Middle East carriers witness 15.3% air cargo demand growth in May: IATA

Middle East carriers witness 15.3% air cargo demand growth in May: IATA
Demand for air cargo routes between the Middle East and Europe grew at an annual rate of 33.8 percent in May. Shutterstock
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Updated 02 July 2024
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Middle East carriers witness 15.3% air cargo demand growth in May: IATA

Middle East carriers witness 15.3% air cargo demand growth in May: IATA

RIYADH: Middle Eastern airlines witnessed a 15.3 percent year-on-year demand growth for cargo in May, driven by growing e-commerce and maritime issues, an analysis showed.

In its latest report, the International Air Transport Association said that airlines in the Middle East region handled 13.5 percent of the overall cargo globally, a figure that remained unchanged from the previous month. 

IATA also highlighted 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. 

Countries in the Middle East region, including Saudi Arabia, have strengthened their aviation sector over the past few years as they continue to reduce their dependence on oil and continue their economic diversification journey. 

Saudi Arabia’s national aviation strategy outlines an ambitious plan aimed at handling 4.5 tonnes of cargo by the end of this decade, along with establishing more than 250 direct destinations from the Kingdom’s airports to global locations. 

“Air cargo demand moved sharply upwards in May across all regions. The sector benefited from trade growth, booming e-commerce and capacity constraints on maritime shipping,” said Willie Walsh, director-general of IATA.

The report revealed that the demand for air cargo routes between the Middle East and Europe grew at an annual rate of 33.8 percent in May.

Freight demand between the region and Asia expanded by 18.6 percent year-on-year in May. 

Global outlook

According to the release, the total demand for air cargo globally, measured in cargo tonne-kilometers, surged by 14.7 percent in May, compared to the same month of the previous year, marking the sixth consecutive month of double-digit year-on-year growth. 

IATA revealed that African airlines saw 18.4 percent year-on-year demand growth for air cargo over the period – the strongest of all regions. 

Moreover, demand for air cargo routes between the African and Asian markets increased by 40.6 percent in May compared to the same month of the previous year, marking the most robust performance among all trade lanes. 

The report added that African airlines’ air cargo capacity also surged by 21.4 percent year-on-year in the fifth month of the year. 

Similarly, the Asia Pacific region witnessed a year-on-year growth in air cargo handling in May at 17.8 percent. 

The capacity of Asia Pacific carriers also grew by 8.4 percent in May, compared to the same month of the previous year. 

On the other hand, European carriers witnessed a 17.2 percent year-on-year demand growth for air cargo. 

The report revealed that intra-European air cargo rose by 25.6 percent compared to May 2023, the fifth month in a row of double-digit annual growth, while demand increased by 33.8 percent on the Europe – Middle East routes. 

Similarly, air cargo capacity of European airlines surged by 11.9 percent in May compared to the same month of the previous year. 

Latin American carriers saw a growth rate of 12.7 percent year-on-year in May, while the capacity of these carriers increased by 8 percent during the same period. 

On the other hand, North American carriers witnessed a growth rate of 8.7 percent in air cargo handling, the weakest among all regions. The airlines’ capacity in this region also rose marginally by 2.5 percent in May compared to the same month of the previous year. 

“For Asia-North America, the largest trade lane by volume, the question remains what will happen following the US crackdown on e-commerce deliveries out of China. Rising costs and increasing transit times of shipments valued less than $800 could dampen US consumers’ appetite for e-commerce, which could have an impact on the whole air cargo sector,” the report warned. 

IATA optimistic about future growth

In the analysis, the airline trade association noted that it is optimistic about the future growth of air cargo transportation, as most countries have recorded positive Purchasing Managers’ Index figures in recent months. 

According to Investopedia, PMI measures the prevailing direction of economic trends in manufacturing. It is calculated based on a monthly survey of supply chain managers across 19 industries, covering both upstream and downstream activity. 

IATA revealed that PMI for global manufacturing output and new export orders indicated expansion at 52.6 and 50.04, respectively. 

“The month of May delivered small improvements in global production and trade figures, which continued optimism for new export orders and manufacturing output among purchasing managers,” said IATA in the report. 

Similarly, industrial production and global cross-border trade also increased month-on-month in April by 0.5 percent and 1.5 percent, respectively. 

“The outlook remains largely positive, with purchasing managers showing expectations for future growth. Some dampening, however, could come as the US imposes stricter conditions on e-commerce deliveries from China,” said Walsh. 

He added: “Increased costs and transit times for shipments under $800 may deter US consumers and pose significant challenges for growth on the Asia-North America trade lane –  the world’s biggest.” 

