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Mideast airlines lead traffic growth

Middle Eastern carriers led the industry in traffic growth as regional airlines recorded the strongest year-on-year rate of growth for any region in May, data from the International Air Transport Association, or Iata, revealed on Monday.

It was the only region among all markets that recorded a double-digit growth for international passengers, according to the apex aviation body. Middle East carriers recorded a 15.8 per cent year-on-year increase, the Iata added.

“Middle East carriers were the only ones to report aggregate accelerated demand growth compared to April, when the region’s airlines reported 15.2 per cent growth,” the Iata said. Load factors in the region were the second-weakest among regions at 74 per cent, but it was still better than April.

“It does seem that GCC airlines are far better-placed to cope with change than many of their rivals, despite the gloomy Iata outlook,” Saj Ahmad, chief analyst at London-based StrategicAero Research, told Khaleej Times. “It’s not surprising that growth in many regions has slowed down. A lot of factors contributed from rising oil price to economic turmoil in Europe and political uncertainty in parts of the Middle East.”

The Iata traffic results for May showing a general downward trend in line with deteriorating global economic conditions. While passenger demand was 4.5 per cent ahead of levels in May 2011, growth was virtually flat compared to April.

In May this year, Iata said capacity increased by four per cent and load factors stood at 77.6 per cent, below the historically-high levels recorded in April for inernational passengers.

“The airline industry is fragile. Relief in oil prices provides some good news. Unfortunately, the softness in oil markets comes on the back of fears of deterioration in the European economy. Business and consumer confidence are falling. And we are seeing the first signs of that in slowing demand and softer load factors,” Iata director-general Tony Tyler said in a statement. “This does not bode well for industry profitability. Airlines are expected to return a $3 billion profit in 2012 on $631 billion in revenues. That’s a razor-thin 0.5 per cent margin.”

— abdulbasit@khaleejtimes.com