SINGAPORE // A group representing the airline industry cut profit expectations for Middle East and North African carriers for this year from US$700 million (Dh2.57 billion) down to $100m as high oil prices, natural disasters and political unrest take their toll.
The volatile trading conditions expected for this year will add new hardships for airlines in the Middle East and North Africa (Mena) region. They lost a collective $1bn between 2007 and 2009 during the global downturn and returned to profit only last year, according to the International Air Transport Association (IATA).
The group issued its highly watched economic forecast in Singapore yesterday during its annual gathering. "Political unrest in parts of the region is hurting demand," said Giovanni Bisignani, the IATA chief executive, adding that high fuel costs would weaken demand in key markets.
In March, IATA predicted that the $600bn global airline industry would earn $8.6bn of profits this year. But yesterday IATA reduced the earnings forecast by more than half, to $4bn, because of worsening business conditions for the industry. That reflects a razor-thin profit margin of 0.6 per cent for an industry that for the past decade has been on perpetual alert over disruptions including health scares, natural disasters and volatile economic cycles.
"That we are making any money at all in a year with this combination of unprecedented shocks is a result of a very fragile balance," said Mr Bisignani. The challenging conditions have led several Middle Eastern airlines, including Etihad Airways and Emirates Airline, to issue summer promotions to stimulate demand among Gulf residents.
"At the moment it is really tough," said Tim Clark, the president of Emirates Airline, the largest carrier in the Middle East.
"There is a distinct softening of the European markets. We have the difficulties in the regional markets [due to unrest], and there are issues with Asian markets, in particular with Japan, which has suffered quite a lot," Mr Clark said. "Taken together, there are difficulties out there, but I am hoping the summer will be strong."
Current conditions will make it difficult for Emirates to reproduce the $1.5bn of profit it made last year, he said.
Etihad Airways, which began flying in 2003 and aims to reach its financial break-even point this year, is "pushing hard to meet second-quarter objectives", said its chief executive, James Hogan. "We met our first-quarter targets, but Middle East traffic has been down."
The rising cost of jet fuel is the main worry for airlines, which have struggled to pass along the increased costs to passengers. IATA expects the average oil price for this year to be $110 per barrel, up from a forecast of $96 per barrel made in March. And for every $1 of increase in the average oil price, airlines around the world face an additional costs of $1.6bn, the industry body said.
Airlines in the Asia-Pacific region will enjoy the highest profitability this year, at $2.1bn, according to the forecast. North American carriers are on track to earn $1.2bn, followed by European airlines, with $500m of profits and $100m expected for Latin American airlines. African airlines are forecast to post a loss of $100m.
The large Gulf airlines will continue to win market share on long-haul markets by transiting passenger through their hubs, IATA said. But while the region's airlines will enjoy a 14.6 per cent rise in demand, that gain will fall short of the 15.5 per cent of capacity they are adding this year.
The annual IATA gathering brings together more than 700 executives representing 230 airlines accounting for 93 per cent of all scheduled international air traffic.
