Record number of airline passengers in 2014

getAsset.aspxBy Phil Davies,

Global airline passenger demand rose 5.9% last year with record carryings of 3.3 billion compared to 2013, latest Iata figures show.

The performance was above the 10-year average growth rate of 5.6% and the 5.2% growth seen in 2013.

Capacity rose 5.6% last year, with the result that load factor climbed 0.2 percentage points to 79.7%.

More than half of the growth in passenger travel occurred on airlines in emerging markets including Asia-Pacific and the Middle East.

A pick-up in Chinese domestic travel, which expanded by about 11% in 2014, helped drive the growth in recent months.

Iata director general and chief executive Tony Tyler said: “With a 5.9% expansion of demand, the industry out-performed the 10-year average growth rate.

“Carriers in the Middle East posted double-digit growth while results in Africa were barely above previous-year levels.

“Overall, a record 3.3 billion passengers boarded aircraft last year – some 170 million more than in 2013.”

But he added: “While it is clear that people will continue to travel in growing numbers, there have been signs in recent months that softening business confidence is translating into a levelling off of international travel demand.

“In the aftermath of the Greek elections and the intensifying debate on how to deliver a dynamic economic program for Europe, we must not forget the power of air connectivity to create growth.

“Governments can kick-start economic development by reducing the passenger taxes that depress demand for air transport, costing jobs and prosperity.

“There are some positive signs. The Scottish government is promising to cut its air passenger duty by 50%. And Austria’s air transport levy is being evaluated as part of comprehensive tax reforms. Scrapping the Austrian levy alone could create some 3,300 jobs.

“That should help convince politicians in these countries to move from considering reductions to delivering results.

High taxes, onerous regulation and infrastructure limitations make Europe a tough place to run an airline.

“A continent-wide commitment to address these issues so that aviation can play its critical role as an economic catalyst would be a powerful signal that Europe’s politicians really do mean business,” said Tyler.

Sourced by Travel Weekly

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Flight demand accelerates, says Iata

Aircraft

Demand for flights has continued to “accelerate” during the first few weeks of 2014 helped by improving economic conditions around the world.

International Air Transport Association (Iata) figures show that worldwide passenger traffic in January grew by 8% as measured by total revenue passenger kilometres (RPKs), compared to the same month in 2013. This was up from the 5.2% rise in RPKs recorded during the whole of 2013.

Capacity also rose by 6.7% year-on-year in January while load factor improved by 0.9 percentage points to 78.1%.

Iata chief executive Tony Tyler said: “2014 is off to a strong start, with travel demand accelerating over the healthy results achieved in 2013, in line with stronger growth in advanced economies and emerging market regions.”

European airlines saw international air travel demand rise by 6.4% in January which Iata said was down to “modest” economic improvements in the Eurozone and “rising consumer and business confidence”.

Capacity across the continent increased by 5.9%, as measured by available seat kilometres (ASKs), while load factors picked up by 0.4 points to 77.2%.

The biggest rises in demand came in the Middle East where airlines saw international RPKs soar by 18.1% in January while Asia-Pacific carriers recorded an overall 8% increase in traffic.

North American airlines experienced a 3.5% increase in January while those in Latin America saw a 4.4% rise. African traffic was up by just 2.7% – the slowest rate of growth of any region.

Tyler added: “The second century of commercial aviation has begun on a positive note, with air traffic demand rising in line with generally positive economic indicators.

“While this is in line with an improved overall outlook for 2014, aviation remains highly vulnerable to external shocks. Rising geopolitical tensions around the world have the potential to cast shadows on this optimistic outlook.”

Sourced from TTG Digital


Demand for APD holiday for families

Demand for APD holiday for familiesBy Phil Davies

Image via ShutterstockAn MP is calling on the government to cut or axe taxes for those going away during the school holidays.

Liberal Democrat John Hemming is lobbying to reduce or suspend Air Passenger Duty at peak travel times to make family holidays more affordable.

A debate, convened by the backbench business committee, is to take place in Westminster after an e-petition on the issue received 166,229 signatures.

The government said international demand at peak times meant high prices.

The debate comes after the Department for Education tightened rules on when headteachers could grant leave for family holidays.

Regulations were tightened last September so that such holidays could be granted only in exceptional circumstances.

But Hemming, MP for Birmingham Yardley, is also calling for a rethink of these changes.

He told the BBC: “The new rules were brought in ‘on the nod’ and were not debated before they were brought into force.

