The demand for international air travel more than doubled in August as countries continued to ease coronavirus pandemic-related restrictions amid a drop in the number of infections, aiding the recovery of air travel.
International travel demand surged almost 116 per cent in August compared with the same month last year, with airlines in Asia delivering the strongest year-on-year growth rates, the International Air Transport Association (Iata) said in its monthly report on Thursday.
Domestic travel demand, on the other hand, rose 26.5 per cent in August and overall travel demand, measured in revenue passenger kilometres, or RPKs, increased about 68 per cent annually during the month.
Globally, traffic is now at 73.7 per cent of pre-crisis levels in 2019, the latest data show.
“The Northern Hemisphere peak summer travel season finished on a high note,” said Willie Walsh, Iata’s director general.
“Considering the prevailing economic uncertainties, travel demand is progressing well. And the removal or easing of travel restrictions at some key Asian destinations, including Japan, will certainly accelerate the recovery in Asia.”
Asia-Pacific airlines recorded a 449.2 per cent jump in demand in August compared to August 2021. The region experienced the strongest year-on-year growth, but “remaining travel restrictions in China continue to hamper the overall recovery for the region”, Iata said.
China, the world’s most populous country, continues to enforce strict pandemic-related restrictions in a number of cities to stem the spread of Covid-19.
Iata data shows that Middle East airline traffic rose about 145 per cent in August compared to August 2021. Airlines increased capacity by 72.2 per cent versus the prior year period, and load factor — a measure of how well an airline can fill available seats — climbed 23.7 percentage points to 79.8 per cent.
Meanwhile, global air cargo demand in August improved slightly compared with the previous month but is still 8.3 per cent down annually. Capacity was 6.3 per cent above August 2021, Iata data showed.
“Air cargo continues to demonstrate resilience. Cargo volumes, while tracking below the exceptional performance of 2021, have been relatively stable in the face of economic uncertainties and geopolitical conflicts,” Mr Walsh said.
“August presented several indicators with upside potential: oil prices stabilised, inflation slowed and there was a slight expansion in goods traded globally.
“But the decrease in new export orders in all markets except the US tells us that developments in the months ahead will need to be watched carefully.”
Airlines in the Middle East recorded an 11.3 per cent year-on-year decrease in cargo volumes in August due to “stagnant cargo volumes” to and from Europe.
UAE currency: the story behind the money in your pockets
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
