Business | Aviation
Passenger air traffic falls 2.8% in region
Passenger traffic for Middle Eastern airlines in September fell 2.8 per cent as the global economic crisis took its toll on international air travel, new industry figures showed.
- By Shakir Husain, Staff Reporter
- Published: 23:33 October 25, 2008
Dubai: Passenger traffic for Middle Eastern airlines in September fell 2.8 per cent as the global economic crisis took its toll on international air travel, new industry figures showed.
The regional decline is in line with deteriorating international air traffic across all regions.
The Geneva-based International Air Transport Association (IATA) said passenger traffic declined 2.9 per cent globally in September while cargo traffic dropped 7.7 per cent compared to the same month in 2007.
This is the first time since the SARS crisis in 2003 that global passenger traffic has shrunk, said IATA, which represents about 230 airlines. It said capacity cuts were not able to keep pace with the fall in demand. September load factors in all regions fell compared to August.
"After years of double-digit growth, passenger traffic by Middle Eastern carriers turned to a negative 2.8 per cent," IATA said. "While the region's oil-based economy remains strong, the large portion of transit traffic exposes the region's carriers to the global economic weakness."
It recently said Middle East and North Africa airlines were not immune from projected losses for the industry and urged them match capacity and demand. The region's fleet is set to double to 1,300 aircraft over the next decade.
Matching demand
Leading Gulf-based airlines such as Emirates, Etihad Airways, Qatar Airways and Gulf Air have ordered hundreds of new planes from Boeing and Airbus to support their widening route network.
"The challenge of matching capacity to demand will be difficult," IATA director general Giovanni Bisignani told the recent AGM of the Arab Air Carriers Association.
IATA projects that profits of Middle East carriers will fall from $300 million (Dh1.1 billion) in 2007 to $200 million this year and "only a handful of carriers will be profitable".
The September traffic shrank despite a fall in oil prices as high fuel costs this year have made travel expensive.
International load factors tumbled by 4.4 percentage points from August to 74.8 per cent in September.
The steady 5 per cent international growth of North American carriers turned into a 0.9 contraction, while European carriers saw traffic drop from last year by half a per cent as the region's economies head for recession.
"The deterioration in traffic is alarmingly fast-paced and widespread. We have not seen such a decline in passenger traffic since SARS in 2003," Bisignani said. "Even the good news that the oil price has fallen to half its July peak is not enough to offset the impact of the drop in demand. At this rate, losses may be even deeper than our forecast $5.2 billion for this year," he added.
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