Middle East continues to outperform airline traffic growth rates

Middle East airlines recorded double-digit traffic growth in January, posting a 14.5% increase which is by far the largest rate of growth for any region in the world and represents a return to the rates experienced in 2010.

The International Air Transport Association (IATA) global traffic results for January showing an overall 5.7% rise in passenger demand but an 8.0% decline in air freight compared to the same month in 2011.

The occurrence of Chinese New Year in January (rather than in February as in 2011) exaggerated the increase in passenger demand and the fall in air freight. Stripping this out, the underlying trend was for stronger passenger growth, while stabilized weakness in cargo markets continues.

For the Middle East, capacity rose 10.6%. Load factor climbed 2.7 points to 78.5%, among the highest of the regions.

African airlines reported a 3.6% decline in demand and a 0.8% decline in capacity, with a load factor of 64.8%, the lowest load factor among the regions. Although sub-Saharan economies are showing strong economic growth, African airlines are finding it difficult to capitalize on the trend, IATA said.

“The year started with some hopeful news on business confidence. It appears that freight markets have stabilized, albeit at weak levels. And this is having a positive impact on business-related travel. However, airlines face two big risks: rising oil prices and Europe’s sovereign debt crisis. Both are hanging over the industry’s fortunes like the sword of Damocles,” said IATA’s director general and CEO Tony Tyler.

In the freight sector the Middle Eastern carriers enjoyed a 9.4% rise in demand, the healthiest performance among all the regions. North American airlines’ demand dropped 4.0%. Latin American carriers’ traffic climbed 2.2% while African carriers saw a 3.7% decline compared to the year-ago period.

“Running an airline in today’s uncertain economic climate is a tough job. Some well-known names—Spanair and Malev—disappeared in January. At the same time, we know that demand for air travel will grow as the global economy recovers and requires even greater connectivity. The billions of dollars in commercial orders placed at the recent Singapore Airshow demonstrate that airlines are strategically investing to meet that demand with ever-more fuel efficient and environmentally-sustainable aircraft,” said Tyler.

“The aviation industry is a catalyst for economic growth. Governments should keep this in mind in their policy initiatives. Measures to boost competitiveness—not taxes or restrictions—are immediately needed, along with a long-term vision to support sustainable economic growth through much needed infrastructure investments. This includes the Single European Sky, the Federal Aviation Administration’s NextGen, Seamless Asian Skies and airport development. Of course, this must be accompanied with polices to improve environmental performance—the commercialization of sustainable biofuels and a global framework for economic measures to manage aviation’s emissions through the International Civil Aviation Organization included. Such a holistic policy approach will keep communities sustainably connected to global economic opportunities,” said Tyler.

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