Boeing's director, market forecasting, Wendy Sowers pointed out that growth in passenger numbers had averaged 7.2% pa over the past five years. Emerging markets led the way with 10.7% pa growth, but advanced economies still put in a healthy average of 4.9% pa.
The world's airlines carried one billion passengers in 1987 and reached two billion 18 years later, in 2005. The three billion mark was achieved in 2013 and it then took only four more years for the industry to carry four billion passengers, a landmark reached in 2017.
Airbus' SVP business analysis & market forecasting Bob Lange noted that annual growth in passenger numbers now equalled the entire global industry in 1969, when the Boeing 747 made its first flight.
In the past, growth has been occasionally interrupted by external shocks, but these tend to act merely as what IATA's chief economist Brian Pearce calls "speed bumps", only briefly slowing the growth.
Both Airbus and Boeing forecast a doubling of the global commercial airline fleet size by 2037, although they have differences of detail over the distribution of demand between different aircraft sizes.
Emerging markets will continue to outpace the traffic growth of advanced economies, driven by a growing middle class, which Airbus expects to double over the next 20 years. As countries increase their GDP per capita, they also move up the curve of air trips per capita. This process can be accelerated by liberalisation of market access and the development of low fares business models. In 2017, there were 0.3 trips per capita in emerging markets. Airbus forecasts this to grow to 0.8 trips per capita in 2037.
Mr Pearce noted the historic link between global GDP growth and traffic growth measured in RPKs. "Traffic growth is leveraged to the economic cycle," he said, " and we used to say the same about airline financial performance."
Airline profit margins typically followed the economic cycle, airlines ordered new aircraft when economic growth and margins were high, but deliveries often came when the cycle had turned down and the resultant overcapacity exacerbated the margin slump.
The average airline industry net margin before the global financial crisis of 2008 was zero. Airlines paid their bills and served their debt, but had nothing left over for equity investors. Now, however, they are making historically high margins and covering their cost of capital, in spite of global GDP growth not being at historically high levels.
Mr Pearce suggested that this was evidence of a structural improvement in airline industry financial performance. The fall in oil prices from their peak coincided with higher airline margins, but airlines were making very low margins at times of low oil prices in previous cycles and managed respectable margins when oil prices exceeded USD100, and so oil prices were not the only reason for improved margins in recent years, according to Mr Pearce.
He conceded that financial markets were yet to be convinced that the airline industry had wholly changed its ways. As he rightly said, "maybe it will take a recession to convince the financial markets". It is certainly true that the recent period of historically high margins and improved return on capital has not yet been tested by a downturn.
Cycles always turn, although there is no law that determines that this must happen after a certain number of years. It is the 'unknown unknowns' that tend to put an end to the cycle and the chances are that an external shock will challenge the industry at some point.
However, nine years since the last airline industry net loss, the cycle is still looking strong.