Middle East airlines record traffic growth despite regional unrest

04 October 2011

Regional air travel market has been unaffected by the wave of uprisings

Middle Eastern carriers have recorded the second highest growth in passenger demand in August with a rise of 6.7 per cent.

It has been a similar story throughout the year with airlines in the Middle East region consistently recording monthly increases in passenger traffic. Despite potential demand shocks associated with the political instability in the region, Middle East airlines witnessed an overall growth in passenger traffic of 8.3 per cent in the first seven months of the year.

In every month of 2011, regional airlines have recorded year-on-year growth in actual passenger traffic.

There were some signs of the civil unrest hitting Middle East passenger numbers, with revenue passenger kilometres (RPK), a key metric used by the industry to distinguish between short-haul and long-haul passengers, growing by the smallest amount of the year in March, when the protests peaked. RPK is essentially the number of passengers times the distance flown. In March, the growth in RPK was just 4 per cent.

Traffic fell month-on-month in both February and March. Egypt and Tunisia experienced a 10-25 per cent decline in March. Military action in Libya virtually stopped civil aviation to, from and within the country in March.

However, traffic has been consistently good overall because activities in key hubs such as Qatar and the UAE have balanced out less stable countries.

“The unrest in the Middle East has not affected the key markets, such as the UAE. Egypt, a large market that has been affected, appears in the African region,” says a spokesman for the Montreal-based International Air Transport Association (Iata).

Other markets that have been affected in the region are small and therefore have not made a great impact on the regional industry as a whole.

“Syria and Yemen amount to only around six per cent of the Middle East air market. Weakness in those two states has been more than offset by the strength of the UAE in particular,” the spokesman says.

Unlike many other regions around the world, freight carriers in the Middle East also showed growth in August, at 3.7 per cent showing the robustness of the industry.

Middle East carriers are also expected to make a profit of $800m in 2011, a leap from the $100m expected in June, according to Iata forecasts.

“Our profit forecast increased for almost all the regions, including the Middle East. The reasons for this were mainly to do with a stronger second quarter than anticipated, with traffic, load factor and yields holding up,” says the spokesman. “Middle East airlines have also been improving their yields by matching capacity and demand and controlling costs. The headwinds into next year look very challenging however.”

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