flight international

30 | Flight International | 8-14 March 2016 flightglobal.com

AIRLINE INDUSTRY

GRAHAM DUNN LONDON

With a prolonged fall in oil prices driving down fuel

costs, it’s no surprise 2015 was a record year for airline

profits – but the big story is strong demand for air travel

L Caliaro/Superjet International

A

irline traffic increased among lead-

ing global carriers more than 6% in

2015 as demand remained strong in

what looks set to be confirmed as

the industry’s most profitable year to date.

While lower fuel costs have driven im-

proved airline profitability (see related story),

the lower fares that have resulted from

reduced costs and continued competitive

pressures have also contributed by helping

boost demand. This is evident in financial

figures for US carriers, where airlines doubled

collective net profits despite airline revenues

staying flat in 2015.

Figures covering nearly 70 global carriers

and airline groups show passenger traffic –

measured in revenue passenger kilometres

(RPK) – up 6.2% in 2015. That compares with

traffic growth of 5.1% and 5.7% for leading

carriers in 2014 and 2013, respectively.

With traffic growth outpacing the 5.2%

capacity airlines added in 2015, the collective

load factor rose by nearly a percentage point,

to 81.4%.

Passenger traffic in the Americas increased

4.7% in 2015, an increase driven in part by

fast growth among Mexican carriers and low-

cost operators in the USA.

Aeromexico and budget pair Interjet and

Volaris all enjoyed double-digit traffic growth

in 2015; Interjet increased traffic by a quarter.

Traffic growth was tempered elsewhere in

Latin America, as currency and economic

challenges – most notably in the key Brazilian

market – took a toll. Brazil’s two biggest carri-

ers – Gol and TAM – both recorded minimal

traffic growth.

Discounters Allegiant Air and Spirit

Airlines grew the fastest in the USA, albeit

from a relatively low base. Spirit increased

traffic more than a quarter in 2015, while

Allegiant increased 14%. This fell short of the

capacity the carriers added, so load factor

slipped more than two points at both.

Spirit Airlines’ chief executive Bob Fornaro

says the carrier does not expect to “repeat a

30% growth rate” – the speed at which the

airline expanded in 2015 – again any time in

the near future. But the airline still expects to

increase capacity in the 15-20% range annu-

ally in the coming years.

Meanwhile, US majors kept a tight grip on

capacity. American Airlines Group, now in-

cluding US Airways, increased its load factor,

as did Delta Air Lines and United Airlines.

Overall, North American airline traffic

growth stood at 4.5%, slightly ahead of the

extra capacity and helping lift collective load

factors fractionally to 83.7%.

In 2015, passenger traffic among leading

European carriers increased just over 5%.

Again, this reflects mixed growth at the

biggest carriers and more rapid gains by their

low-cost rivals.

Among the majors, British Airways,

Lufthansa and Air France-KLM kept capacity

increases down to not much more than 2%.

Traffic at all three outpaced this, resulting in

small increases in load factors.

Lufthansa unit Brussels Airlines and BA’s

IAG stablemate Iberia, though, raised traffic

sharply. Iberia’s traffic gained almost 14% in

2015, rebuilding much of the network cut

during its restructuring two years ago –

passenger traffic had fallen nearly 17% in

2013. That return to growth continues this
      year, not just with the restoration of routes to
      Johannesburg and San Juan this summer, but
      also its first Asian services, to Tokyo Narita
      and Shanghai.

Despite the wider turmoil in

Chinese financial markets,

the country’s carriers enjoy

strong fortunes

VIRTUOUS CYCLE

At Mexico’s fast-growing

low-cost carrier Interjet,

traffic rose by a quarter

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