Dubai: Middle Eastern airlines recorded traffic growth of 25.8 per cent — the strongest of any region, in February, according to the global aviation watchdog the International Air Transport Association (IATA).
This is expected to grow further in the coming months as most Gulf carriers, especially Emirates, Etihad, Qatar Airways and Air Arabia, are expanding fleet and route networks faster than other airlines and the trend is expected to have a positive impact in the overall performance of the region's growing industry.
Emirates and Etihad this week launched direct flights to Tokyo, connecting Dubai and Abu Dhabi to the capital of the world's second biggest economy, Japan.
"Travel markets continue to develop within the region creating new demand. Successful competition on long-haul connections to Asia over Middle Eastern hubs has improved market share for the region's carriers," an IATA statement said yesterday.
IATA said that February 2010 international scheduled air traffic showed continued strengthening of demand. Compared to February 2009, passenger demand was up 9.5 per cent, while cargo demand grew 26.5 per cent.
These are strong gains, but it must be noted that February 2009 marked the bottom of the cycle for passenger traffic during the global economic recession, it said.
"Passenger demand must recover by a further 1.4 per cent to return to pre-crisis levels. Cargo hit bottom in December 2008, with little improvement realised by February 2009," it said.
Cargo traffic, which plunged much further than passenger demand, has a further 3 per cent to recover in order to return to pre-crisis levels.
"We are moving in the right direction. In two to three months the industry should be back to pre-recession traffic levels. This is still not a full recovery. The task ahead is to adjust to two years of lost growth," said Giovanni Bisignani, IATA's director general and CEO.
Improved load factor
The highlight for February was improved load factors which stood at 75.5 per cent. Considering that February is traditionally the weakest month for travel, and if seasonally adjusted, this translates to an all-time record February load factor of 79.3 per cent.
While demand increased by 9.5 per cent, supply was held back to just 1.9 per cent. Airlines are maintaining normal aircraft utilisation on short-haul fleets but long-haul utilisation is down over 8 per cent compared to 2008 levels. The resulting increase in unit costs for long-haul operations may delay the positive impact of stronger demand to the bottom line.
Regional demand patterns continue to reflect the asymmetrical nature of the economic rebound, IATA's statistics showed.
European carriers posted the weakest growth at 4.3 per cent. This is the result of sluggish home economies, rising unemployment and labor strikes. This region saw a capacity reduction in February (-0.5 per cent).
North American airlines posted weak growth of 4.4 per cent. Having cut capacity deeply during the recession (February 2010 capacity was 3.0 per cent below 2009 levels), this is to be expected. Consumers continue to pay down debt rather than increase spending, keeping demand for air travel comparatively weak.
In contrast to Europe and North America, Asia-Pacific carriers posted strong traffic growth of 13.5 per cent, which was partly boosted by the timing of the Chinese New Year. Compared with the mid-2009 low there has been a 19 per cent rebound.
Latin American carriers posted growth of 8.5 per cent on the strength of the performance of the region's economies.
African airlines have also benefited from strong local economies with a 9.8 per cent growth. However, capacity is also coming back fast (+9.2 per cent) so airlines in this region continue to see the weakest load factors.
IATA's Agenda for Freedom continued to gain support with Kuwait, Bahrain and Lebanon endorsing its multilateral Statement of Policy Principles on liberalisation in the last month. Chile, Malaysia, Panama, Singapore, Switzerland, the US, the UAE and the European Commission were the original signatories in November 2009.
