International air travel is booming due to stable economic growth worldwide, relatively moderate oil prices and reform of visa regulations, a report by ForwardKeys found.
The report showed that for the first eight months of 2019 (January to August), international departures were up 4.9% from the same period last year. Even more positively, bookings for travel in the following three months (September to November) are currently 7.6% ahead of where they were at the end of August 2018.
Olivier Ponti, vice president insights, ForwardKeys, said: “2019 has been, and is set to become, another exceptionally good year for travel and tourism, worldwide. That is good news because travel and tourism is an increasingly important driver of export revenue and general prosperity globally. What I find particularly notable is the resilience of the industry in the face of several potentially adverse events such as Brexit, the China-US trade war, and political unrest in Hong Kong and the Middle East.”
ForwardKeys attributes the favourable report to stable economic growth worldwide, relatively moderate oil prices and reform of visa regulations. Throughout this year, the IMF has been forecasting that global growth in 2019 would be above 3%. Airlines have responded by increasing capacity, most notably between Africa and North America, which is up 17.9%.
Despite the recent attack on Saudi processing facilities, the oil price is still below its peak this year and well below the peak in 2018. A low oil price is helpful to the world economy as a whole, but it benefits aviation disproportionately, as oil makes up at least a fifth of the cost of a typical flight.
Also, in the last couple of years, there have been numerous relaxations in visa requirements by different countries, which have contributed to making travel easier.
From a geographical perspective, the Asia-Pacific region has been leading the way. International departures in the first eight months of 2019 were up 7.9%. In second place is Africa, with departures from the period of January to August up 6.0%. The US and Europe are in the third and fourth places, registering growth through August at 4.6% and 4.5%, respectively. The region of the world which has been struggling is the Middle East, with international departures from January to August down 1.7%.
The growth highlights in the first eight months have been from Asia-Pacific to Europe, up 10.4%; from Africa to the US, up 10.1% and from Europe to the Middle East, up 9.7%. The driving factors behind these trends have been the strong Chinese outbound market, aggressive expansion by Ethiopian Airlines which increased the frequency of its flights to New York, and a continued recovery in tourism to Egypt, which was badly damaged by terrorism incidents in 2015.
Looking ahead at the upcoming three-month period of September to November, Africa is leading the way, with forward bookings 9.8% ahead of where they were at the end of August last year. Europe is in second place, with forward bookings 8.3% ahead. It is followed by Asia-Pacific and the US, with forward bookings ahead 7.6% and 6.0%, respectively. The Middle East is the laggard, where forward bookings are ahead 2.9%.
The most promising trends in bookings for future travel over the September to November period are from the US to the Middle East, ahead 18.4%; from Europe to the Middle East, ahead 14.2%; and from Africa to the UK, ahead 15.2%. The driving factors are the recovery of Egypt and Ethiopian Airlines further developing its seating capacity.
Ponti concluded: “Looking ahead, I see two counterbalancing indicators. Forward bookings are very positive but geopolitical events remain a major concern.”