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Abu Dhabi, UAEMonday 25 June 2018

Middle East air passenger growth lags in November, IATA says

Demand increased by 4.9 per cent year-on-year, the lowest among all regions

Iata said Middle East carriers route to and from North America continues to be affected by the now-lifted ban on personal electronic devices. Issouf Sanago/AFP
Iata said Middle East carriers route to and from North America continues to be affected by the now-lifted ban on personal electronic devices. Issouf Sanago/AFP

Middle East airlines recorded the slowest growth in air passenger demand in November out of all regions, impacted by revived proposals for travel restrictions to the US from certain countries, according to the International Air Transport Association (IATA).

The industry body’s latest monthly figures showed a 4.9 per cent year-on-year demand increase in November.

This is compared to a 6.9 per cent increase in October – which was a strong rise from 3.9 per cent year-on-year growth in the previous month.

“The market segment to and from North America continues to be affected by the now-lifted ban on personal electronic devices [imposed by the US], as well as a wider impact stemming from the proposed travel restrictions to the US from certain [Muslim-majority] countries,” IATA said in a statement on Sunday.

Middle Eastern carriers are struggling to fill seats on some routes due to the economic slowdown hitting prime markets in the Arabian Gulf countries, proposed travel bans to the US, and geopolitical instability.

Alexandre de Juniac, director-general of IATA, told The National in December that he expects the region to witness a slowdown in the rapid rate of growth from previous years, “bringing the Middle East in line with its regional peers”.

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Regional airline capacity rose 4.3 per cent in November compared to 5.3 per cent in October, according to IATA, while load factor increased 0.4 percentage points to 70.1 per cent.

Globally, IATA recorded continued robust demand in passenger traffic in November, with total revenue per passenger kilometers (RPKs) up 8 per cent compared to November 2016 – the fastest growth rate in five months and up from a 7.3 per cent year-on-year rise in October.

Capacity (available seat kilometers or ASKs) increased by 6.3 per cent, and load factor rose 1.2 percentage points to 80.2 per cent, IATA said.

Growth was led by Asia-Pacific airlines, whose November traffic climbed 10.8 per cent compared to the year-earlier period, driven by strong regional economic growth and continuing expansion of options for travellers, IATA said. Capacity increased 8.7 per cent and the load factor was 78.6 per cent.

“The airline industry is in a good place entering 2018,” said Mr de Juniac in the statement. “November’s strong demand gives the industry momentum. Passengers not only have more travel choices than ever, the cost of travel in real terms has never been cheaper."

Air travel demand in the Middle East is predicted to grow by 7 per cent in 2018, and regional carriers will see net profits improve to US$600m in 2018, up from $300m in 2017, IATA said at the end of last year.

Mr de Juniac said this week 2018 is expected to be the fourth year in a row where the industry’s return on invested capital will exceed the cost of capital.

However, he said challenges remain. “Security threats continue, infrastructure issues persist, fees and charges are a growing part of the cost base, and, in many cases airports and air traffic management struggle to keep pace with demand and technology advancements,” he said.