Further updraught for Middle East airline passenger demand

July acceleration from the 3.6 per cent annual growth seen in June, says Iata

Global passenger demand has grown as have Middle East passenger numbers. Simon Dawson/Bloomberg

Passenger demand for Middle East carriers increased 4.5 per cent in July from 3.6 per cent the previous month, as carriers saw a rebound in travelers with the easing of bans impacting flights to the US, according to the International Air Transport Association (Iata)

The Middle East to North America market has been affected by a combination of factors in 2017, that include the recently-lifted cabin ban on large portable electronic devices, and a wider impact from the proposed travel bans to the US, Iata said. Traffic growth on the Middle East-US route was already slowing in early 2017, in line with a moderation in the pace of expansion of nonstop services flown by the largest Middle East airlines. July capacity climbed 3.6 per cent compared to a year ago and the load factor rose 0.7 percentage points to 81.5 per cent.

Asia-Pacific airlines’ July traffic rose 5.9 per cent over the year-ago period, a deceleration compared to June growth of 8.8 per cent, Iata said. As with Europe, carriers in the Asia-Pacific region are seeing a slowing of demand growth. Capacity increased 6.7 per cent and load factor slipped 0.6 percentage points to 81 per cent.

African airlines experienced a 6.5 per cent increase in traffic compared to a year ago, down from 9.8 per cent demand growth in June. Capacity rose 1.7 per cent, and load factor jumped 3.4 percentage points to 74.1 per cent. Conditions in the region’s two largest economies continue to diverge, with South Africa in recession while business confidence levels are at a two-year peak in Nigeria, according to Iata.

Global passenger traffic results for July showed strong but moderating demand growth. Total revenue passenger kilometres (RPKs) rose 6.8 per cent, compared to the same month last year, down from 7.7 per cent year-over-year growth recorded in June.

“As the first full month in the summer peak travel season, July is a bellwether month, and demand continues to be very strong," said Alexandre de Juniac, Iata’s director general and chief executive.

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The aviation organisation said all regions reported solid or better growth in passenger volumes over the past year. Capacity (available seat kilometres or ASKs) increased by 6.1 per cent, and load factor rose 0.6 percentage points to a July record of 84.7 per cent.

“As is evidenced by the record high load factor in July, the appetite for air travel remains very strong. However, the stimulus effect of lower fares is softening in the face of rising cost inputs. This suggests a moderating in the supportive demand backdrop,” said Mr de Juniac.

July international passenger demand rose 6.2 per cent compared to July 2016, which was a slow-down compared to the 7.6 per cent growth recorded in June. Total capacity climbed 5.5 per cent, and load factor edged up 0.5 percentage points to 84.6 per cent.

European carriers posted a 7.5 per cent rise in traffic for July compared to a year ago, down from 8.8 per cent annual growth in June. Capacity rose 5.9 per cent, and load factor climbed 1.3 percentage points to 88.7 per cent, highest among the regions, said Iata.

North American airlines’ traffic climbed 3.5 per cent compared to July a year ago. This was down from 4.4 per cent growth in June, but still ahead of the five-year average pace of 2.9 per cent. July capacity rose 3.8 per cent with the result that load factor slipped 0.3 percentage points to 85.9 per cent.

Latin American airlines recorded the strongest growth among regions, posting a 10.5 per cent demand rise compared to July 2016. Capacity increased almost as fast, up 10 per cent, and load factor climbed 0.4 percentage points to 84.9 per cent, Iata said.

"People want to travel and aviation connectivity is vital to the smooth functioning of the global economy," said Mr de Juniac.

"But the economic and social benefits that aviation brings need to be supported by adequate, affordable airport and air traffic management infrastructure. To do this effectively, governments must include aviation’s requirements as part of their national economic strategy."