Cheaper airfares help airlines to 12-year high in passenger traffic
More travellers took to the skies in the first half of this year, with international passenger traffic rising to a 12-year high of 7.9 per cent compared to the previous year thanks to a “brighter economic picture and lower airfares”, the International Air Transport Association (Iata) said yesterday.
However, the Middle East and North Africa market is continuing to experience headwinds, posting 2.5 per cent traffic increase in June, the slowest growth out of all regions, compared to the global increase of 7.5 per cent.
Every region recorded an increase in traffic in June, but the winners were airlines in Africa, where passenger demand surged 9.9 per cent as the continent’s largest economy, Nigeria, has been experiencing a sharp rise in business confidence in recent months.
However, this increase may soon come to an end as the days of low prices comes to a close.
“But as costs rise, this stimulus of lower fares is likely to fade. And uncertainties such as Brexit need to be watched carefully,” said Alexandre de Juniac, Iata’s director general and chief executive.
Iata does not release details as to what factors it uses to determine pricing assumptions.
Can impressive first half for passenger and cargo demand be sustained?
There has been a slowdown in most markets month-onmonth, but the Mena region’s lag is the most visible.
Iata said the slowdown in Mena was due to a combination of several factors, including the ban on electronic devices that was lifted last month as well as a “wider negative stimulation from the travel ban that has now been implemented for certain countries”.
The aviation organisation said that passenger demand in the region had already begun to slow earlier this year, corresponding to the moderation of the pace of growth from the region’s largest carriers.
Saj Ahmad, a chief analyst for London-based Strategic Aero Research, said that the travel plus electronics ban had a massive impact.
“That’s how much pent-up demand there actually is to the US, both from the Mena region and those in transit,” he said.
But this is a glitch rather than a trend.
“I see a resurgence [in demand] in the second half, particularly from Emirates Airlines,” he said.
There was plenty of growth still to be had, but it would be based on how “particular players in the market are trying to have a leg-up to harness” the opportunities, he added.