RIYADH: Middle Eastern airlines saw a 9.7 percent annual growth in passenger demand in May fueled by an increase in Asia-related travel, according to an industry body.
In its latest report, the International Air Transport Association said that the total capacity of airlines in the region posted a growth of 9 percent year-on-year in May.
Moreover, the Middle East region handled 9.4 percent of the overall passengers globally in May, a figure that remained unchanged from the previous month.
Countries in the Middle East, including Saudi Arabia, have been strengthening their aviation sector over the past few years as they continue their economic diversification journey by reducing their decades-long dependence on oil.
Saudi Arabia’s national aviation strategy aims to triple the number of passengers compared to 2019, handling 4.5 million tons of cargo, and establishing more than 250 direct destinations from the Kingdom’s airports to global locations.
In May, a report released by the Kingdom’s General Authority of Civil Aviation revealed that the sector contributed $21 billion to the Kingdom’s gross domestic product in 2023.
The IATA report notes that the Asia – Middle East route “ranks second only to within Asia in terms of RPK (revenue passenger kilometers) levels” as it highlighted the strength of travel between the two regions.
It went on: “The route pair has regained 2019 levels and set new records to-date for the whole 2024, standing 32 percent above the corresponding value of 2019 thus demonstrating strengthening flight demand between the two regions. Contributing factors to this disproportionate demand are geopolitical tensions and war in Ukraine which would divert passengers through the Middle East to reach Asia as a safer route.”
The Russia-Ukraine war was also cited as a potential influence on the continued growth of the Europe-Middle East route, which saw an April-May RPK increase for two years in a row, reversing the previous historic pattern of a decline between these months, noted the report.
“In the coming months, it will become clearer to what extent these trends could be related to the Russia-Ukraine war,” said IATA.
Earlier this month, another report released by IATA revealed that Middle Eastern airlines witnessed a 15.3 percent year-on-year demand growth for cargo in May, driven by growing e-commerce and maritime issues.
The report also added that the total cargo 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 the overall cargo globally, a figure that remained unchanged from the previous month.
Global outlook of passenger demand
According to the report, global passenger demand – measured in RPK – rose by 10.7 percent in May compared to the same period of the previous year.
Similarly, total capacity, measured in available seat kilometers, also 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 growth trend shows no signs of abating,“ Willie Walsh, director-general of IATA.
He added: “Airlines are doing everything they can to ensure smooth journeys for all travelers over the peak northern summer period.”
Asia-Pacific region leads passenger demand
According to the report, airlines operating in the Asia-Pacific region led passenger demand globally, marking a 27 percent growth in May compared to the same month in 2023.
IATA noted that the total capacity of airlines in the APAC region rose by 26 percent year-on-year, while the load factor increased to 81.6 percent.
Moreover, Asia-Pacific airlines handled 31.7 percent of the passengers globally in May, followed by Europe and North America at 27.1 percent and 24.2 percent, respectively.
Airlines from the Latin American region witnessed a passenger demand growth of 15.9 percent in May compared to the same month of the previous year. Moreover, the total capacity of these carriers also rose by 9.7 percent.
Similarly, the load factor among airlines in Latin America hit 85.1 percent in May, the highest among all regions.
On the other hand, African airlines saw a 14.1 percent year-on-year increase in demand, while the total capacity of these carriers surged by 8.2 percent during the same period.
The load factor among African airlines also rose to 72.3 percent in May, representing an annual rise of 3.7 percentage points.
This was the fastest increase in load factor among all regions, although Africa still has the lowest load factor overall.
Similarly, European airlines witnessed a passenger demand growth of 11.7 percent year-on-year in May.
Additionally, the total capacity of these carriers rose by 11.3 percent in May compared to the year-ago period, while their load factor edged up by 0.03 percentage points to 84.7 percent.
However, the passenger demand growth among North American carriers stood at 8.7 percent, the lowest among all regions.
Even though the capacity of airlines in North America edged up by 7.7 percent year-on-year in May, the load factor declined by 1.2 percentage points to 84 percent during the same period.
On the other hand, IATA revealed that domestic traffic globally increased by 4.7 percent in May compared to the same month in 2023, while the load factor rose by 3.8 percentage points to 84.5 percent.
IATA also noted it is optimistic about the future growth of passenger demand globally.
“Overall, the increase in trip bookings made in May and the first half of June for travel during the second half of June and the whole of the month of July suggests that air traffic and demand in both domestic and international segments are expected to maintain a positive trend,” said the industry body.
Saudi growth
Boosting Saudi Arabia’s aviation sector is a key pillar of the Kingdom’s Vision 2030 economic diversification plan, and in May a new roadmap was unveiled which will seek to boost the business travel sector.
Saudi Arabia’s aviation sector contributed $21 billion to the Kingdom’s gross domestic product in 2023 while generating an additional $32.2 billion in tourism receipts.
Speaking at the Future Aviation Forum in Riyadh in May, Abdulaziz Al-Duailej, president of the General Authority of Civil Aviation, said Saudi Arabia’s aviation sector in 2023 saw its number of passengers reach a record 112 million, up from 88 million in 2022, marking a 27 percent year-on-year increase.
As part of the plan to boost the sector further, the Kingdom is set to see its newest airline – the Public Investment Fund-backed Riyadh Air – take to the skies in 2025, with an aim of flying to 100 countries by 2030.
