RIYADH: Middle East airlines posted a 9.7 percent year-on-year growth in passenger demand in May, boosted by an increase in Asia-bound travel, according to an industry body.
In its latest report, the International Air Transport Association announced that the total capacity of airlines in the region recorded a 9 percent year-on-year increase in May.
Moreover, the Middle East region carried 9.4 percent of the total number of passengers worldwide in May, a figure that remained unchanged from the previous month.
Middle Eastern countries, including Saudi Arabia, have strengthened their aviation sector over the past few years as they continue their path of economic diversification 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 Directorate of Civil Aviation revealed that the sector contributed $21 billion to the Kingdom’s gross domestic product in 2023.
The IATA report said the Asia-Middle East route was “second only to 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 their 2019 levels and set new year-to-date records for the whole of 2024, which is 32 percent above the corresponding value in 2019, thus showing strengthening demand for flights between the two region. Contributing factors to this disproportionate demand are geopolitical tensions and the war in Ukraine which would divert travelers via the Middle East to reach Asia as safer routes.
The Russia-Ukraine war was also cited as a potential impact on continued growth on the Europe-Middle East route, which has seen RPK increase from April to May for two consecutive years, reversing the previous historical pattern of declines between these months, the report said.
“In the coming months, it will become clearer to what extent these trends may be related to the Russia-Ukraine war,” IATA said.
Earlier this month, another report released by IATA found that Middle East airlines saw cargo demand grow 15.3 percent year-on-year in May, boosted by growing e-commerce and shipping issues.
The report also adds 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 noted that the Middle East region handled 13.5 percent of total cargo globally, a figure that remained 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 last year.
Similarly, total capacity, measured in available seat kilometers, also increased by 8.5 percent year-on-year in the fifth month of this year.
“Airlines have filled 83.4 percent of their seats, which is a record for a 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 Director General.
He added: “Airlines are doing everything they can to ensure smooth travel for all passengers during the peak northern summer period.”
The Asia-Pacific region leads the way in passenger demand
According to the report, airlines operating in the Asia-Pacific region led passenger demand globally, recording growth of 27 percent in May compared to the same month in 2023.
IATA stated that the total capacity of airlines in the APAC region increased by 26 percent compared to the previous year, while the load factor increased to 81.6 percent.
Moreover, Asia-Pacific airlines carried 31.7 percent of passengers worldwide in May, followed by Europe and North America with 27.1 and 24.2 percent, respectively.
Airlines from the Latin American region recorded a 15.9 percent increase in passenger demand in May compared to the same month of the previous year. Moreover, the total capacity of these carriers also increased by 9.7 percent.
Similarly, the load factor among airlines in Latin America reached 85.1 percent in May, the highest among all regions.
On the other hand, African airlines recorded a 14.1 percent increase in demand compared to the previous year, while the total capacity of these carriers increased by 8.2 percent in the same period.
The load factor among African airlines also rose to 72.3 percent in May, an annual increase 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 recorded passenger demand growth of 11.7 percent year-on-year in May.
In addition, the total capacity of these carriers in May increased by 11.3 percent compared to the same period last year, while their load factor increased by 0.03 percentage points to 84.7 percent.
However, passenger demand growth among North American carriers was 8.7 percent, the lowest among all regions.
Although North American airline capacity rose 7.7 percent year-on-year in May, load factor fell 1.2 percentage points to 84 percent over 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 increased by 3.8 percentage points to 84.5 percent.
IATA also noted that it is optimistic about future growth in passenger demand globally.
“Overall, the increase in travel bookings made in May and the first half of June for travel during the second half of June and the entire month of July suggests that air traffic and demand in the domestic and international segments are expected to 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 roadmap was unveiled in May that 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 revenue.
Speaking at the Future Aviation Forum in Riyadh in May, Abdulaziz Al-Duailey, chairman of the General Authority of Civil Aviation, said Saudi Arabia’s aviation sector is set to reach a record 112 million passengers in 2023, up from 88 million in 2022. marking a 27 percent increase over the previous year.
As part of a plan to further strengthen the sector, the Kingdom should see its newest airline – Riyadh Air, backed by the Public Investment Fund – in 2025, with the aim of flying to 100 countries by 2030.