Outlook for the Middle East aviation sector remains rosy for 2010 as air traffic demand is expected to post a double-digit growth of 15.2 per cent, but low returns on long-haul flights connecting to the region’s hubs will likely drag overall annual revenue by $400 million (Dh1.5 billion), the International Air Transport Association(Iata) reported on Thursday.
In its Industry Outlook report published on March 11, the association confirmed that it had slashed by 50 per cent its loss forecast for the global air travel sector, expressing further optimism that the industry has been off to a good start this year.
“We are cutting our loss forecast in half from the previously predicted $5.6bn to $2.8bn. It is still a loss so it is too early for a party. But now, we can clearly see from the numbers that the industry situation is improving,” says Giovanni Bisignani,
Iata’s Director General and CEO.
Iata’s latest prediction says that worldwide traffic growth will rise by 5.6 per cent for passengers and 12 per cent for cargoes in 2010. In an earlier forecast announced in December, the association estimated passenger demand growth for 2010 to be only 4.5 per cent while cargo demand will stand at 7 per cent.
Bisignani added that while they expect industry revenues this year to be worth $522bn, up by about $43bn from the global aviation earnings posted in 2009, it is still $42bn short of the profits recorded in 2008.
Aviation growth shifts to emerging markets
The report mentioned that Middle East carriers will likely continue to be at the forefront of the industry’s journey towards recovery as it is expected to record the highest growth rate. Forecast for Latin America and the Asia-Pacific airlines remain positive as well at 12.2 per cent and 12 per cent, respectively, owing to the strong performance of emerging economies in these regions.
“The recovery of business in Asia has been so strong that we actually have a shortage of capacity for freighter shipments from the region. Unfortunately, it is a one-way problem,” Bisignani said during a presentation in Geneva, Switzerland.
Iata noted that African airlines’ air traffic demand growth will still be substantial at 7.4 per cent despite facing tough competition from international carriers.
North American and European carriers are seen posting the lowest passenger traffic figures at 6.2 per cent and 4.2 per cent, respectively, according to the air transport association. This has been attributed to economic concerns that could influence travel trends of penny-pinching consumers, which would eventually stifle travel demand growth.
In December alone, traffic growth within Europe slid by nearly 10 per cent while North American traffic dwindled by over 13 per cent. Bisignani said the shift in the sector’s growth orientation “could be a structural change that the industry will have to adjust to.”
UAE’s February air traffic surge 12.7pct
Meanwhile, annual air traffic movements in the UAE have been soaring steadily with February posting an increase of 12.7 per cent to 47,800 as compared with the 42,400 traffic recorded in the same period in 2009, the country’s
General Civil Aviation Authority (GCAA) announced on Sunday.
Earlier statistics from the GCAA, however, revealed that month-on-month figures posted an 8.47-per-cent decline when compared to the 51,851 air traffic volumes registered in January.
Average daily traffic in the second month of this year was 1,707, which is 11.2 per cent more than in February 2009 (1,515) and almost 2 per cent more than in January 2010 (1,673).
The bulk of air travel activities in the Emirates remain to be focused in Dubai, the GCAA reported.
“Dubai [International Airport] ranked first with 21,847 air traffic movements, representing almost 45.7 per cent of [the] total UAE air traffic movements,” the report said.
Overflight traffic in the UAE, or the number of aircrafts flying past the country but using its airspace, had been noted at 10,263, accounting for 21.5 per cent of the total traffic movements in February.
Traffic in the Abu Dhabi International Airport reached 7,128 flights, followed by Sharjah International Airport (4,955), Fujairah International Airport (459), Al Ain Airport (161) and Ras Al Khaimah International Airport (86).
Consider also reading:
Middle East aviation dodges 2009 turbulence
Global air travel demand jumps 6pct in January: Iata
Budget carriers buck the penny-pinching trend
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