Middle East airlines log strongest traffic growth

Business Saturday 06/February/2016 19:18 PM
By: Times News Service
Middle East airlines log strongest traffic growth

Muscat: Middle East carriers had the strongest annual traffic growth at 10.5 per cent. As a result, the share of international traffic carried by Middle East airlines reached 14.2 per cent, surpassing their North American counterparts (13.4 per cent), latest data from IATA reveals.
Capacity growth of 13.2 per cent exceeded the demand gains, pushing down load factor 1.7 percentage points to 76.4 per cent, IATA said.
On the other hand, international passenger traffic rose 6.5 per cent in 2015 compared to 2014. Capacity rose 5.9 per cent and load factor rose 0.5 percentage points to 79.7 per cent. All regions recorded year-over-year increases in demand, the International Air Transport Association (IATA) global passenger traffic results for 2015 showed.
“Last year’s very strong performance, against a weaker economic backdrop, confirms the strong demand for aviation connectivity. But even as the appetite for air travel increased, consumers benefitted from lower fares compared to 2014,” said Tony Tyler, IATA director general and chief executive officer.
While economic fundamentals were weaker in 2015 compared to 2014, passenger demand was boosted by lower airfares. After adjusting for distortions caused by the rise of the US dollar, global airfares last year were approximately 5 per cent lower than in 2014, the report said.
IATA also said that global demand (revenue passenger kilometres or RPKs) rose 6.5 per cent for the full year compared to 2014. This was the strongest result since the post-global financial crisis rebound in 2010 and well above the 10-year average annual growth rate of 5.5 per cent.
Globally, annual capacity rose 5.6 per cent last year, with the result that load factor climbed 0.6 percentage points to a record annual high of 80.3 per cent. All regions experienced positive traffic growth in 2015. Carriers in the Asia-Pacific region accounted for one-third of the total annual increase in traffic.
Asia Pacific carriers recorded a demand increase of 8.2 per cent compared to 2014, which was the largest increase among the three largest regions. Demand was stimulated by a 7.3 per cent increase in the number of direct airport connections in the region, resulting in time-savings for travelers. Capacity rose 6.4 per cent, pushing up load factor 1.3 percentage points to 78.2 per cent.
European carriers’ international traffic climbed 5 per cent in 2015. Capacity rose 3.8 per cent and load factor increased 1 percentage point to 82.6 per cent, highest among the regions. The healthy result in part was attributable to a pick-up in consumer spending in the eurozone as well as a moderate increase in flight frequencies. Traffic growth slowed toward the end of the year owing to strikes at Lufthansa and the shutdown of Russia’s Transaero.
North American airlines saw demand rise 3.2 per cent in 2015, broadly unchanged from the growth achieved in 2014. Capacity rose 3.1 per cent, edging up load factor 0.1 percentage points to 81.8 per cent.
Latin American airlines’ traffic rose 9.3 per cent in 2015. Capacity rose 9.2 per cent and load factor inched up 0.1 percentage points to 80.1%. While key regional economies, particularly Brazil, have been struggling, overall traffic has been robust.
African airlines had the slowest annual demand growth, up 3 per cent although this was a significant improvement over the 0.9 per cent annual growth achieved in 2014. With capacity up just half as much as traffic, load factor climbed 1 percentage point to 68.5 per cent. International traffic rose strongly in the second half of 2015, in conjunction with a jump in trade activity to and from the region.
“Aviation delivered strong results for the global economy in 2015, enabling connectivity and helping to drive economic development. The value of aviation is well understood by friends and families whom aviation brings together, by business travelers meeting clients in distant cities, and particularly by those for whom aviation is a lifeline in times of crisis,” the IATA boss said.
“It is very disappointing to see that some governments still wrongly believe that the value of taxes and charges that can be extracted from air transport outweighs the benefits — economic and social — of connectivity,” Tony Tyler said.
“The most recent example is the dramatic increase in the Italian Council Tax levied on air passengers. This 33-38 per cent hike will damage Italian economic competitiveness, reduce passenger numbers by over 755,000 and GDP by €146 million per year. An estimated 2,300 jobs a year will be lost. At a time when the global economy is showing signs of weakening, governments should be looking for ways to stimulate spending, not discourage it,” Tyler added.