2015 marks the 50th anniversary of the first data collection of the British National Travel Survey (NTS). The Transport Statistics Users Group and the Department for Transport held a meeting on 23 September at which I was one of the speakers. My presentation is available Metz tsug 23-9-15. This article outlines what I said about air travel. A previous article dealt with daily travel.
Cessation of growth of air travel
Slide 11 of my presentation shows how passenger numbers using UK airport grew rapidly prior to the recession, with grow now seemingly resuming. The Government set up the Airports Commission to look at the case for additional runway capacity. The Commission’s growth projection is shown in Slide 12, based on an econometric model of demand for air travel, a refinement of a model developed by the Department for Transport. The Commission sees passenger number doubling by 2050 and has therefore recommended that an additional runway be constructed at Heathrow.
It is, however, illuminating to disaggregate historic demand by market segment. Slide 13 shows passenger numbers flying between the UK and USA. Growth was strong until 2000, when it stopped. This cessation coincided with 9/11, so no surprise at the immediate dip. What is unexpected is that growth did not resume, so either the effects of the terrorist attack have been long lasting, or other factors have come into play.
Slide 14 shows passengers flying to and from the UK and Japan, displaying a clear peak followed by a halving before bottoming out – seemingly an example of ‘peak air travel’. But could this be a statistical artefact? The data is published by the Civil Aviation Authority (CAA) based on reports of passenger numbers from the airlines. It might be that some passengers whose end destination is Japan are reported as flying to the Middle East if they change aircraft at one of the rapidly expanding hub airports located in this region. However, we have an independent check in the International Passenger Survey which asks returning UK residents where they have spend their time abroad, and departing overseas residents about their country of origin. Slide 15 shows visits to and from Japan – the halving of numbers is confirmed.
The US and Japan are exceptions to the general trend for air travel to and from the UK to increase over time. But these are important, well-established market segments; what we are seeing here may be evidence of market maturity that may in future become apparent in other segments. It seems likely that current econometric models of demand for air travel do not take account of the behavioural factors contributing to the plateauing and peaking seen for the US and Japan and thus are significantly mis-specified.
One factor that may limit air travel is time constraints. For daily travel (ie surface travel) there are only 24 hours in the day and many essential activities to fit in, so that travel time is constrained to one hour a day on average. For flying, it is not the hours in the day, but the days in the year that constrains travel – not the time spent in the air but the time away from responsibilities at home and work. We have no relevant data, but it is likely that for most people such constraints exist in principle and for some they may already bite. Time constraints on being abroad could cause travel to established destinations to cease to grow, or even to fall, as new destinations open up, whether for business or leisure.
Time abroad does not relate simply to frequency of air travel. If you spend two weeks away in one place, that involves one return flight. If you spend two separate weeks away in different places, that involves two such flights. We have information on frequency of flying from the National Travel Survey (NTS), not from the seven-day travel diaries (which wouldn’t pick up most air travel), but from a specific question (NTS0316) about how many times respondents flew in the previous 12 months. This question has been asked for nine years, with the outcome shown in Slide 16. The pattern is stable, with over half the respondents reporting no flights abroad in the past year. I call these the ‘Infrequent Flyers’ – some fly rarely, some never, and some may have flown regularly in the past.
These Infrequent Flyers are of interest as a potential source of future demand for air travel, if their needs could be better met. We know something about them from the NTS, which collects information about the personal characteristics of respondents – age, gender, income, socio-economic status, place of residence. Slide 17 shows how the proportion of infrequent flyers declines with increasing income, as expected since affordability would be important for those on low incomes. However, 30 per cent of those in the top quintile don’t fly, even though they could very probably afford at least one trip, so that other factors are important.
Most of what we know about the characteristics of people who fly comes from surveys of passengers at airports carries out by the CAA. But of course the Infrequent Flyers are not usually seen at airports. However, earlier this year the CAA commissioned a household survey of attitudes to air travel which, like the NTS, includes this group. One example of the findings is shown in Slide 18, where it can be seem that the biggest single barrier to flying by the Infrequent Flyers is budget constraints.
So the Infrequent Flyers might fly more often in the future if their incomes rise faster that the costs of travelling abroad – hard to judge how likely that is. One important affordability factor that has boosted air travel in the past has been the growth of the low cost carriers (budget airlines), but market penetration seems largely complete as regards short haul leisure markets, with the prospects for long haul very uncertain. So the affordability boost may now be largely historic.
Slide 19 summaries my conclusions on the prospects for the growth of air travel. There is emerging evidence consistent with market maturity as an important consideration. A likely factor limiting growth is time constraints, a topic worth researching. The prospects for the Infrequent Flyers travelling more often are unclear, in part because further price reductions seem unlikely. Altogether, the growth of demand in the future seems a good deal more uncertain than is generally supposed.