Airline capacity crunch looms

The International Air Transport Association (IATA) is warning of a capacity crunch in some regions even as data for September this year showed global passenger demand growing. The expected crunch, of course, will be the result of the shortage in the timely delivery of aircraft orders that piled up with the resurgence of air travel following the pandemic in 2020 that nearly grounded international travel to a halt and resulted in the cancellation of several aircraft orders at that time.

Unfortunately, the supply problem is now exacerbated by the ongoing problem of major aircraft manufacturer Boeing which is facing a contentious labor problem on top of its legal problems resulting from its series of manufacturing defects.

According to data released by the IATA which represents some 330 airlines comprising more than 80 percent of global air traffic, total demand as measured in revenue passenger kilometers (RPK – which measures actual passenger traffic) was up by 7.1 percent compared to September last year, an all-time high for September. Total capacity, measured in available seat kilometers (ASK – which measures available passenger capacity), was up by 5.8 percent year-on-year. The September load factor was 83.6 percent (+1.0 ppt compared to September 2023).

International demand rose 9.2 percent compared to September last year while capacity was up 9.1 percent year-on-year and the load factor rose to 83.8 percent (+0.1 ppt compared to September 2023). Domestic demand rose 3.7 percent compared to September 2023 while capacity was up 0.7 percent year-on-year and the load factor was 83.3 percent (+2.4 ppt compared to September 2023).

“The year’s peak travel season ended with demand at an all-time high. This is good news not just for passengers, but also for the global economy. Every flight creates more jobs and trade. But the air travel success story is bringing challenges. We will soon face a capacity crunch in some regions which threatens to curtail these economic and social benefits. Government’s will face a choice: lose out to more dynamic nations who value global connectivity, or forge a consensus for sustainable growth. Airlines are making significant investments to achieve net zero carbon emissions by 2050. That needs to be accompanied by an equally active political vision, backed-up by actions, to ensure we have efficient and sufficient airport and air traffic management capacity to meet the needs of citizens and businesses to travel,” said Willie Walsh, IATA’s director general.

All regions showed growth for international passenger markets in September compared to September 2023. Load factor was a mixed bag: Europe had the highest load factors and Asia and African carriers also improved, but the Americas and the Middle East suffered falls.

All key markets, the IATA reported, showed stable growth in domestic demand and all, except Japan, saw all-time highs for September domestic traffic.

Statistics compiled by IATA Economics use direct airline reporting complemented by estimates, including the use of FlightRadar24 data provided under license. All figures are provisional and represent total reporting at time of publication plus estimates for missing data. Historic figures are subject to revision.

A quiet long weekend

As expected, it was more relaxing to stay in the city for the extended Undas holiday that started early last Thursday, with Oct. 31 declared a half-day holiday, causing a day-long rush out of the city to the provinces and beaches where most Filipinos now prefer to spend the two-day observance of the traditional remembrance of departed relatives.

Nov. 1, as expected, was very quiet except in areas where cemeteries are located. Filipino families as usual trooped to the cemeteries to spend the day with their departed relatives and reconnect with other relatives. The city of the dead were alive, noisy, with plenty of vendors surrounding all roads and access selling a variety of food, snacks, flowers and candles.

Memorial parks became a sea of pitched tents and camping chairs and equipment, with activity actually picking up as the sun set, and traffic and parking clogging up even the major C-5 Road as families continued to flock to the Libingan ng mga Bayani and Heritage Park.

Clearly missing out on the activity last Friday were the malls, proving that Undas is still a tradition that Filipinos still follow, especially for those who now feel the higher cost of travel. However, by Saturday the crowds were back in the malls, but not as much as usual during the weekends. I regularly do my walking now in the big malls instead of walking outside because of the heat, and have noted the times when the malls become crowded.

It has also been interesting to note that movie going now is no longer a profitable business even for malls, with most downsizing the space that they had initially allocated for the big theaters.

Likewise, malls are also allocating more space for government facilities that provide basic services such as banks, offsite passport applications and utility payment outlets. What is also clear is that small businesses are finding it harder to survive with most malls still showing a number of closed shops that failed during the pandemic, or unrented stalls especially in the topmost floors.

With the malls pivoting to become pseudo community centers, there are now more personal services providers such as beauty parlors, cosmetic clinics and spas. Likewise, malls are also offering space to various sports activities that previously were located within local communities.

Thus, on long holidays, the key to entertaining is mall hopping from the numerous SM Malls, the swanky Ayala Malls and Robinsons Malls which are all stepping up their game to cater to the Metro’s growing population that still prefer air conditioned comfort.