Middle East carriers enjoyed traffic growth at 11.2 per cent year-over-year, even though this was lower than the 12.4 per cent increase in capacity. The global traffic results of International Air Transport Association (IATA) for July also indicated slower global growth in both air travel and freight.
Air freight demand dropped by 3.2 per cent compared to July 2011 but remained the same in June. Demand for Middle East carriers marked an increase of 16 per cent year-on-year but all other markets contracted and the small recovery seen since the end of 2011 has stopped.
IATA’s director general and CEO, Tony Tyler, said that the uncertain economic outlook is influencing negatively demand for air transport.
July passenger demand as a whole was 3.4 per cent higher than the same month last year, compared to a rise of 6.3 per cent in June and average increase of 6.5 per cent over the first half of the year. This stagnation in travel growth is caused mainly by the decreasing business confidence in many economies.
July freight demand was 3.2 per cent lower than it was in the same month last year. This slowdown was mainly due to a comparison with a relatively strong July last year, but as a whole the trend in air freight is weak.
Tony Tyler commented that the cargo business is 3.2 per cent smaller than it was a year ago. Passenger markets, with the exception of Africa, China-domestic and the Middle East, also marked a decline in demand from June to July. Passenger demand as a whole is still 3.4 per cent higher than it was the previous July. Anyway, the growth trend is slowing. The rising fuel prices will add to this and will make the second half of the year very difficult.
The reaction of the airlines was to reduce the capacity added to markets. This move has stabilised load factors at relatively high levels and provided some support for profitability in the face of high fuel prices. In July passenger capacity increased by 3.6 per cent which kept the relatively high levels of the load factor.
July international passenger demand rose by 3.5 per cent compared to the same period last year. Load factors remained at 83.3 per cent. The stagnation is obvious when compared to the previous month (June) when the year-on-year rate was 7.5 per cent. The average growth during the first half of the year was also 7.5 per cent. The stagnation in international air travel growth has been concentrated in the past few months, which is caused by the decline of business confidence. The slowdown in some key domestic air travel markets has been obvious for a longer period. Only African and Middle Eastern airlines reported month-to-month growth. Airlines in all other regions showed declines for international demand for July compared to June.
The traffic of African carriers hiked 5.2 per cent year-on-year, which is lower than the 6.3 per cent rise in capacity. Load factor was 73.1 per cent, which is by far the lowest of any region. The carriers of the continent have marked strong average growth of 10.8 per cent during the first half of the year.
