< PreviousICAO WORLD CIVIL AVIATION REPORTINTERNATIONAL CIVIL AVIATION ORGANIZATION...................................................................................................................................................................40.............................................................................................................................................................................WorldReturn on Invested CapitalROIC is a measure that combines almost every element of an airport's income statement and balance sheet. It is a robust measure of profitability because it not only considers the effective management of total revenues and total costs for a fiscal year, but also includes invested capital within a single measure. From an investor's point of view, ROIC measures the payment that both debt and equity holders would receive by providing their capital. In Source: ACI Airport Economics Survey (2015)the case of equity holders, this is the return for bearing the risk. Actual returns are considerably lower across the industry when examined through the lens of this measure. A global ROIC of 6.3% was calculated for the industry as a whole in 2014. However, there are differences between airports in advanced economies and airports located in emerging markets. The latter has higher returns on the whole (Chart 5).ROIC by itself does not tell the full story of financial performance and efficiency. Only when it is compared to the weighted average cost of capital (WACC) does it offer meaningful results. WACC essentially serves as a measure of the opportunity cost of an alternative investment with a similar risk profile. Thus, it can be viewed as the expected return on investing in airports, both from the perspective of equity holders and debt holders. ROIC is the actual return. If ROIC exceeds WACC, there is value creation in the form of real positive economic profits. In contrast, ROIC that falls short of WACC is indicative of economic losses. Previous industry studies have pointed to WACC in the realm of 6% to 8%. Thus, assuming that this range has remained steady in 2014, airports are just breaking even in generating returns and in some cases may be suffering real economic losses as compared to the WACC.ICAO WORLD CIVIL AVIATION REPORTINTERNATIONAL CIVIL AVIATION ORGANIZATION.....................................................................................................................................................................41.............................................................................................................................................................................Airport Traffic Then and NowWorld’s busiest airports – passenger traffic 2001-2015Atlanta, United States ATL 101 491 106 1 1 1 1 1Beijing, China PEK 89 938 628 2 2 3 15 34Dubai, United Arab Emirates DXB 78 014 841 3 7 15 42 76Chicago, United States ORD 76 949 504 4 5 4 2 2Tokyo, Japan HND 75 573 106 5 4 5 4 5London, United Kingdom LHR 74 989 795 6 3 2 3 4Los Angeles, United States LAX 74 937 004 7 6 7 5 3Hong Kong, China (SAR) HKG 68 283 407 8 11 13 16 18Paris, France CDG 65 766 986 9 8 6 7 8Dallas/Fort Worth, United States DFW 65 512 163 10 9 8 6 6Istanbul, Turkey IST 61 346 229 11 18 39 55 68Frankfurt, Germany FRA 61 032 022 12 12 9 8 7Shanghai, China PVG 60 098 073 13 21 34 44 130Amsterdam, Netherlands AMS 58 284 864 14 14 14 9 9New York, United States JFK 56 827 154 15 19 12 13 23Singapore SIN 55 449 000 16 13 21 25 25Guangzhou, China CAN 55 201 915 17 16 23 45 71Jakarta, Indonesia CGK 54 089 062 18 10 22 35 86Denver, United States DEN 54 014 502 19 15 10 11 10Bangkok, Thailand BKK 52 902 110 20 17 16 18 22San Francisco, United States SFO 50 057 887 21 22 20 23 14Incheon, Republic of Korea ICN 49 412 750 22 24 41 40 67Kuala Lumpur, Malaysia KUL 48 938 424 23 20 40 46 69Madrid, Spain MAD 46 779 554 24 29 11 12 15New Delhi, India DEL 45 981 773 25 32 44 85 110Las Vegas, United States LAS 45 443 900 26 25 17 10 12Charlotte, United States CLT 44 876 627 27 23 24 34 36Miami, United States MIA 44 350 247 28 26 25 28 19Phoenix, United States PHX 44 003 840 29 27 19 14 11Houston, United States IAH 43 023 224 30 28 18 17 13City, CountryAirportCodePassengers2015Ranking20152013200920052001Source: ACI ICAO WORLD CIVIL AVIATION REPORTINTERNATIONAL CIVIL AVIATION ORGANIZATION...................................................................................................................................................................42World’s busiest airports – air cargo traffic 2001-2015Hong Kong, China (SAR) HKG 4 460 065 1 1 2 2 2Memphis, United States MEM 4 290 638 2 2 1 