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Tue 29 Mar 2011 08:38 PM

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Middle East carriers see demand growth fall in Feb

IATA report says political unrest in Bahrain, Yemen and Syria is likely to see further declines in March

Middle East carriers see demand growth fall in Feb
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Middle East airlines saw demand growth fall to 8.4 percent in February, down from 12 percent the previous month.

The International Air Transport Association (IATA) said on Tuesday that political unrest in Bahrain, Yemen and Syria was expected to have an impact on the region’s markets in March.

These three countries represent about six percent of Middle Eastern traffic and 0.3 percent of global capacity, IATA said in a statement.

IATA announced that scheduled international traffic for February showed increases of six percent and 2.3 percent respectively for passenger and cargo demand compared to February 2010.

February demand growth was down significantly from the revised 8.4 percent and 8.7 percent expansion recorded in January for passenger and cargo traffic respectively.

The political unrest in the Middle East and North Africa during February is estimated to have cut international traffic by about one percent, IATA added.

As such it is responsible almost entirely for the slippage in passenger demand growth, IATA said.

In addition to the political unrest in the MENA region, the more dramatic fall in cargo growth (from 8.7 percent in January to 2.3 percent in February was impacted in part by factory shutdowns due to the Chinese New Year period.

Giovanni Bisignani, IATA’s director general and CEO, said: “Another series of shocks is denting the industry’s recovery from the recession. As the unrest in Egypt and Tunisia spreads across the Middle East and North Africa, demand growth across the region is taking a step back.

"The tragic earthquake and its aftermath in Japan will most certainly see a further dampening of demand from March. The industry fundamentals are good. But extraordinary circumstances have made the first quarter of 2011 very difficult.”

Based on an average oil price of $96 per barrel, IATA is forecasting fuel to account for 29 percent of average operating costs with a total fuel bill of $166bn.

For every dollar increase in the price of a barrel of oil, the industry must recover an additional $1.6bn in added costs, IATA added.

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