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CAPACITY UP 11.5pc

ME air passenger traffic jumps 9.8pc

GENEVA, January 13, 2016

Middle East carriers witnessed international passenger demand jump 9.8 per cent in November, a report said, adding that while capacity rose 11.5 per cent, it caused load factor to dip 1.0 percentage point to 69.4 per cent.

According to global passenger traffic results for October announced by the International Air Transport Association (Iata), business conditions across the non-oil producing private sectors of the UAE and Saudi Arabia appear to be strengthening, and this should help sustain solid expansion in air passenger demand for local carriers.

African airlines’ experienced their fifth consecutive month of positive traffic growth in November, posting a 12.2 per cent rise compared to November 2014. However, the trend for the year-to-date so far remains weak, with growth of just 1.3 per cent, reflecting adverse economic developments in parts of the continent, including in Nigeria, which is highly reliant on oil revenues.

Over the past few months, exports from Africa have held up better than they did earlier in 2015, and this could be helping boost international air travel on the region’s carriers. Capacity rose 9.8 per cent and load factor rose 1.5 percentage points to 65.1 per cent, the report said.

November international passenger demand rose 5.6 per cent compared to November 2014, with airlines in all regions recording growth. Total capacity climbed 4.1 per cent, and load factor edged up 1.1 percentage points to 76.2 per cent.

Total revenue passenger kilometers (RPKs) rose 5.9 per cent compared to the year-ago period. Although below the October rate of 7.1 per cent, this largely was owing to the impact of factors that are expected to be short-lived, including the cessation of operations by Transaero, Russia’s second largest carrier, and labour strikes at Lufthansa.

The healthy demand continued despite some softening in economic growth, in large part owing to falling fares. Data for the first 10 months of the year show a 5 per cent decline in average fares in currency-adjusted terms. November capacity (available seat kilometers or ASKs) increased by 4.2 per cent, and load factor rose 1.3 percentage points to 78.0 per cent. 

“Consumers continue to benefit from lower fares, which are spurring demand. The economy benefits from the stimulus to consumer spending. And airlines are starting to achieve minimum acceptable profit levels. It’s good news all around, but as we open 2016, economic risks are mounting,” said Tony Tyler, IATA’s Director General and CEO.

Domestic Passenger Markets

Domestic travel demand rose 6.4 per cent in November compared to November 2014 but results were mixed, with Brazil, Russia and Japan all showing declines. Domestic capacity climbed 4.4 per cent, and load factor improved 1.6 percentage points to 81.1 per cent.

• India’s strong results reflect notable increases in service frequencies, ongoing economic strength and the timing of the Diwali holiday, which occurred in October in 2014.

• Air travel in Japan declined but measures of manufacturing activity improved strongly during the month, which should support rising passenger demand.

 “The airline industry is delivering solid financial and operational performance. The industry’s return on capital for 2015 and 2016 is expected to exceed its cost of capital—a very rare occurrence. This means we are on the path toward financial sustainability. Consumers are benefitting from lower fares, and airlines are able to invest in new aircraft that are more comfortable, quieter and more environmentally friendly.

“Passenger demand remains strong; however, the ongoing turmoil in the global financial markets and concerns over slowing economic growth in China are casting a shadow over the New Year.

“2016 will be a historic year for aviation as States come together at the 39th International Civil Aviation Organization Assembly to discuss—and I hope agree—a market-based-measure that will allow airlines to achieve carbon-neutral growth from 2020,” said Tyler. – TradeArabia News Service




Tags: Middle East | Iata | Traffic | Passenger | Carrier | Air |

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