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  • Good growth prospects for the sector as a whole over the long term
  • Increasing use of air transport in Asia, due to emerging middle classes
  • Technical progress is reducing costs, particularly for air and maritime transport


  • Sector dependent on oil price fluctuations
  • Health of the sector closely tied to economic conditions

Risk Analysis


(100 = Q1 2014)

Overall, the transport sector – including air, road, maritime, and rail – is expected to benefit from a positive outlook for 2019 and beyond, mainly due to the emerging middle classes in China and India and the lower costs associated with technological progress, particularly in air and maritime transport.

Global air traffic increased by 7% in 2018, slowing slightly compared with 2017 (8.1%) to reach its lowest growth rate since 2014. Air freight, measured in freight tonne kilometres, decelerated in 2018 compared with the five-year average, falling to 2.3% in September 2018 year-on-year compared with a five-year average of 5.1%. The container throughput index, which is an indicator of world maritime trade, rose by 1.5% in September 2018 year-on-year. This was its lowest increase since July 2016 and seems to indicate a stagnation in world maritime trade.

According to the International Air Transport Association (IATA), the long-term outlook for the sector is positive. The IATA forecasts that the number of air travellers will have doubled to 8.2 billion by 2037, mainly due to growth in the Asia-Pacific region, which is expected to account for half of the total number of passengers worldwide by that time.

In addition, companies in the maritime transport sector are using digitalisation processes to cut production costs.


After doubling over the last 12 years, the number of air passengers is expected to double once again by 2037, according to the IATA. This sector continues to benefit from the decline in ticket costs, which have halved in 20 years in real terms. However, the expected slowdown in economic activity (mainly in the Eurozone), the ongoing trade war between the United States and China, and higher oil prices are expected to dampen transport demand in 2019.

In the United States, the trade war with China is expected to dampen freight demand. However, the US economic growth, forecast by Coface to reach 2.3% in 2019 after 2.9% in 2018, should somewhat cushion the decline in demand due to tensions with China.

In Europe, the decline in GDP growth (2.1% in 2018 and 1.7% in 2019, after 2.7% in 2017) is expected to weigh down household consumption, and subsequently freight demand. However, bright economic prospects for the United States and China, the European Union's main trading partners, should support freight transport in the region. British airlines could experience a sharp drop in passenger numbers connected with the uncertainties surrounding Brexit. UK air transport could be affected both by a hard Brexit and by a decrease in household consumption linked to lower British GDP growth (Coface forecasts rate of 1.2% in 2019). Large companies, including Airbus, have stated that they need more certainty to continue investing, and that they may have to leave the UK if the country opts for a hard Brexit.

In Latin America, Brazil's economic recovery, with Coface forecasting GDP to grow by 2.8% in 2019 after 1% in 2018, should be beneficial to companies in the sector. Moreover, increased Chinese demand for Brazilian soybeans owing to trade tensions with the United States will lift freight demand directed towards Brazil.

In Asia, the emergence of middle classes is a boon for the air transport sector. For example, in China, the share of households earning more than USD 35,000 per year is expected to triple by 2022 and drive growth in the sector.


Oil prices, are expected to remain high in 2019. Coface is forecasting an average price of USD 75 a barrel for Brent in 2019. This would force companies in the sector to cut their margins initially, and then put up their prices. The increase in oil prices is reflected in particular in the BDI, an indicator of the cost of maritime freight, whose average value between January and October rose by 32% between 2017 and 2018. Since the profitability of air and maritime transport companies moves in the opposite direction to oil and the BDI (see graph), increases for the BDI and Brent should lead to a decrease in the profitability of companies in the air and maritime transport sector at global level.

In North America, US carriers are being hurt by higher oil prices and higher customs tariffs on imports of Chinese steel (25%) and aluminium (10%), which impact machinery construction costs. The IATA expects airline profits to fall by 18% in 2018 after an 8% increase in 2017 across the region as a whole. Truck freight transport in the United States, which accounts for 70% of domestic freight, is doing well: the American Trucking Association (ATA) estimates that road freight volumes increased by 3.4% per year between 2018 and 2017 and reckons that this trend will continue until 2023.

In Europe, the sector is expected to suffer from the decline in domestic GDP growth. Many businesses in the sector struggled in 2018. Irish company Ryanair, for example, had to downgrade its profit forecasts because of higher oil prices and strikes by company employees. European company Air France – KLM also had a tough year, reflecting the difficulties linked to fierce competition in the air transport sector. The rail transport sub-sector may feature a merger between two international groups, one founded in France (Alstom) and the other in Germany (Siemens). At the time of writing, the European Commission seemed to be having reservations about this merger, which would de facto reduce competition in the sector in Europe.

The emergence of middle classes in India and China is good for airlines. In China, the increase in per capita income is boosting domestic air transport. India’s aviation sector is booming, with the IATA estimating that the number of passengers will grow by 6.1% per year over the next 20 years. Also in India, air freight transport grew by 16.9% in 2017.

Latin American airlines performed well in 2018: passenger transport increased by 5.1% year-on-year from January to September, and air freight, measured in freight tonne kilometres, rose by 8.7% over the same period. In Argentina, the sector was hit by an increase in costs, which jumped by 45% between January and September 2018 on currency depreciation and higher oil prices.


Last update : February 2019

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