MidEast carriers strongest performers in September
By Ruchi Shroff
Middle East carriers experienced by far the strongest traffic growth, with demand up 13.3% year-on-year in September, according to the International Air Transport Association (IATA). This was down compared to the 17% growth recorded in August. However, the growth comparison for August was inflated by seasonal impacts with Ramadan decreasing traffic growth during August 2011.
September capacity rose 11.3% and the load factor strengthened to 78.7% in the region. Middle Eastern carriers had a 16.3% rise in cargo traffic on a 6.9% rise in capacity, pushing up the load factor 3.8% points to 46.1%.
Globally in September, passenger travel increased 4.1% on a year ago, down on the 5.3% year-on-year growth rate in August and well below the 6% average growth rate seen throughout the first half of the year. Capacity increased by 3.1% over the year-ago period, and the load factor stood at 80%, up 0.7% points compared to September 2011.
The growth trend in air travel started to flatten in the second quarter, with no growth in the passenger market between April and August. The year-on-year comparisons are now also starting to show slower rates of growth.
The minor 0.6% year-on-year growth posted for air cargo is less significant than the 0.6% fall in air freight volumes between August and September which is more indicative of the trend. This is the second notable month-on-month fall in air freight growth in as many months. Capacity was trimmed 0.6% compared to year-ago levels. This strengthened the freight load factor slightly to 45.6% from 45.1% a year ago.
Tony Tyler, IATA’s director general and CEO, said:“A ‘two-speed’ recovery is emerging into a ‘multi-speed’ reality. Carriers in China, Latin America and the Middle East are growing strongly. Europe’s airlines are experiencing profitless growth in a strategy to manage high fixed costs and taxes. In Africa the challenge is to turn growth opportunities into profits. But for North American airlines the focus is on tightly managing capacity in order to optimize profits in a slow to no-growth environment. Asia-Pacific carriers outside of China are a mixed bag. Robust growth in China is being tempered by faltering markets in Japan and India. Putting regional diversity aside, the fact that airlines are making any money at all with weak markets and high fuel prices is a tribute to their strong business performance, as evidenced by maintaining global load factors close to 80% since the start of 2012. Even with that, airlines are expected to eke out a global net profit margin of only 0.6%. It’s a tough year.”