Middle East carriers defy global trend

Middle East carriers experienced the strongest traffic growth at 11.2 per cent year-over-year, although this was surpassed by a 12.4 per cent rise in capacity, despite a slower global growth in both air travel and freight, the International Air Transport Association (Iata)’s global traffic results for July showed on Thursday. Air freight demand contracted 3.2 per cent compared to July 2011 but was unchanged compared to June. Middle East carriers recorded a 16 per cent increase in demand year-on-year but all other markets experienced declines and the small recovery seen since the end of 2011 has stagnated. “The uncertain economic outlook is having a negative impact on demand for air transport,” said Tony Tyler, Iata’s director general and CEO. July passenger demand in aggregate was 3.4 per cent higher than the same month last year, compared to a 6.3 per cent increase in June and average growth of 6.5 per cent over the first half of the year. This slowdown in travel growth is being driven largely by the recent fall in business confidence in many economies. July freight demand was 3.2 per cent lower than it was in the same month last year. This is down on the 0.1 per cent year-on-year growth rate of June. A large part of that decline was due to a comparison with a relatively strong July last year, but overall the trend in air freight is weak, in line with subdued world trade growth. “The cargo business is 3.2 per cent smaller than it was a year ago. And passenger markets — with the exception of Africa, China-domestic and the Middle East — saw demand fall from June to July. 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,” said said Tony Tyler Airlines have responded to this slower growth environment by reducing the capacity added to markets, a move which has stabilised load factors at relatively high levels and provided some support for profitability in the face of high fuel prices. In July passenger capacity rose 3.6 per cent, in line with the expansion of traffic, keeping the load factor at a relatively high 83.1 per cent. July international passenger demand was up 3.5 per cent compared to the year-ago period, exactly in line with a 3.5 per cent expansion in capacity. Load factors stood at 83.3 per cent. The slowdown becomes evident when comparing to the previous month (June) when the year-on-year rate was 7.5 per cent. Growth on average during the first half of the year was also 7.5 per cent. The slowdown in international air travel growth has been concentrated in the past few months, in line with the decline of business confidence. Weakness in some key domestic air travel markets has been evident for rather longer period. Only African and Middle Eastern carriers showed month-to-month growth. Carriers in all other regions reported aggregate declines for international demand for July compared to June. African airlines’ traffic climbed 5.2 per cent year-on-year, below a 6.3 per cent rise in capacity. Load factor was 73.1 per cent, by far the lowest of any region. The continent’s airlines have seen strong growth of 10.8 per cent on average during the first half of the year. From : Khalij