After a strong couple of years, UAE airlines have found the going tough in the latter half of 2016 and are expected to see profits fall in 2017.
The UAE is home to Emirates and Etihad Airways, two of the world's best airlines, and low cost carriers flydubai and Air Arabia.
Lower oil prices, attacks on airports and Trump’s visa ban, have all contributed to a lower demand on some routes for UAE airlines. Emirates alone has recorded a 35 percent loss in bookings to the US due to the travel ban.
In the first half of the 2016-17 financial year, Emirates registered AED 786 million (US$ 214 million) as net profit, down 75 percent year-on-year.
According to Reuters, IATA expects all global airlines to see profits fall for the first time in six years in 2017.
Back in December, IATA said that Middle East airlines were likely to see profits fall to $300 million in 2017, down from $900 million in 2016.
UAE airlines have long benefited from high oil prices that spurred growth and profitability. But demand has softened after more than two years of falling oil prices, high-risk markets, currency fluctuations in some countries and the increased competition of low cost carriers from Europe and Asia.
More recently, a rush to take advantage of low oil prices to offer more seats and gain customers has also put UAE airlines’ ticket prices under pressure and threatened profit margins, especially as the price of oil is expected to rise again, Reuters reported.
IATA said that the growth of low cost, long haul carriers is “starting to accelerate” in Europe and Asia and is likely to develop in other markets such as the Middle East, pushing the losses of UAE airlines even further.