“It is clear that in refusing children permission to go to funerals and having little discretion for headteachers, they are too restrictive.”

Mother-of-two Donna Thresher from Essex set up the petition in March last year after being “outraged” at the £600 difference in the cost of taking her family away for a weekend during the school holidays.

The campaign is backed by Travelzoo, which claims taxes can add as much as £376 to outbound flights.

European managing director Richard Singer said he was prompted to act after becoming frustrated with what he calls the “parent trap” of government legislation, taxes and tour operator price rises during school holidays.

In a response to the petition, the Department for Business, Innovation and Skills said: “The UK holiday industry is an extremely competitive market and as a result the sector relies on the profits from peak periods to make sure it can trade throughout the year.

“On top of this, the industry competes internationally against companies from other countries and as a result may need to increase prices during these periods.

“If there were to be any evidence of anti-competitive practices, it should be presented to the Civil Aviation Authority in respect of airline prices or the Office of Fair Trading.

“They have significant powers to investigate and act if they find examples of companies abusing a dominant position or behaving anti-competitively.”

The petition says: “Family time is so much more essential in the current working world, but so many people cannot afford holidays in school holidays.

“A break at home is not the same as getting away from it all where there isn’t any housework or DIY to get done; instead focus is on family.

“It’s time to stop the holiday companies cashing in on school holidays and let parents have some guilt-free family time! Enforce action that caps the percentage increase on holiday prices in school holidays.”

Sourced from Travel Weekly


Opinion: A cap on prices is not the answer

Opinion: A cap on prices is not the answerIs the industry ripping people off, or is there an explanation for why prices are higher in the summer school holidays? Alan Bowen knows the answer

The recent prosecution of a Shropshire family highlighted a change in the law in 2013 that prevents headteachers granting permission for term-time holidays.

As a result, more parents look at the cost of high-season holidays and claim we as an industry are ‘ripping them off’. But are we?

And what if we were forced to make changes to holiday pricing?

E-petition hits a nerve

Almost 160,000 people had signed an e-petition entitled ‘Stop holiday companies charging extra in school holidays’ on a government website by the end of last week (100,000 is enough to be considered for Parliamentary time). And many consumers have shared examples of differences between peak and off-peak prices on a Facebook group called ‘Holiday price increase’.

Is the industry ripping people off or is there an explanation for why prices are higher at the end of July than at the beginning of June?

Most operators sign contracts for the full summer season from May to October. The price paid to suppliers is often fixed for the whole season and it costs an airline the same price to fly a passenger to Malaga on July 23 as it does on June 1, but the selling price will be different.

Reasons for the ‘rip-off’

There is the obvious issue of supply and demand: most people with school-age children want to travel in the school holidays.

However, the number of beds and air seats is fixed. When demand rises, so does the price, not least to encourage potential customers to choose a cheaper date to travel.

There is nothing unique about travel in this respect. With the weather we’ve been having in the UK, umbrella or sandbag manufacturers will be doing well, while snow-shovel sellers may be reducing their prices.

The industry tries to encourage low-season travel by selling at lower prices – in some cases, at virtually no profit – simply to keep aircraft flying and beds filled.

No operator makes money in the low season – they just hope to keep losses as low as possible. No operator makes a fortune either – the profit margins in travel are some of the lowest in any industry. The truth is, without the summer’s profits, there wouldn’t be traditional package operators in the first place. Those few weeks of peak prices have to make up for the losses during the rest of the year.

Capping would not work

Capping prices at peak season would mean prices would have to increase at other times when demand isn’t there. The consequence would be that demand would fall, profits would fall and businesses would fail.

Of course, those who take no risk, the dynamic packagers, would argue they are the future. But hotels with rooms left empty by operators no longer in the market and airlines with empty seats in early June and late September would have to increase high-season prices even more to make up for the loss of business. It would lead to less choice and higher prices for everyone.

If you don’t believe me, try selling a holiday while the World Cup is on and see how hard it is.

Sourced by Travel Weekly


Cruise demand set to soar by 74%

Cruise

Demand for cruises is set to increase by 74% to 36.4 million global passengers over the next 12 years, according to a new industry report.

The cruise market is predicted to grow from 20.9 million annual passengers in 2012 to 24 million by 2015.

It will then rise to 29.7 million by the end of this decade and to 36.4 million by 2025, according to a report by UK-based cruise analyst Ocean Shipping Consultants (OSC).

North America is forecast to continue dominating the industry although the region’s overall share of the cruise market is set to decline from the current 56% to 50% by 2025.

