Middle East airlines to see improved profits, African losses
Demand in 2018 is expected to grow by 7.0%, outpacing announced capacity expansion of 4.9% (the slowest growth since 2002).
The region’s carriers face challenges to their business models, and from low oil revenues, regional conflict, crowded air space, the impact of travel restrictions to the U.S., and competition the new “super connector” (Turkish Airlines).
Despite the challenges, there is positive momentum heading into 2018.
African carriers are expected to continue to make small losses of $100 million in 2018 following a collective net loss of $100 million in 2017.
Stronger forecast economic growth in the region is expected to support demand growth of 8.0% in 2018, slightly outpacing the announced capacity expansion of 7.5%. ■