OAG Review of the Year 2003
29 December 2003
December 23, 2003 - 2003 – when we have celebrated the centenary of powered flight - has been yet another turbulent year for the airline industry. War, SARS and the continued depressed global economy have all taken their toll. New alliances and partnerships have emerged - others have broken down. Some airlines have suffered from industrial unrest, yet more have seen heavy financial losses. But, an obvious feature of the year is that the low cost carriers continue to thrive, perhaps indicating the future trend of the airline industry.
OAG, the world’s leading source of independent flight schedule information, has produced a round up of activity in the airline industry in 2003. The review tracks changes in flight levels by region and looks at traffic to and from key financial centres. The impact of the Iraqi conflict and SARS outbreak are measured comparing flight levels to a base week just prior to the onset of hostilities and initial diagnosis. OAG also examines the shifting alliances within the global airline industry over the year.
Overall market by region
Worldwide, the number of flights has risen by 3% over 2004 and flight levels were generally stable throughout the year. The most significant variance was in the immediate aftermath of the Iraqi War (March to April) when over 10,000 flights were pulled from airlines’ networks. However, the industry bounced back surprisingly quickly with more than 25,000 flights added between May and July, showing a return to the busier summer period usually seen at this time of year.
The UK domestic market is the only region to show a drop in flight levels over the year, falling by –4%. Flights within Asia Pacific have shown the biggest growth in 2004 - up 11%.
Financial Centres
London airports reflect a mixed picture. Gatwick has seen a slight fall in the number of flights over the course of the year but a slight increase in the number of seats possibly reflecting the use of fewer but bigger planes in order to gain cost efficiencies.
In contrast, Heathrow has seen increases in both the number of flights and seats – supporting the demands for an additional runway in the near future. Stansted, which has continued to attact low cost routes, has seen 133 additional flights added over 2004, over 60,000 additional seats.
Dubai has shown strong growth in 2003, adding 260 flights between January and December.
New York’s JFK airport has seen a decrease of –186 flights between January and December but the number of seats had increased by around 600.
Singapore Changi airport saw a massive drop in the number of flights at the height of the SARS virus, between April and May, over 750 flights. However, the Asia Pacific region overall has managed to bounce back and Singapore Changi only shows a slight decrease in the number of flights over the whole year. Beijing airport has added over 700 flights in 2003, mirroring the ongoing confidence and increased frequencies and seats both within and to/from China.
The effect of war and SARS
OAG has tracked global flight levels on a weekly basis since the start of the Iraqi War. The weekly statistics measure flight levels against the base week of March 17th (just before the outbreak of hostilities). In the week immediately after, global flight levels were down –0.1%, the most severe drop occurred at the end of April, tumbling by –3.2%.
Flights in the US market appear to have been most severely affected by the conflict, US domestic flights fell by –3.3% at the end of April and US to Western Europe flights fell by –5.5% in the same week.
The impact of SARS is also recorded. Flights to and from Asia Pacific fell by –6.6% at the beginning of May, but recovered quickly, climbing again by the beginning of June.
Low-cost flights
The low cost sector remains a strong influence in the global flight industry. The low cost carriers in all regions have increased their market share.
Low cost flights to and from the UK now represent a quarter of all flights, compared with 21% in January. Low cost within the UK is up from 17% to 21%. Low cost within Europe is up from 7% to 11%.
Alliances
The oneworld alliance, which includes British Airways and American Airlines, has seen a –5% drop in the number of flights it represents. In contrast, both SkyTeam and Star Alliance have increased their totals by 5%. The growth of the SkyTeam alliance may well continue into next year with the potential addition of KLM’s flights following its recent merger with Air France.
Lynne Fraser, marketing director of OAG data, commented:
“The centenary of flight has certainly been an eventful year for the airlines. With SARS, war, industrial action and poor financial results there has barely been time to pause for breath in the industry. The OAG Review of the Year highlights the effect of these events on the airlines, yet shows just how resilient the industry is and how it has managed to recover fairly well over the 12 months.
“The low cost carriers continue to show their strength. They are gaining an ever increasing share of the market, across all regions.
“For 2004, OAG will be watching the Asia Pacific region with particular interest. It has shown incredible growth in the last year - despite the devastating impact of SARS. OAG sees Asia Pacific as a critical market and is already dedicating additional resources and attention to this critical market.”
For further information or requests for interviews, please contact:
Fiona Chow at Brown Lloyd James in the UK
T: +44 (0)20 7591 95610
M: +44 (0)7973 753 583
E: fionac@blj.co.uk