Buoyed by the growth of intra-regional traffic, the Arab world's carriers overcame the Iraq war and SARS to post unexpectedly solid passenger figures.
As airline presidents gathered in Oman for the annual meeting of the Arab Air Carrier Organisation (AACO), their mood was surprisingly upbeat despite the fallout from the Iraq war. The meeting itself, originally due to take place in the spring, had been postponed for over six months due to the war, finally taking place in early October.
AACO reports that its members, which cover the Gulf, Middle East and North Africa, actually posted passenger growth of 1.9% over the first half of 2003. And now, anticipating growth in Arab tourist traffic within the region, AACO tentatively expects that the year will end with its members showing annual passenger growth of around 5%, only slightly down from the 6.5% they recorded in 2002.
Abdul Wahab Teffaha, AACO secretary general, says the rise in leisure traffic within the Arab world has its roots in the region's troubles. Arab nationals have found it difficult to travel elsewhere in the world, both for reasons related to visa acquisition and anti-Arab sentiment. Such factors have especially affected travel to the USA. These barriers, coupled with the Asia-Pacific SARS outbreak early in the year, helped boost the attractions of travelling closer to home. As a result, Teffaha says, routes such as Beirut to Tunis boomed on an unprecedented level.
Over the 12 months to June 2003, AACO estimates that the intra-Arab market stood at 17 million passengers, up by 9%. That contrasts with a 7% decline on the North American market, with some 2.2 million passengers. That was affected by continuing economic doldrums in the US economy as well as the country's skittishness toward all things Arab.
Over the first half of this year, the effect of the war in Iraq inevitably took its toll, during both the protracted build-up to the conflict and the actual period of hostilities. The year had started encouragingly, with traffic for the first two months up 9% compared with 2002 but predictably fell apart as the military action began. In March and April, AACO points to a 20% decline in passengers, with traffic between the Arab world and outside regions falling fastest - reaching a 30% drop at its worst in March.
Important sixth freedom traffic to South-East Asia was also harmed severely by the SARS outbreak, as May and June volumes fell by 16% and 25%, respectively. Teffaha speaks of the year's events as having been frustrating enough to 'try the patience of Job'.
AACO reckons that the overall result was a traffic decline of 5.4% for the first half of 2003. Intra-Arab traffic came under pressure, with the European market, which it estimates at 15 million passengers a year, also suffering.
Gulf Air chief executive James Hogan, for example, reports that the crises cost his carrier $27 million in revenue. However, supporting regional optimism, he also notes, that, despite the market conditions, Gulf Air still managed to beat its financial targets and increase passenger numbers, one of several AACO carriers to do so.
Teffaha is quick to point out that the traffic gains being recorded by AACO members are being achieved through more disciplined planning practices than in the past. He notes that carriers have 'timed their capacity additions carefully, not haphazardly'. This is borne out by the collective load factor figures. Whereas five years ago, the Arab carriers posted load factors of 65%, they now stand at 70.4%, only a point below the IATA average.
RICHARD PINKHAM MUSCAT, OMAN
Source: Airline Business