1 1Shanghai, China PVG 3 275 231 3 3 3 9 47Anchorage, United States* ANC 2 630 701 4 6 7 3 3Incheon, Republic of Korea ICN 2 595 678 5 4 4 5 15Dubai, United Arab Emirates DXB 2 506 092 6 5 8 18 25Louisville, United States SDF 2 350 656 7 7 6 11 11Tokyo, Japan NRT 2 122 314 8 10 10 4 5Paris, France CDG 2 090 795 9 9 5 6 8Frankfurt, Germany FRA 2 076 734 10 8 9 7 7Taipei, Taiwan, Province of China TPE 2 021 865 11 15 15 13 16Miami, United States MIA 2 005 175 12 11 12 12 6Los Angeles, United States LAX 1 938 624 13 14 13 8 4Beijing, China PEK 1 889 829 14 13 14 24 28Singapore SIN 1 887 000 15 12 11 10 9Amsterdam, Netherlands AMS 1 655 354 16 16 17 16 14Chicago, United States ORD 1 592 826 17 21 19 15 12London, United Kingdom LHR 1 591 637 18 17 16 17 13Guangzhou, China CAN 1 537 759 19 18 21 26 31Doha, Qatar DOH 1 454 952 20 25 33 91 New York, United States JFK 1 286 484 21 19 18 14 10Bangkok, Thailand BKK 1 230 563 22 20 20 19 20Tokyo, Japan HND 1 171 311 23 23 23 23 23Indianapolis, United States IND 1 084 857 24 22 22 20 17Shenzhen, China SZX 1 013 690 25 24 27 38 76Leipzig, Germany LEJ 984 389 26 26 34 334 322Dubai, United Arab Emirates DWC 890 912 27 99 Abu Dhabi, United Arab Emirates AUH 837 551 28 29 48 90 120Istanbul, Turkey IST 812 908 29 35 49 65 93New Delhi, India DEL 772 362 30 38 37 43 70City, CountryAirportCodeFreight Tonnes2015Ranking20152013200920052001.............................................................................................................................................................................*ANC data includes transit freightSource: ACI ICAO WORLD CIVIL AVIATION REPORTINTERNATIONAL CIVIL AVIATION ORGANIZATION.....................................................................................................................................................................43.............................................................................................................................................................................World’s busiest airports – departures 2001-2015Atlanta, United States ATL 441 249 1 1 1 1 2Chicago, United States ORD 437 568 2 2 2 2 1Dallas/Fort Worth, United States DFW 340 624 3 4 3 3 3Los Angeles, United States LAX 327 782 4 3 4 4 4Beijing, China PEK 295 085 5 6 10 36 76Charlotte, United States CLT 271 972 6 7 9 13 17Denver, United States DEN 270 607 7 5 5 7 10Las Vegas, United States LAS 265 165 8 8 8 5 9Houston, United States IAH 251 422 9 9 6 6 13Paris, France CDG 237 905 10 10 7 11 6London, United Kingdom LHR 237 052 11 12 12 17 15Frankfurt, Germany FRA 234 077 12 11 13 16 19Amsterdam, Netherlands AMS 232 761 13 14 21 20 22Istanbul, Turkey IST 232 387 14 21 44 81 120Shanghai, China PVG 224 586 15 31 43 92 262Toronto, Canada YYZ 221 979 16 17 20 23 23Phoenix, United States PHX 220 206 17 13 14 8 5New York, United States JFK 219 449 18 22 18 32 45Tokyo, Japan HND 219 271 19 23 33 44 58San Francisco, United States SFO 214 908 20 19 24 31 29Mexico City, Mexico MEX 213 381 21 26 29 38 46Hong Kong, China (SAR) HKG 208 450 22 28 42 55 85Newark, United States EWR 207 767 23 20 19 19 21Miami, United States MIA 206 458 24 24 28 28 12Philadelphia, United States PHL 205 684 25 15 11 9 14Guangzhou, China CAN 204 840 26 27 38 86 146Dubai, United Arab Emirates DXB 203 285 27 32 45 83 149Minneapolis, United States MSP 202 306 28 16 17 10 8Jakarta, Indonesia CGK 193 308 29 25 48 67 166Seattle, United States SEA 190 704 30 41 35 35 24City, CountryAirportCodeDepartures2015Ranking20152013200920052001Source: ACI ICAO WORLD CIVIL AVIATION REPORTINTERNATIONAL CIVIL AVIATION ORGANIZATION...................................................................................................................................................................44Outlook to 2042The predicted changes in the Revenue Passenger-Kilometres (RPK) and predicted annual Freight Tonnes-Kilometres (FTK) are used to calculate Compound Annual Growth Rates (CAGR) of passenger and freight traffic for both a twenty (2012-2032) and a thirty (2012-2042) year period. PassengerThe estimated results indicate that global passenger traffic will grow at 4.6 per cent annually to 2032. Fourteen route groups outpace this global growth, including all route groups involving Asia/Pacific 1. The fastest growing route group is Domestic Asia/Pacific 1, which is estimated to grow at around 10 per cent annually. The growth rates of route groups in and between Africa, Latin America/Caribbean 1 and Middle East are close to the global growth rate. Route groups in and between mature markets including Europe, North America, and Asia/Pacific 3 have lower estimates of growth. Passenger