Driving in Spain
Almost a Million Passengers Per Day at the Airports
This weekend sees the first major operation on the roads of Spain where traffic is set to increase tremendously, but a similar picture can also be painted at the airports.
Estimations collated for Operation Output 2018 is showing an estimated 7.6% growth in airport passengers compared to last year, reaching an average of 960,000 passengers per day in July and August.
Of those passengers, 65% are concentrated in just five airports: Adolfo Suárez Madrid Barajas, Barcelona-El Prat, Palma de Mallorca, Malaga-Costa del Sol and Alicante-Elche Airport.
The report “The Spanish airline revolution: the monopoly to world leadership, in twenty years,” has detailed lowering prices and strong growth in connectivity, detailing the movements of travellers who have experienced the world in general, with Spain in particular.
The number of passengers travelling by plane each year has increased tenfold since 1970, tripling the rate of growth of the global economy, while air links have grown from 5,000 to 15,000 over the same period. On the other hand, the study points out that the weight of international travellers in the Spanish airline market is 80%, compared to the global average of 54%.
In addition, the report notes that aviation generates 3.5% of world GDP, and nearly 8 percentage points in the case of Spain (11.1%), representing some 120,000 million euro a year. Specifically, directly and indirectly, the industry supports 1.5 million workers, 8% of the total.
In the words of Diego Sanchez de la Cruz, director of Smart Regulation Forum and author of the report, “Spain is the sixth world market and will further grow in the next two decades and we cannot think about 2 years, but in 20 years.” Spain is one of the countries with the highest air connectivity, ranked 5th in the world, with 325 domestic flights and 1,300 flight deals abroad during the presentation of the report, Sanchez de la Cruz recalled that in Spain, the growth of air transport has exceeded the growth rate of GDP between 2015 and 2016. He also noted that despite the relative backwardness that cast the industry in the 90s, this “Sorpasso” has made aviation one of the economic activities pulling economic growth.
The study’s author emphasised that the struggle between traditional airlines and low cost is “particularly high” in Spain. In this regard, he noted that globally, their respective market shares are 75% vs 25%, while in Spain ratios are close to a scenario of 50% vs 50%. For all these reasons, the study argues that the airline industry carries a historical problem of profitability because their profit margins are below 2%, compared to average levels of 10% in several parallel industries. These low levels of return on invested capital complicate the sustainability of long-term investments that give rise to technological and operational improvements.
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