Latest figures show traffic improving

Passenger traffic growth in the region improved on September's figures according to the International Air Transport Association (IATA).

Airlines recorded a growth of 3.5% in the Middle East. But this figure remains well below the double-digit growth rates experienced over the first half of the year.

Economic forecasts for the region see considerable slowing of GDP growth over the next 12 months to the 2-4% range and IATA warned that airlines operating in the Middle East can expect a continued slowing of growth. The industry body said Middle Eastern airlines will see losses double to US$200 million in 2009.

Middle Eastern cargo carriers reported a growth of just 1% in October. But forecasted declines in key air cargo sectors indicate that weakness is expected to continue.

IATA's director general and CEO, Giovanni Bisignani, said the economic downturn should be used as a lever for policy change in the aviation industry. "As the global economic downturn reshapes the world's financial industry, policy makers must also understand that change is needed in air transport.

Unlike the finance industry, airlines are not asking for handouts. Commercial freedom, efficiency and a fair treatment in taxes are needed," Bisignani said.

For 2009, IATA estimates an overall industry loss of $2.5 billion. All regions, except the US, are expected to report larger losses in 2009 than in 2008. In the report, Bisignani said the industry faces the worst revenue environment in 50 years.

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