RIYADH: Middle Eastern airlines reported a 9.7 percent year-on-year rise in demand for air travel in May, driven by increased travel to Asia, according to an industry body.
The latest report from the International Air Transport Association said total airline capacity in the region rose by 9 percent year-on-year in May.
Moreover, the Middle East region handled 9.4% of all global passengers in May, unchanged from the previous month.
Middle Eastern countries, including Saudi Arabia, have been strengthening their aviation sectors for several years, continuing the process 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, handle 4.5 million tonnes of cargo and create more than 250 direct routes from the Kingdom’s airports to locations around the world.
In May, a report by the Kingdom’s General Civil Aviation Authority revealed that the sector would contribute $21 billion to the Kingdom’s gross domestic product in 2023.
The IATA report notes that the Asia-Middle East route “ranks second after the Asia route in terms of passenger numbers per kilometre (RPK)”, highlighting the strong interest in travel between the two regions.
It added: “The route pair recovered from 2019 levels and set new records for the full year 2024, exceeding 2019 levels by 32 per cent, demonstrating growing demand for flights between the two regions. Factors contributing to this disproportionate demand include geopolitical tensions and the war in Ukraine, which would drive passengers through the Middle East to Asia as a safer route.”
The war between Russia and Ukraine was also cited as a potential impact on the further development of the Europe-Middle East route, with the number of passengers travelling on the RPK route increasing in April-May for two years in a row, reversing the previous historical trend of decline in those months, the report noted.
“It will become clearer in the coming months to what extent these trends may be related to the Russia-Ukraine war,” IATA said.
Earlier this month, IATA released another report showing that Middle Eastern airlines saw cargo demand rise by 15.3% year-on-year in May, driven by the growth of e-commerce and issues related to ocean freight.
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 also highlighted that the Middle East region handled 13.5% of total global freight transport, unchanged from the previous month.
Global Passenger Demand Outlook
According to the report, global passenger demand – measured in RPKs – increased by 10.7 percent in May compared with the same period last year.
Similarly, total capacity, measured in available kilometres per kilometre, increased by 8.5 per cent year-on-year in the fifth month of the year.
“Airlines filled 83.4% of their seats, a record for the month. With early peak season ticket sales for May up almost 6%, the upward trend shows no signs of abating,” IATA Director General Willie Walsh said.
He added: “Airlines are doing everything they can to ensure all travellers have a smooth journey during the peak summer period in the north.”
Asia Pacific region leads in passenger demand
According to the report, airlines operating in the Asia-Pacific region led the world in passenger demand, recording a 27 percent increase in May compared to the same month in 2023.
IATA reported that total airline capacity in the Asia-Pacific region increased by 26 percent year-on-year, with load factor rising to 81.6 percent.
Moreover, Asia-Pacific airlines served 31.7% of global passengers in May, followed by European and North American airlines with 27.1% and 24.2%, respectively.
Airlines in the Latin American region saw passenger demand increase by 15.9 percent in May compared to the same month last year. In addition, the total capacity of these carriers also increased by 9.7 percent.
Similarly, airline load factors in Latin America reached 85.1 percent in May, the highest among all regions.
On the other hand, African airlines saw demand grow by 14.1 per cent year-on-year, while their total capacity increased by 8.2 per cent during the same period.
The load factor on African flights rose to 72.3 percent in May, up 3.7 percentage points year-on-year.
This was the fastest increase in load factor of any region, although Africa still has the lowest load factor.
Similarly, European airlines saw passenger demand increase by 11.7 per cent year-on-year in May.
Additionally, the combined capacity of these carriers increased by 11.3% in May compared to the same period last year, and their load factor increased by 0.03 percentage points to 84.7%.
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% year-over-year in May, load factors fell 1.2 percentage points to 84% over the same period.
On the other hand, IATA revealed that global domestic traffic grew by 4.7% in May compared to the same month in 2023, while the load factor increased by 3.8 percentage points to 84.5%.
IATA also stressed that it is optimistic about the future growth of passenger demand worldwide.
“Overall, the increase in travel bookings made in May and the first half of June for travel in the second half of June and throughout July indicates that air traffic and demand in both domestic and international segments should continue to trend positively,” the industry body said.
Saudi Arabia’s Rise
Developing Saudi Arabia’s aviation sector is a key part of the Kingdom’s economic diversification plan, Vision 2030. A new roadmap was unveiled in May to revitalize 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-Duailei, chairman of the General Authority for Civil Aviation, said Saudi Arabia’s aviation passenger numbers would reach a record 112 million in 2023, up from 88 million in 2022, a 27 percent year-on-year increase.
As part of its plan to further develop the sector, the Kingdom plans for its newest airline – backed by Public Investment Fund Riyadh Air – to begin operations in 2025 and aims to offer flights to 100 countries by 2030.