RIYADH: Airlines in the Middle East saw a 9.7 percent annual growth in passenger demand in May, driven by an increase in travel in Asia, according to an industry body.
The International Air Transport Association said in its latest report that total airline capacity in the region saw a year-on-year growth of 9 percent in May.
In addition, the Middle East region handled 9.4 percent of the total number of passengers worldwide in May, a figure unchanged from the previous month.
Countries in the Middle East, including Saudi Arabia, have been strengthening their aviation sectors in recent years as they continue on a path of economic diversification by reducing their decades-old dependence on oil.
Saudi Arabia’s national aviation strategy aims to triple passenger numbers compared to 2019, handle 4.5 million tonnes of cargo and create more than 250 direct destinations from the kingdom’s airports to global destinations.
In May, a report released by the Royal Civil Aviation Authority revealed that the sector would contribute $21 billion to the kingdom’s gross domestic product in 2023.
The IATA report said the Asia-Middle East route “ranks second within Asia in terms of RPK (Revenue Passenger Kilometer) levels, as it highlighted the strength of travel between the two regions.
It continued: “The pair of routes regained 2019 levels and to date have set new records for the full year 2024, being 32 per cent above the corresponding 2019 figure, demonstrating growing demand for flights between the two regions. Factors contributing to this disproportionate demand are geopolitical tensions and the war in Ukraine, which would divert travelers via the Middle East to Asia as a safer route.
The Russia-Ukraine war was also cited as a potential impact on continued growth on the Europe-Middle East route, which has seen RPKs rise from April to May for two consecutive years, reversing the previous historical pattern of declines between the months. , the report noted.
“In the coming months, it will become clearer to what extent these trends could be related to the Russian-Ukrainian war,” IATA said.
Earlier this month, another report released by IATA revealed that Middle Eastern airlines saw a 15.3 percent year-on-year increase in cargo demand in May, driven by growing e-commerce and shipping issues.
The report also added that the total freight capacity of carriers in the region increased by 2.7 percent in May compared to the same month of the previous year.
IATA further pointed out that the Middle East region handled 13.5 percent of total cargo worldwide, a figure unchanged from the previous month.
Global passenger demand outlook
According to the report, global passenger demand – measured in RPK – increased by 10.7 percent in May compared to the same period a year earlier.
Similarly, the total capacity measured in available seat kilometers rose by 8.5 percent year-on-year in the fifth month of the year.
“Airlines filled 83.4 percent of their seats, a record for the month. With May ticket sales for early peak season travel up nearly 6 percent, the upward trend shows no signs of abating,” Willie Walsh, IATA CEO.
He added: “Airlines are doing everything they can to ensure smooth journeys for all passengers during the peak northern summer period.”
The Asia-Pacific region leads passenger demand
Airlines operating in the Asia-Pacific region led passenger demand globally, recording a 27 percent increase in May compared to the same month in 2023, according to the report.
IATA noted that total airline capacity in the APAC region grew by 26 percent year-on-year, with load factor rising to 81.6 percent.
Additionally, Asia-Pacific airlines handled 31.7 percent of passengers worldwide in May, followed by Europe and North America with 27.1 percent and 24.2 percent respectively.
Airlines from the Latin American region saw a 15.9 percent increase in passenger demand in May compared to the same month of the previous year. In addition, the total capacity of these carriers increased by 9.7 percent.
Likewise, airline load factor in Latin America reached 85.1 percent in May, the highest among all regions.
On the other hand, African airlines saw a year-on-year increase in demand of 14.1 percent, while the total capacity of these carriers increased by 8.2 percent over the same period.
Load capacity among African airlines also increased to 72.3 percent in May, a year-on-year increase of 3.7 percentage points.
This was the fastest increase in occupancy of any region, although Africa still has the lowest overall occupancy.
Similarly, European airlines also recorded an 11.7 percent year-on-year increase in passenger demand in May.
In addition, the total capacity of these carriers increased by 11.3 percent in May compared to the same period last year, while their load factor increased slightly by 0.03 percentage points to 84.7 percent.
However, passenger demand growth among North American carriers was 8.7 percent, the lowest of any region.
Although North American airline capacity rose 7.7 percent year-over-year in May, load factor fell 1.2 percentage points to 84 percent over the same period.
On the other hand, IATA revealed that worldwide domestic traffic grew by 4.7 percent in May compared to the same month in 2023, with load factor increasing by 3.8 percentage points to 84.5 percent.
IATA also noted that it is optimistic about future growth in passenger demand worldwide.
“Overall, the increase in tour bookings made in May and the first half of June for travel during the second half of June and the entire month of July indicates that air travel and demand in both the domestic and international segments will maintain a positive trend,” the industry body said.
Saudi growth
Strengthening Saudi Arabia’s aviation sector is a key pillar of the kingdom’s Vision 2030 economic diversification plan, and a new plan was unveiled in May that will seek to boost the business travel sector.
Saudi Arabia’s aviation industry will contribute $21 billion to the kingdom’s gross domestic product in 2023 and generate an additional $32.2 billion in tourism revenue.
Speaking at the Future Aviation Forum in Riyadh in May, Abdulaziz Al-Duailej, president of the General Authority of Civil Aviation, said the Saudi aviation sector will reach a record 112 million passengers in 2023, up from 88 million in 2022, a year-on-year increase. by 27 percent.
As part of a plan to further strengthen the sector, the kingdom is set to take to the skies in 2025 with its newest airline, Riyadh Air, backed by a public investment fund, with the aim of flying to 100 countries by 2030.