Amadeus study reveals Asia as biggest market for air travel

Worldwide air traffic volume grew 5% between 2011 and 2012, with Asia being the largest, fastest-growing and most competitive market for air travel.

The analysis comes via Amadeus‘s Air Traffic Travel Intelligence report, revealing growth numbers on passenger volume by region, top ten global air busiest routes, global air travel concentration, percentage of air traffic volume in each region with number of operating airlines and LCC share of traffic in each region.

The infographic below shows a high level summary of the global air traffic analysis, including an interesting pointer: Colombia, Peru and Philippines are new emerging markets for passenger air travel.

Scroll down for more detail.

Amadeus Air Travel Infographic

Pascal Clement, head of travel intelligence at Amadeus, says:

“The rapid pace of change and increasing competitiveness of the global airline industry, as evidenced by this data, means airlines and the wider travel industry increasingly need to base operational decision-making on data insights and analytics, in order to identify opportunities and risks as they emerge.

“This data provides good news for the airline industry, showing that passenger air traffic has increased in every region of the world from 2011 to 2012.

“As in 2011, this growth is led by Asia, however, the data points to a further opportunity in the region, where the majority of traffic is on a small number of busy routes.”

1. Passenger volume growth in air traffic, by region

Asia experienced year over year growth of 9% between 2011 and 2012, followed by Latin America, at 6%.

Overall, the passenger volume growth for 2012 is at 5%.

Year over year passenger volume growth in air traffic, by region

RegionPassenger Volume 2011 (Millions)Passenger Volume 2012 (Millions)Proportional Change
North America5875972%
Latin America1781896%
Middle East97992%
South West Pacific79824%

2. World’s busiest air routes by passenger volume are dominated by Asian domestic travel

Seven out of the top ten world’s busiest air travel routes are in Asia.

Jeju-Seoul in South Korea remains the world’s busiest air route, and many of 2011’s top origin and destination (O&D) routes return to the league table for 2012.

However, there has been some change: in particular, Beijing-Shanghai has risen from seventh-busiest route in the world in 2011, to fourth-busiest in 2012.

Sapporo-Tokyo has overtaken Rio de Janeiro-Sao Paulo to second-busiest route ranking, and Okinawa-Tokyo has entered the top ten table, as ninth-busiest route in the world.

Top 10 global air travel busiest routes by passenger volume

RegionRoutePassengers 2012 (Thousands)Growth 2012-20112012 Rank (change in ranking from 2011)
AsiaJeju-Seoul10,1562%1 (=)
AsiaSapporo-Tokyo8,2118%2 (+2)
Latin AmericaRio de Janeiro-Sao Paulo7,716-1%3 (-1)
AsiaBeijing-Shanghai7,2467%4 (+3)
South West PacificMelbourne-Sydney6,943-2%5 (=)
AsiaOsaka-Tokyo6,744-11%6 (-3)
AsiaFukuoka-Tokyo6,640-3%7 (-1)
AsiaHong Kong- Taipei5,5132%8 (=)
AsiaOkinawa-Tokyo4,458412%9 (new)
AfricaCape Town-Johannesburg4,407-1%10 (-1)

3. Thousand worldwide origin and destination routes account for 40% of all global air traffic

35% of air travel in Europe and North America is made on smaller routes with fewer than 100 thousand annual passengers.

This contrasts sharply with other regions such as Asia where 85% of air travel is concentrated on routes that carry over 100 thousand passengers each year.

This concentration of Asian air travel suggests the region’s growth may continue as there is an opportunity for airlines to develop secondary links beyond the heavily competitive super routes.

In Asia, the larger routes with over 100 thousand annual passengers have a 4-9% growth range, but the smaller and medium sized routes in the region are growing at approximately 19-21% per annum.

Global air travel concentration based on passenger volume for 2012

Region>1 million passengers1 million to 100 thousand passengers100 thousand to 10 thousand passengers<10 thousand passengers
Asia - Asia40%45%12%3%
Europe - Europe14%52%27%6%
North America – North America14%52%25%9%
Latin America – Latin America28%50%17%5%
South West Pacific – South West Pacific42%38%14%6%
Middle East – Middle East15%60%22%3%
Africa - Africa25%35%34%7%

4. Competition within the airline industry has increased consistently  

Globally, the airline industry has become consistently more competitive over the past three years.

The percentage of air traffic served by just one or two airlines has fallen by 2% each year from 39% in 2010 to 35% in 2012.

Concurrently, the percentage of air traffic with four or more competing airlines has also risen consistently from 35% in 2010 to 38% in 2012.

Asia is the market with the highest competition between airlines in the world, with 75% of air traffic volume served by more than 3 airlines and only 25% of air traffic served by one or two airlines.

This contrasts strongly with other regions, for example in Europe 45% of air traffic volume is served by just one or two different airlines and in the Middle East 50% of all air traffic has only one or two competing carriers.

The highly competitive nature of air travel in Asia may be due to the high concentration of passengers on a relatively low number of ‘super routes’, where several airlines vie for dominance.

Percentage of air traffic volume in each region with number of operating airlines
RegionPassengers 2012 (Millions)1 Operating Airline2 Operating Airlines3 Operating Airlines4 Operating Airlines5+ Operating Airlines
North America59710%24%27%22%17%
Latin America1899%23%32%22%13%
Middle East9922%28%24%16%10%
South West Pacific8215%29%31%20%5%

5. Low cost carrier penetration is highest in the traditional European and North American markets

The rise of low cost airlines has been significant over the past decade, but this has been largely limited to traditional markets.

Europe has the highest concentration of LCC traffic, representing 38% of total air travel in 2012.

The South West Pacific and North America regions also have significant LCC penetration, with 37% and 30% respectively.

However, in markets where air travel is growing most strongly, LCCs’ respective share of overall air travel remains at modest levels – in the Middle East LCCs represent just 14% of all air travel, in Asia 19% and Latin America 25%.

Within specific regions, the spread of LCCs varies strongly. In Europe, Spain has the highest share of departing LCC traffic at 57%, followed by the UK where 52% of all originating air travel is now made on low cost airlines, up 4% from 2011 and passing the 50% milestone for the first time.

Despite the low overall share of low cost air travel in Asia, some countries have bucked this trend, for example 65% of all air travel in the Philippines and 61% of all air travel in Thailand is made on low cost carriers.

LCC share of traffic in each region in 2011 and 2012

RegionLCC Share of Traffic 2011LCC Share of Traffic 2012Proportional Change (in % points)
South West Pacific35.5%36.6%+1.1
North America29.5%30.2%+0.7
Latin America26.6%24.9%-1.7
Middle East11.7%13.5%+1.8

6. Middle East is becoming an increasingly important global air travel hub

The region’s three key airports of Dubai, Doha and Abu Dhabi, are all experiencing strong overall air traffic growth of around 10% per annum and they have very high levels of connecting traffic, with each airport seeing around 50% of its total air travel volume connect.

These figures demonstrate the region’s increasingly important role as a hub between Europe and the emerging markets of Asia and the South West Pacific.

When the three airports are taken as a group they already serve around 15% of air traffic volume between Asia – Europe and Europe – South West Pacific.

It is particularly interesting to note that overall traffic volume between Europe and Asia is growing by approximately 7% year over year, but traffic volume between these two locations and routed via the Middle East grew by approximately 20% between 2011 and 2012.

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Karthick Prabu

About the Writer :: Karthick Prabu

Karthick was general manager for Tnooz in Asia until September 2014.



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