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Abu Dhabi, UAETuesday 18 September 2018

Middle East airline passenger traffic up for 2017 as global demand soars

 Iata says broad-based pick-up in economic conditions boosts results 

The region saw passenger traffic rise by 6 per cent last year as improving world economy helped to boost global demand. Sascha Steibach/EPA
The region saw passenger traffic rise by 6 per cent last year as improving world economy helped to boost global demand. Sascha Steibach/EPA

The International Air Transport Association (Iata) announced Middle East carriers’ traffic increased 6.6 per cent last year over 2016. Capacity climbed 6.4 per cent and load factor rose 0.1 percentage point to 74.7 per cent.

Global passenger traffic results for 2017 show that demand (revenue passenger kilometres or RPKs) for the year ended December 31 rose 7.6 per cent compared to 2016.

"2017 got off to a very strong start and largely stayed that way throughout the year, sustained by a broad-based pick-up in economic conditions. While the underlying economic outlook remains supportive in 2018, rising cost inputs, most notably fuel, suggest we are unlikely to see the same degree of demand stimulation from lower fares that occurred in the first part of 2017," said Alexandre de Juniac, Iata’s director general and CEO.

Global passenger traffic results were well above the 10-year average annual growth rate of 5.5 per cent. While the rate of demand growth slowed to 6.2 per cent in December 2017, compared to December 2016, this largely was owing to less favourable comparisons to the even stronger growth trend seen in the year-ago period, Iata said. Full-year 2017 capacity rose 6.3 per cent, and load factor climbed 0.9 percentage point to a record calendar-year high of 81.4 per cent.

International passenger traffic soared 7.9 per cent compared to 2016, Iata said. Capacity rose 6.4 per cent and load factor climbed 1.1 percentage points to 80.6 per cent. All regions recorded year-over-year increases in demand, led by the Asia-Pacific and Latin America regions.

Asia-Pacific carriers posted annual demand growth of 9.4 per cent, compared to 2016, driven by robust regional economic expansion and an increase in route options for travellers. This was the first time since 1994 that Asia-Pacific led all the regions in annual growth rate. Capacity rose 7.9 per cent, and load factor climbed 1.1 percentage points to 79.6 per cent.

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European carriers’ international traffic climbed 8.2 per cent in 2017 compared to the previous year, underpinned by buoyant economic conditions in the region. Capacity rose 6.1 per cent and load factor surged 1.6 percentage points to 84.4 per cent, which was the highest for any region.

Airlines based in the Middle East faced a challenging first half of the year, although Iata said it is worth noting that the seasonally adjusted (SA) trend in international RPKs recovered somewhat during the second half. The market segment to/from North America was hit the hardest owing to factors including the temporary ban on large portable electronic devices in the aircraft cabin as well as the proposed US travel bans affecting some countries in the region. The region’s share of global traffic (9.5 per cent) fell for the first time in 20 years.

Still, in December Iata said Middle East airlines were likely to see net profits double to $600 million in 2018, with demand expected to outpace announced capacity expansion.

North American airlines saw full year traffic rising 4.8 per cent compared to 2016, as the comparatively robust economic backdrop supported outbound passenger demand. This was somewhat offset by a slowdown in inbound travel partly attributable to the new immigration and security restrictions put in place for travel to the US, as well as the extreme weather events that hit the US later in the year, according to the aviation group.

Latin American airlines’ traffic climbed 9.3 per cent in 2017, the fastest rate since 2011. Capacity rose 8 per cent and load factor increased 1 percentage point to 82.1 per cent, the second highest among the regions.

African airlines saw 2017 traffic rise 7.5 per cent compared to 2016. Capacity rose at less than half the rate of demand (3.6 per cent), and load factor jumped 2.5 percentage points to 70.3 per cent. While indicators in South Africa are consistent with falling economic output, Nigeria has returned to growth, helped by the recent rise in oil prices, Iata said.

Domestic air travel climbed 7 per cent last year. All markets showed annual growth led by India, China, and Russia, albeit with wide variation. Capacity increased 6.2 per cent and load factor was 83 per cent, up 0.7 percentage point compared to 2016.

Japan posted its fastest full year of growth (up 5.8 per cent) since 2013, driven in part by the country’s stronger economic backdrop. Brazils domestic traffic returned to growth last year with a 3.5 per cent demand increase, after recording an annual decline of 5.5 per cent in 2016.

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