Mideast airlines on growth trajectory
Leaving the rough rides of 2009 behind, the Middle Eastern airlines are getting ready to take on yet another challenging year.
There is no doubt the global aviation industry last year faced one of its most turbulent years in history. The Middle East, though equally impacted, has been the most resilient, becoming the only region in the world to have clocked in double-digit growth month after month.
As Iata (International Air Transport Association) revealed last month, the Middle Eastern airlines would see their losses actually shrink to $300 million (Dh1.10 billion). In 2009, the region's carriers lost about $500m collectively.
Compared to that, the global aviation industry has been forecast (by Iata) to lose $11bn in 2009. And the global trade aviation body is predicting a wider industry loss of $5.6bn for 2010, due to yield weaknesses.
Kareem Z Murad, Vice- President, Research, at Shuaa Capital, could not agree more. "I am a little cautious about 2010 – not just about the aviation sector, but across sectors. The impact of global crisis will be still felt in 2010. Having said that, even though I am actually more optimistic about the Middle East aviation sector, the region's airlines are not going to be substantially more profitable in 2010, especially not in the first half of the year. We will continue to see pressure on yields especially first half of 2010," he told Emirates Business.
"The region's airlines may just maintain their current levels of performance but no major improvement in sight," he added.
Abu Dhabi's Etihad Airways, meanwhile, is seeing definite signs of an upturn in passenger travel as well as in the cargo sector, according to the airline's chief executive. "As this continues, we expect to see a corresponding industry focus in 2010 on responsible pricing, allowing yields to return to levels that will enable airlines to move back to profitability," said James Hogan.
He added: "It has been a difficult year for the aviation industry. However, in contrast to other regions, the Middle East market has continued to grow."