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Thursday, February 6, 2014

Middle East Airlines Dominate Passenger Growth

Woodrow Bellamy III 

Airlines based in the Middle East dominated air passenger growth in 2013, a trend that will continue this year, according to a new report from the International Air Transportation Association (IATA).  
Middle Eastern carriers posted a combined increase of 12.1 percent more air passenger traffic in 2013 compared to the previous year. Latin American airlines posted the second highest passenger growth rate last year with an 8 percent increase, followed by African carriers, which saw a combined increase of 5.5 percent during the same period. 
IATA attributes the growth in the Middle East to the "continued strength of regional economies," particularly Saudi Arabia and the United Arab Emirates. That was compared to the rest of the global air transportation market, which the group describes as still recovering from the recession. 
"We saw healthy demand growth in 2013 despite the very difficult economic environment. There was a clear improvement trend over the course of the year, which bodes well for 2014. Last year’s demand performance demonstrates the essential and growing role that aviation-enabled connectivity plays in our world. And with system-wide load factors at 79.5 percent it is also clear that airlines are continuing to drive efficiencies to an ever-higher level," said Tony Tyler, director general and CEO of IATA. 
Airlines in the region are responding quickly to the increased passenger demand as well. Emirates, Etihad and Qatar Airways, the three biggest Middle Eastern carriers, announced orders for 393 new commercial aircraft at the Dubai Airshow. Etihad and Qatar Airways are the two launch customers for the industry's next two biggest commercial aircraft projects, with Etihad representing the Boeing 777X and Qatar Airways the Airbus A350 XWB. 
Both Boeing and Airbus are also taking notice of the region's growing aviation industry as well. Boeing is forecasting a $550 billion market for 2,610 new aircraft in the Middle East over the next 20 years, and the Chicago-based airframer recently signed a broad collaboration agreement with Saudi Arabian Airlines allowing both companies to pursue commercial and military aviation partnership opportunities within Saudi Arabia. 
Tyler believes that in order to support aviation growth, such as the growth of the commercial airline industry in the Middle East, government policies will have to feature lower air travel tax rates and better infrastructure investment. The 100th year of commercial aviation, 2014 will be crucial in terms of government regulation and how countries allow airlines to grow and invest in fleet modernization. 
"Forward-looking governments recognize the power of aviation to drive economic growth and spread prosperity," said Tyler, who has been critical of government regulation and taxation of commercial aviation in the United States in recent years. 
"These governments are laying the foundations for our next century and in doing so will reap enormous benefits. But not all governments are on the same page. This anniversary year is an opportunity to remind short-sighted governments that they risk being left behind if they cripple aviation with taxes, over-burden it with onerous regulation, or fail to provide the infrastructure that it needs to grow."


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