Business | Aviation
Mideast air traffic booms with double-digit growth
The Middle East achieved double-digit growth in both air passenger numbers and cargo volumes last year, leading all other regions, an industry group said on Thursday.
- By Shakir HusainStaff Reporter
- Published: 00:52 February 1, 2008
Dubai: The Middle East achieved double-digit growth in both air passenger numbers and cargo volumes last year, leading all other regions, an industry group said on Thursday.
Carriers in the Middle East recorded an 18.1 per cent increase in passenger traffic, continuing a four-year trend of double-digit growth.
"This was the highest among all regions, resulting from strong regional economies, the impact of oil wealth, expanded capacity and new routes," the Geneva-based International Air Transport Association (IATA) said in its full-year traffic results for 2007.
However, cargo growth in the Middle East slowed down last year compared with 2006. Middle East carriers still led all regions in 2007 with a 10.1 per cent increase in freight volumes, declining from 16.1 per cent a year before.
Slight dip
Freight traffic globally grew 4.3 per cent last year, below the 4.6 per cent increase in 2006. Passenger traffic worldwide grew 7.4 per cent in 2007 compared with 5.9 per cent increase recorded during 2006.
December passenger traffic grew 6.7 per cent, down from the 9.3 per cent growth in November, IATA said, attributing the decline to the impact of high oil prices.
IATA director-general Giovanni Bisignani fears the slowdown could be "the trend for the coming months".
Average international passenger load factors, or the ratio of seats filled, reached an industry record 77 per cent in 2007, compared with 76 in 2006.
"This trend will likely end in 2008 as demand growth is forecast to slow to five per cent while capacity rises 5.2 per cent," said IATA, which represents some 240 airlines.
Airlines in Asia Pacific saw their passenger number rise in line with average international growth. Robust Chinese and Indian economies are widening air travel markets in the region.
"Strong passenger traffic growth of 7.4 per cent was a key component of the industry's $5.6 billion profit in 2007, the first black number since 2000," said Bisignani, adding that "it was not all good news" as air freight growth slowed to 4.3, lower than the 7.5 per cent increase in world trade.
IATA believes that the air freight demand environment will remain challenging. Growth is expected to slow in the first half of 2008 before picking up with overall growth of 4-4.5 per cent projected for 2008.
The high price of fuel has already depressed the profit outlook for the aviation industry this year.
IATA said in its annual report the airline industry's profit will drop more than 10 per cent to $5 billion in 2008.
"There will be no encore performance in 2008. Oil prices are higher than ever. Economic uncertainty accompanying the US credit crunch is broadening," Bisignani said.
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