Dubai: Airlines in the Middle East delivered a combined annual profit of approximately $1 billion (Dh3.67 billion) in 2011, according to estimates by the International Air Transport Association (IATA).
IATA said that if rising oil prices don't eventually turn the predicted profit of Gulf airlines into a $200 million loss this year, the carriers are forecast to deliver an annual profit of $500 million, up from the $300 million IATA originally predicted.
Meanwhile, the Centre of Asia Pacific Aviation (Capa) predicted that Middle East carriers have a profitable year ahead in 2012.
"Despite the regional disruptions and spiralling price of oil [last year], passengers in the region kept flying and Middle Eastern carriers increasingly developed their links with the rest of the world," the Capa report said, adding that financial results for the carriers were unevenly spread across the region.
Emirates results awaited
It pointed out that some of the region's largest carriers were able to report profits.
Emirates expects its fiscal year 2011-12 (year ending March 31, 2012) results to be lower than the previous year's record $1.6 billion, due to higher oil prices, and Etihad Airways reported a maiden net profit of $7 million in 2011 and expects to improve on this performance in 2012.
Qatar Airways, having achieved a $205 million result in 2010-11, expects to be profitable for the same period, as per Capa analysis, albeit results are expected to be dragged down by high oil prices, which touched $125 a barrel in recent weeks.
The region's budget carriers also turned in profit in 2011, with Air Arabia reporting a solid result of $74.6 million and Kuwait-based Jazeera Airways declaring its best ever result with a net profit of $38.9 million.
Jazeera Airways' outlook is for another year of financial growth, Capa said, although it is keeping a "strict rein" on its fleet and network growth. Air Arabia, on the other hand, has aggressive expansion plans, both for its main operation at Sharjah International Airport and its secondary hubs in Morocco and Egypt.
But the improved outlook does not mean that some regional carriers are still not suffering, Capa pointed out, adding that the regional unrest brought about by the Arab Spring hit profits, notably among the smaller and state-owned airlines.
Perennially troubled Gulf Air and Kuwait Airways, for example, both suffered during the year.
"Gulf Air reportedly lost around $500 million and is looking at another round of government-assisted restructuring to whittle this down to $210-$265 million. The Bahrain government is looking at a bailout package for the airline," the report said.
Routes closed down
The beleaguered carrier was forced into dropping six routes between February and March, citing commercial reasons. These included Athens, Milan, Geneva, Kuala Lumpur, Damascus and Entebbe.
Oman Air, on the other hand, which is in the midst of its ambitious redevelopment programme, does not expect to report profits until around 2014.
Finally, Royal Jordanian, which was profitable in 2009 and 2010, suffered a record loss of $81.4 million last year. The Amman-based carrier has initiated a network rework in light of the results and will prune four routes and reduce capacity on another seven over March/April-2012.
International traffic to and from the Middle East is now edging back towards the double-digit levels seen in 2009 and 2010, when growth by airlines in the region appeared unstoppable, Capa said.
Big 3's fleet orders
Even with around 750 aircraft on order by regional carriers, capacity remains closely aligned with demand in Middle East, the study said. "The ‘Big 3' of the Gulf region — Emirates, Etihad Airways and Qatar Airways — are expected to take delivery of at least another 50 new aircraft over the remainder of the year," it stated, adding that Etihad Airways is scheduled to take delivery of six more aircraft in 2012.
Qatar Airways and Emirates, meanwhile, are expected to each take delivery of two aircraft per month this year. While deliveries for Qatar Airways will include five Boeing 787s, Emirates' aircraft will comprise widebodies — either A380s or Boeing 777-300ERs.
The report also stated that while Qatar Airways has announced 15 new routes for 2012 — three of which already launched, Emirates kicked off the year with the launch of six new routes in the first three months of the year, with plans to launch at least five more during the year.
Etihad Airways, on the other hand, has been focusing on growth through acquisitions to expand its global network rather than adding large numbers of new routes. The Abu Dhabi-based carrier added just two new routes this year and announced two other planned route launches.
Source: http://gulfnews.com
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