Sunday, August 6, 2017

ME carriers witness slowdown in air travel demand

Middle Eastern carriers posted a 2.5 per cent traffic increase in June, which was a slowdown from the already subdued 3.7 per cent growth seen in May, according to figures released by International Air Transport Association (Iata).

Capacity rose 3.1 per cent, and load factor slipped down 0.4 percentage points to 68.9 per cent. While most markets have seen demand slowing, it is most visible on the Middle East-North America market, which has been affected by a combination of factors including the (recently-lifted) ban on personal electronic devices, as well as a wider negative stimulation from the travel ban that has now been implemented for certain countries, the report said.

However, passenger traffic between the Middle East and North America was already slowing in early 2017, in line with a moderation in the pace of growth of the largest carriers in the region.

June international passenger demand rose 7.5 per cent compared to June 2016. All regions recorded growth, led by airlines in Africa (9.9 per cent). Capacity climbed 6.2 per cent, and load factor climbed 1.0 percentage point to 80.6 per cent.

Demand for domestic travel climbed 8.2 per cent in June compared to June 2016, up slightly from the 7.9 per cent growth seen in May. June capacity increased 7.0 per cent, and load factor rose 0.9 percentage points to 84.3 per cent. Led by China and India, all markets reported demand increases, but with wide variation.

“A brighter economic picture and lower airfares are keeping demand for travel strong. But as costs rise, this stimulus of lower fares is likely to fade. And uncertainties such as Brexit need to be watched carefully. Nonetheless, we still expect 2017 to see above-trend growth,” said Alexandre de Juniac, Iata’s director general and CEO.

Iata announced global passenger traffic data for June showing that demand (measured in total revenue passenger kilometers or RPKs) rose by 7.8 per cent compared to the year-ago period. This was in line with the 7.7 per cent growth recorded in May. All regions reported growth. June capacity (available seat kilometers or ASKs) increased by 6.5 per cent, and load factor rose 1.0 percentage point to 81.9 per cent.

For the first six months of 2017, the industry experienced a 12-year high in traffic growth (7.9 per cent) and a record first half load factor of 80.7 per cent.

“This is all good news. The demand for travel is strong and that, in turn, will make a positive contribution to the global economy. This growth will also further expose infrastructure deficiencies. In every part of the world airport and air navigation infrastructure is struggling to cope with demand. There are plenty of examples linking connectivity and economic prosperity. But few governments have been able to deliver on the imperatives of sufficient capacity, quality aligned with user needs and affordability. This year’s strong growth is a reminder that there is no time to lose,” said de Juniac. - TradeArabia News Service

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