Amadeus: One fifth of global passengers fly on just 300 routes

New analysis from Amadeus, a leading provider of advanced technology solutions for the global travel industry, reveals that worldwide air traffic grew five per cent between 2011 and 2012, with Asia being the largest, fastest-growing and most competitive market for air travel. The analysis - which provides comprehensive passenger volume data, including both direct and indirect sales of airline seats - shows that Asia experienced year-on- year growth of nine per cent across the two years, followed by Latin America at six pr cent. The tool, part of the Amadeus’ Air Traffic Travel Intelligence portfolio, calculates the most accurate air passenger volume for any Origin and Destination (O&D) markets worldwide.

Among other key findings, the study reveals that 22 per cent of all global air travel is concentrated on just 300 origin and destination ‘super routes’, each of which carries over one million passengers annually. Furthermore, 69 per cent of all global air travel is made on major routes with 100,000 annual passengers.

In terms of connecting air traffic, the analysis shows the Middle East as a strong performer, with the three key airports of Doha, Abu Dhabi and Dubai all showing high connecting traffic volumes. For instance, when taken as a group the three airports now serve roughly 15 per cent of all air traffic volume that goes from Asia to Europe and from Europe to the South West Pacific. Furthermore, Europe-Asia traffic routed via the Middle East is growing at roughly 20 per cent per annum.

The analysis also shows Asia as the market with the highest airline competition, 75 per cent of the region’s air traffic is operated by three or more airlines and 27 per cent by five or more airlines, making this a region with a very intense competition in all its air travel routes. This contrasts sharply with other regions such as the Middle East and Europe where just half of all air traffic on its routes is operated by three or more airlines.

Analysis of the busiest routes in the world by passenger volume shows that seven out of the top ten world’s busiest air travel routes are in Asia. Jeju-Seoul in South Korea remains the world’s busiest air route, and many of 2011’s top O&D routes return to the league table for 2012, however, there has been some change: in particular, Beijing-Shanghai has risen from seventh-busiest route in the world in 2011, to fourth-busiest in 2012. Sapporo-Tokyo has overtaken Rio de Janeiro-Sao Paulo to second-busiest route ranking, and Okinawa-Tokyo has entered the top ten table, as ninth-busiest route in the world.

The report says global air travel is heavily concentrated, with 1,000 worldwide O&D routes accounting for 40 per cent of all global air traffic. Around 35 per cent of air travel in Europe and North America is made on smaller routes with fewer than 100,000 annual passengers. This contrasts sharply with other regions such as Asia where 85 per cent of air travel is concentrated on routes that carry over 100,000 passengers each year.

This concentration of Asian air travel suggests the region’s growth may continue as there is an opportunity for airlines to develop secondary links beyond the heavily competitive super routes, the report says. In addition, the analysis shows that in Asia, the larger routes with over 100,000 annual passengers have a four per cent to nine per cent growth range, but the smaller and medium sized routes in the region are growing at approximately 19 per cent to 21 per cent per annum.

Globally, the airline industry has become consistently more competitive over the past three years. The percentage of air traffic served by just one or two airlines has fallen by 2 per cent each year from 39 per cent in 2010 to 35 per cent in 2012. Concurrently, the percentage of air traffic with four or more competing airlines has also risen consistently from 35 per cent in 2010 to 38 per cent in 2012. Asia is the market with the highest competition between airlines in the world, with 75 per cent of air traffic volume served by more than three airlines and only 25 per cent of air traffic served by one or two airlines.

This contrasts strongly with other regions, for example in Europe 45 per cent of air traffic volume is served by just one or two different airlines and in the Middle East 50 per cent of all air traffic has only one or two competing carriers. The highly competitive nature of air travel in Asia may be due to the high concentration of passengers on a relatively low number of ‘super routes’, where several airlines vie for dominance, says the report.

The rise of low-cost airlines has been significant over the past decade, but this has been largely limited to traditional markets. Today, Europe has the highest concentration of LCC traffic, representing 38 per cent of total air travel in 2012, shows the analysis. The South West Pacific and North America regions also have significant LCC penetration, with 37 per cent and 30 per cent respectively. However, in markets where air travel is growing most strongly, LCCs’ respective share of overall air travel remains at modest levels – in the Middle East LCCs represent just 14 per cent of all air travel, in Asia 19 per cent and Latin America 25 per cent.

Within specific regions, the spread of LCCs varies strongly, highlights the report. In Europe, Spain has the highest share of departing LCC traffic at 57 per cent, followed by the UK where 52 per cent of all originating air travel is now made on low cost airlines, up four per cent from 2011 and passing the 50 per cent milestone for the first time. Despite the low overall share of low cost air travel in Asia, some countries have bucked this trend, for example 65 per cent of all air travel in the Philippines and 61 per cent of all air travel in Thailand is made on low-cost carriers.

The Amadeus report shows that the Middle East is becoming an increasingly important global air travel hub. The region’s three key airports of Dubai, Doha and Abu Dhabi, are all experiencing strong overall air traffic growth of around 10 per cent per annum and they have very high levels of connecting traffic, with each airport seeing around 50 per cent of its total air travel volume connect. These figures demonstrate the region’s increasingly important role as a hub between Europe and the emerging markets of Asia and the South West Pacific.

The data shows that when the three airports are taken as a group they already serve around 15 per cent of air traffic volume between Asia - Europe and Europe - South West Pacific. It is particularly interesting to note that overall traffic volume between Europe and Asia is growing by approximately seven per cent year-on-year, but traffic volume between these two locations and routed via the Middle East grew by approximately 20 per cent between 2011 and 2012.

“The rapid pace of change and increasing competitiveness of the global airline industry, as evidenced by this data, means airlines and the wider travel industry increasingly need to base operational decision-making on data insights and analytics, in order to identify opportunities and risks as they emerge,” said Pascal Clement, Head of Travel Intelligence, Amadeus. “This data provides good news for the airline industry, showing that passenger air traffic has increased in every region of the world from 2011 to 2012.”

Source: Amadeus Air Traffic Travel Intelligence