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Sat 30 Jul 2011 09:39 AM

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MidEast carriers see 6.4% demand growth in June

International Air Transport Association predicts industry profit of $4bn in 2011, 78% down on 2010

MidEast carriers see 6.4% demand growth in June
Generic airplane, airport

Middle East airlines recorded a 6.4 percent increase in demand in June against a capacity increase of 8.4 percent, the International Air Transport Association (IATA) has said.

For the second consecutive month both demand and capacity increases by Middle East carriers fell behind those of Europe and Latin America, IATA said in a statement.

For freight, carriers in the Middle East, showed year-on-year growth for June, recording demand increases of 3.7 percent, it added.

IATA said it was now forecasting an industry profit of $4 billion for 2011 which is a 78 percent fall from the $18 billion that the airlines made in 2010.

On anticipated revenues of $598 billion, this translates to a net industry margin of 0.7 percent.

Globally, traffic results for June showed a slight softening in demand for both air travel and freight markets.

Compared to June 2010, passenger demand was up 4.4 percent while freight demand was three percent lower, IATA said.

It said the trend for passenger travel remained upwards, but at a slower pace than the post recession rebound which was at an annual rate close to 10 percent.

The slowdown reflected slower economic growth and increased costs resulting from higher jet fuel prices, and increased taxation (in some countries), IATA added.

“Compared to May both passenger and cargo markets contracted by about 1 percent. For passenger traffic, this is a speed-bump in a gradual post recession improvement. But air cargo continues in the doldrums at 6 percent below the post-recession peak,” said Tony Tyler, IATA’s director general and CEO.

“The industry is living in several different realities. With high load factors and an upward growth trend, the passenger business is doing better than cargo," said Tyler.

"But regional growth patterns are shifting. The Middle East carriers have moderated to a single digit expansion and tighter economic conditions have slowed China’s growth,” he added.

“What is clear is that the rising jet fuel price is putting pressure on the bottom line,” said Tyler.

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