Air transport market in Europe and Italy

Air transport market in Europe and Italy1

The performance of the European market
In 2016, passenger traffic in Europe grew by 5.1%, exceeding 2 billion passengers and marking an increase of more than 5% for the third consecutive year.
This means that European airports received 300 million passengers more than in 2013, and 80% of them (240 million) concerned the EU air transport market.
Much of this impressive performance is due to three interrelated factors:

  1. improvement of the economic conditions driven by the growth of private consumption and the reduction of unemployment;
  2. low oil prices;
  3. airlines offer expansion.

The most significant part of the growth in 2016 was generated by the EU market, whose airports recorded an increase of 6.7%. This despite the negative impact exerted by the terrorist attacks in Belgium (which has paid the highest price in terms of reduced air traffic), France and Germany.
Passenger traffic at non-EU European airports, on the other hand, decreased by 0.9%, mainly due to the drop recorded at Turkish airports (-6.6%) as a result of terrorist attacks and political instability. Although slightly improving in the second half of the year, passenger traffic was also weak at Russian airports, while other non-EU markets such as Iceland, Israel and Ukraine experienced very dynamic growth. The significant drop in tourist flows at Turkish airports benefited airports in Croatia, Cyprus, Bulgaria, Greece, Portugal, Romania and Spain.
Cargo traffic grew by 4.1% at European airports, recording the best performance since 2010 and confirming the improvement of economic conditions for Europe. Movements increased by 3.2%, reflecting a significant expansion of airline capacity over previous years.

The performance of the Italian market
In Italy, growth in 2016 was +4.8%, with 164 million passengers (it was 159 million in 2015) taking domestic flights. Total movements were 1,332,388, an increase of 2.4% over the previous year. This last figure also confirms better use of airport infrastructures, as well as greater profitability and efficiency of flights in terms of average aircraft load factor.
Cargo volumes (freight and mail) were 998,856 tons , compared with 941,107 in 2015. These volumes recorded a significant increase, equal to 6.1%, even higher than the European average, stationary at 4.1%. This figure is also extremely positive for import/export in terms of contribution to the country's trade balance, as well as for the direct, indirect and downstream economic effects.
In the last five years (2012-2016), passenger traffic in terms of average composite growth rate (CAGR) was 2.4%, while cargo traffic recorded 3.4%, demonstrating yet again the growth trend that has characterized the last few years. The business model introduced by low-cost airlines has made it a success all over Europe, but it is interesting how in Italy the percentage of traffic operated by these carriers is significantly higher than that of any other continental country: about 50% compared to an average of 32%. Another aspect that is increasingly evident is the contraction in the share of traffic served by domestic operators (mainly attributable to the Alitalia crisis), losing large market shares to European and non-European operators, which adopt more efficient business models. This trend shows a clear difficulty for domestic operators to operate in a competitive and liberalized environment such as the aviation sector.

1) Source: ACI Europe, Press Release of 17/02/2017; ENAC, Social Report and Summary Statement 2016