Director General of the International Air Transport Association (IATA) Willie Walsh.
Doha: The Middle East aviation market is recovering from the unprecedented impact of the COVID-19 crisis at a fast rate, and is even ahead of other aviation markets globally, according to Director General of the International Air Transport Association (IATA) Willie Walsh.
Speaking to The Peninsula on the sidelines of the 8th IATA World Financial Symposium which opened in Doha yesterday, Walsh said the global aviation industry may expect a full recovery by next year.
“The Middle East market is ahead of the rest. Some markets in the Middle East and North Americas, they are 10 percent larger now than they were in 2019. So the Middle East market is recovering at a fast rate, and I think that reflects the ambition here. The one area that is restricting the recovery in the Middle East is Asia, because of ongoing restrictions there. But the industry is returning to a more stable position than it had been,” Walsh added.
According to IATA’s Air Passenger Market Analysis, for airlines in the Middle East, traffic was up by 193.1 percent year-on-year (Y-o-Y) in July and international revenue passenger kilometres (RPKs) are now 22.3 percent below the July 2019 level.
Amid global inflation, the airline industry recently faced several flight cancellations, staff shortages, and strikes from workers demanding better compensation. Airlines, which have accumulated huge debt and the aviation industry just emerging from the COVID-19 pandemic, need to find the right balance between financial sustainability and advancing workers’ rights.
Asked on how to find this balance, Walsh said: “Airlines and employees are always in a dialogue, how best to do this, some of these are short terms because of increased inflation. And I think we’ve got to balance it by ensuring that the right decisions are taken in the long term. We can all do things to deal with short term crisis, but it could lead us in a difficult position in the long term. And I think there is a reasonable balance between what needs to be done to reflect the challenges that we’re seeing in the short term, but making sure we’re not putting things at risk in the long term”.
Earlier during a press conference, Walsh noted that China, which had been implementing several lockdowns, was a very important market and will have an impact on the global economic outlook for 2023.
He also reiterated that deregulation of the aviation industry has benefited consumers, and added that the idea of introducing regulation in pricing would be anti-competitive. “Consumers have benefitted significantly from competition in the industry after it was deregulated. Competition has played a greater network availability to consumers. Back when pricing was regulated in the industry, aviation was very limited. Consumers benefitted from deregulation. So the idea that you would introduce regulation in pricing would be anti-competitive,” he said.
IATA has previously said that aviation industry losses are expected to reduce to $9.7bn this year from nearly $180bn in red ink in 2020-2021. As travel barriers fall in most regions, very strong demand is supporting for a recovery to pre-COVID traffic levels by 2024, with profitability a possibility in 2023. It added that strong pent-up demand, the lifting of travel restrictions in most markets, low unemployment in most countries, and expanded personal savings are fueling a resurgence in demand that will see passenger numbers reach 83 percent of pre-pandemic levels this year.
