Middle East's Premium Air Traffic Jumps

July 18--Growth in the number of passengers traveling in premium seats on international markets accelerated in May.

Passengers travelling in premium seats in the Middle East recorded a double digit growth in May, far surpassing the growth rate in its category across the globe, International Air Transport Association, or Iata, said on Thursday.

Hussein Dabbas, vice president, Africa & Middle East, Iata, said May was another good month for premium-traffic growth in the region. "Compared to May last year, traffic from the Far East was up 11.6 per cent and from Europe it grew 12.4 per cent."

Dabbas pointed out that economies in the region, particularly the Gulf, are recording strong growth in non-oil producing sectors and close to record levels of business activity, which should mean continued strength in the coming months.

Growth in the number of passengers travelling in premium seats on international markets accelerated in May, rising 6.5 per cent compared to a year ago, significantly stronger than April growth of 3.8 per cent. Demand conditions appear to be picking up again, after signs of wavering during recent past months, Iata said in a statement.

The trade association representing and serving the airline industry world-wide observed that developments during the first quarter of 2014 were marked by a slowdown in improvements in the demand environment seen throughout the latter months of 2013.

"The weakness was primarily driven by emerging markets. But continued improvements in advanced economies helped to negate some of the slowdown in markets like China, sustaining continued growth in air travel demand," it said.

"Most recent data shows that downward pressure on demand drivers from emerging markets is easing. Manufacturing business activity in China is expanding once again, for the first time since December 2013. But indicators of trade for China, and hence the region overall, are mixed, with export order measures showing considerable volatility over recent months," it said.

The global body said the outlook for air travel is positive. "Global business activity (manufacturing and services) is now growing at the fastest rate for the past three years, suggesting a pick-up in global economic growth in second quarter.

But growth in manufacturing and export orders, specifically, has yet to recover to 2013 year-end rates, which raises some doubts whether strong acceleration in trade and business-related demand will occur in the near-term."

Growth in international trade is a good indicator of business travel. This is not only because of the obvious link to the manufacturing sector, but also because international trade is a good proxy for the drivers of business travel in other key sectors, such as finance and consulting, Iata said.

In May, the global passenger traffic grew 6.2 per cent compared to May 2013. While this represented a deceleration compared to April year-over-year traffic growth of 7.6 per cent, the performance is indicative of improving demand drivers. May capacity rose 5.2 per cent and load factor climbed 0.7 percentage points to 79.0 per cent.

Iata said all regions except Africa experienced positive traffic growth.

"We are seeing healthy demand for air traffic to support and help sustain the pick-up in global economic activity," said Tony Tyler, Iata's Director General and CEO.

Middle East carriers had the strongest year-over-year traffic growth in May at 13.2 per cent as airlines continue to benefit from the strength of regional economies, including non-oil production sectors, and solid growth in business-related premium travel. Capacity rose 6.9 per cent and load factor climbed 4.4 percentage points to 78.0 per cent.



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