x Abu Dhabi, UAEThursday 18 January 2018

Middle East carriers record strong passenger traffic growth

Middle Eastern airlines post the strongest regional year-over-year passenger traffic growth at 15.1 per cent in August.

Middle Eastern airlines recorded the strongest regional year-over-year passenger traffic growth at 15.1 per cent in August.

The timing of Ramadan a month earlier was an important factor in the rise, according to the International Air Transport Association (Iata), but the strong demand is expected to continue. North American airlines posted the slowest growth of any region at 5.1 per cent.

“Trading conditions are still tough with high oil prices, stiff competition and regulatory hurdles. But demand growth remains a bright spot with most indications pointing towards an acceleration in the fourth quarter,” said Tony Tyler, Iata’s director general and chief executive.

Mr Tyler added that August was a positive month for passenger travel as strong demand and capacity discipline saw load factors match the previous record high of 83.4 per cent.

“The solid performance was also supported by a stabilisation of emerging market weakness and renewed confidence in Europe and North America,” he said.

Asia-Pacific carriers recorded an increase of 8.6 per cent compared to August last year, the strongest performance among the three biggest regions. Downward pressure on growth appears to have eased, at least with respect to China, where latest indicators show an improvement in new export orders. With capacity up 6.3 per cent over August 2012, load factor rose 1.7 percentage points to 81.6 per cent.

European carriers’ international traffic climbed 5.4 per cent in August compared to the year-ago period, on a 3.7 per cent rise in capacity, pushing load factor up 1.4 percentage points to 86.4 per cent. Modest economic improvements and rising consumer confidence are supporting the growth in demand.

North American airlines saw demand rise 5.1 per cent over a year ago, the slowest growth for any region but still close to double the year-to-date increase of 2.7 per cent. The US government shutdown is not expected to impact airline operations but could dampen demand, Iata said.

The 27-day shutdown in 1996, for example, resulted in delays for tens of thousands of passport and visa applications, it added.

Latin American airlines posted a demand rise of 9.8 per cent in August, year-over-year while African airlines’ traffic climbed 5.4 per cent.

“Last week we announced a revised industry outlook. Profits are weak, but moving in the right direction. In 2012 airlines made an average 1.1 per cent net profit margin. That is expected to double to 2.2 per cent in 2014. Cost control, consolidation, joint ventures and product innovations are among the measures that are helping airlines achieve the efficiencies needed to secure their financial futures,” said Mr Tyler.