Monday, 26 September 2016

AFRICA: Travellers Drop In 2016

Global passenger traffic grew 4.5 per cent in June 2016 and 5.6 per cent for the first half of the year, according to Airports Council International

Even though airports reported an increase of four per cent in international passenger traffic and an increase of 5.1 per cent in domestic traffic in June 2016, international passenger traffic grew faster than the domestic component during the first six months of 2016 (six per cent versus 5.4 per cent).

The lower than expected growth rates during June 2016 in international traffic in Europe and the slowdown in the Middle East testified to the fragile and uncertain economic conditions, political instability and passenger sensitivity to the wave of terrorist attacks. These events weighed on travel confidence and air transport demand.

Nevertheless, except for Africa where the drop in passenger traffic was apparent and anticipated (-4.4 per cent year-to-date), all regions posted growth in passenger volumes, ranging from 1.7 per cent in the recessionary Latin America-Caribbean region to the buoyant Asia-Pacific and Middle East regions, which both grew strongly at 8.8 per cent on a year-to-date basis. The mature markets of Europe and North America both grew 4.9 per centduring the first half of the year.

Air freight markets were substantially weaker than passenger markets, posting marginal 0.5 per cent growth in total freight on a year-to-date basis, largely due to a subdued growth in emerging markets and developing economies and a modest recovery in advanced economies (4.1 per cent and 1.8per cent in GDP respectively, as projected by the International Monetary Fund for 2016).

The 0.5 per cent growth rate in global freight volumes comprised +0.3 per cent in international freight and +1.0 per cent in domestic freight on an annualised basis. The lacklustre performance of global industrial activity and trade due to China’s economic transition, the weak growth of the Japanese economy and the weaker than expected growth of the United States, combined with recessions in Brazil and Russia, all have had a negative impact on air freight markets. Three regions plunged into negative territory in terms of year-over-year changes in freight volumes on a year-to-date basis.

North America, Latin America-Caribbean and Africa reported freight traffic losses of 2.1 per cent, 0.9 per cent and 0.1 per cent respectively.

Asia-Pacific and Europe reported freight traffic growth of one per cent and 2.3 per cent respectively, while the Middle East grew 4.5 per cent over the course of the first six months in 2016.

On the back of a growing middle class in key emerging markets, the significant growth of intercontinental hubs in Asia-Pacific revealed that air transport’s nucleus is moving eastward. Despite the slowing of economic growth in China, its move away from an investment-led economy to a consumption-driven economy will further stimulate air transport demand in the long run.

India is also poised to be one of the largest aviation markets in the world in the years to come. The combination of a move towards a more liberalized market for aviation, coupled with stronger economic fundamentals, helped the country become one of the fastest-growing markets in the world.

In Asia-Pacific, passenger traffic grew 9.9 per cent in June 2016, outpacing the 8.8 per cent year-to-date growth rate. International and domestic passenger traffic were strong during the first half of 2016 at 10.1 per cent and 8.2 per cent respectively. Major commercial airports in China, India and Korea remained the major driving forces for the robust air passenger growth in the region (+12.1 per cent, +17 per cent and +14.1 per centrespectively).

A 20.6 per cent increase in domestic passenger traffic in India is worth a special note. Over half of the growth in passenger traffic in Asia-Pacific came from these three economic giants. Other major contributors to the region’s strong passenger numbers were the major commercial airports in Thailand (+12.5 per cent), Japan (+4.6 v), Indonesia (+9.2 per cent), Australia (+5.4 per cent) and Chinese Taipei (+12.1 per cent). China and Korea posted strong a growth in international passengers (16.6 per cent and 15.7 per cent respectively).

Total air freight traffic in Asia-Pacific picked up 5.9 per cent in June 2016, surpassing the year-to-date figure of one per cent. International air freight in the region grew a meagre 0.5 per cent during the first half of the year, while domestic air freight in Asia-Pacific was somewhat stronger at 2.4 per cent.

China, accounting for over a third of air freight traffic in the region (34.3 per cent share in 2015), grew a modest 3.9 per cent in total freight (+3.2 per cent in domestic and +4.8 per cent in international freight on a year-to-date basis).

In Japan – the second largest air freight market in the region with a 13.4 per cent share – air freight at major commercial airports dropped 2.7 per cent during the first half of 2016, with equal declines in domestic and international freight.

Hong Kong, the third largest air freight market in Asia-Pacific with a 10.8 per cent share—saw a 0.8 per cent fall in international freight, while India posted a robust 9.6 per cent increase in total freight for the first six months of 2016, consisting of 4.1 per cent growth in domestic freight and 10.5 per cent growth in international freight.

Korea posted 0.4 per cent increase in total air freight, international freight growing 0.9 per centeven as domestic freight slipped into negative territory with a 4.6 per cent decrease. The air freight markets of Malaysia and Indonesia saw traffic declines of 18.5 per cent and 8.8 per cent respectively on a year-to-date basis.
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