Wild fluctuations in global stock markets are not crippling air traffic demand, particularly in China, argues the head of aircraft lessor AerCap.
“What we see on the ground is significant and stable demand for aircraft in the Chinese market – traffic for 2015 moved [up] by 12% and that is a very big number,” said Aengus Kelly, chief executive officer of AerCap at the Airline Economic Growth Frontiers conference in Dublin today. “We don’t see a significant fall-off in demand for Chinese air travel.”
He notes AerCap put four eight-year-old Airbus A330s into China during the holiday period and "the customer absolutely had to have the aircraft."
Kelly says that while GDP growth correlates with traffic growth, in China demand increased over the last five years despite slowing economic growth. “GDP growth has gone from 9% to less than 7%, but in the same time frame, air traffic growth has gone annually from 10% to 12%, and 12% is off a much bigger number," he observes.
He argues that market observers should "disaggregate" the financial markets, which carry a “high level of speculation” from domestic consumption in China, which is still healthy and that is “what air traffic is driven by”.
Kelly does not “see anything out there” that is going to change the levels of global air traffic growth going forward. “We continue to see RPKs growing by almost 7% and passengers up by almost 8%,” he says.
Even with the fall in various currencies, particularly in Russia and Brazil, the drop in fuel prices has "offset" this decline, he adds.
Source: Cirium Dashboard