Mideast Airlines bolster capacity, says IATA report

Manama : While airlines around the world are cautiously adding capacity, Middle East airlines have chosen to ramp it up at a good pace, even faster than the speedy growth witnessed in passenger demand.

The latest monthly air passenger market numbers released by IATA says Middle East witnessed a growth in international passenger demand of 11.3 per cent in February compared to the same period last year. This is on the back of a healthy 10.6pc growth clocked in January, compared to 2015.

But, the capacity of Middle East airlines grow by 16.9pc in February compared to the earlier year and this caused the ratio of demand to capacity or load factor to fall by 3.7pc points to 73pc. Also, it must be noted that traffic growth of these airlines has been lagging capacity growth for the past six months, according to IATA data. 

The load factor of Middle Eastern airlines is below all other regions except Africa, and the latest dip in load factor is the deepest globally, thanks to big jump in capacity.

World over, IATA said, total revenue passenger kilometers (RPKs) rose 8.6pc, compared to the same month last year. Monthly capacity (available seat kilometers or ASKs) increased by 9.6pc, and load factor declined 0.7pc points to 77.8pc.

IATA said, “At 78.4pc, the passenger load factor across January and February was 0.3pc points higher than it was during the same period of 2015. However, February was the first month since the middle of last year in which annual capacity growth exceeded that of passenger traffic,” said IATA’s Director General and CEO Tony Tyler.

“In the first two months of 2016, demand for passenger connectivity is off to its strongest start in eight years. However, February was the first month since the middle of 2015, in which capacity growth exceeded demand, which caused the global load factor to decline,” he added. 

The reports says the biggest divergence was for Middle Eastern carriers, where capacity growth continues to outstrip even double-digit annual growth in traffic. 

“But capacity outstripped strong demand growth in North America too, which is perhaps notable given the region’s key role in driving the improvement in industry financial performance over recent years,” it said.

Total domestic air travel growth accelerated to 7.9pc year-on-year in February, from 6.9pc in January and the domestic China market was the only one to see annual growth slow in February. 

The domestic India market remains the fastest-expanding market, with growth edging up to 24.6pc year-on-year in February. 

Domestic passenger market conditions remain under more pressure in Brazil and Russia and the Brazil market was the only one to have registered negative annual growth in traffic in February, according to IATA.