Passenger traffic growth set to slow, reports IATA
CARRIERS in the Middle East recorded an 18.1 per cent increase in passenger demand, so continuing a four year trend of double digit increases, according to figures released by the International Air Transport Association (IATA).
This was the highest among all regions, resulting from strong regional economies, the impact of oil wealth, expanded capacity and new routes.
Worldwide, international passenger traffic demand grew 7.4 per cent for 2007, up considerably from the 5.9 per cent increase recorded during 2006. December’s passenger traffic demand rose 6.7 per cent down from the 9.3 per cent jump recorded in November. This step down reflects the impact of rising prices and economic uncertainty that grew more acute in December.
Average international passenger load factors reached an industry record of 77.0 per cent in 2007, up from 76.0 per cent in 2006 and 75.1 per cent in 2005. This trend will likely end in 2008 as demand growth is forecast to slow to five per cent while capacity rises 5.2 per cent, says IATA.
Latin American airlines recorded an 8.4 per cent demand in growth resulting from the effects of restructuring in the region - a sharp recovery compared with the 2.4 per cent fall in 2006.
African carriers recorded an above average growth of eight per cent reflecting the strong economic growth and successful market liberalisation in parts of the continent.
Asia Pacific carriers had a 7.3 per cent growth which mirrored that of the global average, while Europe saw demand rise from 5.3 per cent in 2006 to 6.0 per cent in 2007, reflecting a steady economic growth and expansion on long haul routes to Asia and the Middle East.
North America recorded 5.5 per cent growth in 2007. This continues the growth of 5.7 per cent recorded in 2006 as region’s carriers transfer capacity to more lucrative international markets.
“Strong passenger traffic growth of 7.4 per cent was a key omponent of the industry’s $5.6 billion profit in 2007—the first black number since 2000,” said Giovanni Bisignani, IATA’s director general and CEO.
“But it wasn’t all good news. Freight slowed to 4.3 per cent, below the 4.6 per cent recorded in 2006. It was also below the 7.5 per cent at which global trade expanded, highlighting a competitiveness issue with shipping.”
“Despite the ambiguity of strong passenger growth accompanied by weaker freight demand, we can say clearly that 2007 was the best in recent memory. We can state equally clearly that there will be no encore performance in 2008. Oil prices are higher than ever. Economic uncertainty accompanying the US credit crunch is broadening. And the slower growth for passenger demand in December sets the trend for the coming months. In a tough business environment the mantra remains the same: efficiency everywhere is everything,” said Bisignani.