Air cargo: IATA says Middle East and North Africa show promise

For 2010, IATA is forecasting a bottom line improvement of $1 billion on the $600 million that the region’s carriers lost in 2009.

By ·

The International Air Transport Association (IATA) called for coordinated efforts to deal with the challenges of growth in the Middle East and North Africa (MENA).

“Over the last decade, the carriers of the Middle East and North African region have grown from 5 percent of global traffic to 11 percent,” said Giovanni Bisignani, IATA’s Director General and CEO. “Planned aircraft purchases of $200 billion over the next decade will support this growth into the foreseeable future. This expanding global presence brings with it the challenge of playing a larger role in the global aviation community,” said.

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 $400 million profits this year. A more cautious approach to capacity is helping to drive this improvement. While demand is in line for a 21 percent increase over last year, the capacity increase has been limited to 15.9 percent,” said Bisignani in a keynote address to the Arab Air Carriers Organization (AACO) Annual General Meeting in Cairo, Egypt.

Luciana Suran, an economist with CB Richard Ellis Economic Advisors, noted that air cargo is ramping up for U.S. multinationals in a number of emerging nations.

“Even though it may be more expensive in the short term, many companies will absorb that for velocity benefits,” she said at the recently-concluded Supply Chain Executive Summit in Houston.

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


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
Reduce Order Processing Costs by 80%
Sales order automation software will seamlessly transform inbound emailed and printed purchase orders into electronic sales orders that can be automatically processed into your ERP system with 100% accuracy.
Download Today!
From the June 2016 Issue
In the wildly unstable ocean cargo carrier arena, three major consortia are fighting for market share, with some players simply hanging on for survival. Meanwhile, shippers may expect deployment shifts as a consequence of the Panama Canal expansion.
WMS Update: What do we need to run a WMS?
Supply Chain Software Convergence: Synchronization Realized
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Optimizing Global Transportation: How NVOCCs Can Use Technology to Operate More Profitably
Global transportation isn't getting any easier to manage, especially for non-vessel operating common carriers (NVOCCs). Faced with uncertainties like surcharges—but needing to remain competitive when bidding against other providers—NVOCCs need the right mix of historical data, data intelligence, and technology support to make quick and effective decisions. During this webcast you'll learn how Bolloré Transport & Logistics was able to streamline its global logistics and automate contract management.
Register Today!
EDITORS' PICKS
Details Key to Cross-border Ease
Ever-changing regulations are making it risky for U.S. companies engaged in cross-border trade...
Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....

Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...
Port of Oakland launches smart phone apps for harbor truckers
Innovation uses Bluetooth, GPS to measure how long drivers wait for cargo