igale@thenational.ae
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
Company%20Profile
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Company%20profile
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Wicked
Director: Jon M Chu
Stars: Cynthia Erivo, Ariana Grande, Jonathan Bailey
Citadel: Honey Bunny first episode
Directors: Raj & DK
Stars: Varun Dhawan, Samantha Ruth Prabhu, Kashvi Majmundar, Kay Kay Menon
Rating: 4/5
Results
Stage Two:
1. Mark Cavendish (GBR) QuickStep-AlphaVinyl 04:20:45
2. Jasper Philipsen (BEL) Alpecin-Fenix
3. Pascal Ackermann (GER) UAE Team Emirates
4. Olav Kooij (NED) Jumbo-Visma
5. Arnaud Demare (FRA) Groupama-FDJ
General Classification:
1. Jasper Philipsen (BEL) Alpecin-Fenix 09:03:03
2. Dmitry Strakhov (RUS) Gazprom-Rusvelo 00:00:04
3. Mark Cavendish (GBR) QuickStep-AlphaVinyl 00:00:06
4. Sam Bennett (IRL) Bora-Hansgrohe 00:00:10
5. Pascal Ackermann (GER) UAE Team Emirates 00:00:12
A little about CVRL
Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
The specs: 2018 Ford F-150
Price, base / as tested: Dh173,250 / Dh178,500
Engine: 5.0-litre V8
Power: 395hp @ 5,000rpm
Torque: 555Nm @ 2,750rpm
Transmission: 10-speed automatic
Fuel consumption, combined: 12.4L / 100km
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
De De Pyaar De
Produced: Luv Films, YRF Films
Directed: Akiv Ali
Cast: Ajay Devgn, Tabu, Rakul Preet Singh, Jimmy Sheirgill, Jaaved Jaffrey
Rating: 3.5/5 stars
THE BIO
Mr Al Qassimi is 37 and lives in Dubai
He is a keen drummer and loves gardening
His favourite way to unwind is spending time with his two children and cooking
Company%20Profile
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The biogs
Name: Zinah Madi
Occupation: Co-founder of Dots and links
Nationality: Syrian
Family: Married, Mother of Tala, 18, Sharif, 14, Kareem, 2
Favourite Quote: “There is only one way to succeed in anything, and that is to give it everything.”
Name: Razan Nabulsi
Occupation: Co-founder of Dots and Links
Nationality: Jordanian
Family: Married, Mother of Yahya, 3.5
Favourite Quote: A Chinese proverb that says: “Be not afraid of moving slowly, be afraid only of standing still.”
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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Electoral College Victory
Trump has so far secured 295 Electoral College votes, according to the Associated Press, exceeding the 270 needed to win. Only Nevada and Arizona remain to be called, and both swing states are leaning Republican. Trump swept all five remaining swing states, North Carolina, Georgia, Pennsylvania, Michigan and Wisconsin, sealing his path to victory and giving him a strong mandate.
Popular Vote Tally
The count is ongoing, but Trump currently leads with nearly 51 per cent of the popular vote to Harris’s 47.6 per cent. Trump has over 72.2 million votes, while Harris trails with approximately 67.4 million.
COMPANY%20PROFILE
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Sun jukebox
Rufus Thomas, Bear Cat (The Answer to Hound Dog) (1953)
This rip-off of Leiber/Stoller’s early rock stomper brought a lawsuit against Phillips and necessitated Presley’s premature sale to RCA.
Elvis Presley, Mystery Train (1955)
The B-side of Presley’s final single for Sun bops with a drummer-less groove.
Johnny Cash and the Tennessee Two, Folsom Prison Blues (1955)
Originally recorded for Sun, Cash’s signature tune was performed for inmates of the titular prison 13 years later.
Carl Perkins, Blue Suede Shoes (1956)
Within a month of Sun’s February release Elvis had his version out on RCA.
Roy Orbison, Ooby Dooby (1956)
An essential piece of irreverent juvenilia from Orbison.
Jerry Lee Lewis, Great Balls of Fire (1957)
Lee’s trademark anthem is one of the era’s best-remembered – and best-selling – songs.
Western Region Asia Cup T20 Qualifier
Sun Feb 23 – Thu Feb 27, Al Amerat, Oman
The two finalists advance to the Asia qualifier in Malaysia in August
Group A
Bahrain, Maldives, Oman, Qatar
Group B
UAE, Iran, Kuwait, Saudi Arabia
UAE group fixtures
Sunday Feb 23, 9.30am, v Iran
Monday Feb 25, 1pm, v Kuwait
Tuesday Feb 26, 9.30am, v Saudi
UAE squad
Ahmed Raza, Rohan Mustafa, Alishan Sharafu, Ansh Tandon, Vriitya Aravind, Junaid Siddique, Waheed Ahmed, Karthik Meiyappan, Basil Hameed, Mohammed Usman, Mohammed Ayaz, Zahoor Khan, Chirag Suri, Sultan Ahmed
Disclaimer
Director: Alfonso Cuaron
Stars: Cate Blanchett, Kevin Kline, Lesley Manville
Rating: 4/5
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.
When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.
How to get there: Emirates currently flies from Dubai to Orlando five times a week.
Killing of Qassem Suleimani
Specs%20
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