x Abu Dhabi, UAETuesday 25 July 2017

Middle East airlines soar ahead again to buck the global trend

Middle East airlines again led the world in market growth last month, with figures for passengers and freight well ahead of all other regions despite the continuing uncertain global outlook.

Middle East airlines again led the world in market growth last month, with figures for passengers and freight well ahead of all other regions despite the continuing uncertain global outlook.

The International Air Transport Association (Iata) said global traffic results showed slower growth in both air travel and freight, with overall passenger demand just 3.4 per cent higher than the same month last year. That compares with a 6.3 per cent increase in June and average growth of 6.5 per cent over the first half of the year.

Middle East carriers, however, recorded the strongest traffic growth of any region last month, of 11.2 per cent year-on-year, and a 12.4 per cent rise in capacity. Compared with June, traffic rose just 0.1 per cent, although Iata said this was down to the impact of Ramadan.

Although air freight demand contracted 3.2 per cent globally, compared with July last year, it was unchanged compared with June. Middle East carriers, however, recorded a 16 per cent increase in demand year-on-year, while all other markets experienced declines. Iata said the small global recovery since the end of last year had stagnated.

Iata blamed the slowdown in global travel growth on the recent fall in business confidence in many economies.

Global freight demand last month was 3.2 per cent lower than in the same month last year and down on the 0.1 per cent year-on-year growth rate of June. The overall trend in air freight was weak, in line with subdued world trade growth, Iata said.

"Passenger markets, with the exception of the Middle East, Africa and China-domestic, saw demand fall from June to July," said Tony Tyler, Iata's director general and chief executive. "The uncertain economic outlook is having a negative impact on demand for air transport.

"Overall passenger demand is still up 3.4 per cent on the previous July. But the growth trend is clearly slowing. This, along with rising fuel prices, is likely to make it a tough second half of the year," he said.

Airlines have responded to this slower growth environment by reducing the capacity added to markets, a move that has stabilised load factors at relatively high levels and provided some support for profitability in the face of high fuel prices, said Iata. Last month passenger capacity rose 3.6 per cent, keeping load factors for global airlines at a relatively high average of 83.1 per cent.

dblack@thenational.ae