$1.3 billion profit boost expected in Middle Eastern airlines

Amid the soaring prices of fuel and labour, the expectations of profit boost in the Middle East airlines are doing the round.

profit boost, airlines, Middle East
Emirate airline in flight. Source: Pixabay

The IATA, or “International Air Transport Association”, has informed that as per its expectations, the airlines sector in the Middle East could possibly see a profit boost of either “$1.3 billion” in 2018 or of “$5.89 per passenger”. The “number factor” will be the driving agent for the expected increment. According to a statement of IATA: “The rise of oil prices is helping revenues and the oil-based economies in the region, aero-political relations with the U.S. have improved, while the Gulf airlines have substantially curbed growth”.

As per the 2017’s figures the Middle East airlines saw a profit boost by “$1 billion” or “$4.81 per passenger”. Moreover, the IATA’s global data show that the airlines could arrive at a “achieve a collective” net profit boost of “$33.8 billion” in 2018.

This reminds us, that even though the cost of labour and fuel are touching the sky, it will not stand growth’s way, as profit boost will be essayed forward by “an upturn in the interest rate cycle”, expects the IATA. Last year, the airlines hit a revenue record of “$38 billion globally”, although comparative figures remain distorted due to “special accounting items” like “one-off tax credits”, while contributing to the profit boost in 2017. In the words of the chief executive as well as the director general of IATA, Alexandre de Juniac: “Solid profitability is holding up in 2018, despite rising costs. The industry’s financial foundations are strong with a nine-year run in the black that began in 2010. The return on invested capital will exceed the cost of capital for a fourth consecutive year. At long last, normal profits are becoming normal for airlines. This enables airlines to fund growth, expand employment, strengthen balance sheets and reward our investors.”

As per the recent announcements of Emirates Group, the company saw a rise in revenue by “67%” in the fiscal year ending on March 31, 2018, whereby amounting to a “netted around” of “$27.2 billion”. As a result, the company’s profit boost marked an 8% hike of “$1.1 billion” in comparison to its previous year’s figures.