Air travel demand continues to slow down

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Southern Times Writer

Harare - Growth in global air travel demand continues to slow, sliding from 7.8 percent year over year (YoY) in June 2018 to 4.5% by May 2019.

During the first five months of 2019, traffic increased by 4.6%, down from 6.8% the year before. This has been revealed by a report by BCD Travel, a provider of global corporate travel management

“The performance of the global economy has been key to this trend, and it’s likely that growth will moderate further in 2020. Demand will still be strong enough to allow airlines to increase average fares in most markets to help offset higher fuel and labour costs. The collapse of carriers like Air Berlin, flybmi, Jet Airways and Wow Air has encouraged some airlines to pursue higher yields.

“But, as capacity continues to expand, it will limit fare increases — with some exceptions. In China and India, strong demand, changes in competition and regulatory developments mean travellers face rapidly rising fares. Globally, we expect average ticket prices (ATPs) to rise by one percent in 2020. That applies to intercontinental travel in both business and economy class and to regional flights in economy. Regional business class fares will increase by 2 percent,” stated the travel management company.

 

 

For Africa the report revealed that technology-based ride-hailing services are travellers’ preferred ground transportation choice in Africa.  Uber already operates across much of sub-Saharan Africa, where it has 36,000 active drivers. With the exception of Nigeria and Ghana, it has yet to establish a similar presence in West Africa.

But the company is talking to regulators about expanding to Senegal and Côte d’Ivoire. It’s also looking at introducing boat rides in Lagos to alleviate street traffic.

“Travelers also have more than 50 smaller operators to choose from, including Safaricom-backed Little Cabs in Kenya. New entrants continue to launch, such as Russian operator inDriver. After launching in Arusha in Tanzania in 2018, it now also operates in Cape Town, Johannesburg and Nairobi and plans to expand to Nigeria, Ghana, Zimbabwe, Uganda and Namibia.

“Uber’s deal to acquire rival operator Careem will reduce competition, particularly across North Africa, where the United Arab Emirates-based ride-hailing company is often the first choice for travellers. Authorities in Egypt, a market where ride-hailing already faces a legal challenge from taxi drivers, have promised to block any merger between Careem and Uber, saying it would create a ride-hailing monopoly,” stated the report.

In addition to the ground transportation prospects for the African continent mentioned in the report, the Al Boraq, Africa’s first high-speed rail line, opened in Morocco in November 2018. An initial phase connects Tangier to Kenitra, with trains operating at speeds up to 320 kilometres per hour (kph). Egypt has also announced its own plans for its first high-speed railway linking Ain Sokhna.

 

 

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