IATA sees drop in Mideast airline passenger loads

DUBAI — International Air Transport Association (IATA) said the average passenger load factor (PLF) in all four major largest carrier regions, including the Middle East, fell to 73.3 per cent in February 2008, the most “significant” drop in four years.

By Issac John

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Published: Sat 19 Apr 2008, 10:09 AM

Last updated: Sun 5 Apr 2015, 11:41 AM

Releasing the figures ahead of the 2008 Airline Distribution Conference to be held in Kuala Lumpur, IATA confirmed that the economic slowdown in the United States has started to bite into the industry’s revenue globally.

According to IATA, the February 2008 figure shows traffic has fallen 0.6 percentage point below the passenger load factor (PLF) of February last year. The industry recorded 7.4 percent passenger growth in 2007 worldwide.

“When we adjust for the impact of the leap year, passenger demand increased by 4-5 per cent,” said Giovanni Bisignani, CEO of IATA. “Demand is still growing, but it is slowing down.”

Load factors from all four major largest carrier regions indicate a decline, said Bisignani.

While the Middle East sector showed a 0.9 percentage point drop, falling to 72.6 per cent, the Asian carriers saw their PLF fall by 0.1 percentage points to 75.2 per cent. The European PLF recorded the largest single drop of 1.6 percent to 71.7 percent, while the North American carriers experienced a 0.5 percent drop to 74 percent.

In the Middle East, passenger traffic has been balanced by the oil business. “It is strong growth even taking into consideration the leap year impact,” added Bisignani.

Last month IATA warned that a global aviation slowdown might have begun after traffic statistics for January showed a sharp fall on previous months.

It said a 4.3 per cent growth in international passenger demand for January was sharply down on the 6.7 per cent growth in December and the 7.4 per cent for 2007.

The IATA had been warning for some time that it expected growth to slow in 2008 but said yesterday that January’s figures showed the industry could be at a turning point.

“A month’s data is not enough to define a trend. However, the sharp shift in demand-growth patterns makes it clear that the US credit crunch is negatively impacting air travel,” Bisignani said. “Fasten your seat belts. There is likely to be turbulence ahead.”

In January, Middle Eastern carriers recorded a 7.4 per cent increase in passenger traffic for the month but this was less than half the 2007 figure of 18.1 per cent. The IATA attributed this to a slower growth in capacity rather than a change in the region’s oil-driven upward growth trend.

The good news for Asia-Pacific carriers is that the drop in demand in this region for January was marginal — down from 6.2 per cent in December to 5.7 per cent. The IATA said Asia-Pacific carriers benefited from increased competitiveness due to a strong euro as well as the booming economies of China and India.

But it was a glum result for Europe, which recorded the weakest growth of all regions and the biggest fall from 5.5 per cent in December to just 0.3 per cent in January.

North American carriers recorded 5 per cent growth in international passenger traffic, down from 6 per cent in December. The IATA said this was helped by increased competitiveness due to a weak US dollar.

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