Middle East only region to post traffic growth: IATA

According to IATA the Middle Eastern growth is fueled by greater capacity and increased market share in Europe and Asia.

While worldwide passenger demand declined 2.9% compared to the same month in the previous year while freight demand was down 11.3%. The international passenger load factors stood at 80.3%.

The July passenger demand fall of 2.9% was a relative improvement over the 7.2% drop in June and the 6.8% decline recorded over the first seven months of the year. July capacity was more in line with reduced demand than in previous months and load factors are similar to those recorded in July 2008. These positive developments, however, have come at the expense of yields which continue to fall sharply.

The 11.3% decline in cargo demand for July was also a relative improvement over the -16.5% recorded in June and the -19.3% average for the first seven months of the year. Despite this improvement, the July freight load factor of 47.6% was lower than the 49% recorded in July 2008.

“Demand may look better, but the bottom line has not improved. We have seen little change to the unprecedented fall in yields and revenues. The months ahead are marked by many uncertainties, including the price of oil. The road to recovery will be both slow and volatile. In the meantime, the industry remains in intensive care,” said Giovanni Bisignani, IATA’s Director General and CEO.

Freight demand on international markets was 11.3% lower in July than a year earlier, but was a considerably better result than the -16.5% recorded in June. All regions, except Africa, saw improvement in demand compared to June. The Middle East was the only region to grow.

The stabilisation of air freight demand in the first quarter and its improvement in the second quarter has helped reduce the rate at which excess capacity has been growing. But load factors are still lower than levels seen at the same time last year. Downward pressure on freight rates and revenues continued to intensify in July.

“The freight numbers tell an interesting story. The sector is being boosted as companies re-stock depleted inventories. Once inventories are at desired levels in relation to sales, improvements in demand will level off until business and consumer confidence returns. Given the large amount of debt in all sectors of the economy, instant relief is not in the forecast.

“Airlines need to make their money in the June-August peak travel season. Planes are full. Load factors are high. But revenues are way down. Conserving cash, effectively managing capacity and cutting costs will be the long-term theme for every business in the air transport value chain,” he said.