Future trends in air travel

Although the economic environment is improving and stimulating traffic growth, airlines are forecast to lose around $US5.6 billion this year compared with $US11 billion in 2009 as oil prices rise.

Yields for airlines remain depressed by competition for passengers, with fares falling 12 percent last year.

The International Air Transport Association (IATA), which represents 230 airlines carrying 93 percent of the world’s international traffic, said jet fuel would account for 26 percent of airlines’ operating costs this year, with crude averaging $US75 a barrel compared with $US61 last year.

Air fares lose altitude

The association’s chief economist Brian Pearce recently predicted that air fares would continue their downward trend ‘in the foreseeable future’ as airlines took delivery of more fuel-efficient aircraft to reduce costs. 

And in the highly competitive aviation industry, those savings will be passed on to travellers – ‘Cheap travel is getting even cheaper,’ Pearce said.

Airlines were badly hit last year by business travellers’ migration from the high-yield premium seats to the back of the aircraft.

However carriers such as Air New Zealand, which offers a premium-economy class with 50 percent more seat recline,  experienced huge demand for the product.

The cost-conscious corporate sector also made fewer trips or switched from the legacy carriers to low-cost, no-frills operators.

Economy business travel is however expected to deliver a quick recovery in the face of lower fares and an improving global economy – a face-to-face meeting to seal a deal beats video-conferencing every time.

The wings carrying the new economies for the industry are Boeing’s 787 and 747-8 Intercontinental and the Airbus A380 and A350.

The A380 could accommodate 525 passengers in three classes on its two decks but most operators have configured the world’s biggest commercial aircraft with fewer than 500 seats to provide more space.

Airbus has 202 orders for the A380 from 17 customers including Emirates which has received eight of its commitment for 58. Emirates’ A380s are fitted with 489 seats including 14 first-class and 399 seats in economy class.

Singapore Airlines, Qantas and Air France have collectively carried almost 3.5 million passengers and accumulated 90,500 flight hours on the A380.