Dubai: Middle East air travel is increasing this year despite a first-half non-oil sector slump in major regional economies, including in Saudi Arabia and the UAE, the region’s two biggest economies.
In June, Saudi Arabia’s Purchasing Managers Index (PMI), an indicator of growth in the non-oil sector, fell to its lowest level in six years and the UAE recorded its weakest PMI in 22 months.
But Middle East travel is increasing, the International Air Transport Association (IATA) said in a release on Wednesday. Total passenger traffic on Africa — Middle East routes was up 8.2 per cent in the seven months to July 30, 2015 compared to the same 2014 period, European — Middle East routes increased 8.5 per cent and Middle East — Far East routes has risen 6.3 per cent, the airline representative body said.
Air travel to and from the Middle East is expected to continue its upwards trend in the second half, according to IATA, citing a “robust” outlook in the second half for the major regional economies to sustain “robust growth.”
Saudi Arabian gross domestic profit (GDP) is forecast to grow by 3.5 per cent this year and UAE GDP by 3.2 per cent, according to the International Monetary Fund (IMF). And in a sign of an expanding non-oil sector, Saudi Arabia and the UAE regained some of their losses in July with the two major regional economies posting an improved PMI when compared to June.
Three big carriers
The Middle East is one of the fastest growing regions for international air travel, growing annually between 8 and 9 per cent. The rate of growth is driven by the region’s three largest carriers; Emirates, Etihad Airways and Qatar Airways, but also by growth by Saudia (Saudi Arabian Airlines) and the region’s low cost carriers.
And in July, the Middle East passenger traffic recorded double-digit growth, partially due to the timing of the holy month of Ramadan this year, IATA said.
First and business class Africa — Middle East travel grew by 23.5 per cent in July 2015 compared to the same month last year, according to IATA. Premium European — Middle East air travel and Middle East — Far East increased 26 per cent and 16.9 per cent, respectively. Economy class travel, which is more price sensitive, also increased in July. The Africa — Middle East routes grew 15.3 per cent, Europe — Middle East up 22.1 per cent and Middle East — Far East up 13.1 per cent.
Last week, Boeing dismissed concerns falling oil prices and jittery Middle East economies could impact orders from regional buyers, who are some of its largest customers. The US aerospace giant said there had been no cancellations or deferments for aircraft deliveries from the region despite economic concerns.
