Airlines Businesses Hit By Low Ticket Sales

Travel agents in Kigali recorded a significant decline in airline ticket sales during the first half of this year, a mini survey by Business Times indicates.

Monday, August 16, 2010

Travel agents in Kigali recorded a significant decline in airline ticket sales during the first half of this year, a mini survey by Business Times indicates.

Operators say that ticket sales have been low since beginning of this year as  the airlines enter  into the traditional "peak  summer season” that normally runs from June ,through  August, a popular period for vacationing.

"We have seen a reduction in our ticket sales between 10-15 percent compared to last year.  Despite the impact of the global recession last year – sales were better,” Mukesh Sahu, the General Manager, Satguru Travels and Tours Services a leading Travel Agency on Avenue De Commerce told Business Times in an interview last week.

Satguru Travels currently handles services of almost all the airlines and hotels worldwide including; Kenya Airways, SN Brussels, Ethiopian Airlines, Air Uganda, Emirates, Qatar Airways, South African and the national carrier RwandAir.

"This is a "high season” when you expect not to easily get a seat because normally most airlines are fully booked by now it is very easy get one during this period. The sales do not show that it is a high season,” Sahu said.

The Official also observed that the business is equally slow in some other parts of the world where the travel agency has branches including  West and  Central Africa , Middle East and Asia.

According to Sahu, regional integration has also made it easy and affordable for most travelers not only to travel by road but also to conduct business in one country without necessary moving.

"It is has made it possible to do business when you are in one partner state like Kenya,” Sahu also observed that their sales have been affected by an increase in the cost of air travel in addition to removal of commission earnings for travel agents and instead instating a service charge in July.

"For instance Kigali – Entebbe return used to be approximately between $300 sometimes with discount at $290 but now it is $330 with the service charge.  It is minimal but it will have an effect because we can no longer offer discounts as an incentive,” he said.

However data from the industry’s lobby group, International Air Transport Association (IATA) shows an improvement in passenger traffic with the number of international airline passenger in Africa expected to double this year compared to 2009.

African carriers posted a 21.3 percent increase in traffic in June, positively impacted by activities surrounding the FIFA World Cup finals played in South Africa from June 11 to July 11.

"The industry continues to recover faster than expected, but with sharp regional differences. Europe is recovering at half the speed of Asia with passenger growth of 7.8 percent compared to the 15.5 percent growth in Asia-Pacific,” IATA director general and chief executive officer (CEO) Giovanni Bisignani said.

IATA says the recovery of the airline travel started towards the end of last year and has remained strong, went up by 11.9 percent while international scheduled freight traffic showed a 26.5 percent improvement.

Capacity increased only slightly above demand improvements during the month, keeping load factors in line with historical highs at 79.8 percent for passenger traffic and 53.8 percent for freight.

Ends