Middle East carriers will make a profit of $700m in 2011, up from the $400m originally forecast.
However, the profit is a reduction from the $1.1bn that the region recorded in 2010.
Political instability in the region is expected to take its toll in Egypt, Tunisia and Libya, which together account for about 20 per cent of the total international passenger traffic in the region. The Gulf region benefits from economic activity related to high oil prices and air hubs continue to win long-haul market share.
Globally, the International Air Transport Association (Iata) has downgraded its outlook to $8.6bn for 2011, from the $9.1bn it previously forecast (MEED 21:9:10).
“Political unrest in the Middle East has sent oil more than $100 per barrel. That is significantly higher than the $84 per barrel that was the assumption in December. At the same time the global economy is now forecast to grow by 3.1 per cent this year – a full 0.5 percentage point better than predicted just three months ago,” says Giovanni Bisignani, director general and chief executive of Iata.
Carriers in Asia Pacific will now record a profit of $3.7bn down from a previous forecast of $7.6bn, while North American carriers remains on track to report a profit of $3.2bn.
Airlines in Europe are expected to make a $500m profit, an increase on the $100m previously expected and carriers in Africa are expected to break even. Carriers in Latin America are forecast to post a $300m profit, a sharp drop from the $1bn previously forecast mainly due to the region’s exposure to higher oil prices.