Air Transport World

World Airport Report.

LAST YEAR WAS A BUMPER YEAR FOR airports around the world as they posted their fifth consecutive year of traffic increases, reaching a passenger throughput of 4.9 billion. This was up 6.5% on 2006, and the rate also surpassed the 4.9% increase recorded between 2005 and 2006 (see Table 1). Since the industry bottomed in 2002, passenger traffic has grown at an average annual rate of 5.7%, bringing 1 billion new passengers into airports, an increase of 32% over the five years.

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Table 1 Evolution of airport traffic between 2006 and 2007 by
geographical areas

                                       Geographic breakdown of
                                        airport traffic--Year
                                                 2007

North America                   +3.5%                    32.5%
Western Europe                  +6.3%                    28.7%
Asia                            +9.5%                    23.0%
Latin America and West Indies   +8.0%                     6.7%
Middle East                    +12.3%                     2.7%
Africa                          +6.8%                     2.5%
Eastern Europe Russia-CIS      +19.0%                     1.2%
Oceania                         +5.5%                     2.7%

World airport traffic evolution

2001/02  -0.3%
2002/03   1.4%
2003/04  10.5%
2004/05   6.2%
2005/06   4.9%
2006/07   6.5%

Sources: Arthur D. Little analysis, ACI 2007 and airports data, World
Bank, IMF

Note: Table made from bar graph.

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But the outlook for the current year is gloomy, warns Mathieu Blondel, manager at Arthur D. Little in Paris, which concluded a comprehensive analysis of world airport passenger traffic and is presenting it in cooperation with ATW for a second year. "It was tasting paradise before flying back to purgatory," he summarizes. Based on traffic trends for the first five months of the current year, the consultancy forecasts a slowdown in airport passenger traffic growth.

"The growth rate of 2007 will not be maintained in 2008. All indicators are showing a significant slowdown except in 'small' markets like the Middle East and Latin America where RPKs in the first five months of the year rose 11% and 17.3% respectively," Blondel says. Africa and Asia showed a deceleration in growth, whereas traffic in Europe and North America stagnated at last year's rate.

"The big question," he believes, "is how the winter will evolve. While certain regions including Russia, Asia and the Middle East will keep fueling air traffic demand, a slowdown of the overall growth rate in passenger throughput to 2%-4% can be anticipated." ADL predicts a reduction of ultra-long flights owing to record high oil prices and a boom in hubs in the Middle East as well as the possibility of hubs in West Africa. "At the current kerosene prices, a stopover at a hub gives about 20% lower operating costs compared to an ultra-long flight. Hubs in the Gulf benefit from their geographic position and their based carriers are very competitive, also owing to the fact that they buy oil cheaper. Because of all this, airports in the Middle East are poised to continue to post high growth," he argues.

Middle East Record In fact, airports in the Middle East recorded their best growth of the past decade in 2007, with an increase of 12.3%, up from 9.1% in 2006. Moreover, they exceeded the performance of their counterparts in Asia, taking possession of second place in terms of the fastest-growing region, according to ADL. Equally noteworthy is that a Gulf airport entered the ranks of the Top 20 largest Intercontinental hubs for the first time last year, with Dubai International, hub of Emirates Airline, taking 18th place by handling 34.3 million passengers, up 16.3% over 2006.

Three Gulf platforms are among the world's Top 10 best performing Intercontinental hubs (Table 2) despite the fact that as a region the Middle East represents just 2.7% of world airport passenger traffic. Abu Dhabi International, home to expansionary Etihad Airways (ATW, 4/08, p. 42), enjoyed the fastest relative growth of all Intercontinental hubs, increasing its passenger throughput by 24.1% to 6.6 million. Qatar Airways' Doha base took the third rank with a 23.6% rise to 10.8 million passengers.

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Table 2 World's top 10 performing Intercontinental hubs 2006-2007

Relative growth

AUH  24%
DEL  24%
DOH  24%
BOM  18%
CAN  18%
DXB  16%
MAD  15%
GRU  13%
JFK  12%
ADD  11%

Additional passenger volume
(passengers in millions)

MAD  6.6
PEK  5.1
JFK  5.1
CAN  4.7
DXB  4.7
DEL  4.6
ATL  4.5
BOM  3.8
MUC  3.2
CDG  3.1

Sources: Arthur D. Little analysis, ACI 2007 and airports data

Note: Table made from bar graph.

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European and Asian airports in aggregate accounted for 64% of the global growth last year. In 2006 the two regions contributed 75%. The decline is owing to the recovery of traffic passing through North American airports, which rose a firm 3.5% in 2007. "North America [defined as the US and Canada] was back on the growth track last year and contributed 18% of the world growth," Blondel says. Although this was "still below the world average, [it] represents a fair performance for a large and mature market." In 2006, passenger traffic increased only 0.7%.

Europe was marked by healthy growth in the western portion (defined as the 27 EU member states plus Norway, Iceland, Switzerland and Albania as well as Turkey), which was up 6.3%, and the strong dynamism of airports in Eastern Europe and Russia/CIS, which ended 2007 with a lofty 19% gain in passenger throughput.

"Russia and the CIS really have become a booming region for air traffic owing to a high GDP growth--Russia's GDP jumped 8% in 2007, or twice the world average rate--and the population benefiting from this strong economy," he says. Conversely, Western Europe "is losing ground despite the fact it is growing in size [with the enlargement of the EU]." Airports in Western Europe accounted for 28.7% of passenger traffic in 2007, down from a 29.9% share in 2006. Asia's slice of the world pie was 23%. By comparison, in 2003 Asia held a mere 15.4% share of the world's passenger traffic.

With a 9.5%, increase in traffic last year, airports in Asia were still above the world average and well ahead of their counterparts in North America and Western Europe, owing mainly to the explosion of domestic traffic in China and India but also, and increasingly, in Indonesia and Vietnam. Oceania, defined as Australia, New Zealand and the Pacific Islands, showed a slower growth rate than the rest of the region as it was characterized by a more mature market, low inbound tourism flow (a 1. …

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