The Middle East aviation industry is expected to make a profit of nearly $2.2bn this year, an enormous 37.5 percent increase on last year, according to the International Air Transport Association (IATA).
The massive growth will be driven by an 11 percent increase in passenger traffic, IATA director of corporate communications Anthony Concil said in Qatar on Saturday, ahead of the Gulf state hosting the IATA annual general meeting in June.
“Despite global economic slowdown and industry challenges, the civil aviation industry in the Middle East is expected to register the fastest growth in the world,” Concil was quoted as saying by English daily, The Peninsula.
By comparison, airline profits globally are expected to reach a total of $18.7bn in 2014, up 55.8 percent from $12bn in 2013. However, the forecast has been revised down from the initial $19.7bn.
Global revenue is estimated to reach about $745bn this year, $2bn more than previously expected, but Concil said profit margins would be only about 2.5 percent due to increasing competition, rising fuel prices and weak cargo business.
IATA expects the oil prices to reach $108 per barrel, adding $3bn to the industry’s fuel bill. Fuel makes up about 30 percent of airlines’ operating costs.
Concil said rising fuel prices and increasing competition would continue to be among the biggest challenges faced by the aviation industry.
They would be offset by stronger demand, especially for cargo, which is being supported by a strengthening global economy.
Air cargo revenues are expected to reach nearly $63bn worldwide, which would constitute 8.4 percent of the total industry revenue. Cargo business in the Middle East is expected to remain stronger than the global average.
Qatar will be the first GCC state to host the IATA AGM on June 1 to 3,
The meeting is expected to discuss passenger rights, the industry’s environmental impact, rising fuel prices, innovation and the a new initiative to develop an XML-based data transmission standard for communications between airlines and travel agents.
About 1000 industry leaders, including CEOs from more than 240 airlines and leading aircraft manufacturers are expected to attend.
This year’s AGM also will celebrate the 100th year of commercial civil aviation.
Qatar Airways CEO Akber Al Baker was last year voted onto the IATA board of governors.