-FMP
forecasts, together with estimates made of the high and low probabilities within which the actual demand should fall, is presented in Figure 2.
A detailed analysis of air cargo history and potential was also performed (see Figure 3). The average annual growth in tonnage of 26% from 1960 to 1972 is expected to remain strong into the early 1980s; it will decline gradually at first, then more sharply to a relatively stable growth in the 1990s. By 1995, total air cargo should reach 1.9 million tons per year to represent a 24-fold increase over 1972.
Implicit in the projections of air traffic growth is the assumption that world political and economic conditions will continue on a stable course such as has existed since 1945. This presumes no major wars between great powers and nonescalation of armed conflicts among smaller nations into war involving the great powers. It is expected that the political and economic institutions of the free world will adjust to temporary shocks such as oil embargoes and inflationary forces in a way that will prevent a worldwide depression. The processes of capital accumulation, productive investment, education and training in skills, scientific and industrial research, and mutually beneficial trade are sufficiently established to provide for continuing economic growth in the non-Communist world.
The most recent experience shows passenger arrivals and departures in calendar year (CY) 1973 totaled 3,543,377 - an increase of 23% over CY 1972. For fiscal year (FY) 1974 (ending March 31, 1974), the total was 3,662,343 - an increase of 19.8% over FY 1973. Both increases are above the 18.2% average annual increase forecast for the 1972-1975 period, and the experience is at the high end of the range. Provisional figures for CY 1974 show an increase of 4.32% over CY 1973. If these provisional figures are proven, the 1974 total will fall very slightly below the low end of the forecast range. This fluctuation around the range is customary. In the past 21 years, the growth rate in 6 years was substantially below the average of 19%, and in 15 of those years it was above average.
Air traffic in 1974 has been influenced by a tripling of the price of petroleum products, including jet fuel. Before 1973, fuel costs were approximately 10% of total aviation costs. A tripling of the fuel costs for aircraft could lead to a 20% increase in air fares unless compensating savings are made in other operating costs. Air fares to Hong Kong make up approximately one-half of the total tourist expenditures, and a 20% increase in air fare would mean a 10% increase in total trip cost. This could cut the growth rate by more than half for 1 year; afterwards, growth could be expected to resume at a normal rate. It is interesting to
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