Middle East carriers are expected to record a $100m profit in 2011, an 86 per cent decline from the $700m previously forecast.
Political unrest in specific parts of the region, such as Libya, Syria and Yemen is hurting demand. The major airlines, including Dubai-based Emirates and Qatar Airways, are expected to continue to win market share on long-haul routes.
The Montreal-based International Air Transport Association (Iata) has also downgraded the global industry profit to $4bn for 2011, a 54 per cent drop from the $8.6bn profit forecast in March (MEED 3:3:11).
“Natural disasters in Japan, unrest in the Middle East and North Africa, plus the sharp rise in oil prices have slashed profit expectations to $4bn this year,” says Giovanni Bisignani, Iata’s director general and chief executive officer.
“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.”