x Abu Dhabi, UAETuesday 23 January 2018

Region's airlines build up traffic

Middle East air travel bounces back in June, climbing by 12.9 per cent compared with zero growth earlier this year.

Middle East air travel bounced back last month, climbing by 12.9 per cent compared with zero growth earlier this year, with rising demand on routes to Asia and Europe. The better than expected results were the sole bright spot among global airlines, with passenger demand worldwide down 7.2 per cent compared with the same period last year, the International Air Transport Association (IATA) reported.

Regional airlines are continuing expansion campaigns amid the global economic downturn by adding new aircraft and destinations, and offering large discounts to stimulate demand. The expansion of airlines such as Emirates and Etihad were prime reasons UAE airports were among the fastest growing in the world, with Dubai International Airport posting a 10.3 per cent rise in passenger traffic last month to 3.36 million passengers, and Abu Dhabi International Airport up by 8.1 per cent compared with June last year.

IATA's regional figures show a sharp rise from February when regional traffic growth grew just 0.4 per cent, the only region worldwide to see positive numbers at the time. But the traffic growth was outstripped by capacity expansion of 15.2 per cent, suggesting airlines are adding new seats faster than they are filling them, putting pressure on profitability. Giovanni Bisignani, the director general and chief executive of IATA, said in his monthly report that falling demand and ticket prices painted a bleak picture for the industry.

"Airlines are seeing international revenue falls of up to 30 per cent at the start of the busy June to August period, when airlines traditionally make their money," Mr Bisignani said. In the air cargo market, Middle East airlines posted the best results even as volumes fell. Air freight declined by 4.2 per cent last month against a 16.5 per cent fall worldwide. The air cargo industry, generally the first to feel the effects of recessions and the first to emerge from them, is in its 13th straight month of declines.

The global economic downturn is being felt by different degrees across the globe. African airlines reported traffic falling by 5.9 per cent last month compared with June last year, because of growing competition from European and Middle Eastern carriers, as strong economies on the continent grew overall air travel, IATA said. In Asia-Pacific, airlines saw a 14.5 per cent fall in demand, equalling the declines in May.

North American airlines saw conditions improve, with demand declining 6.7 per cent after May traffic dropped by 10.9 per cent. European airlines saw traffic fall 7.1 per cent last month compared with June last year, slightly better than a 9.4 per cent drop in May. igale@thenational.ae