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ME airlines record strongest growth in Jan

Geneva, March 5, 2013

The Middle East airlines posted the strongest growth rates for January with a 14.3 per cent increase in demand by successfully tapping into demand from emerging markets with the strength of their network structures and efficient hubs, the International Air Transport Association (IATA) said in its report released on Tuesday.

This was nearly evenly matched by a 14.4 per cent growth in capacity, while the load factors for the region were above the global average at 78.6 per cent, it stated.

The Middle East region’s carriers have successfully tapped into demand from emerging markets with the strength of their network structures and efficient hubs, said the global aviation body in its report.

IATA said the global air travel demand statistics for January showed a continuation of the uptick in passenger travel that began at the end of 2012.

The international markets outperformed the global industry average in January with a 3.7 per cent increase in demand against a 2.7 per cent capacity expansion. This led to load factors of 77.6 per cent.

Overall, the air travel demand was up 2.7 per cent compared to last year, which is slightly ahead of the 2.2 per cent expansion in capacity.  
The load factors stood at 77.1, it added.

"Passenger travel is growing in line with business confidence levels. Recent months have seen some positive economic signs emerge in both the US and China, and the Eurozone crisis seems to have stabilized," remarked Tony Tyler, the IATA’s director general and CEO.

"Of course risks remain; the impact of US budget cuts has yet to play out and fuel prices are high. But even with those headwinds—real and potential—we still see underlying support for continued and potentially even strengthened growth," he added.

Tyler pointed out that the strong demand for air travel driven by the Chinese New Year has distorted the January figures.

"Chinese New Year fell in January 2012 and in February this year. The comparisons to such a strong month made January 2013 demand look weaker than the underlying trend would indicate," he explained.

After adjusting for such seasonal factors, IATA chief estimates that the actual growth would have been 3.5 per cent. "This growth is still lower than the 5.3  2012 average. However, air travel growth slowed sharply through the year and the results of the past few months represent an acceleration of demand growth," he added.

The Asia-Pacific airlines captured over half of the growth in demand between October and January. The year-on-year growth rate in January (0.1 per cent) was distorted by the timing of the Chinese New Year, said the IATA report.

After adjusting for seasonal factors, January saw demand growth in the region of 3 per cent for Asia-Pacific airlines compared to a year ago. Load factors for the region’s airlines stood at 77.8 per cent.

The African airlines posted 9.4 per cent growth, ahead of a 5.8 per cent capacity expansion. Despite this, the region’s airlines recorded the weakest load factors at 67.9 per cent, the report stated.

Economic growth rates in many African nations are strong—particularly those in resource-rich West Africa. This is providing the demand for a sustained market expansion, it added.

Latin American airlines posted the second highest growth in demand at 12.2 per cent, while North American carriers reported a 1.5 per cent expansion in demand even as capacity was trimmed by 0.8 per cent when compared to year-ago levels.

The European airlines were among the weaker performers, with 2.1 per cent demand growth on 0.4 per cent capacity expansion.

On the domestic front, the air travel expanded by 1.1 per cent, slightly behind a capacity expansion of 1.4 per cent. The load factors were 76.4 per cent, but after seasonal adjustment, the load factor reached a record high, exceeding 80 per cent.

According to Tyler, the global attention is focused on the US to understand the economic impact of mandated budget cuts.

"For millions of travellers and the aviation industry, the concerns go deeper. There are threats of reduced availability of government-provided services for airport security, bordercontrol and air traffic management," he said.

"That the connectivity of the world’s largest economy is being held captive to politics is not acceptable. Airlines pay for air traffic management services through fees and taxes that average 20 per cent of the cost of a typical domestic air ticket," the IATA chief stated.

"Clearly there are some difficult budget decisions for the US government to make. But compromising connectivity—which supports 9.3 million jobs and $669.5 billion in economic activity in the US—is not the right choice,” he added.-TradeArabia News Service




Tags: Middle East | Iata | travel | growth | Airlines |

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