Aviation's Economic Success and Future Growth
The global economy, connectivity, and social development are all significantly influenced by air travel. Its many contributions to trade, employment, and tourism have strengthened its position as a key driver of economic development and growth.
Economic contributions of air transport
The aviation sector is a major contributor to the global economy, accounting for $3.5 trillion (4.1%) of GDP. Commercial aviation drives 5% of the GDP in the United States alone, or an astounding $1.25 trillion in 2022. Approximately 87.7 million jobs are supported by this industry worldwide, of which 11.3 million are direct work opportunities. One of the significant aspects of the aviation industry is the functioning of airports and carriers.
Bogotá-based Avianca made a significant leap from sixth place in the rankings in 2022 to become the world's most punctual airline in 2023, with just under 86% of its flights arriving on time. Closely behind are Brazilian airline Azul (85.51% on time), US airline Delta (84.75% on time), Qatar Airways (85.72% on time), and Madrid-based Iberia (84.38% on time).
On the other hand, with 84.44% of flights leaving on time, Minneapolis-St. Paul International Airport emerged as the world's most punctual airport. Rajiv Gandhi International Airport (HYD) came in second with 84.42%, Kempegowda International Airport (BLR) third with 84.08%, El Dorado International Airport (BOG) fourth with 84.01%, and Salt Lake City International Airport (SLC) third with 83.99%.
Passenger traffic and future projections
The United States dominated the list of nations with the biggest airline sectors in terms of passenger volume, with over 666 million passengers flying commercially there in 2021. With an astonishing 440 million travelers, China achieved the second position in terms of passenger traffic. With almost 97 million passengers, Russia came in third position. Ireland and India concluded the top five with 74 million and over 83 million passengers, respectively.
Remarkably, the demand for passengers using air travel increased by more than 64% worldwide in 2022, recovering from the difficulties caused by the COVID-19 pandemic. When we focus on specific countries, the aviation sector in the US contributes a significant $2.7 trillion (3.6%) to the country's GDP. This industry has a significant impact on the job market and national economy, sustaining 4.9 million jobs either directly or indirectly.
In China, the aviation industry generates $104 billion (0.93%) of the nation's GDP and supports 6 million employment. Meanwhile, the aviation sector in India, comprising both airlines and their supply chain, supported more than 63,000 airline employees in 2021 and generated $13 billion in GDP. Moreover, the aircraft sector is aggressively exploring environmentally friendly projects.
Reducing the carbon impact of air travel is the goal of innovative technologies and alternative fuels. Sustainable aviation fuel (SAF), which lowers carbon emissions by up to 80% when compared to conventional jet fuel, and renewable energy sources are being used by airlines to lessen their environmental effect.
Interestingly, with nearly $6 trillion worth of products transported, air cargo emerges as a key component of global trade, making up 35% of global trade in terms of value. August 2023 saw a 0.9% rise in air cargo traffic from August 2022 to a total of 20.7 billion tonne-kilometers worldwide. In fact, by 2030, the worldwide air freight market is expected to grow to a value of USD 490 billion.
Furthermore, with more than half (58%) of all foreign visitors relying on air travel, aviation has a significant impact on tourism. In addition to directly assisting in the creation of jobs in the tourism sector, the industry also indirectly influences other businesses that serve it.
Forecasts suggest that 4.7 billion individuals will fly by plane in 2024, and operating profits for the airline sector are predicted to come in at $49.3 billion, a significant increase from $40.7 billion in 2023. It is anticipated that total revenues will reach a record $964 billion in 2024, growing by 7.6% annually. On the other hand, the increase in expenses is predicted to be marginally lower at 6.9%, or $914 billion in total.
The aviation sector has the potential to significantly boost connectivity, job development, and global economic growth. The industry continues to influence the global economy by embracing innovation and sustainability.