Middle East airlines recorded a year-on-year growth of 12.1 per cent in passenger demand during the month of June owing to the rising demand for new routes to emerging markets in Asia and Africa, according to the latest figures from International Air Transport Association (IATA).
Growth for Middle East carriers fell slightly below the 13.4 per cent capacity expansion resulting in a load factor of only 78.4 per cent, down from 79.3 per cent in June 2012.
Globally, passenger demand showed a year-on-year growth of six per cent and is ahead of the 4.8 per cent growth in demand reported during the first half of the year. Passenger growth is also ahead of the 5.6 per cent expansion in capacity for June over the previous year, resulting in a passenger load factor of 81.7 per cent.
Asia-Pacific airlines contributed majorly to the strong global passenger growth while European airlines reported a second consecutive month of growth signaling rising consumer confidence in the Eurozone. Emerging markets, including Africa, showed strong performance in June.
“June was a positive month for passenger markets. The stability in the Eurozone, albeit tentative, is giving a boost to business and consumer confidence. And the load factor at 81.7 per cent shows that airlines are efficiently meeting increasing demand for travel,” said Tony Tyler, IATA’s director general and CEO.
However, Tyler noted headwinds that could impact passenger traffic globally.
“Growth in the BRICS economies, including China, is slowing and oil prices remain high. The industry is still on track to make $4 per passenger this year for a global net profit of $12.7 billion. But there is little margin for error and even a small change in the second half of the year could shift the outlook significantly,” he said.
The half-year report for passenger markets remained broadly positive. Airlines are expecting continued growth in demand though chances of an immediate improvement in yields are slim.
“In the short term, cost control remains high on every airline’s agenda. And the longer-term challenge is to expand value streams to generate sustainable levels of profitability,” said Tyler.
The July IATA airline Business Confidence Index reported that 61.5 per cent of respondents expected an improvement in demand while only 30.8 per cent expected an improvement in yields over the next 12 months.