Asia-Pacific is the next hot spot
With demand slowing in the larger and matured markets of Europe and America, the Asia-Pacific region is expected to be the growth engine for the coming decade. Here are some factors that make Asia-Pacific the next big airline market:
- The market size is very large, as 60% of the global population resides in this region.
- The GDPs (or gross domestic products) of countries like China, Japan, and India are growing.
- Domestic passenger traffic has grown by 11.2% in China, by 5.2% in Japan, and by 4% in India.
- According to the International Air Transport Association (or IATA), the Asia-Pacific region’s international passenger traffic climbed at a healthy rate of 5.3% in 2013.
- Of the top ten busiest routes in the world, seven are in Asia.
- More than 38% of the world’s middle-income group resides in the Asia-Pacific region, and this percentage is estimated to grow to 68% by 2032.
- Discount carriers such as Lion Air and AirAsia are making air travel more affordable, and the growing middle-class population is responding well to the strategy.
New opportunities created in the market will help the PowerShares Aerospace & Defense ETF (PPA). The following companies will likely benefit from this growing market: