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STRONGEST GROWTH GLOBALLY

Middle East air passenger traffic up 13pc

Geneva, November 4, 2012

Middle East carriers experienced by far the strongest passenger traffic growth globally, with demand up 13.3 per cent year-on-year in September, according to the International Air Transport Association (Iata).

The figure is down compared to the 17 per cent growth recorded in August but the growth comparison for August was inflated by seasonal impacts, with Ramadan dampening traffic growth during August 2011, it said.

September capacity rose 11.3 per cent and the load factor strengthened to 78.7 per cent in the region.

Global air passenger traffic increased 4.1 per cent in September compared to the same period last year, but air cargo traffic growth was weaker at 0.6 per cent, Iata said.

The growth trend in air travel started to flatten in the second quarter, with no growth in the passenger market between April and August. The year-on-year comparisons are now also starting to show slower rates of growth, the report showed.

In September, passenger travel increased 4.1 per cent on a year ago, down on the 5.3 per cent year-on-year growth rate in August and well below the 6 per cent average growth rate seen throughout the first half of the year.

Capacity increased by 3.1 per cent over the year-ago period, and the load factor stood at 80 per cent, up 0.7 per cent points compared to September 2011.

The minor 0.6 per cent year-on-year growth posted for air cargo is less significant than the 0.6 per cent fall in air freight volumes between August and September which is more indicative of the trend, it said. This is the second notable month-on-month fall in air freight growth in as many months.

This has eroded the stability in volumes achieved earlier in the year. Capacity was trimmed 0.6 per cent compared to year-ago levels. This strengthened the freight load factor slightly to 45.6 per cent from 45.1 per cent a year ago.

“A ‘two-speed’ recovery is emerging into a ‘multi-speed’ reality. Carriers in China, Latin America and the Middle East are growing strongly. Europe’s airlines are experiencing profitless growth in a strategy to manage high fixed costs and taxes. In Africa the challenge is to turn growth opportunities into profits. But for North American airlines the focus is on tightly managing capacity in order to optimise profits in a slow to no-growth environment. Asia-Pacific carriers outside of China are a mixed bag. Robust growth in China is being tempered by faltering markets in Japan and India,” said Tony Tyler, Iata’s director general and chief executive.

“Putting regional diversity aside, the fact that airlines are making any money at all with weak markets and high fuel prices is a tribute to their strong business performance, as evidenced by maintaining global load factors close to 80 per cent since the start of 2012. Even with that, airlines are expected to eke out a global net profit margin of only 0.6 per cent. It’s a tough year,” said Tyler.

“Tough times deliver innovation. High oil prices have turned fuel management into a fine art of conserving every last drop. Consumer demand for convenience and simplified process supported the development of a whole new way to travel facilitated by e-tickets, bar-coded boarding passes and kiosk technology. And the recent approval of the foundation standard for a new distribution capability (NDC) means that travelers are set to benefit from a revolution in airline retailing.”

“NDC will enable airlines to retail their products in a modern way and with much greater product transparency to their customers across all channels - including travel agents,” he added. “Now that the foundation standard is agreed, we are working with partner-experts across the travel value chain to move from theory to reality. Within the next five years, shopping for travel will take place in a much more customer-centric environment.”

Hussein Dabbas, regional vice president for the Mena region, said: "Middle Eastern carriers continue to outperform the wider market, with growth expanding 1 per cent between August and September. And freight also had a positive month, one of only two global regions to show any month-on-month growth. Although profits will be lower this year compared to 2011, these trends look good for stronger profitability in 2013." – TradeArabia News Service




Tags: Iata | Passenger traffic | Switzerland | Geneva | air cargo |

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