x Abu Dhabi, UAEThursday 27 July 2017

Middle East airlines beat global trend on growth

Middle East airlines led the world in passenger traffic growth last month, the International Air Transport Association said yesterday.

Middle East airlines led the world in passenger traffic growth for September, the International Air Transport Association (Iata) said yesterday.

According to Iata's global traffic returns, demand for Middle East airlines rose 13.3 per cent year-on-year compared to worldwide demand for passenger traffic of just 4.1 per cent above September 2011 levels.

For air cargo, demand growth was even weaker globally, at 0.6 per cent, said Iata, but the Middle East's carriers had a 16.3 per cent rise in cargo demand on a 6.9 per cent increase in capacity.

"The growth trend in air travel started to flatten in the second quarter, with no growth in the passenger market between April and August," said Iata.

"The year-on-year comparisons are now also starting to show slower rates of growth. In September, the increase in passenger travel was down on the 5.3 per cent year-on-year growth rate in August and well below the 6 per cent average growth rate seen throughout the first half of the year."

The report also noted that September was the second notable month-on-month fall in global air freight growth, and the poor performance was eroding the stability in volumes achieved earlier this year. Global freight capacity also fell by 0.6 per cent compared with levels a year ago.

"A 'two-speed' recovery is emerging into a 'multi-speed' reality," said Tony Tyler, Iata's director general and chief executive. "Carriers in China, Latin America and the Middle East are growing strongly. Europe's airlines are experiencing profitless growth in a strategy to manage high fixed costs and taxes. In Africa, the challenge is to turn growth opportunities into profits.

"But for North American airlines the focus is on tightly managing capacity in order to optimise profits in a slow to no-growth environment. Asia-Pacific carriers outside of China are a mixed bag. Robust growth in China is being tempered by faltering markets in Japan and India.

"Putting regional diversity aside, the fact that airlines are making any money at all with weak markets and high fuel prices is a tribute to their strong business performance, as evidenced by maintaining global load factors close to 80 per cent since the start of 2012. Even with that, airlines are expected to eke out a global net profit margin of only 0.6 per cent. It's a tough year," Mr Tyler added.

Iata said the performance of Middle East airlines in September was actually down on the 17 per cent growth recorded between August 2011 and last August. But it noted that Ramadan last year artificially dampened traffic growth during August 2011, leading to an artificially higher growth figure for August 2012.

dblack@thenational.ae