The International Air Transport Association (IATA) reported that full year 2011 passenger demand rose 5.9% compared to 2010, in line with long-term growth trends. In contrast, cargo markets contracted by 0.7% for the year; but recorded positive demand growth in December of 0.2%.
Growth in demand lagged capacity increases at 6.3% (passenger) and 4.1% (cargo) putting downward pressure on load factors. The average passenger load factor for 2011 was 78.1%, down from 78.3% in 2010, while the freight load factor was just 45.9%, down from 48.1% in 2010.
Barcelona's long haul strategic passenger markets
International air travel rose 6.9% last year, reflecting the strong growth of 6.2% recorded between February and July, compared to 1.2% between September and December. International capacity climbed 8.2%, pushing the passenger load factor down to 77.4%. For December, international traffic climbed 6.4% year over year, in part owing to depressed traffic levels in 2010 in North American and Europe, and rose 1.4% compared to November.
Passenger demand in domestic markets for the full year rose 4.2% compared to a 3.1% rise in capacity, leading to a load factor of 79.3%. December demand rose 3.7% from a year earlier, however, this represented a 0.5% decline from November. It is not clear yet whether this signals a new trend or is just an anomaly. Individual markets varied dramatically in their performance.
US demand rose just 1.3% for the year – the result of market maturity and a sluggish US economy – but with nearly flat capacity growth of 0.5%, load factors led the industry at 83%, helping to boost airline unit revenues. For December, traffic actually contracted 1.2% while capacity tightened 1.4%, pushing load factors to 81.1%.
Chinese domestic demand rose a solid 10.9% for the year on a 7.8% lift in capacity, strengthening load factors to 82.2%, which helped the profitability of the country’s airlines. Economic growth slowed but by most standards still remained strong, underpinning air travel demand. December capacity rose 14% compared to the year-ago period with demand up 12.3%, achieving a 78.7% load factor.
India had the strongest annual growth with demand up 16.4% but capacity rose 18.6% and the load factor was 74.7%. The demand/capacity gap was particularly acute in December, with traffic rising 9.3% on a 15.5% increase in capacity. The deterioration in load factors generated by this excess capacity is one of the factors behind the losses being reported by Indian airlines, in contrast to the current situation in China.
The impact of last year’s earthquake and tsunami meant Japan’s airlines ended the year with demand down 15.2% on a capacity decline of 11.5%. By December, however, the domestic market had recovered to levels 4.7% below pre-earthquake levels. Even with an 8.7% drop in capacity load factors were the lowest among the group at just 58.8%.
Brazilian carriers saw a 13.7% jump in demand from their home market last year on an 11.2% rise in capacity. Load factors remain below the industry average at 69.3%. December demand slipped back to 5.6% on a 9.6% rise in capacity, resulting in a load factor of 69.6%.
Air Freight (Domestic and International)
Air freight markets turned up at the end of the year after shrinking through much of the summer and autumn as business confidence across major economies, and export orders, slumped. Surveys are now showing that business confidence, a leading indicator for changes in cargo markets, turned up in December, suggesting that industrial production and international trade may be stabilizing. Although international freight markets contracted 0.6% for the full year and 0.8% in December, compared to a year ago, December international demand was 1.5% ahead of the level in November, while domestic demand was up 3.2% compared to November and 5.5% compared to December 2010.
Freight markets have now shown sequential month-over-month growth in November and December, adding evidence to the view that international trade may be stabilizing. However, the situation for airlines in these markets has deteriorated significantly. Freight load factors declined considerably to 45.9% in 2011, as measures to match capacity with demand by reducing the freighter fleet have been offset by introduction of new twin aisle passenger aircraft.
The Barcelona Air Route Development Committee considers growth of the interchange role of Barcelona Airport a priority and will continue to work substantially towards maintaining and increasing air connectivity and the connectivity of its users.
Connecting passengers are key for two reasons: first of all, connectivity makes it possible to maintain an area of influence that reaches beyond the hinterland of Barcelona Airport, reinforcing its competitiveness not only in Spain but also throughout Southern Europe and North Africa. Secondly, because it is a fundamental element in order to maintain existing long haul routes or to create new ones which could play a very important strategic role, such as Asian or North American routes.
Barcelona Airport continues to consolidate its position with extraordinary passenger growth in 2011, reaching over 34 million.
This overall airport growth can be explained, not only by the growth of European and short haul routes, but also by the rising demand for intercontinental routes. Barcelona is the fourth European destination in number of passengers by source and destination.
Within this framework of air traffic growth, in all likelihood the passengers travelling up until now with the company Spanair, which has stopped operating, will travel with other operators. Barcelona Airport is expected in 2012, and in coming years, to continue to rank in the top 10 most important airports in Europe by number of passengers.
