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CAPACITY UP 15.6pc

ME carriers drive global air traffic demand in May

LONDON, July 9, 2016

Middle Eastern carriers registered the strongest year-over-year traffic growth with its capacity increasing 15.6 per cent in May compared to a year ago, according to data released by International Air Transport Association (IATA).

The airlines in the region had a 11.8 per cent rise in demand in May compared to a year ago, which was the largest increase among regions.

Capacity has increased even exceeding traffic growth in 18 of the past 20 months. However, the load factor dropped 2.4 percentage points to 71.9 per cent, stated the global aviation body in its report.

On the global scenario, IATA said the passenger traffic results for May showed that demand (measured in revenue passenger kilometers, or RPKs) rose 4.6 per cent, compared to the same month in 2015, which was the same level achieved in April,

Capacity climbed 5.5 per cent, which pushed the average load factor down 0.7 percentage points to 78.7 per cent. Demand for domestic traffic rose 5.1 per cent, outpacing international demand growth of 4.3 per cent, it added.

"After a very strong start to the year, demand growth is slipping back toward more historic levels. A combination of factors are likely behind this more moderated pace of demand growth," remarked Tony Tyler, IATA’s director general and CEO.

"These include continuing terrorist activity and the fragile state of the global economy. Neither bode well for travel demand. And the shocks of Istanbul and the economic fallout of the Brexit vote make it difficult to see an early uptick," stated Tyler.

Annual growth in international RPKs slowed for the third consecutive month, to 4.3 per cent, from 5 per cent recorded in April year-over-year. Airlines in all regions recorded growth. Total capacity climbed 6.1 per cent, causing load factor to slip 1.3 percentage points to 77.1 per cent.

Asia-Pacific airlines’ traffic rose 5.1 per cent in May compared to the year-ago period. Capacity increased 6.4 per cent, which caused load factor to slide 1.0 percentage point to 75.1 per cent. Strong upward momentum has stalled in recent months with growth tracking sideways since the beginning of the year.

European carriers’ May demand climbed just 2.1 per cent over May 2015, reflecting continuing fallout from the Brussels terror attack. Capacity rose 3.5 per cent and load factor dipped 1.1 percentage points to 80.6 per cent, which despite the decline still was the highest among regions.

North American airlines’ traffic climbed 0.5 per cent as carriers continue to focus on the larger and stronger domestic markets. Capacity rose 1.9 per cent and load factor fell 1.1 percentage points to 80.1 per cent.

Latin American airlines experienced a 5.1 per cent increase in traffic in May compared to the same month last year. As with Europe, upward momentum has stalled. Capacity climbed 5.2 per cent and load factor was flat at 80.2 per cent.

African airlines’ traffic rose 9.5 per cent, continuing the trend of strong growth that is linked to the expansion of long-haul networks by the region’s carriers, particularly Ethiopian Airlines. Capacity rose 10.4 per cent, and load factor slipped 0.5 percentage points to 64.5 per cent.

Domestic demand rose 5.1 per cent in May compared to May 2015, which was up from the 4 per cent year-on-year growth recorded in April.

Results were decidedly mixed, with Brazil, Russia and Japan all showing declines. Domestic capacity climbed 4.4 per cent, and load factor rose 0.5 percentage points to 81.7 per cent.

US domestic traffic climbed 4.4 per cent in May. Having gone through a soft patch over the past six months in line with softening indicators of business confidence, demand appears to have resumed its upward trend.

Brazil’s traffic continued to contract in May, falling 7.7 per cent compared to a year ago amidst continuing political and economic turmoil. It is down more than 10 per cent in seasonally-adjusted terms since early 2015.

“The shockwaves of the Brexit vote have extended worldwide and the fallout will affect the air transport industry, from both economic and regulatory perspectives. Aviation plays a vital role in supporting economic growth and development," remarked Tyler.

"As the post-Brexit regulatory framework is negotiated between the EU and the UK it is critical that there are no steps backward for aviation connectivity,” he added.-TradeArabia News Service




Tags: Middle East | demand | air traffic | carriers |

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