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JEREMY MAGGS: It’s been a bumpy year for global aviation, with passenger numbers soaring and premium class travel surging ahead. The International Air Transport Association releasing its 2024 World Air Transport Statistics report. Let me tell you, it’s a goldmine of insight into how, where and what the world is flying.

I want to discuss these trends and what they mean for travellers, airlines and regional markets. I’m joined by well-known aviation analyst and commentator Linden Birns. Linden, premium class, this is interesting, growing by nearly 12% last year – that’s faster than many economies. Do you think it’s a post-Covid boom, or a deeper shift maybe in airline economics?

LINDEN BIRNS: Hi Jeremy, I think it’s a combination of two things, and it’s where that growth is taking place. Significantly, that boom in premium class travel is happening in Asia-Pacific. It’s growing at 28%, which is phenomenal. I think if you look across not just last year’s numbers, but also this year, what’s been happening, of course, this year is a very different picture globally because of the three Ts: Trump, trade and tariffs.

Asia-Pacific seems to be, I wouldn’t say immune, but more immune than anyone else. It seems to be a very resilient market.

A lot of strong intra-Asia-Pacific trade and commerce and tourism that’s happening. So we’re seeing there that in the premium market, there were about 21 million premium passengers. It was a year-on-year growth of 22.8% last year, just in that market. We’re seeing similar this year. If we look at June’s numbers for this year, year-on-year, it’s 9% up on the same last year.

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Whereas if we look at Africa, for example, we’re a much smaller market. We only represent about 2% of the global market. We’ve got just under 4 million premium travellers who travelled with African airlines last year, and we’re seeing that market growing at around 5.5% for premium travel, and we’re seeing about 11% for economy travellers. Fifty seven million economy travellers travelled with African airlines last year. But again, if we look across it this year, it’s a lot slower.

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We’ve seen only a 0.8% rise in demand for passenger travel in the African market in June this year compared to last year. A lot of that’s down to, again, increased competition. The fact that within Africa, we’ve got a very low propensity to travel because of the low per capita income compared to places like Asia-Pacific, Europe and North America.

JEREMY MAGGS: Linden, that observation is in the data, because there are 3.3 million passengers on the Johannesburg to Cape Town route, it’s Africa’s busiest route. It tells us a lot then about intra-country versus cross-border travel on the continent and where the balance is.

LINDEN BIRNS: Yeah, absolutely. I was actually surprised by that number. There are more people who travel between Cape Town and Joburg than travel between New York JFK and Los Angeles.

JEREMY MAGGS: Wow.

LINDEN BIRNS: Last year, they only had 2.2 million passengers on that route. So, yes, it’s a real headache. This actually plays into the broader picture. When the president [Cyril Ramaphosa] says, we need to pivot trade and look at intra-Africa and the African Continental Free Trade Area, [you say] yeah, that’s all very good but can people in those markets afford our products and services?

We’re seeing that reflected, as it is, in demand for air travel and for air cargo. Because they do reflect, they’re a very handy mirror or barometer, whichever analogy you want to use, of the state of trade, commerce and economic health.

JEREMY MAGGS: So Linden, in that respect then, and based on your observation and these trends, where should South Africa be focusing its efforts in order to stay relevant and competitive?

LINDEN BIRNS: I think we need to be doing more everywhere, frankly. What’s a little disconcerting is that the Africa-Asia trade lane was looking very healthy until about May this year. Then suddenly it started reversing. We’ve seen those numbers declining for two consecutive months now. So that’s not a good sign. I don’t know to what extent that’s influenced by seasonality, if it’s to do with the holidays or perishable good exports, I’m not quite sure what it is, but it’s not looking great.

You’d think that we would be a very attractive source market as well as a destination, obviously, for travellers, because of the low cost, the weak rand, and therefore the great value-for-money proposition that we offer for foreign travellers.

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You would also think that we’d be a competitive market for investment. But obviously there are more fundamental issues here that we’ve got to deal with in South Africa. We know what they are, to do with crime, corruption, governance, accountability. It’s all very good having all the other things, if we don’t have those, people aren’t going to come.

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JEREMY MAGGS: Interesting to see the Boeing 737 and the Airbus A320 families remain the workhorses of aviation. Why are airlines still leaning so heavily on these two narrowbody jets? Is there no other alternative?

LINDEN BIRNS: I think we’re actually going to see even more use of the narrowbody aircraft, as Boeing and Airbus start filling up their order books. The only other viable alternative in the same category, and we’re talking about aircraft in the 150 to 200 seat bracket, the Brazilians with Embraer make aircraft up to about 125, 130 seats. The only other manufacturer that’s looking at breaking into that market is Comac [Commercial Aircraft Corporation of China]. But the aircraft, first of all, is not yet fully certified and it’s not certified outside of China.

I think there’s going to be an issue around how do they break through the resistance and the inertia in the market. They’re going to have to satisfy the banks that those are solid investments, that they’ll hold their residual value. They’ll have to demonstrate to operators that they have good customer support and that there are deep supply lines.

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It’s already a frustration in the industry at the moment with a supply chain crisis. You can wait up to three years for some aircraft parts at the moment. That’s also why we’re seeing a lot of the older 737s and A320s remaining in service longer than they would have, because the manufacturers aren’t able to turn them out at the tempo they would have preferred to.

They were hoping to be producing them at around about 60 a month each, but they’re down currently at about 30 and 40. That’s meaning that airlines have to keep older aircraft in service for longer than they’d originally intended.

JEREMY MAGGS: Linden, just a quick one in conclusion. Middle East has the highest share of premium passengers. Latin America, Europe, North America all seeing premium travel outpace economy. So fair to say then, that business travel is back now with a vengeance, or at least being redefined in one way or another?

LINDEN BIRNS: I think so. Certainly, last year, remember this report is 2024 numbers and that’s why I qualified it, saying a lot has changed since then. Let’s see how this year pans out. It will be fascinating to see if that buoyancy and optimism that characterised last year, in terms of trade and commerce, continues and that activity.

People obviously still see a lot of value in premium travel. It’s a very competitive space.

As South Africans, I think we are seeing it becoming more and more expensive, relatively speaking. But obviously, for everyone else, that’s seen as a good value proposition.

JEREMY MAGGS: Linden Birns, as always, thank you very much indeed.

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Tuesday, August 5, 2025