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Middle Eastern carriers see a 10.8% traffic rise in April

Posted 2 June 2017 · Add Comment

The International Air Transport Association (IATA) has announced global passenger traffic data for April 2017 showing that demand rose by 10.7% compared to April 2016, which was the fastest pace in six years, with Middle Eastern carriers seeing a 10.8% traffic increase.

The strong performance is supported by a pick-up in global economic activity and lower airfares. After adjusting for inflation, the price of air travel in the first quarter was around 10% lower than in the year-ago period. IATA estimated that falling airfares accounted for around half the demand growth in April. However, the cabin ban on the carriage of large portable electronic devices (PEDs) from 10 Middle Eastern and African airports to the US appears to have weighed down Middle East-North America passenger traffic.

"April showed us that demand for air travel remains at very strong levels. Nevertheless there are indications that passengers are avoiding routes where the large PED ban is in place. As the US Department of Homeland Security considers expanding the ban, the need to find alternative measures to keep flying secure is critical. If the ban were extended to Europe-to-US flights, for example, we estimate a $1.4 billion hit on productivity. And an IATA-commissioned survey of business travelers indicated that 15% would seek to reduce their travel in the face of a ban," said Alexandre de Juniac, IATA’s Director General and CEO.

Middle Eastern carriers posted a 10.8% traffic rise in April. Capacity rose 8.9% and load factor climbed 1.3 percentage points to 76.5%. However, in contrast to all the other regions, the April growth rate for Middle East airlines was slower than the five-year average growth pace. Moreover, in seasonally-adjusted terms, the region’s international traffic has tracked sideways since January. 

International Passenger Markets  

April international passenger demand rose 12.5% compared to April 2016, with all regions recording double-digit year-over-year traffic increases for the first time in 12 years. Total capacity climbed 7.7%, and load factor climbed 3.5 percentage points to 81.5%. 

Impact of the large PED ban : The route-level data from March (the most recent month available) show that RPKs flown by Middle East airlines to the US fell in year-on-year terms by 2.8% for the month. This was the first annual decline recorded for this market in at least seven years. While traffic growth on the market segment already was slowing, the decline is consistent with some disruption from the PED ban that was announced 21 March, as well as a wider impact on inbound travel to the US from the Trump Administration’s proposed travel bans.

European carriers saw demand rise 14.4% in April, supported by growing momentum in the region’s economy. Comparisons with the year-ago period are distorted partly by the disruption following the series of terrorist attacks last year. That said, the April 2017 results represented the fastest year-over-year growth pace since April 2011, when comparisons were heavily impacted by the Icelandic ash cloud event in 2010 that led to the grounding of thousands of flights in Europe. Excluding this one-off event, April’s growth rate was the fastest in nearly 13 years. Capacity climbed 7.9% and load factor soared 4.9 percentage points to 85.4%, which was the highest among the regions.

Asia-Pacific airlines’ April traffic increased 10.9% compared to the year-ago period, a 14-month high. Traffic on Asia-Europe routes continues to recover from the terrorism-related slowdowns last year. Capacity rose 7.6% and load factor jumped 2.4 percentage points to 80.3%.

North American airlines posted a 10.3% demand increase compared to April a year ago. This appears to reflect a combination of the comparatively robust economic backdrop and the strength of the US dollar supporting outbound passenger demand. Capacity climbed 5.8%, and load factor jumped 3.3 percentage points to 81.8%. 

Latin American airlines experienced a 16.1% rise in April demand compared to the same month last year, which was the fastest rate for the region’s carriers since December 2011. Demand conditions within South America are robust, although traffic on the larger North-South America route has trended downwards in seasonally-adjusted terms since mid-2015. Capacity rose 8.4% and load factor surged 5.5 percentage points to 82.7%. 

African airlines’ led all regions in growth with a 17.2% traffic increase in April, the fastest pace in more than five years. This follows a recovery in demand on the key market to Europe. Conditions in the continent’s two largest economies are diverging, however, with business confidence rising in Nigeria, while political uncertainty remains heightened in South Africa. Capacity rose just 6.1%, with the result that load factor soared 6.9 percentage points to 72.5%.

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