Middle East passengers helping airlines to take off
Profit margins in 2012 were 1.3 per cent; in 2013 this will rise to 1.6 per cent due to the increase in the number of passengers
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The Middle East and North Africa (Mena) region is witnessing the fastest growth in the aviation sector, higher than the global average growth rate, Tony Tyler, Director-General and CEO of IATA, told Gulf News on Monday.
Speaking during meetings of the World Travel and Tourism Council (WTTC), Tyler said: “The aviation industry has proved to be a real trigger for economic development and growth in the Mena region, not cash flows, particularly in the GCC.”
He added that the aviation industry has generated significant growth in Dubai and Abu Dhabi and raised the employment rate as well.
Tyler stressed that international airlines will report an increase in profits this year due to higher passenger numbers from Asian countries.
“Profit margins in 2012 were 1.3 per cent; in 2013 this will rise to 1.6 per cent due to the increase in the number of passengers from Asian countries such as China, India and South East Asia,” he said.
“The profits also depend on the condition in the aviation market in Europe and whether there are fundamental changes in government attitudes towards the industry, including taxes. When governments scrap taxes on aviation, it boosts economies and the aviation market.
“What we have seen so far is that taxes reduce profit. Some governments in the EU take the contribution of airlines and tourism for granted.”
Passenger travel is growing in line with business confidence levels, Tyler observed, adding that in the past few months, “we have seen some positive economic indicators in both US and China.”
However, he stressed that there are many challenges facing the aviation industry, including high fuel costs amidst uncertain demand.
“Passenger traffic increased in last January by 2.7 per cent on long haul or international routes, much more than available capacities; that is, there were fewer empty seats on planes,” Tyler stressed.
He added that air cargo and freight demand saw string growth since the beginning of 2013 due to growth in Asia and Mena markets.
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