OSC predicts that Europe and Asia Pacific will “grow strongly” over this period which will have “major implications for cruise capacity deployment, cruise ports development, cruise ship construction and cruise ship repair”.

Europe has already seen major growth in the cruise market with 5.7 million passengers embarking from the continent’s ports in 2012 – double the number in 2005. OSC predicts that there will be 12 million European cruise customers by 2025.

The UK is currently the third most popular country in Europe for starting cruises behind Italy and Spain.

OSC added that to match this increased demand, cruise lines will have to increase current passenger capacity from 464,000 to 866,000 by 2025.

This would mean having to build between nine and 13 new ships per year from 2015 onwards, excluding any ships that have already been ordered for this period.

Sourced by TTG Digital


Air passenger demand expected to rise 31% by 2017

Air passenger demand expected to rise 31% by 2017By Phil Davies

Demand for global air travel is forecast to soar by more than 30% with 930 million more passengers flying by 2017.

The projection from Iata will see total annual numbers increase to 3.91 billion against the 2.98 billion carried in 2012.

Demand is expected to expand by an average of 5.4% compound annual growth rate between 2013 and 2017 compared to 4.3% between 2008 and 2012, largely reflecting the negative impact of the 2008 global financial crisis and recession, Iata estimates.

About 292 million of the new passengers will be carried on international routes – bringing the total to 1.5 billion – and 638 million on domestic services to give a total of around 2.46 billion.

The emerging economies of the Middle East and Asia-Pacific will see the strongest international passenger growth with gains of 6.3% and 5.7%, followed by Africa and Latin America with growth of 5.3% and 4.5%.

Routes within or connected to China will be the single largest driver of growth, accounting for 30% of new passengers during the forecast period.

The Asia-Pacific region, including China, is expected to add around 300 million additional passengers by the end of the current forecast period. Of these, around 225 million or 75% are expected to be domestic passengers.

With 677.8 million domestic passengers in 2017, the US will continue to be the largest single market for domestic passengers.

Uzbekistan has displaced Kazakhstan as the fastest-growing market for international passenger traffic, according to Iata. They are followed by Russia, Turkey, Oman, China, Vietnam, Saudi Arabia, Azerbaijan, and Pakistan. No Latin American or African countries are among the fastest growing markets.

Iata director general and chief executive Tony Tyler said: “The fact that the Asia-Pacific region – led by China – and the Middle East will deliver the strongest growth over the forecast period is not surprising.

“Governments in both areas recognise the value of the connectivity provided by aviation to drive global trade and development.

“Similar opportunities exist for developing regions in Africa and Latin America. To reap the benefit, governments in those regions will need to change their view of aviation from a luxury cash cow to a utilitarian powerful draft horse to pull the economy forward.”

Sourced by Travel Weekly


Pilot shortage warning as travel demand rises

Pilot shortage warning as travel demand risesBy Phil Davies

Airlines face the prospect of a flight crew shortage due to growing demand for air travel and a generation of retiring pilots.The warning comes from training company CTC Aviation, which forecasts that 235,000 more pilots will be needed worldwide over the next seven years.

That is to meet the growing demand for air travel and fill the gap caused by a generation of retiring pilots.

The company is embarking on its biggest ever recruitment drive in the UK, where the mix of English being the official language of the skies and youth unemployment of about 20% makes Britain a particularly attractive market for new trainees, the Daily Telegraph reported.

Managing director Martin Hunt said: “Globally there are currently around 22,000 commercial jets and this is forecast to grow to 40,000 by 2030.

“Similarly, there are just under 150,000 pilots but over the next seven years, the aviation industry needs to find a further 235,000 not only to meet the demands for more airline travel but also replace those who retire.”

It costs £89,800 for the two years of training required.

Hunt acknowledged that “£90,000 is a very significant investment but, because we place 99% of the cadets we train with airlines, the return on investment is also very high.”

The Southampton-based company is taking on 200 to 300 applicants a year out of around 8,000 applicants, with numeracy one of the key attributes required.

Hunt said: “The reputation of British pilots abroad is very good and the fact that they can get jobs anywhere in the world means that once you’ve qualified you have a very secure job.”

He admitted the initial funding can be difficult to find, though “most people borrow the money”, with Spanish bank BBVA carving out a niche in the market.

CTC has received 64,800 pilot training applications over the past 10 years, with 25,118 coming from Britain and 45,800 from continental Europe.

Sourced from Travel Weekly