Middle East carriers to post 2010 profit: IATA
Middle East airlines will post a US $100 million profit in 2010 - their first since 2005 - IATA has predicted.This compares to the $400 million loss originally predicted for the year and the $600 million the region’s carriers lost in 2009. “GDP growth of 4.3% is outstripping the global average and Gulf carriers continue to gain market share through their hubs for Europe to Asia-Pacific traffic even as capacity is being added at a more cautious rate,” said an IATA statement.The positive outlook comes as IATA expects a global airline industry profit of $2.5 billion in 2010 - a major improvement on the $2.8 billion loss forecast in March.Industry revenues are forecast to be $545 billion in 2010, up from $483 billion in 2009, but still below the $564 billion achieved in 2008.”The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated,” said IATA Director General and CEO Giovanni Bisignani (pictured).”Airlines are benefiting from a strong traffic rebound that is pushing the industry into the black. We thought that it would take at least three years to recover the $81 billion (14.3%) drop in revenues in 2009. But the $62 billion top line improvement this year puts us about 75% on the way to pre-crisis levels.”But he stressed that the $2.5 billion profit came with some “important health warnings”.”First, this represents a net margin of just 0.5%, which is a long way from sustainable profitability. Second, a major part of the global industry is still posting big losses,,” he said. “A stagnating economy, strikes, natural disasters and a currency crisis have left European carriers struggling with an anticipated $2.8 billion loss.”Europe will be the only region in the red in 2010 with a $2.8 billion loss.This is a downgrading from the $2.2 billion loss previously forecast in March, although it is an improvement on the $4.3 billion that the region lost in 2009. IATA said GDP growth of 0.9% was not enough to support a recovery and the currency crisis clouded the future with uncertainty. Moreover, 70% of the $1.8 billion loss in revenue as a result of the volcanic ash crisis was borne by European carriers.