Air Transportation Growth (Passengers and Freight) and Economic Growth, 1950-2006

Over the period 1950-2006, air passenger and air freight traffic grew faster than gross world product as the unique ability of air transportation to collapse space and time drew more traffic. A correlation analysis between passengers and freight growth rates and the growth rates of the Gross World Product (GWP) reveals significant associations; 0.65 for passengers-km and GWP and 0.75 for tons-km and GWP. Air transportation endured a strong period of growth during the 1960s with passengers and freight growth systematically in the 10%-20% range. Airports were being increasingly congested and airline companies were looking for jet planes with higher capacities. The surge of passengers-km in 1970 (+31.1%) is mainly attributed to the introduction of the 747, a large capacity airplane which revolutionalized air transportation by offering lower fares and a longer range of operation. The first shock for air transportation came in 1973 with the Arab oil embargo and the subsequent recession (1974-1975). The 1981-1984 recession, the Gulf War (1991) and the Asian Financial Crisis (1997) were also economic setbacks that impacted on air transportation. However, September 11 2001 events, linked with a recession had considerable impacts on air transportation which experienced a loss of 35 million passengers between 2000 and 2001. This was the second time in history that passengers air transport experienced a year of negative growth.