MidEast airlines forecast to make $1.5bn profit in 2013

  • Share via facebook
  • Tweet this
  • Bookmark and Share

Middle East carriers are expected to show a profit of $1.5bn this year, slightly improved from a previous projection by the International Air Transport Association (IATA).

The aviation authority also said passenger demand is expected to continue apace at 15 percent for the region's airlines in its latest global outlook update.

The projected growth is ahead of the anticipated 12.6 percent capacity expansion in the Middle East, IATA said.

"The region’s successful hubs continue to connect long-haul traffic, with particular strength in facilitating connectivity to emerging economies in Asia and Africa," it added in a statement

Globally, IATA upgraded its global outlook for the airline industry to a $12.7bn profit in 2013 on $711bn in revenues.

This is $2.1bn better than the $10.6bn profit projected in March and an improvement on the $7.6bn profit generated in 2012.

However, IATA warned that the net profit margin is expected to be 1.8 percent.

"Indicative of the characteristically razor thin profits of the airline industry, even this small margin will make 2013 the third strongest year for airlines since the events of 2001," IATA said.

“This is a very tough business. The day-to-day challenges of keeping revenues ahead of costs remain monumental. Many airlines are struggling. On average airlines will earn about $4 for every passenger carried—less than the cost of a sandwich in most places,” said Tony Tyler, IATA’s director general and CEO.

IATA said the average price for Brent crude oil is expected to be $108/barrel for the year. This is a slight downward revision from the $109.5/barrel previously forecast and it is below the $111.8 average in 2012. Nonetheless, this still is nearly twice as high as it was in 2006 when the average price/barrel was $65.1.

Join the Discussion

Disclaimer:The view expressed here by our readers are not necessarily shared by Arabian Business, its employees, sponsors or its advertisers.

Please post responsibly. Commenter Rules

  • No comments yet, be the first!

Enter the words above: Enter the numbers you hear:

All comments are subject to approval before appearing

Further reading

Features & Analysis
Flights of fancy: the future of aviation

Flights of fancy: the future of aviation

How will passengers’ flight experience be in the future? From...

How Gulf banks are helping to underwrite region's aviation boom

How Gulf banks are helping to underwrite region's aviation boom

Figures from Airbus show that 47% of MidEast aircraft deals in...

The inside story of the new Airbus A350 jet

The inside story of the new Airbus A350 jet

Customers, suppliers and industry sources share their insights...

Most Discussed
  • 12
    Has Narendra Modi already lost the plot?

    Modi was quiet all along and did not utter a word regarding the attacks on minorities and their institutions. It took Obama's address to him to atleast... more

    Saturday, 28 March 2015 2:25 AM - Ali
  • 11
    Nakheel PR: The toughest job in Dubai?

    On service charges.

    We were overcharged for years by Nakheel so that those loans could be paid back.

    The dramatic cuts have come to nothing... more

    Friday, 27 March 2015 7:32 PM - Pondersome George
  • 6
    Drunk passenger who slapped air stewardess jailed in Dubai

    Its high time airlines ban alcoholic drinks on board or limit it to just one drink. There are many passengers who love the free alcohol and keep drinking... more

    Saturday, 28 March 2015 2:25 AM - Azk