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Worldwide air travel records growth
Dennis Morrison, Contributor
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| Morrison |
The most up-to-date figures for air travel worldwide indicate surprising
resilience in international passenger traffic for the first four
months of 2008. This traffic grew by 6.2 per cent, even while forecasters
were painting a negative outlook as oil prices were increasing at
an accelerated pace. Evidently, the demand for travel remained steady
over the period, although economic conditions in the major countries
had already begun to soften.
Domestic air travel did not, however, fare as well, with the level
of domestic passengers remaining virtually unchanged compared with
the similar period of 2007. Indeed, domestic passengers declined
by 1.3 per cent in the biggest market. North America, where air
fares have been rising and new baggage fees have been imposed to
help offset higher oil prices.
At the current level of oil prices and given pressures on airfares,
as well as recessionary economic conditions, we are likely to see
a further slowdown in both international and domestic air travel
in the coming months. In anticipation of such an outcome, United
States carriers are already planning reductions in their schedules.
For now, these cuts appear to be aimed at removing excess seat
capacity in the traditional slow Fall period and hence, should not
affect summer travel which has become increasingly important to
the local tourist industry. The major concern is therefore whether
economic conditions and oil prices will be more favourable for the
winter season.
us in recession
Essential to any positive turn in the outlook will be how soon
the US economy begins to recover from the mortgage and credit crisis
and its ripple effects on employment and consumer confidence. It
is notable that despite some of the worst conditions seen in the
housing market for several decades and a sharp drop in construction
and manufacturing activity, the US economy has so far not slipped
into a recession. But high oil prices and increasing inflation pressures
still pose significant threats.
After apparently resisting appeals from the US and other major
developed countries to boost oil production, Saudi Arabia and other
members of OPEC are now signalling their willingness to increase
output to help moderate oil prices.
The removal of subsidies on oil products in China, India and several
other Asian countries should also serve to dampen the rate of growth
of consumption and, therefore, ease oil price pressures. High prices
are already restraining oil demand in the US and Europe.
The timeframe within which a turnaround in the US economy will
take place is not obvious and most experts do not anticipate significant
shifts before 2009. Fortunately, conditions in Canada remain positive
and, therefore, that market provides scope for continued growth
in visitor arrivals, especially as new hotel rooms on the island
are scheduled to be opened for the next winter tourist season.
Dennis Morrison is a former chairman of the Jamaica Tourist Board.
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