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MENAFN - Khaleej Times - 05/11/2012

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(MENAFN - Khaleej Times) Amid a continued slowdown in the rate of air traffic growth globally, Middle Eastern carriers recorded the strongest growth, with demand surging by 13.3 per cent year-on-year, the International Air Transport Association, or Iata, said on Sunday.

The region's growth was slower compared to the 17 per cent growth recorded in August, but the growth comparison for this month was inflated by seasonal impacts, with the holy month of Ramadan dampening traffic growth during August 2011, the Iata said.

September capacity rose 11.3 per cent and the load factor strengthened to 78.7 per cent.

Globally, demand for passenger traffic was 4.1 per cent above the level of September 2011. For air cargo, demand growth was even weaker at 0.6 per cent, it said in a statement.

The global body airline trade group said the growth trend in air travel started to flatten in the second quarter, with no growth in the passenger market between April and August.

The year-on-year comparisons are now also starting to show slower rates of growth.

In September, passenger travel increased 4.1 per cent on a year ago, down on the 5.3 per cent year-on-year growth rate in August and well below the six per cent average growth rate seen throughout the first half of the year. Capacity increased by 3.1 per cent over the year-ago period, and the load factor stood at 80 per cent, up 0.7 per cent points compared to September 2011.

"A 'two-speed' recovery is emerging into a 'multi-speed' reality, with carriers in China, Latin America and the Middle East are growing strongly. Europe's airlines are experiencing profitless growth in a strategy to manage high fixed costs and taxes. In Africa, the challenge is to turn growth opportunities into profits. But for North American airlines the focus is on tightly managing capacity in order to optimize profits in a slow to no-growth environment. Asia-Pacific carriers outside of China are a mixed bag. Robust growth in China is being tempered by faltering markets in Japan and India," Iata director-general and chief executive officer Tony Tyler said.

"Putting regional diversity aside, the fact that airlines are making any money at all with weak markets and high fuel prices is a tribute to their strong business performance, as evidenced by maintaining global load factors close to 80 per cent since the start of 2012. Even with that, airlines are expected to eke out a global net profit margin of only 0.6 per cent. It's a tough year," he added.

"Tough times deliver innovation. High oil prices have turned fuel management into a fine art of conserving every last drop. Consumer demand for convenience and simplified process supported the development of a whole new way to travel facilitated by e-tickets, bar-coded boarding passes and kiosk technology. And the recent approval of the foundation standard for a New Distribution Capability (NDC) means that travelers are set to benefit from a revolution in airline retailing," said Tyler.

Hussein Dabbas, Iata's regional vice-president for the Middle East and North Africa, said Middle Eastern carriers continue to outperform the wider market, with growth expanding one per cent between August and September. And freight also had a positive month, one of only two global regions to show any month-on-month growth. Although profits will be lower this year compared to 2011, these trends look good for stronger profitability in 2013."

European airlines experienced 5.4 per cent growth on international services compared to September 2011, posting the strongest performance among the major regions.

With capacity up 3.5 per cent, the load factor reached 83.9 per cent, up 1.5 per cent points on September 2011, and the second highest among the regions.

Asia-Pacific was one of the weakest regions, as demand rose just 1.7 per cent year-on-year.

North American airlines' international traffic climbed 2.1 per cent for the month, while capacity declined 0.2 per cent, with the load factor reaching 84.6 per cent, the highest for any region and a two per cent point rise over September 2011.

African airlines' traffic climbed 4.7 per cent year-on-year, on a three per cent rise in capacity.

The load factor was 71.6 per cent, the lowest of any region but a 1.2 per cent point rise over last year.


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