Abu Dhabi, UAEThursday 14 November 2019

Global air travel in July slows as trade tensions hurt demand, Iata says

Middle East passenger travel demand grew 1.6 per cent in July, slowing from 8.3 per cent in June

Alexandre de Juniac, director general of Iata, said global trade tensions have weakened passenger demand for air travel compared to last year. Mona Al Marzooqi / The National
Alexandre de Juniac, director general of Iata, said global trade tensions have weakened passenger demand for air travel compared to last year. Mona Al Marzooqi / The National

Middle East air travel demand fell sharply in July following the end of Ramadan as a slowdown in the global economy took its toll, according to a global aviation industry body.

Demand in the region, home to global long-haul carriers including Emirates and Etihad Airways, grew 1.6 per cent in July, slowing from 8.3 per cent in June, the International Air Transport Association (Iata) said on Friday. July capacity climbed 1 per cent year-on-year while load factor, a measure of how many seats are sold on each flight, rose 0.4 percentage points to 81.3 per cent from a year earlier.

"Weakness in global trade, volatile oil prices and heightened geopolitical tensions have been negative factors for the region," Iata said in a statement.

The industry body, representing 290 airlines or more than 80 per cent of world traffic, has repeatedly warned that escalating trade tensions between US and China are hurting air freight volumes - a measure of global economic health - and slowing down demand for air travel.

Passenger demand around the world rose 3.6 per cent in July compared to the same month in 2018, but this is down from 5.1 per cent annual growth recorded in June.

Globally, monthly capacity increased by 3.2 per cent and load factor rose 0.3 percentage points to 85.7 per cent, a new high for any month, according to Iata data.

"July’s performance marked a soft start to the peak passenger demand season," Alexandre de Juniac, Iata’s chief executive, said. "Tariffs .... and uncertainty over Brexit are contributing to a weaker demand environment than we saw in 2018. At the same time, the trend of moderate capacity increases is helping to achieve record load factors."

Latin American airlines recorded the strongest growth in passenger demand compared to other regions in July, with a 4.1 per cent rise in traffic. However, this marked a decline from 5.8 per cent year-on-year growth in June.

The rise came following the shutdown of Avianca Brasil, Brazil's No 4 airline that ceased operations in May after filing for bankruptcy, and increasingly deteriorating business conditions in some key regional economies. Capacity rose 2.7 per cent and load factor climbed 1.1 percentage points to 85.6 per cent, Iata noted.

North American carriers' traffic climbed 1.5 per cent in July from a year-earlier period. This, however, was down from 3.5 per cent growth in June, reflecting the slowdown in the US and Canadian economies and the ongoing trade disputes, Iata said.

Asia-Pacific airlines' July traffic rose 2.7 per cent, a slowdown compared to June growth of 3.9 per cent and their weakest performance since early 2013.

"US-China and Japan-South Korea trade tensions as well as political tensions in Hong Kong have all weighed on business confidence," the trade body said.

Carriers in Europe registered modest 3.3 per cent annual growth in July, down from a 5.6 per cent year-on-year increase in June. This is the slowest rate of growth since mid-2016.

Traffic for airlines in Africa rose 3.6 per cent in July, a significant decline from 9.8 per cent growth recorded in June, as "weakening business confidence in South Africa offset solid economic conditions elsewhere on the continent", Iata said.

Updated: September 7, 2019 12:26 PM

SHARE

SHARE