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Global airline traffic on pace to grow by 20% through 2016, says ICAO

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MONTREAL - Global air passenger traffic grew 5.5 per cent last year and is on pace to increase 20 per cent through 2016, according to the UN agency that governs civil aviation.

The International Civil Aviation Organization says passenger traffic was up 0.2 percentage points from 2012 and should increase by at least six per cent annually to reach nearly seven trillion passenger-kilometres in 2016.

The forecast is good news for airlines, especially in developed regions, which have kept a lid of capacity to maximize profits.

The number of passengers flown by 191 members states grew 4.5 per cent to 3.1 billion last year, while departures were up just 1.2 per cent.

World scheduled air freight traffic grew only 0.4 per cent in 2013, but marked a turnaround from a one per cent decrease in 2012. ICAO says it should show more robust growth over the next few years, rising to 4.4 per cent in 2016.

Global real gross domestic product is forecast to grow by 2.9 per cent in 2014, up from 2.5 per cent last year and then accelerate to 3.7 per cent in 2016, according to IHS/Global Insight, a major economic forecasting organization.

Airline traffic growth is expected to be fuelled primarily by fast expansion in developing regions such as the Middle East, Latin America and Asia.

North American passenger traffic is forecast to grow by 2.7 per cent this year on a rebound in the U.S. economy and higher employment.

The Middle East is expected to remain the fastest growing region for airline traffic, expanding an estimated 11.6 per cent in 2014 on strong expansion of airline networks.

The FIFA World Cup in Brazil is expected to drive an 8.9 per cent traffic growth this year in Latin America and the Caribbean.

Although a slowdown of the Chinese economy had an negative impact on passenger traffic in the first half of 2014, traffic in the Asia and Pacific region is estimated to expand by 7.2 per cent this year.

European traffic is anticipated to grow by 5.4 per cent amid improving economic trends, following by Africa at 4.8 per cent.

— Follow @RossMarowits on Twitter

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