(MENAFN- Khaleej Times) Middle East carriers recorded the strongest year-on-year traffic growth in May at 11.7 per cent, far outstripping the global average traffic surge of 5.6 per cent, statistics released on Wednesday by International Air Transport Association (Iata) show.
On the back of solid expansion in trade volumes, the region's carriers boosted capacity by 12.8 per cent, but load factor declined 0.7 percentage point to 73.5 per cent, Iata said.
Middle Eastern and African airlines lead the various regions with growth of 11.7 per cent and 9.8 per cent, respectively as demand for air travel has benefitted from continued expansion in trade volumes in the two regions since late 2011, with regional airlines embarking on network and capacity expansion to take advantage of that growth, the global association of airlines said.
Globally, air travel continued to expand at a healthy rate, led by emerging markets. Compared to the year-ago period, overall demand rose 5.6 per cent, while capacity climbed 5.2 per cent pushing the load factor up 0.3 percentage points to 78.1 per cent.
"Global economic performance remains a concern; however, demand for air travel continues to expand. The primary driver is growing demand for connectivity to emerging markets. The business environment has also improved compared to mid-2012 with some indications of easing weakness in the eurozone. It's still a tough environment, but there are some reasons for optimism in the second half of the year," said Tony Tyler, Iata's Director General and CEO.
European carriers recorded 5.6 per cent growth on international services compared to May 2012. Asia-Pacific airlines' international traffic rose 3.7 per cent. North American airlines' international traffic climbed three per cent, the slowest rise among the regions but with capacity up just 1.7 per cent, load factor rose 1.1 percentage points to 83.4 per cent, the highest for any region.
Latin American carriers' saw demand rise 7.9 per cent while capacity climbed 8.9 per cent, depressing the load factor 0.7 percentage points to 77.4 per cent. Domestic demand rose 5.6 per cent with all markets recording growth. Growth was driven primarily by markets in Asia, particularly China.
Iata pointed out that demand for air travel continued to be strong despite less-than-robust economic indicators in some key markets, a further demonstration of the importance of air transport.
"The average profit per passenger is just enough to buy a sandwich in most parts of the world. Aviation will have to do much better than that in order to attract the $4-5 trillion in capital investment that will be needed over the next 20 years to meet the demands for aviation-enabled connectivity," said Tyler.
This year airlines are expected to carry more than three billion people for the first time, and is predicted to make $12.7 billion profits, Iata said in its revised forecast in June. On $711 billion in revenues, that is a 1.8 per cent net profit margin, or around $4 profit for every passenger. That compares with a forecast of $10.6 billion issued on March 20, and represents a 67 percent gain on last year's profit of $7.6 billion.
According to Iata's latest industry traffic forecast, airlines around the world expect to welcome some 3.6 billion passengers in 2016 - about 800 million more than the 2.8 billion passengers carried by airlines in 2011.
A recent Iata study supported by analysis from McKinsey & Company shows that in the 2004-2011 period airline investors would have earned $17 billion more annually by taking their capital and investing it in bonds and equities of similar risk. "We need to find ways to improve returns for investors. It will require fresh thinking across the aviation value chain and from governments as well," said Tyler.
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