at 75%, by available income and at 25% by fares

21. Impact of MBM on world international air travel demand
World international traffic
Scenario
Impact
on yield growth
on traffic in 2036
Baseline No
0.0%
Scenario 1
+0.1 pt. per year
-0.43%
Scenario 2
+0.2 pt. per year
-0.87%
Scenario 3
+0.3 pt. per year
-1.32%
In 2036:
2036 international traffic
8.5 trillion RPKs
-37 billion RPKs
-74 billion RPKs
-113 billion RPKs

22. Conclusions
The results of both analyses show an impact of MBM leading to a decrease between 0.2 and 1.3% in international air travel demand for the year 2036
Impact of MBM on operating result and travel costs could be changed by cost of carbon, availability of alternative fuel, etc.
Impact of MBM on traffic may vary according to the different price elasticity of air travel demand in international markets based on their maturity level

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The statements made herein are based on the mentioned assumptions and are expressed in good faith. Where the supporting grounds for these statements are not shown, ICAO will be pleased to explain the basis thereof.