Mena airlines to make $400m profit in 2010

Iata chief calls for co-ordinated efforts for the growth of the region

The International Air Transport Association (Iata), an international industry trade group of airlines, has called for co-ordinated efforts for the growth of the Middle East and North Africa (Mena) region.

“Over the past decade, the carriers of the Middle East and North African region have grown from five per cent of global traffic to 11 per cent. Planned aircraft purchases of $200 billion over the next decade will support this growth. This expanding global presence brings with it the challenge of playing a larger role in the aviation community,” said Giovanni Bisignani, Iata’s Director General and CEO.

The financial situation of the Mena carriers is improving. For 2010, Iata is forecasting a bottom line improvement of $1 billion on the $600 million that the region’s carriers lost in 2009.

“We are expecting the region to make $400m profits this year. A more cautious approach to capacity is helping to drive this improvement. While demand is in line for a 21 per cent increase over last year, the capacity increase has been limited to 15.9 per cent,” said Bisignani in a keynote address to the Arab Air Carriers Organisation’s annual general meeting in Cairo, Egypt.

For 2011, Iata expects a fall in global profitability to $5.3bn from the $8.9bn that airlines are expected to make in 2010. Iata expects Mena carriers to follow the trend with a reduced 2011 regional profit of $300m. The small profit will be partially driven by an expected capacity expansion of 10.6 per cent outstripping demand growth of 10.4 per cent.

Bisignani highlighted five challenges of growth for the region: safety, infrastructure, technology for simplifying the business, government involvement and environment.

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