The report further noted that inflation figures showed a mixed picture in April. 

In April, the inflation rate in Japan and the EU fell to 2.8 percent and 2.7 percent, respectively, while in the US, it rose to 3.3 percent. 

In contrast, China’s inflation rate remained at 0.3 percent, reflecting weak domestic demand due to high unemployment, slow income growth, and a crisis in the real estate sector, a trend that has persisted since 2023.


JS Investments launches Pakistan’s ‘first’ Shariah-compliant real estate investment trust

JS Investments launches Pakistan’s ‘first’ Shariah-compliant real estate investment trust
Updated 44 min 13 sec ago
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JS Investments launches Pakistan’s ‘first’ Shariah-compliant real estate investment trust

JS Investments launches Pakistan’s ‘first’ Shariah-compliant real estate investment trust
  • JS Investments partners with real estate developer Gohar Group of Companies to establish JS Hotel REIT in Hyderabad
  • REIT is a regulated investment vehicle that pools capital from investors to finance income-generating real estate

KARACHI: A Pakistani investment firm on Wednesday announced the launch of what it described as the country’s first Shariah-compliant real estate investment trust (REIT) focused on the hospitality sector.

A REIT is a regulated investment vehicle that pools capital from investors to finance income-generating real estate, offering returns through rent or capital gains. It provides exposure to the property market without direct ownership of assets.

JS Investments Limited, one of Pakistan’s oldest private-sector asset and REIT managers, has partnered with real estate developer Gohar Group of Companies to establish the JS Hotel REIT in Hyderabad district, located in the southeastern Sindh province.

“As the manager of Pakistan’s first hotel REIT, we are pleased to offer investors a professionally managed and regulated investment vehicle backed by international hospitality standards,” the statement quoted Iffat Zehra Mankani, CEO of JS Investments Limited, as saying.

The REIT will finance the development of a 139-room hotel in Hyderabad under a franchise agreement with an international hospitality brand. The fund is currently open to accredited local and foreign investors through private placement.

The statement added the Securities and Exchange Commission of Pakistan (SECP) had granted regulatory approval for the fund, which is not being offered to the general public at this stage.

Pakistan’s REIT market remains small, though regulatory reforms in recent years have aimed to draw institutional investment into real estate through both conventional and Islamic finance structures.

The project will also feature environmentally responsible construction, according to the statement.


Closing Bell: Saudi main index ends lower at 11,303 

Closing Bell: Saudi main index ends lower at 11,303 
Updated 21 May 2025
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Closing Bell: Saudi main index ends lower at 11,303 

Closing Bell: Saudi main index ends lower at 11,303 
  • MSCI Tadawul 30 Index lost 19.78 points to close at 1,441.01
  • Parallel market Nomu declined 110.94 points to end at 27,417.62

RIYADH: Saudi Arabia’s Tadawul All Share Index closed in the red on Wednesday, falling 134.5 points, or 1.18 percent, to settle at 11,303.68. 

The total trading turnover reached SR4.37 billion ($1.16 billion), with 37 stocks advancing and 206 declining. 

The MSCI Tadawul 30 Index also dropped, losing 19.78 points, or 1.35 percent, to close at 1,441.01. 

The Kingdom’s parallel market Nomu declined by 110.94 points, or 0.40 percent, to close at 27,417.62, with 26 stocks gaining and 49 retreating. 

The best-performing stock of the day was Saudi Arabia Refineries Co., rising 4.38 percent to SR69.10. 

Other top gainers included Perfect Presentation for Commercial Services Co., whose share price rose 3.37 percent to SR11.66, and SHL Finance Co., which gained 2.22 percent to SR20.30. 

The day’s largest decline was seen in National Gypsum Co., with its share price dipping 4.76 percent to SR20.4. 

ACWA Power Co. saw its shares drop 4.40 percent to SR274, while Al-Rajhi Co. for Cooperative Insurance declined 4.17 percent to SR115. 

On the announcements front, ACWA Power said it has received approval from the Capital Market Authority to proceed with a SR7.12 billion capital increase through a rights issue. 

The CMA’s decision, issued on May 20, allows the company to offer, register, and list rights issue shares — pending shareholder approval at an upcoming extraordinary general assembly. 

The rights issue was first disclosed on Dec. 19, when ACWA Power submitted its application to the CMA. 

Alinma Bank has successfully completed a $500 million issuance of dollar-denominated sustainable Additional Tier 1 capital certificates under its Tier 1 Capital Certificate Issuance Programme. 

