Driven by recovering economic conditions in North America and Europe, and the rising financial might of developing regions fuelling the wanderlust of local populations, I am convinced airborne passenger numbers are poised to gallop higher.
This view was given further credence this week when Gatwick Airport announced that it had the busiest year in the airfield’s history during the 12 months concluding March 2015. Total passenger numbers leapt 7.8% during the period to 38.7 million, marking the highest annual footfall in the airport’s history.
Following the results, the company noted that “Gatwick’s growth is a combination of more planes, bigger planes and fuller planes,” adding that average load factors had increased to 83.9%.
Primed for take-off
Gatwick noted that the addition of new transatlantic routes from Norwegian — as well as rising demand for holidays to emerging markets like Turkey and the Middle East — as a positive driver for improved passenger numbers last year.
Naturally this news comes as music to the ears of long-haul specialists like International Consolidated Airlines (LSE: IAG), whose British Airways and Iberia planes fly all over the world. But these statistics also show the improving strength of holidaymakers’ wallets, providing a massive shot in the arm for European specialists like Flybe (LSE: FLYB), Ryanair (LSE: RYA) and easyJet (LSE: EZJ).
Indeed, easyJet’s latest financial update showed passenger numbers leap 7.2% in May to almost 6.5 million, momentum that is encouraging the Luton carrier to ramp up its operations on the continent. The firm announced plans just this month to boost its Italian presence by expanding its bases at Milan Malpensa and Naples, as well as opening a new hub in Venice in 2016 in a bid to secure more leisure and business flyers. It also intends to unveil a new base in Barcelona next year.
IAG is also trying to get in on the act through its planned €1.4bn purchase of Aer Lingus, the move having already received approval from the Irish government but which is still awaiting regulatory clearance from the European Commission. If approved, the deal will allow IAG to further boost its position in the budget airline market, a segment already serviced by its Vueling brand but which continues to grow at a breakneck rate.
And supported by lower fuel costs, the airlines I have mentioned should be able to pass on these savings to their customers if they wish, further massaging customer numbers. I reckon the European airline industry is poised for a solid upturn following more recent difficulties.
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Royston Wild has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.