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IATA downgrades aviation outlook for Middle East, Africa on slow recovery

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IATA downgrades aviation outlook for Middle East, Africa on slow recovery

Highlights

Middle East forecast to recover late 2024, Africa 2023

Middle East, Africa lagging behind global traffic recovery

International traffic in Middle East particularly hurt

Dubai — The International Air Transport Association has downgraded its aviation outlook for the Middle East and Africa, highlighting that the region is lagging behind global numbers and its slow recovery diminishes the chances of it returning soon to pre-COVID 19 levels, a bearish signal for jet fuel demand.

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The Middle East region will not recover before 2024, while Africa may be able to get back to pre-pandemic aviation levels by 2023, Muhammad Ali Albakri, IATA's regional vice president for Africa and the Middle East, said in a media briefing Oct. 21.

Government restrictions and quarantines are exacerbating an already weak aviation demand situation, he added.

"The Middle East is lagging behind a little bit about a year behind Africa because of the international traffic and the major hubs that are available in the Middle East," said Albakri.

The Middle East is home to international traffic hubs in Dubai and Abu Dhabi in the UAE, and Doha in Qatar, which rely mainly on transit passengers to fill up seats.

The downgrade of outlook will likely hit jet fuel demand in the Middle East, particularly the UAE, which accounted for around 30% of total regional jet fuel demand in 2019, according to S&P Global Platts Analytics data.

Lagging global recovery

Middle East airlines' flights in the week of Oct. 11 were 60% lower than at the beginning of the year, although this also represented an improvement from the 92% record drop in April. In Africa, flights in the week of Oct. 11 were 56% down from the start of the year, with the lowest point occurring in mid-April when they were down by 96%.

But both regions lag behind the global picture, where flights are down 47% compared with the beginning of the year. In September, IATA downgraded its global passenger traffic outlook to a drop of 66% for full-year 2020 compared with 2019 levels, against a previous estimate of a 63% decline.

In the Middle East, total passengers are set to drop to around 60 million this year from 203 million in 2019, IATA said.

This compares with an expected 45 million passengers in Africa in 2020 compared with 155 million in 2019.