Middle East airlines enjoy increased passenger demand
The industry is still on track to make $4.00 per passenger this year for a global net profit of $12.7 billion
Middle East carriers saw a year-on-year expansion of 12.1 per cent in passenger demand last month, fuelled by the growth in new routes to emerging markets in Africa and Asia, said an International Air Transport Association (Iata) release.
The demand growth was slightly below the 13.4 per cent capacity expansion resulting in a load factor of 78.4 per cent, according to Iata figures.
African airlines benefitted from strong domestic economic growth in key markets such as Ghana, Nigeria, Ethiopia and the Democratic Republic of Congo, to post growth of 11.2 per cent.
Although African airlines' load factors (70.7 per cent) still lag the global average by around ten percentage points, they have made consistent progress to close the gap this year, and in June, improved their load factor by almost three percentage points compared to June 2012.
"June was a positive month for passenger markets. The stability in the Eurozone, albeit tentative, is giving a boost to business and consumer confidence,” said Tony Tyler, Iata's director general and CEO.
“And the load factor at 81.7 per cent shows that airlines are efficiently meeting increasing demand for travel. But there are some headwinds. Growth in the BRICS economies, including China, is slowing. And oil prices remain high.
“The industry is still on track to make $4.00 per passenger this year for a global net profit of $12.7 billion. But there is little margin for error and even a small change in the second half of the year could shift the outlook significantly,” he added.
Globally, June passenger demand figures showed year-on-year growth of 6.0 per cent. The growth, measured in revenue passenger kilometers (RPK), is ahead of the 4.8 per cent demand growth reported over the first six months of 2013 compared to the same period in 2012.
It is also ahead of the 5.6 per cent expansion in capacity for June over the previous year. This pushed the passenger load factor to 81.7 per cent.
"The half-year report for passenger markets is broadly positive,” said Tyler. “There is plenty of evidence to support some cautious optimism. Airlines are expecting continued growth in demand, but there is little immediate hope for an improvement in yields.”
“In the short term, cost control remains high on every airline's agenda. And the longer-term challenge is to expand value streams to generate sustainable levels of profitability," he added.
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