Some fascinating figures about the state of commercial aviation have just been released by a global body which represents 275 airlines worldwide. The International Air Transport Association (IATA), whose members account for 83% of all air traffic worldwide have crunched the numbers on last years performance and despite perceptions, times have never been so good.
In the last year, we’ve seen some really big, high-profile disappointments in the commercial aviation industry. In May, Italy’s flag-carrier, Alitalia filed for bankruptcy protection after it couldn’t make the sums add up and we learnt yesterday that low-cost German carrier, airberlin would stop flying at the end of October.
Both airlines were forced into insolvency when equity partner, Etihad Airways of Abu Dhabi pulled funding from the loss-making airlines. That decision was made after the Gulf airline reported its own massive loss of $1.87 billion USD for 2016. More recently we’ve seen, British charter airline Monarch collapse and even European heavyweight, Ryanair has had its own problems.
But all is not as bad as it first seems. Last year, airline’s carried 3.8 billion passengers – that represents a huge 7% increase over 2015 or 242 million extra trips. The overall trend is for the bulk of air travel being made in the Asia-Pacific region – dominating global aviation with 35% market share.
The North American market comes in just beneath Europe in third place with a 24% market share – around 992.4 million trips made in 2016. Yet that only tells half the story with North American airline’s dominating the list of the world’s largest carriers.
Interestingly, Southwest Airlines was the largest overall airline by passengers carried in 2016. Founded over 38 years ago, the Texas-based airline reinvented air travel with its low-cost model which has been copied in markets around the world. In 2003, Southwest became the largest carrier in the U.S. and despite only having a limited international route network, Southwest carried 151.8 million last year.
U.S. citizens are also the most likely nationality to get on a plane. Making up 21% of all passengers in 2016, U.S. citizens were the world’s most prevalent air travellers last year and the most likely to travel overseas. They were followed by the citizens of the United Kingdom, Germany, China and France for their love of international air travel.
And it doesn’t look like this trend is going to change in 2017 either. The latest figures for August show yet another strong month for air travel demand. Alexandre de Juniac, IATA’s Director General said of the latest figures:
“Following the strong summer traffic season in the Northern hemisphere, 2017 is on course to be another year of strong traffic growth.”
Although de Juniac is wary of some changes in the industry which could slow demand in the next few months, noting:
“Some important demand drivers are easing, particularly lower fares. As we head towards the end of the year we still expect growth to continue, but potentially at a slower pace.”
In fact, much of the aviation industry’s growth in the last year has been helped by rock-bottom ticket prices – driven by intense competition and overcapacity in the market. Some airline’s, including the Dubai-based Emirates, have been able to fill seats but only at discounted rates. That’s led to a massive drop in profits – at Emirates, profits fell by over 80% in 2016.
Although, even there things might be on the up. In recent comments, reported by Reuters, Tim Clark, the airline’s President said at an aviation conference in Dubai: “The six months were a lot better than this time last year,” – referring to the first six months of 2016.
Emirates is still facing intense competition and a much tougher market on it’s U.S. routes, yet Clark is sounding more positive, noting business was very “robust” for the summer season.