The Barcelona Air Route Development Committee (BARDC) has been working on increasing the supply of direct intercontinental flights out of Barcelona and in the next few days will be presenting their Strategic Plan 2012-2013, which will lay own the lines of action to continue making progress in achieving their foundational aims:
1. To encourage and boost long distance routes out of Barcelona Airport with the regions considered as strategic by Barcelona and Catalonia.
2. To promote the routes benefitting the international strategic position of Barcelona and its citizens.
3. To contribute to improving air connectivity between the nations and territories in the Euro Mediterranean region, working especially on balancing the supply of air services and products on both shores of the Mediterranean.
4. To promote an increase in air connectivity from Barcelona with the markets, within the Euro Mediterranean area, that can feed the long haul routes operated out of Barcelona Airport and, conversely, distribute passengers from intercontinental flights by developing a hub and spoke model.
In 2011, Spanish luxury brands including fashion, accessories, beauty, aviation, yachts, jewelry, watches, beverages, food, cosmetics, hotels and innovation experienced major growth in income, especially outside of Spain. In fact, 80% of the € 4.5 billion in turnover came from exports and tourism.
The European Union is, according to Luxury Spain, the main destination for Spanish luxury exports; although markets like Russia, China, India and Mexico take in a large volume of the sales.
About 40% of luxury items from Spain are used by foreigners. Upscale tourism in large cities like Madrid, Barcelona and Marbella has added to the growth in sales and has compensated the decline in national consumption. Russians are among the biggest spenders, averaging € 2,400 a day in purchases. Chinese and North American tourists also play an important role in purchasing Spanish luxury items.
Spanish gastronomy and beauty products are among the items that are highest in demand, followed by hotels, fashion and accessories.
42 % of tourists who arrived in Barcelona in 2010 did so for professional reasons, the year in which congress, meeting and convention tourism had an economic impact of 1,326 million euros in the city, which reinforces its ranking in the top 5 European urban destinations, owing to the record number of tourists and overnight stays achieved last year.
According to the Barcelona Tourism consortium, the city hosted last year 2,138 professional meetings with 616,833 delegates, figures that mean a growth of 15 % and 7 % respectively, boosted by the recovery of the business convention sector, representing a return to levels of activity of 2007, prior to the credit crunch.
The conventions and incentives sector recorded a rise of 18.8 %, the delegates attending this sort of events increased by nearly 40 % last year, whereas conference attendees decreased 11.7 %.
Hotels are still the ultimate place to hold these events and attract 70.7 %, followed by convention centres and private auditoriums.
This year, among the most important events to be held in Barcelona are the Mobile World Congress 2011, with 63,000 delegates, last February; the 1st Congress of CE-ORL-HNS, with 2,500 delegates, in July; the International Joint Conference on Artificial Intelligence (IJCAI) with 2,000 delegates, held in the same month; the International Exhibition of Textile Machinery (ITMA), with 100,000 delegates, in September; the V Southern European Veterinary Conference which gathered 7,000 delegates in October and the 2011 edition of EIBTM, last month, which gathered 12,000 delegates.
The main source markets in this sector are the United Kingdom, the United States, France, Germany, the Netherlands, Italy, Switzerland, Belgium and Israel.
Host of the Mobile World Congress for seven years
GSMA, organizer of the Mobile World Congress, has chosen Barcelona to host the congress for seven consecutive years, from 2012 to 2018, both inclusive, as well as hosting a research centre for mobile technologies and a cultural festival on new technologies. The seven editions will make Barcelona 3,500 million euros and will place Catalonia at the forefront of innovation.
Despite a lack of direct connections, the Catalan capital’s experience in organizing events, fairs and congresses, its infrastructures, hotel facilities, transport network and model of public-private collaboration was what prevailed. Confirmation of the event, in part, is in recognition of the Fira de Barcelona, organizer and host of the event since 2006.
Forces of fate
Barcelona has four conference centres that enables it to hold both small and large events: two in Fira de Barcelona (Fira Montjuic and Fira Gran Vía, the latter with practically unlimited capacity), Barcelona’s International Convention Centre (CCIB), with a capacity for 15,000 people and the Palau de Congressos de Catalunya, which can hold up to 3,000 people. It also has several hotels which have a capacity for up to 1,000 people such as Hesperia Tower, Arts, W, Hilton Diagonal Mar, Fira Palace and Juan Carlos I, Princesa Sofia, among others.
All in all there are 280,000 square metres of covered surface area for exhibitions and a capacity to accommodate close to 700,000 congress delegates. Another of its attractions as opposed to other competing cities is the amount of unique venues to hold receptions, gala dinners or parties in different environments, whether historical or modern. The sea also offers the opportunity to carry out water-related activities for incentive groups, such as yacht races.
Source: Especial Ferias y Congresos 2012 - Hosteltur
China company Hainan Airlines ranked within the top five safest airlines in the world in 2011 because of no recorded casualties or loss of aircraft in its 19 years of service, said the German aviation accidents agency JACDEC (Jet Airliner Crash Data Evaluation Centre) in a recent annual report.
