29 September 2011

Yes There Is A Slowdown In Passenger Traffic

There is a general view that when cargo goes soft - so does passenger traffic in about 4-6 months immediately following.

I don't want to be a doomsday person but I believe we are going to see a reduction in passenger traffic particularly in TC1, TC2 and between the two coming shortly. Further among the other areas of robust growth I believe we are going to see moderation of that in GCC and Latam traffic.The only area where I believe we will see a continuing growth will be in Asia Pacific. But don't take my word for it. Check out these learned folks:

The latest IATA numbers have revised upwards the airline profitability. BUT I tend to look at the transactions (e.g. number of passengers and number of flights rather than the financials.

Folks you have been warned. Tighten your belts. The airlines have already started to do this by cutting surgically flights from their schedules. Unlike the traditional slash and burn we have seen in the past these cuts are much more subtle. Less nonstops. Axing of daily frequencies in favour of only several times a week (particularly in International flights). And of course more codeshares.

What is rather interesting is that the DoT should be looking more carefully at the results of its allowance of the JV Alliances and to see what the economic impact has been on the markets. The fundemental question of whether the Alliances benefited the travelling public through lower fares deserves full analysis.


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