The offering targets eligible investors in Saudi Arabia and internationally, with settlement expected on May 28. 

The issuance comprises 2,500 certificates, each with a par value of $200,000, offering an annual return of 6.5 percent. These perpetual instruments are callable after 5.5 years. 

The certificates will be listed on the International Securities Market of the London Stock Exchange and were offered exclusively under Regulation S of the US Securities Act of 1933. 

During Wednesday’s session, Alinma Bank shares rose 0.18 percent to close at SR27.50 on the main market. 

Flynas has set the final offer price for its initial public offering at SR80 per share following the successful completion of the institutional book-building process, which was oversubscribed by 99.8 times, according to a statement.

BSF Capital, Morgan Stanley Saudi Arabia, and Goldman Sachs Saudi Arabia, acting as joint financial advisors, co-underwriters, and joint bookrunners for the IPO, confirmed that institutional investors subscribed in full to the 51,255,568 ordinary shares allocated in the first phase, representing 100 percent of the total offered.

Following this, up to 20 percent of the total offering will be allocated to retail investors in the second phase of the IPO.

Saudi Fransi Capital, serving as lead manager, announced that all necessary arrangements have been completed with receiving agents to facilitate the individual subscription process, which will run for three days from May 28 until June 1 at 12:00 p.m.


Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout
Updated 21 May 2025
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Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout

Saudi Arabia’s PIF halts Swiss financial market investments over Credit Suisse fallout
  • Decision driven by how Swiss regulators handled 2023 government-backed rescue of Credit Suisse by UBS Group
  • PIF continues to expand footprint across Europe, signaling redirection of capital

RIYADH: Saudi Arabia’s Public Investment Fund will no longer allocate capital to Switzerland’s financial markets, two years after suffering losses from the collapse of Credit Suisse.

During the FII PRIORITY Europe Summit in Albania, PIF Gov. Yasir Al-Rumayyan said that the decision was driven by the manner in which Swiss regulators handled the 2023 government-backed rescue of Credit Suisse by UBS Group, reported Bloomberg.

The abrupt deal was executed without shareholders’ approval, impacting investors across the Middle East.

PIF, one of the world’s largest sovereign wealth funds, is reassessing its investment strategy amid growing concerns over regulatory stability and investor protection.

The fund’s decision to halt investments in Switzerland’s financial markets marks a significant shift in its approach, underscoring the long-term impact of the 2023 Credit Suisse collapse on regional and institutional investor confidence.

PIF also continues to expand its footprint across Europe, signaling a redirection of capital.

“We’re not going to invest in the financial markets in Switzerland. If you change something overnight and wipe out all of your investors, this is a big red flag,” Al-Rumayyan said, as reported by Bloomberg.

The remarks were made during an on-stage discussion with Noel Quinn, newly appointed chairman of Zurich-based Julius Baer Group Ltd.

Quinn responded: “As the chairman of a Swiss bank as of 10 days ago, that concerns me.”

The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price.

The plunge became worse after the former chairman of the Saudi National Bank, Ammar Al-Khudairy, said the bank would “absolutely not” be open to further investments in Credit Suisse.

“The deal didn’t receive approval from either Credit Suisse or UBS shareholders as regulators and lawmakers rushed to contain a crisis of confidence that was spreading across global markets,” according to Bloomberg.

The 2023 acquisition of Credit Suisse was finalized rapidly following a sharp decline in its stock price. Shutterstock

At the time, shareholders from the Middle East, including SNB and the Qatar Investment Authority, collectively held around 20 percent of Credit Suisse.

SNB, which was the largest shareholder in the Swiss lender, had called on Credit Suisse to reject the offer from UBS, Bloomberg reported.

Other investors had cautioned that the Swiss government’s decision to override standard merger procedures and sideline shareholder votes could deter institutional investors.

Legal analysts also warned that the rushed nature of the transaction had undermined Switzerland’s standing as a reliable investment destination where the rule of law is safeguarded.

Al-Rumayyan’s remarks came as PIF announced plans to open a subsidiary office in Paris and committed to doubling its investments in Europe to $170 billion by the beginning of the next decade.

The fund has already deployed approximately $85 billion across the region between 2017 and 2024, making strategic investments in key European economies, including the UK, France, and Italy.