The Hamburg-based agency, which has viewed world airline accidents since 1973 and enjoys global reputation, published its "Classification of Aviation Safety" in the German monthly magazine "Aero International".
It is based on a network and global database, called JACDEC, with the 60 largest airlines of each continent in terms of casualties and loss of aircraft. The agency said 2011 was the safest year in aviation since the end of World War II, even with increased air traffic.
Hainan Airlines of China ranked fifth in the classification of the safest airlines with a rate up 0.006, after All Nippon Airways, Finnair, Cathay Pacific Airways and Etihad Airways.
Founded in 1933, Hainan Airlines ran its first international route in 2001 and soon expanded its services to large cities in Europe, Africa, Asia and North America with about 400 routes.
In December last year, Hainan Airlines was named for the second time as the "Best Airline in China" at the awards GT Tested Reader Survey, organized by the U.S. magazine Global Traveler.
Hainan Airlines and Barcelona Air Route Development Committee are maintaining good cooperation for a possible direct route in the midterm.
Port of Barcelona will promote short sea shipping (SSS) between Barcelona and North Africa at Fruit Logistica, the largest fresh produce trade fair in the world, taking place between Wednesday and Friday in Berlin.
"We have designed specific procedures for SSS of fresh produce based on our extensive experience in this type of traffic," said the person in charge of SSS the Port of Barcelona, Ana Arevalo, who assured that these protocols help speed up the passage of goods at the Border Inspection Post (BIP) and customs.
The director of Port Community Promotion, Manel Galan, said that the purpose of the facility is to consolidate the relationship with the fruit industry and promote traffic to North Africa.
Catalan enclave representatives are to meet with ship-owners offering refrigerated container traffic to assess possible load increases and to plan the next campaign of perishable goods with container terminals.
In this edition, Fruit Logistica will feature over 2,450 exhibitors from 84 countries, and last year the showroom was visited by 56,000 professionals of 132 nationalities.
China has banned its airlines from supporting the EU plan to tax carbon emissions on flights to and from Europe, and increasing ticket prices to customers as a compensatory measure, as confirmed on Monday by the Chinese government who argue that airlines who want to comply with EU directives must obtain prior approval from Beijing, which has denounced this plan as an unfounded duty.
Beijing's announcement comes a week after the EU-China summit. Failure to pay the tax could lead to Chinese airlines being fined or not allowed to use European airports.
"China hopes Europe will act under more general issues in responding to global climate change, sustainable development of international aviation and ties between Europe and China, strengthening communication and coordination to find the correct and appropriate solution for both parties," said sources at the Chinese civil aviation authority cited by the state news agency Xinhua.
This source has warned of the possible consequences that might be caused by the plan enacted by the EU, because "China will also consider taking steps to protect Chinese public and business interests."
According to European legislation, as of 1 January, all airlines using European airfields are to be taxed in accordance with the EU Emissions Trading Scheme. The penalties are around 100 euros per tonne of carbon dioxide emitted for airlines that do not want to pay the tax. In case of repeated disobedience of the law, the EU has the power to prohibit such airlines operating in European airports.
This policy has the approval of the European Court of Justice, which rejected an appeal by a group of U.S. airlines.
Likewise, the Air Transport Association of China has urged Chinese airlines to disregard such legislation, claiming it will cost 800 million yuan per year (96.7 million) during the first year, an amount that will triple by 2020 (up to 290 million euros), according to the agency.
Barcelona is well positioned for Asian inward investment to Europe and northern Africa and its port is strategically located to capture target goods for these areas. However, "we must rethink how part of the Mediterranean cake can stay here." This was stated in Barcelona by Mr. Andres Rodriguez-Pose, Professor of Economic Geography at the London School of Economics (LSE) and vice president of the European Regional Science Association.
Rodríguez-Pose, supervisor of the report "Global trends and their impact in big cities", commissioned by the Strategic Metropolitan Plan of Barcelona, said that "the world's centre of gravity has shifted to the east and Barcelona is capable of linking Asia and Europe ". But the LSE professor said "there are other well positioned cities and ports," although the Catalan capital has certain advantages, such as "the power of its hinterland or important logistics area," said Francesc Santacana, coordinator of the Barcelona Strategic Metropolitan Plan.
Isabel Carreras, who is an architect and Master in Urban and Regional Planning from the LSE, also spoke about the strategic position of Barcelona. She has been in charge of reporting the document on global trends, along with Anna Puiggròs, geographer and MA in Contemporary Urban Planning by the LSE.
This paper argues for an urban area model with a commitment to attracting talent and knowledge as a means to maintain and increase quality of life and wealth. It does not promote the creation of a new infrastructure “because Barcelona has enough, but rather upscaling by improving management” said Isabel Carreras.
"Managing infrastructure with excellence" is essential to cities that face significant challenges for the future in a changing world and a shift of the centre of gravity towards Asia, which is creating new trade routes where the Mediterranean is one of the key actors.