Business
Middle East airlines see 30.8% y-o-y traffic increase in May: IATA
July 06, 2023 | 10:35 PM
Strong air travel growth continues in May as load factor rises to 2019 levels, IATA said an noted Middle Eastern airlines saw a 30.8% traffic increase compared to the same period last year.For Middle Eastern airlines, capacity climbed 25% and the load factor pushed up 3.6 percentage points to 80.2%. The region is leading the recovery with May traffic at 17.2% above 2019 levels.Total traffic in May 2023 (measured in revenue passenger kilometres or RPKs) rose 39.1% compared to May 2022. Globally, traffic is now at 96.1% of May 2019 (pre-pandemic) levels.Domestic traffic for May rose 36.4% compared to the year-ago period. Total domestic traffic in May was 5.3% above the May 2019 level. This is the second month in a row domestic traffic has exceeded pre-pandemic levels.International traffic climbed 40.9% versus May 2022 with all markets recording strong growth, led once again by carriers in the Asia-Pacific region. International RPKs reached 90.8% of May 2019 levels, with Middle East and North American airlines exceeding pre-pandemic levels.The total industry load factor rose to 81.8%, led by North American carriers at 86.3%."We saw more good news in May. Planes were full, with the average load factors reaching 81.8%. Domestic markets reported growth on pre-pandemic levels. And, heading into the busy Northern summer travel season, international demand reached 90.8% of pre-pandemic levels,” noted Willie Walsh, IATA’s director general."People need and love to fly. The strong demand for travel is one element supporting a return to profitability by airlines. In 2023 we expect airlines globally to post a $9.8bn net profit. It’s an impressive number, particularly after huge pandemic losses."But a 1.2% average net profit margin is just $2.25 per departing passenger. As a return, that is not sustainable in the long-term.Moreover, it appears that, while the pandemic has changed many things in aviation, it has not righted aviation’s famously unbalanced value chain. The latest indication came last week as European airports announced a $7bn collective profit in 2022.In comparison, IATA estimates that European airlines made a $4.1bn profit for the same year."We don’t begrudge any business hard-earned profits. But this does raise an interesting question. Is airport economic regulation effectively defending the public interest when a monopoly supplier (airports) can generate seemingly much healthier returns than the competitive businesses (airlines) they supply? Governments should at least take a look,” Walsh said.
July 06, 2023 | 10:35 PM