Middle East airlines posted an increase of 10.4 per cent in passenger demand in the first 11 months of last year, bucking the global trend during a year in which the industry worldwide is expected to lose US$11 billion (Dh40.4bn). Increased capacity and aggressive price cutting helped the region's airlines post a 16.5 per cent increase in passenger demand in November compared to the same month in 2008, data from the International Air Transport Association (IATA) showed.
Globally, airlines actually had an improvement in traffic in November, with an increase of 2.1 per cent. But for the first 11 months of last year, they recorded a traffic decline of 4.2 per cent. The IATA measures demand by revenue per passenger kilometre. The November trend had been exaggerated by the sharp fall in demand in the year-earlier period, it said. The Middle East's growth was "related to the strength of Asia and the ability of Middle East carriers to facilitate connection traffic to the region through Middle Eastern hubs", said the IATA, a global industry group which has about 230 members.
"Demand continues to improve, but we still have a lot of ground still to recover," said Giovanni Bisignani, the IATA's director general "We cannot anticipate any significant improvement in yields in the coming months. So, conserving cash, controlling costs and carefully matching capacity to demand remain at the keys to survival." Passenger demand internationally is 6.4 per cent higher than the low point reached in the first quarter of last year, but still 6 per cent below the peak levels seen in early 2008, the IATA said. The association's forecast of a collective loss of $11bn includes $500 million from the Middle East.
Analysts and travel agents have pointed out that the Middle East's gains have come after some of the sharpest falls in air fares. Also, the growth has been accompanied by an even sharper rise in capacity, which grew by 13.5 per cent in the first 11 months of the year. In the UAE, Abu Dhabi's Etihad Airways took delivery of 11 new aircraft this year and launched flights to eight new destinations, including Melbourne, Chicago and Cape Town, resulting in an 18 per cent increase in capacity. Emirates Airways received 10 new planes and started flying to to Luanda, Angola and Durban, South Africa. The expansion is set to continue for both airlines.
"We currently have 150 aircraft on firm order to be delivered up till 2020," said Tim Clark, the president of Emirates Airline. "Once delivered these aircraft will more than double our current fleet and capacity." According to the IATA, the Asia-Pacific experienced growth of 5.1 per cent in passenger demand in November; Latin America traffic was up 8.2 per cent; and European and North American carriers both experienced a 3.0 per cent fall in November traffic.
International freight demand was up 9.5 per cent in November, with Middle East carriers posting growth of 21.4 per cent. European carriers were the only group to post a drop in freight traffic, their 5.6 per cent fall reflecting "the lingering economic malaise in the region", the IATA said. @Email:rbundhun@thenational.ae