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Airline Capacity Growth Outpaced 2011 Demand

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By Author: Steve Robinson
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The good news for travelers is that typically when airlines increase capacity at a faster rate than people choose to fly, it usually has a positive impact on the availability of cheap airplane tickets and cheap vacation packages.

The number of people flying worldwide last year increased by 5.9 percent while airlines increased their available seats by 6.3 percent which resulted in their average loads declining in 2001.
Average passenger 2011 load factor was 78.1 percent vs. 78.3 percent in 2010.

Strong passenger growth, primarily in the first half of the year was offset partially by a falling cargo market. Optimism in China contrasted with concern in Europe. Passenger demand in China rose almost 11 percent last year, far outpacing all other markets.

The weak Euro helped increase business travel as travelers from outside Europe took advantage of cheaper fares.

Travel to and from Japan was significantly negatively impacted by its earthquake, tsunami, and problems with its nuclear reactors, with demand down over 15 percent.

Airlines have been trying to respond to higher fuel costs by ordering newer, more fuel efficient planes such as the Boeing 737 MAX. Airlines transport over 3 billion people a year and over a third of the world’s value of goods.

The International Air Transport Association, which represents some 240 major airlines, believes business conditions will remain challenging in 2012 and calls for political measures to reduce bureaucracy for airlines.

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