Middle East leads global air travel demand

04 October 2015

Growth is nearly double the international average

  • Region’s passenger demand in August jumped 13.7 per cent compared with a year ago
  • Passenger load factor of regional carriers still lower compared with international average

Middle East carriers’ international passenger demand grew 13.7 per cent in August, compared with the same period in 2014.

This growth rate is nearly twice the international average of 7.1 per cent, according to a report by the Geneva-based International Air Transportation Association (IATA).

The growth in passenger demand arising from the Middle East negates the economic slowdown in the region’s oil and non-oil sectors, attributed mainly to lower government revenues due to prevailing low oil prices since the second half of 2014. The growth also resisted the projected slowdown in overall travel and tourism receipts, due to the devaluation in various international currencies, primarily the Chinese yuan.

IATA reported that capacity among the region’s carriers kept pace at 13.5 per cent, while passenger load factor – or capacity utilisation – eased up by 0.1 percentage points to 83.7 per cent.

In comparison, North American airline traffic in August rose merely 4.5 per cent, although their load factor climbed 0.6 percentage points to hit 87.2 per cent. The international average load factor is at 84.7 per cent.

The Gulf Big Three - Dubai’s Emirates, Qatar Airways and Abu Dhabi’s Etihad Airways - have been locked up in a months-long open skies dispute with the US Big Three – American, Delta and United, with the latter alleging the largest Gulf carriers have received unfair subsidies worth $42bn from their home governments over a period of 10 years, effectively violating the open skies agreement. Delta further attributed the reduction of its flights from Atlanta to Dubai from one a day to four or five a week to overcapacity on US routes to the Middle East.

The Gulf airlines have strongly denied the US Big Three’s allegations and have each presented their counter-arguments to the US Transport Department (DoT), which is now reviewing the case.

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