Airlines in the Middle East to earn 2.2 billion
Tha represents gains over the profit of $1.6 billion obtained in 2013, but is $200 million under the previous forecast made by Iata for 2014. “Oil revenues from high oil prices are benefiting the home markets and the region's carriers continue to win market share in long-haul connections through the region's hubs”, points out the note.
"Cargo, in particular is experiencing strong growth as a result, partly, of tapping into newly emerging trade lanes such as those between Africa and Asia. This follows significant investments by Chinese companies in Africa," says Iata.
Worldwide, Iata foresees airline companies will profit $18.7 billion in 2014, against $19.7 billion forecast previously. The association explains that the decline in the forecast is due to the rising costs of oil, which should be around $108 the barrel, $3.5 more than in previous forecasts.
According to Iata, however, there is hope that the $3 billion additional cost in the industry's fuel expense is offset by a higher demand, especially by cargo, driven by the strengthening of the global economy. Iata foresees that the airlines' combined revenues will reach $745 billion this year, $2 billion more than the previous forecast. ■