Passenger Demand Forecast To Grow Big In Two Decades

According to ACI’s short-term projections till 2027, India’s air passenger growth in 2026 is seen at 10.5 per cent, higher than China’s 8.9 per cent for that year

Driven by a range of complex factors, passenger demand for air travel is expected to grow significantly, over the next two decades.

One of the primary drivers of air travel demand is economic growth, particularly in emerging markets. The link between GDP per capita and air travel is well-established; as incomes rise so too will the propensity to travel.

For nations with GDP per capita below $20,000, even modest increase in income can lead to disproportionately large jumps in air travel.

This phenomenon, often referred to as "catch-up growth", is expected to play a pivotal role in markets such as India and China, where millions are entering the middle class each year.

These regions are projected to contribute a significant share of the additional passenger numbers forecast by 2044.

Urbanisation is another critical driver in long-term air travel demand. As cities grow, particularly in Asia and Africa, they create new hubs. Urbanisation not only increases the number of potential passengers but also shifts travel patterns, encouraging the development of new travel corridors.

For example, megacities and secondary urban centres are driving investments in regional airports and low-cost carrier networks, creating direct connections between previously underserved areas, reducing travel times, improving convenience, and boosting economic activity in connected regions.

Technological advancements that enable airlines to operate more efficiently in these emerging markets are also a key driver of demand.

Innovations in aircraft design allows for longer, more cost-effective flights, making it possible to serve thinner markets profitably. These drivers are central to the forecast’s emphasis on growing connectivity through expanded city-pair networks.

The declining cost of air travel is another fundamental driver integrated into the forecast.

Over the past several decades, improvements in technology, operational efficiencies, and competition among carriers have significantly reduced the real cost of flying. This trend has made air travel accessible to a larger share of the global population.

The growth rate of India’s air passenger traffic appears set to overtake that of China in 2026, and the former is likely to be the world's fastest-growing large aviation market over the next three decades, per projections from global airports industry body Airports Council International (ACI).

While China’s size as an aviation market is notably bigger than that of India, the pace of the latter’s growth is expected to gather pace amid rapidly growing air travel demand from a massive population base whose per capita air travel is low, which in turn points to a significant growth potential. China, on the other hand, is already at a level of relatively greater maturity as an aviation market, and the scope of speedy growth may be limited vis-à-vis India.

According to ACI’s short-term projections till 2027, India’s air passenger growth in 2026 is seen at 10.5 per cent, higher than China’s 8.9 per cent for that year.

For 2027, India’s growth rate is pegged at 10.3 per cent, while that of China is seen at 7.2 per cent. Their aviation markets’ respective growth rates for 2024 were identical at 7.1 per cent. China’s is projected to be 12 per cent for 2025, higher than the 10.1 per cent projected for India. The compounded annual growth rate (CAGR) of India’s air passenger traffic for 2023-2027 is pegged at 9.5 per cent, higher than the projection of 8.8 per cent for China.

As for the long-term forecast, ACI expects CAGR of India’s air passenger traffic at 5.5 per cent, identical to that of Indonesia, a relatively smaller market. The CAGR of all other major aviation markets is expected to be lower than that, with that of China pegged at 3.8 per cent.

Others in the list of the 10 likely fastest-growing major aviation markets over the next three decades include Vietnam (projected CAGR: 4.6 per cent), the Philippines (4.5 per cent), Saudi Arabia (4.5 per cent), Thailand (4.3 per cent), Qatar (4.2 per cent), Egypt (4 per cent), and the UAE (3.8 per cent).

“Why India is moving faster than China in the short term is because the former is a market that is developing and is in the process of enhancing its infrastructure, and also in the process of enhancing its supply side,” said Stefano Baronci, Director General of ACI Asia-Pacific & Middle East. He added that India’s propensity for air travel on a per capita basis is significantly lower than many other large aviation markets, including China.