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India and Brazil stand out with very strong growth in domestic air passenger markets during April 2011 in contrast to the Chinese market which has slowed, partly due to tighter economic policies, according to International Air Transport Association (IATA).
Among the emerging markets, India stands out with very strong growth of 25.6 per cent in April, compared with April 2010 – some 46 lakh passengers travelled in the domestic sector.
In the past five years the Indian domestic air travel market has tripled compared to a doubling of the Chinese and the Brazilian domestic markets, and compared to a shrinkage of domestic air travel in both the US and Japan, IATA said in its report for April.
Brazil is also booming with growth of 23.8 per cent in April. By contrast growth in the Chinese domestic market has slowed over the past nine months, partly as a result of tighter economic policies. However, China remains the second largest domestic air travel market by a large margin, the agency says.
Domestic markets have been the weakest segment of air travel over the past nine months. Travel distances are shorter than on international markets but even so domestic revenue-passenger-kilometre (RPK) still accounts for almost 40 per cent of the total market.
Domestic markets are important for Latin American and Asia-Pacific airlines due to the size of countries such as Brazil, China, India and Australia . Domestic business is less important for airlines in Europe and in Africa where it represents just over 10 per cent of the passenger traffic they carry.
Weakness in Japan
The weakness of the Japanese domestic market is the most striking domestic market development. The impact of the March 11 earthquake and tsunami has been to cut passenger travel within the country by 31 per cent in April. Reconstruction should start boosting economic activity in the country during the second half of the year but it is not clear how rapidly domestic air travel in Japan will recover.
In fact, the Japanese domestic market is small compared with the US, which represents almost half of global domestic air travel. The sluggishness of these very mature markets is the principal reason for slow domestic travel growth in total. The decline in this more price-sensitive market in the past six months also suggests that the surge in fuel costs is also having a damaging effect, says the IATA report.
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