Air travelers forecast to double by 2034 to 7 billion passengers, competition brings down prices of international plane fares

While the aviation industry is enjoying a significant boost in air travel, competition is driving down prices of international plane fare. Despite it being the golden era of travel, Qantas has been chasing market share on international routes, while the end of the mining boom was felt in the domestic market.

However, despite these immediate challenges, Qantas Chairman Leigh Clifford says the long-term growth trend for the industry is positive. He told shareholders of the air carrier that the number of air passengers is forecast to double by 2034 to 7 billion travelers.

The flag carrier is well-placed to capitalise on those opportunities, he says. However, Qantas would “stay disciplined on costs, manage our capacity to match demand, and secure the benefits of cheaper fuel through careful hedging,” says Qantas Chief Executive Alan Joyce at the company’s annual meeting on Friday.

On the same day, Macquarie analysts say Qantas stands to benefit from the surge in visitors from the US and Japan. The air carrier has allocated about 40 percent of the combined capacity of Qantas and Jetstar, its budget airlines, to the routes of these two profitable markets.

Analysts forecast Qantas would report a higher pre-tax profit of $1.54 billion for the current financial year from $1.53 billion the previous year.

According to latest data, Qantas flew 11.5 million passengers for the first five months of 2016, 4.7 percent higher compared to the same period in 2015. International traffic, which accounts for 23 percent of the airline’s total traffic, grew 9.2 percent, while domestic traffic expanded 3.4 percent, Anna.aero reports.