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Sun 23 Sep 2007 04:00 AM

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IATA warns Middle East carriers over profits

The net profits of Middle Eastern airlines is expected to arrive at less than half or US$200m in 2007 compared to the earlier forecast of US$500m, a recent report released by the International Air Transport Association (IATA) predicted.

The net profits of Middle Eastern airlines is expected to arrive at less than half or US$200m in 2007 compared to the earlier forecast of US$500m, a recent report released by the International Air Transport Association (IATA) predicted. The report added that Middle East airlines have doubled their share of global passenger capacity in a period of three years.

The report also suggested that the success of Dubai's Emirates Airline has single-handedly forced other airlines into this troublesome state, explaining that while Emirates earned US$674m in net profit last year, the Middle East region as a whole posted a US$200m profit, signifying widespread losses among other airlines.

"Emirates did very well but other airlines are still in build-up phase and making losses," an IATA spokesman told a local newspaper. The association had not provided an explanation of why the regional outlook had been lowered since its last report in June, but expected a slight improvement to occur in 2008, when Middle East airlines will earn US$300m in profit.

"Airlines in the Middle East have grown strongly over the last three years, increasing their share of global passenger capacity from around 4% in 2003 to nearly 8% in 2006," IATA said, adding: "Though still relatively small in global airline terms, the Middle East continues to be one of the most dynamic regions for airline growth."

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