Saudi Arabia and Kyrgyzstan announce establishment of a joint business council 

Saudi Arabia and Kyrgyzstan announce establishment of a joint business council 
Updated 21 May 2025
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Saudi Arabia and Kyrgyzstan announce establishment of a joint business council 

Saudi Arabia and Kyrgyzstan announce establishment of a joint business council 
  • Forum reviewed investment opportunities, advantages, and incentives in Saudi Arabia and Kyrgyzstan
  • Bilateral meetings were held between company representatives from both countries

BISHKEK: Saudi Arabia and Kyrgyzstan, represented by the Saudi Chambers Federation and the Kyrgyz Chamber of Commerce and Industry, announced the signing of an agreement to establish a Saudi-Kyrgyz Joint Business Council — a significant step to advance economic cooperation between the two countries. 

The signing ceremony took place on the sidelines of the Saudi-Kyrgyz Business Forum held on May 21 in Bishkek, the Kyrgyz capital, in the presence of Kyrgyz Minister of Economy and Commerce Bakyt Sydykov, Saudi Chambers Federation Chairman Hassan bin Muajab Al-Huwaizi, and several ministers and officials from both nations, the Saudi Press Agency reported. 

The forum was also attended by Saudi-Kyrgyz Business Council Chairman Ahmed Al-Dakhil, Saudi Arabia’s Ambassador to Kyrgyzstan Ibrahim bin Radi Al-Radi, Kyrgyzstan’s Ambassador to Saudi Arabia Ulukbek Maripov, along with more than 100 investors. 

The chairman of the Saudi Chambers Federation emphasized that the establishment of the joint business council is the result of sustained efforts and mutual desire, providing an effective platform for Saudi and Kyrgyz businessmen to showcase and promote their activities and build commercial partnerships, amid vast opportunities for cooperation between the two countries. 

The joint business forum reviewed investment opportunities, advantages, and incentives in Saudi Arabia and Kyrgyzstan across sectors including exports, healthcare, pharmaceuticals, banking, hydropower, agriculture, and technology. 

Bilateral meetings were also held between company representatives from both countries. 

Notably, the federation’s delegation visits to Kyrgyzstan included a series of meetings with government and private sector officials to discuss prospects for economic cooperation and explore investment opportunities. 


Saudi crude output hits 8.96m bpd in March: JODI data

Saudi crude output hits 8.96m bpd in March: JODI data
Updated 21 May 2025
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Saudi crude output hits 8.96m bpd in March: JODI data

Saudi crude output hits 8.96m bpd in March: JODI data
  • Crude exports fell by 12.11% month on month to 5.75 million bpd
  • Kingdom’s slight increase in crude production came amid a broader strategic pivot within OPEC+

RIYADH: Saudi Arabia’s crude oil production rose to 8.96 million barrels per day in March, reflecting a 0.11 percent monthly increase, according to the latest Joint Organizations Data Initiative data.

According to the database, crude exports fell by 12.11 percent month on month to 5.75 million bpd.

Refinery crude exports rose 10.3 percent during this period to 1.55 million bpd. The uptick was driven primarily by diesel shipments, which jumped 20.66 percent from the previous month to 806,000 bpd.

It also accounted for the largest share of refined product exports in March at 52 percent, followed by motor and aviation gasoline at 17 percent, and fuel oil at 12 percent.

Total refinery output reached 2.94 million bpd in March, a 12.32 percent monthly increase, with diesel comprising 42 percent of refined products, motor and aviation gasoline 24 percent, and fuel oil 15 percent.

Domestic demand for refined petroleum products increased by 223,000 bpd in March compared to the previous month, reaching 2.22 million bpd.

On an annual basis, demand rose by 5.07 percent, equivalent to 107,000 bpd.

The Kingdom’s slight increase in crude production across the month came amid a broader strategic pivot within OPEC+, which has agreed to significantly boost oil output starting in June. The alliance announced an additional 411,000 bpd increase for June, following a similar adjustment made for May.

This marks a continuation of the group’s recent efforts to accelerate the return of previously curtailed supply to the global market. The upcoming increase is expected to add further downward pressure on prices, which have already been trending lower due to ample inventories, modest international demand growth, and increasing non-OPEC output.

Total refinery output reached 2.94 million bpd in March, a 12.32 percent monthly increase. Shutterstock

Direct crude usage

Saudi Arabia’s direct crude oil burn rose to 383,000 bpd in March, reflecting a 35.3 percent increase from the previous month.

Direct crude burn refers to the use of unrefined crude oil for electricity generation, rather than for export or refining.

The increase came amid the seasonal ramp-up in cooling needs as temperatures begin to rise heading into the warmer months.

Although the Kingdom has made substantial progress in expanding its natural gas infrastructure to reduce reliance on direct crude burn, fluctuations still occur, particularly in transitional months like March, when energy demand begins to shift but supply systems have not fully ramped up.