Regional airlines see almost no passenger traffic growth in May – IATA

The earlier timing of Ramadan this year may have affected growth, says report



Airlines in the Middle East saw passenger demand in May grow by just 0.8 per cent compared to May 2017, the slowest growth across all the regions worldwide, according to the latest report issued by the International Air Transport Association (IATA).

The slow growth in May comes after regional carriers recorded 2.9 per cent annual growth recorded in April.

“The earlier timing of Ramadan this year may have affected the result, but more broadly, the upward trend in traffic has slowed compared to last year,” IATA said in a report.

Capacity in May increased by 3.7 per cent, and load factor fell 1.9 percentage points to 67.5 per cent.

Also read: Emirates grounds 20 planes; facing ‘double whammy’ – Tim Clark

Globally, international passenger traffic demand rose 5.8 per cent, up from 4.6 per cent growth in April.

All regions recorded growth, led by Asia-Pacific airlines (8 per cent), Latin American airlines (7.5 per cent), and European carriers (6.2 per cent). While North American airlines saw traffic demand grow by 4.9 per cent year-on-year in May, African carriers recorded an increase of 3.8 per cent.

Overall, total capacity climbed 5.4 per cent, with load factor rising 0.3 percentage point to 78.7 per cent.

“May was another solid month in terms of demand growth,” said Alexandre de Juniac, IATA’s director general and CEO.

“As had been expected, we saw some moderation, as rising airline costs are reducing the stimulus from lower airfares. In particular, jet fuel prices are expected to be up nearly 26 per cent this year compared to 2017. Nevertheless, the record load factor for the month signifies that demand for air connectivity is strong,” he added.

Last month, IATA released its mid-year economic report in which it forecast an industry net profit of $33.8bn.

“This is a solid performance. But our buffer against shocks is just $7.76. That’s the average profit per passenger that airlines will make this year — a narrow 4.1 per cent net margin,” said de Juniac.

“And there are storm clouds on the horizon, including rising cost inputs, growing protectionist sentiment and the risk of trade wars, as well as geopolitical tensions.

“Aviation is the business of freedom, liberating people to lead better lives. Governments that recognise this will take steps to ensure aviation is economically sustainable. And aviation works best when borders are open to trade and people,” he added.