Middle East air traffic inches up in September

Middle East carriers reported a 1.8 per cent rise in demand in September, which was a four-month low, according to air passenger traffic data released by the International Air Transport Association (Iata) on Wednesday.

The volatility in the region’s growth rate mainly reflects the developments in 2017 such as the cabin ban on large portable electronic devices and the proposed travel bans to the US. Capacity rose 5.3 per cent, and load factor fell 2.4 percentage points to 72.3 per cent, Iata said.

Globally, passenger demand, measured in revenue passenger kilometres (RPKs), rose 5.5 per cent compared to the same month in 2017.

“This was a slowdown from the 6.4 per cent growth recorded in August year-over-year. Capacity climbed 5.8 per cent and load factor slipped for the first time in eight months, down 0.3 percentage point compared to the year-earlier period, to 81.4 per cent,” said Alexandre de Juniac, the Iata’s director-general and CEO.

According to Iata estimate, the impacts from severe hurricane and typhoon activity in September shaved around 0.1-0.2 percentage point off expected growth. However, even after accounting for these impacts, monthly traffic demand was below the 6.7 per cent year-to-date pace.

“While September’s traffic growth was in line with the long-term average, it represents a moderation compared to recent months. This is likely due to the anticipated reduced demand boost from lower airfares caused by rising airline cost pressures, particularly fuel. Heightened uncertainty about trade policies and mounting protectionist policies may also be having an impact,” said de Juniac.

International RPKs climbed 4.9 per cent with airlines in all regions recording growth compared to 2017. Total capacity climbed 5.1 per cent, and load factor dipped 0.1 percentage point to 81.2 per cent.

Domestic demand globally climbed 6.5 per cent in September compared to September 2017, which was a slowdown compared to 7.5 per cent year-over-year growth in August. This was partly owing to afore-mentioned weather-related disruptions. 

Capacity rose 7.4 per cent and load factor slipped 0.6 percentage point to 81.6 per cent, the Iata said.

Just recently, the Iata cautioned governments in the Middle East and North Africa against airport privatisation move and called for urgent measures to minimise traffic delays.

Stressing the need to maximise the economic and social benefits of aviation, the global body of airlines also called for bringing under control rising airport costs in the Mena region to preserve competitiveness.

In a statement, Iata warned that if urgent progress is not made in solving traffic delays, they could double by 2025 costing over $7 billion in lost productivity and adding over $9 billion to airline operating costs. The average delay per flight attributed to air traffic control issues in the region is 29 minutes, the Iata said.

Last month, the Iata released its latest passenger forecast showing that demand for air travel could double to 8.2 billion passengers in 2037.

“Aviation already supports 65.5 million jobs and has an economic impact of $2.7 trillion. With growth comes the opportunity to make an even bigger contribution to global well being. But governments need to start preparing by investing in adequate airport and airspace infrastructure to support rising demand for connectivity,” said de Juniac.

The Iata chief said the recent decision to cancel construction of the much-needed new airport for Mexico City is a backward step that would have negative economic ramifications not only for Mexico’s economy, but also for connectivity options across the Latin American region.

– issacjohn@khaleejtimes.com


Issac John

Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE’s mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.

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