forecasts by route group are shown in Appendix 3. FreightGlobal freight traffic is expected to grow at 4.4 per cent annually over the same time period as passenger forecasts. The Middle East has the highest forecast of annual growth, outpacing the global estimate by about 2.8 percentage points. The growth rate for Asia/Pacific is close to the global estimate, at 4.7 per cent. Europe, Latin America/Caribbean, and North America will grow at a slightly slower pace than Asia/Pacific, while Africa has the lowest annual growth rate at 2.1 per cent. Freight forecasts by region are shown in Appendix 3..............................................................................................................................................................................ICAO WORLD CIVIL AVIATION REPORTINTERNATIONAL CIVIL AVIATION ORGANIZATION.....................................................................................................................................................................45.............................................................................................................................................................................Total passenger plus freight traffic: history and forecastsTotal passenger traffic: history and forecastsWorldICAO WORLD CIVIL AVIATION REPORTINTERNATIONAL CIVIL AVIATION ORGANIZATION...................................................................................................................................................................46Regulatory and Industry Developments icao.int/storeICAO WORLD CIVIL AVIATION REPORTINTERNATIONAL CIVIL AVIATION ORGANIZATION.....................................................................................................................................................................49.............................................................................................................................................................................Liberalization of Air TransportThe main challenge before international civil aviation in the 21st century is growth in demand for goods and services. Throughout the history of aviation, operations have doubled in volume every fifteen years since the 1970s and ICAO forecasts have already confirmed that flight and passenger volumes will have doubled again by 2030.Liberalization has been one of the main drivers of the continuous growth of air traffic and measures enabling expanded market and capital access for air transport have resulted in enhanced connectivity with the corresponding benefits of sustainable economic development at State and regional levels, emission reductions and the emergence of strong carriers and airports that are more passenger-friendly. The opening-up of the air transport market has furthermore led to an increased and more efficient utilization of airspace, more competitive fares, and more choices for the traveling public.Liberalizing measures and subsequently enhanced connectivity have an overall positive impact on tourism, employment and the economy at large. Improved connectivity in air cargo enhances the level of productivity, opens up new markets, boosts exports and increases competition and choice in the home market from foreign-based producers. The many States seeking regulatory convergence on liberalization and competition issues on bilateral and regional levels shows the importance of liberalization. Bilateral liberalizationBilateral air services agreements remain the primary vehicles for liberalizing international air transport services for most States. During the past decade, over one thousand bilateral air services agreements (including amendments and/or memoranda of understanding) were reportedly concluded. The vast majority of these agreements and amendments contained some form of liberalized arrangements, such as expanded traffic rights (covering Third, Fourth and in some cases Fifth Freedom traffic rights), multiple designations with or without route limitations, free determination of capacity, a double disapproval tariff or free pricing regime, and broadened criteria of airline ownership and control.ICAO continues to provide guidance and assistance to States in the conclusion of bilateral air services agreements using facilities such as the ICAO Air Services Negotiation (ICAN) events. By the end of 2016, a total of 141 States (representing 74% of ICAO membership) have utilized this facility at least once. Since 2008 when the first ICAN event was held, over 2 800 bilateral meetings have been held during these events resulting in the conclusion of over 1850 bilateral agreements and arrangements.Next >