Middle East airline profits are expected to quadruple this year to US$400 million (Dh1.46 billion). That will come through increased passenger and cargo traffic using the region as a stopover destination between Europe and Asia, says the latest forecast from the International Air Transport Association (IATA).
The report points to the growing role carriers in the region are playing in the global travel industry. The IATA tripled its earnings forecast for the industry to $8.9bn worldwide this year based on a stronger than expected recovery but said profits would encounter turbulence next year and slow to $5.3bn. It warned the industry would achieve only "razor thin" profit margins and could come down with a bump as austerity measures bit across the globe.
"This year … is as good as it gets for this cycle," said Giovanni Bisignani, the director general and chief executive of the IATA. "Governments are running out of cash for pump priming. Unemployment remains high and business confidence is weakening. And we expect the 3.2 per cent GDP growth of 2010 to drop to 2.6 per cent in 2011. "As a result, 2011 is looking more austere." Lower fuel bills are also helping to improve the bottom line for the industry as excess refinery capacity has reduced the cost of fuel, which accounts for about a quarter of total costs.
The Middle East is due to see a dramatic rise in passenger and cargo traffic, with a combined 21 per cent growth this year and 10.4 per cent next year, more than double the average for the rest of the world over the same period, the IATA report says. "Middle-Eastern airlines have benefited from strong regional economies and an expanded share of long-haul markets," the report said. "Unlike the previous two years, capacity has been added at a slower pace than demand growth in 2010, raising load factors and helping profitability. Carriers in the region are expected to see their profits rise significantly from $100m to $400m."
Samir Murad, a logistics analyst at the National Bank of Kuwait, said more low-cost carriers, such as flydubai and Air Arabia, may come online, further depressing ticket prices and limiting airlines' profits. "We'll see numbers of passengers increasing and we might even see the numbers of low-cost carriers increasing … there's talk of another low-cost airline in Abu Dhabi," he said. Mr Murad said national carriers would need to manage their new aircraft orders carefully, as large numbers of Airbus A380s and Boeing 787 Dreamliners entering service in the next few years would increase the supply of seats and probably decrease ticket prices.
"It might differ from one airline to another but they'll need to be filling these planes," he said. However, some analysts took issue with IATA's estimates. Vincent Resillot, a transport analyst at Credit Suisse, said revenue growth predictions might be more accurate for publicly listed European airways than their Middle East rivals. Many regional carriers are state-owned and choose not to release earnings statistics. "Nobody wants to give data [on profits]", Mr Resillot said. "I don't think anyone can tell, except their chief executives."
ghunter@thenational.ae
Five expert hiking tips
Always check the weather forecast before setting off
Make sure you have plenty of water
Set off early to avoid sudden weather changes in the afternoon
Wear appropriate clothing and footwear
Take your litter home with you
The Facility’s Versatility
Between the start of the 2020 IPL on September 20, and the end of the Pakistan Super League this coming Thursday, the Zayed Cricket Stadium has had an unprecedented amount of traffic.
Never before has a ground in this country – or perhaps anywhere in the world – had such a volume of major-match cricket.
And yet scoring has remained high, and Abu Dhabi has seen some classic encounters in every format of the game.
October 18, IPL, Kolkata Knight Riders tied with Sunrisers Hyderabad
The two playoff-chasing sides put on 163 apiece, before Kolkata went on to win the Super Over
January 8, ODI, UAE beat Ireland by six wickets
A century by CP Rizwan underpinned one of UAE’s greatest ever wins, as they chased 270 to win with an over to spare
February 6, T10, Northern Warriors beat Delhi Bulls by eight wickets
The final of the T10 was chiefly memorable for a ferocious over of fast bowling from Fidel Edwards to Nicholas Pooran
March 14, Test, Afghanistan beat Zimbabwe by six wickets
Eleven wickets for Rashid Khan, 1,305 runs scored in five days, and a last session finish
June 17, PSL, Islamabad United beat Peshawar Zalmi by 15 runs
Usman Khawaja scored a hundred as Islamabad posted the highest score ever by a Pakistan team in T20 cricket
The specs
Engine: 8.0-litre, quad-turbo 16-cylinder
Transmission: 7-speed auto
0-100kmh 2.3 seconds
0-200kmh 5.5 seconds
0-300kmh 11.6 seconds
Power: 1500hp
Torque: 1600Nm
Price: Dh13,400,000
On sale: now
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
The Uefa Awards winners
Uefa Men's Player of the Year: Virgil van Dijk (Liverpool)
Uefa Women's Player of the Year: Lucy Bronze (Lyon)
Best players of the 2018/19 Uefa Champions League
Goalkeeper: Alisson (Liverpool)
Defender: Virgil van Dijk (Liverpool)
Midfielder: Frenkie de Jong (Ajax)
Forward: Lionel Messi (Barcelona)
Uefa President's Award: Eric Cantona
Tank warfare
Lt Gen Erik Petersen, deputy chief of programs, US Army, has argued it took a “three decade holiday” on modernising tanks.
“There clearly remains a significant armoured heavy ground manoeuvre threat in this world and maintaining a world class armoured force is absolutely vital,” the general said in London last week.
“We are developing next generation capabilities to compete with and deter adversaries to prevent opportunism or miscalculation, and, if necessary, defeat any foe decisively.”
World record transfers
1. Kylian Mbappe - to Real Madrid in 2017/18 - €180 million (Dh770.4m - if a deal goes through)
2. Paul Pogba - to Manchester United in 2016/17 - €105m
3. Gareth Bale - to Real Madrid in 2013/14 - €101m
4. Cristiano Ronaldo - to Real Madrid in 2009/10 - €94m
5. Gonzalo Higuain - to Juventus in 2016/17 - €90m
6. Neymar - to Barcelona in 2013/14 - €88.2m
7. Romelu Lukaku - to Manchester United in 2017/18 - €84.7m
8. Luis Suarez - to Barcelona in 2014/15 - €81.72m
9. Angel di Maria - to Manchester United in 2014/15 - €75m
10. James Rodriguez - to Real Madrid in 2014/15 - €75m
SRI LANKA SQUAD
Upul Tharanga (captain), Dinesh Chandimal, Niroshan Dickwella
Lahiru Thirimanne, Kusal Mendis, Milinda Siriwardana
Chamara Kapugedara, Thisara Perera, Seekuge Prasanna
Nuwan Pradeep, Suranga Lakmal, Dushmantha Chameera
Vishwa Fernando, Akila Dananjaya, Jeffrey Vandersay
The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
