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Shifting Sands

The aviation landscape is changing. Just a few years ago, the United States held top position in terms of traffic but the rise of Asia-Pacific was plain to see.

By 2014 the transformation will be complete. US traffic will have a 23% total market share (down from 26% in 2009) compared with the 30% held by Asia‑Pacific (up from 26% in 2009). Only 22% of the world market will travel within Europe.

It is not only the biggest markets that are shifting Eastwards. Individual routes, such as the North Atlantic market, are undergoing a sea change. The forecast figure of 4.7% growth in air traffic across the Atlantic must be compared to the 9% increase on Middle East-Asia passenger routes. Even Pacific travel will be supported by the burgeoning Asian economies with 6.9% growth.

For many, the North Atlantic figure may even be an overestimate. High taxes, unemployment, and a host of regulatory matters threatening both ends of the market make it a contentious number.

Added to this is the fact that traffic from the Middle East/North Africa (MENA) region to the United States is predicted to be the fastest growing route over the next five years. Aside from the growing MENA economies, this reflects the continuing use of Middle East hubs for long-haul travelers. New, long-range aircraft are giving Middle Eastern carriers the ability to ignore European stops. And for many passengers, avoiding congested gateways has proved a boon.

Nonetheless, Kurt Stache, Vice President International, American Airlines, says his carrier expects a 7.7% increase in international capacity in 2011, partly the result of its recent joint business ventures with British Airways and Iberia over the Atlantic. He believes antitrust immunity issues have put the oneworld partners on a back foot in previous years but the playing field is now levelling out.

He notes, however, that many problems still face the industry and these will continue to affect all markets, including the North Atlantic corridor. “Such issues include high oil prices; congested slot‑controlled airports; the expansion of Open Skies agreements; industry profitability affecting the ability to reinvest in products; and more fuel efficient aircraft to offset oil price instability and—more recently—increases in taxation,” says Stache. “In 2012 the European Union will include aviation in the Emissions Trading Scheme, and several governments continue to introduce or increase taxes on departing passengers.”

Next: Domestic travel surges

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